Professional Documents
Culture Documents
C. BACKGROUND............................................................................................................................. 4
F. STRATEGY PLANNING.............................................................................................................. 8
G. RECOMMENDATIONS............................................................................................................. 10
H. IMPLEMENTATION.................................................................................................................. 11
J. CONTIGENCY PLAN................................................................................................................ 13
REFERENCE....................................................................................................................................... 15
APPENDIX ...........................................................................................................................................16
1. IFE Matrix.............................................................................................................................................. 16
2. EFE Matrix............................................................................................................................................. 17
4. QSPM Matrix......................................................................................................................................... 18
5. Space Matrix.......................................................................................................................................... 21
6. IE Matrix................................................................................................................................................ 21
2
b. Balance Sheet..................................................................................................................................... 22
c. EPS/EBIT Analysis............................................................................................................................ 23
d. Company Evaluation.......................................................................................................................... 24
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A. PROBLEM STATEMENT
PVOIL is one of the leading brand name in Vietnam operating in the field of importing, trading
crude oil and field, trading oil products.
The distribution network of PVOIL is a closed distribution chain, starting with the input of the
finished petroleum products which is either imported or purchased from Binh Son Oil Refinery (BSR).
Some semi-finished products are also purchased for processing the finished products at the refinery.
The output of the finished petroleum products is supplied to the end consumers through the
intermediate distribution channels of CODO or DODO petrol stations.
PVOIL is now facing barriers in achieving its business objectives due to various reasons. It has to
eliminate the major barriers to achieve the petroleum business goal.
B. SYMPTOMS OF THE PROBLEM
1. Difficulty in the scaling of the petrol stations system, and in the effective utilization of the
utility service chain in the retailing and distribution network;
2. Disruption of the supply chain and reduction in production due to storage capacity;
3. Low level of the petroleum products in terms of European emission standards comparing to the
major rival (PVOIL’s petrol M95: ranked at Euro 3, Petrolimex’s: ranked at Euro 4);
4. Inefficient trading capacity causing low/no growth margin
5. High ratio of bad debts which accounts for 12% of short-term receivables. PVOIL has to set up
a receivable reserve fund for the entire value of bad debts (approximately 800 billion VND).
C. BACKGROUND
PetroVietnam Oil Corporation (PVOIL) is a subsidiary of Vietnam Oil and Gas Group (PVN).
PVOIL was established owing to the consolidation of PetroVietnam Trading Company (Petechim) and
PetroVietnam Oil Processing and Distribution Company (PDC). PVOIL officially started its operation
in July 2008.
PVOIL has been diversifying its activity in trading of crude oil and petroleum products. Importing
and trading of crude oil are a unique business that creates PVOIL’s differentiation. In 2011, PVOIL set
up a subsidiary in Singapore (PVOIL Singapore Pte. Ltd. - PVOSN) to deploy international crude oil
trading. Besides, PVOIL focuses on retailing and distribution of petroleum products. For the past
years, the petroleum market has seen a remarkable upsurge in the number of wholesalers, PVOIL has
still affirmed its second position in the petroleum market with the quantity for sales of 3 m3, tons per
year, accounting for 17% of the domestic market share. PVOIL is also known in the producing,
processing of petroleum, diesel and lubricant (PVOIL, 2021). PVOIL is gradually transforming in
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terms of modernizing, diversifying, improving its product quality to meet the demand of the domestic
and regional markets.
PVOIL has grown sharply in expanding its retail network through various activities. Starting from
initial 82 petrol stations, PVOIL nowadays owns more than 600 CODO spacious and standard petrol
stations, plus more than 3,000 DODO petrol stations. This forms a nationwide retailing and
distribution network across 63 provinces and cities across the country (PV OIL, 2021).
D. MISSION STATEMENT AND CRITIQUE
PVOIL constantly strives (7) to become a leading brand in Vietnam (3) in the business of
international trading of crude oil and processing, distribution of petroleum products (2), improving
service quality (2), pioneering (4) and efficiency (5) on the development journey towards the future
(6). PVOIL always facilitates the best working environment (9) to build highly qualified human
resources of professionalism, solidarity/ teamwork, creating trust (8) for its customers and partners (1).
E. SWOT MATRIX
Strengths Weaknesses
PVOIL has a good reputation with a strong
Sales in retail channels compared to total
1 branding that domestic and international 1
sales are still low.
customers are familiar with
Standing second to Petrolimex, PVOIL is Most of PVOIL's petrol stations have not
considered the second largest distributor of been utilized for potential commercial
3 3
oil in Vietnam market with a market share of services, such as advertising, convenience
17%. stores, car washes, etc.
5 Being a member unit of Vietnam Oil and Gas 5 PVOIL has a rather cumbersome
Group; PVOIL always ensures the ability to organizational structure compared to its
5
supply petroleum products to the market capacity
6 warehouses locating across the country with 6 PVOIL faces high competition in the market
a total capacity of nearly 1 million m3.
PVOIL exploits the advantage of being the The warehouse system is unevenly
first to use a non-cash petrol payment distributed, not suitable for the business
10 10
solution by scanning QR codes. (PVOIL needs, and has excessive capacity that might
Easy Program) go to waste
Opportunities Threats
The gas and oil industry is forecasted to
The market became more competitive because
1 maintain a high growth rate, possibly from 1
more businesses entered the market.
5% to 6% per year.
3 The government has issued a roadmap to 3 PVOIL does not have the opportunity to build
completely replace A92 gasoline with E5 new gas stations, especially in big cities due
biofuel from 2018. to the continuous increase in the real estate
6
market
PVOIL has the opportunity to comply with The real estate market is increasing,
7 Government regulations in the field of bio- 7 suggesting a slim opportunity to build new
petroleum business. gas stations
By 2022, the demand for bio-oil is estimated The end of the COVID-19 pandemic cannot
7
advertising, setting a convenience store, option of self-service or using available service point for car
washing, oil changing, etc. in the petrol stations to grow its business.
Primary Implications from EFE Matrix (Opportunity, Threat)
Appendix 2 suggests that there could be a lot of opportunities for PVOIL to grow its business such
as equitization, growth scaling… However, PVOIL has to face risks such as petroleum distribution,
decreased consumption.
F. STRATEGY PLANNING
1. SWOT Matrix
SO Strategies
1 Increasing production capacity, quality and product porfolio to capture new trends (S1, O2)
2 Leading technological advance in production, customers service and management (S7, O4)
3 Capturing government supports for market penetrating and expansion (S8, O1)
4 Improving supply capacity to the domestic demand (S2, O3)
ST Strategies
1 Upgrading product quality and representation on the domestic and international market (S4, T7)
2 Maintain adequade supply across distribution to ensure the source of supply throughout the pandemic (S8, T5)
3 Seeking for land in low cost areas to expand the retail channels (S1, T3)
4 Market penetration in oversea markets would help to be benefits from oil price (S6, T2)
WO Strategies
1 Keep the price at reccommendation of government as the customer has low bargaiuing power (W7, O1)
2 Service quality advanced in order to improve customer experience quality (W3, O4)
3 Imrpove supply the storage capacity in the increasing demand situation (W4, O2)
4 Restructing the management system for effectiveness and efficiency (W5, O4)
WT Strategies
1 Develop a broad distribution and warehouse at closed distance to regular natural disaster areas to ensure the immediate
2 Penetrating on self-directed retails across low cost areas (W1, T3)
3 Improve added service at station in order to reduce cost of land in the cities (W3, R3)
4 Develop a warehouse across the regional hub to increase capacity while minimise costs (W4, T2)
SO Strategies
Market Penetration (S8, O2, O4): PVOIL may take advantage of its strong financial capacity
to develop its domestic and international distribution networks, making use of the existing petrol
stations network to install a complement chain of convenient services, introduce and promote high-
quality petroleum products.
8
Product Development (S1, S6, S7, O1, O6): PVOIL shall leverage its vast networks of
petroleum stations around the country, coupled with the market growth and the high demand of car
consumption, to develop its product that better suits newer cars
ST Strategies
Innovation (S7, S10, T1, T4): PVOIL shall take advantage of the nationwide distribution
network and PVOIL Easy program to apply innovation in non-cash payment methods, especially
during the serious epidemic situation. This will attract a large number of customers.
Development of retailing and wholesale channels (S8, S6, T1): PVOIL has a strong financial
capacity, a complete and modern infrastructure. In the petroleum market situation of more severe
competition and more entrants, development of retailing and wholesale channels is rational to increase
the sales.
WO Strategies
Market penetration (O2, O4, W4): PVOIL complies with the business ethics. It has abundant
gasoline resources taking advantage of Nghi Son refinery that still has some limitations in the petrol
stations in some areas. Therefore, PVOIL can set additional petrol stations in such areas.
Development of retailing and wholesale channels (W5, O5): PVOIL is a listed company. It
owns storages of huge capacity. Therefore, it is an opportunity to boost sales by developing retailing
and wholesale channels.
WT Strategies
Development of the retailing channel (W1, T1). The petroleum market grows. Competition
between petroleum suppliers becomes fiercer. The PVOIL’s sales volume is recorded low. This is an
opportunity for PVOIL to develop the retailing channel by opening more petrol stations.
2. Alternative Strategies
9
Alternative Strategies Objectives Advantages Disadvantages
Expand the distribution Spreads a wider coverage of
network with high-quality gas stations around the
products country and on a global scale
May incur much more
1. Market Penetration Improves branding, whch operating costs
Develop complement helps many more potential
services at petrol stations customers to be aware of the
company
Improve domestic product Creates cost synergies May involve a considerable
quality for meeting Euro 5 through utilizing current amount of time and budget to
standards resources develop a product, run
2. Product Development
Purchase high-quality Has a long-lasting partnership marketing campaigns and
petroleum from with international oil encourage new customers to
international dealers suppliers use the product
3. QSPM Matrix
The results of 3 alternative strategies in the QSPM matrix (as shown in Appendix 4) show that
the product development strategy has the highest score among the 3 alternative strategies, with 2.64
points, while market development and market penetration strategies score points. 2.22 and 2.03 points
respectively. Therefore, the product development strategy will help PVOIL grow revenue, meet
company expectations, stimulate growth, create competitive advantage, and add value to the company.
In the context of the five main symptoms and barriers listed earlier, together with the impact of the
Covid-19 pandemic, PVOIL should consider choosing a product development strategy to be an
alternative strategy in the period 2022 – 2024.
G. RECOMMENDATIONS
Given the objectives of PVOIL in the period 2022-2024 and the current competitive situation,
to boost sales and expand petrol stations, product development will be a strategic priority. This
strategy will address the main barrier by differentiating products from competitors by improving
10
product quality, diversifying petroleum supply, providing complementary services at each petrol
station.
H. IMPLEMENTATION
1. Strategy Elaboration
a. Target segment
- High- and medium-income customers for new high-quality products (with Euro 5 for
higher income customers)
- Ordinary customers for current products (Euro 3 at lower price)
b. Location: nationwide
c. Partner: International petroleum dealers
d. Duration: 03 years 2021 – 2022 – 2023 with half year review basis
e. Goal: expand distribution network; introduce environmentally friendly petrol first, then
gradually shift customers to only high-quality petroleum products
2. Implementation Planning (What, How, When, Who)
12
I. PROJECTED FINANCIAL STATEMENTS AND RATIOS
Projected Income Statement (million VND) 12/31/2022 12/31/2023 12/31/2024
J.
Revenues 55,031,116 61,084,539 68,414,684
Cost of Goods Sold 52,829,872 58,641,157 65,678,096
Gross Profit 2,201,245 2,443,382 2,736,587
Operating Expenses 1,981,120 2,137,959 2,394,514
EBIT 220,124 305,423 342,073
Interest Expense (279,783) (396,359) (419,674)
EBT 499,907 701,781 761,747
Tax 99,981 140,356 152,349
Non-Recurring Events 0 0 0
Net Income 399,926 561,425 609,398
Projected Balance Sheet (million VND) 12/31/2022 12/31/2023 12/31/2024
Assets
Cash and Equivalents 9,802,575 10,399,227 11,025,154
Accounts Receivable 5,151,133 5,690,776 6,279,477
Inventory 1,918,873 2,119,898 2,339,198
Other Current Assets 163,626 180,768 199,468
Total Current Assets 17,036,208 18,390,669 19,843,297
Property Plant & Equipment 3,354,616 3,354,616 3,354,616
Goodwill 9,107 9,107 9,107
Intangibles 1,528,347 1,528,347 1,528,347
Other Long-Term Assets 837,733 837,733 837,733
Total Assets 22,766,010 24,120,471 25,573,099
Liabilities
Accounts Payable 8,307,641 9,177,966 10,127,411
Other Current Liabilities 3,316,052 3,316,052 3,316,052
Total Current Liabilities 11,623,693 12,494,018 13,443,462
Long-Term Debt 251,287 251,287 251,287
Other Long-Term Liabilities 29,730 29,730 29,730
Total Liabilities 11,904,711 12,775,035 13,724,480
Equity
Common Stock 10,342,295 10,342,295 10,342,295
Retained Earnings (659,492) (298,817) 69,681
Treasury Stock 0 0 0
Paid in Capital & Other 1,178,496 1,301,958 1,436,643
Total Equity 10,861,299 11,345,436 11,848,619
14
REFERENCE
Hallencreutz, J. and Parmler, J., 2021. Important drivers for customer satisfaction–from product focus
to image and service quality. Total quality management & business excellence, 32(5-6), pp.501-510.
Ministry of Industry and Trade (2021). Vietnam's petroleum import and export situation in 2020.
Retrieved from http://asemconnectvietnam.gov.vn/default.aspx?ZID1=66&ID8=104288&ID1=1
Phuc Khang. (2021). Tiêu thụ xăng dầu sụt giảm, tồn kho cao do ảnh hưởng của đại dịch Covid 19.
Trích dẫn từ http://baokiemtoannhanuoc.vn/kinh-doanh/tieu-thu-xang-dau-sut-giam-ton-kho-cao-do-
anh-huong-cua-dai-dich-covid-19-150446
PVN. (2021). Petro Vietnam: khó khan không chỉ từ dịch bệnh covid -19. Trích dẫn từ
https://www.pvtrans.com/blog/tin-hoat-ong-dau-khi-12/post/petrovietnam-kho-khan-khong-chi-tu-
dich-benh-covid-19-4885
Thanh Nien Online (2021). Vietnam spends nearly 8,200 billion VND per month to import gasoline.
Retrieved from https://thanhnien.vn/viet-nam-chi-gan-8-200-ti-dong-moi-thang-de-nhap-khau-xang-
dau-post1101979.html https://thanhnien.vn/viet-nam-chi-gan-8-200-ti-dong-moi-thang-de-nhap-khau-
xang-dau-post1101979.html
The Ministry of Industry and Trade (MOIT) (2021). Information on petrol and oil management on
October 26, 2021. Retrieved from https://moit.gov.vn/tin-tuc/thong-bao/thong-tin-dieu-hanh-xang-
dau-ngay-26-10-2021.html
Vietnam Oil Corporation – JSC (2021). The sharp increase in petroleum imports puts pressure on
inflation. Retrieved from https://www.PVOIL.com.vn/truyen-thong/tin-lien-quan/nhap-khau-xang-
dau-tang-manh-gay-suc-ep-lam-phat
15
APPENDIX
Key components of a Mission Statement
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employee
1. IFE Matrix
16
Weaknesses Weight Rating Weighted Score
1 Sales in retail channels compared to total sales are still low. 0.08 2 0.16
Although appearing in all provinces and cities across the country,
2 the coverage of PVOIL's petrol stations is still limited in some 0.02 1 0.02
distant areas
Most of PVOIL's petrol stations have not been utilized for potential
3 commercial services, such as advertising, convenience stores, car 0.05 2 0.10
washes, etc.
The network of gas stations is not evenly distributed and is not
4 0.02 1 0.02
suitable for business needs
PVOIL has a rather cumbersome organizational structure compared
5 0.01 1 0.01
to its capacity
6 PVOIL faces high competition in the market 0.03 1 0.03
Most of the PVOIL stations only do business by selling petroleum,
7 but lack other services such as selling fast food, coffee, garage 0.05 2 0.10
leasing, etc.
Current market share of PVOIL currently belongs to a rather smaller
8 market. Therefore, PVOIL is only leading in the small market for oil 0.05 2 0.10
and gas
PVOIL has a cumbersome management system and an inappropriate
9 0.05 2 0.10
organizational model
The warehouse system is unevenly distributed, not suitable for the
10 0.05 2 0.10
business needs, and has excessive capacity that might go to waste
2. EFE Matrix
17
Threats Weight Rating Weighted Score
The market became more competitive because more businesses
1 0.05 3 0.15
entered the market.
Oil prices are unpredictable because of the influence of external
2 0.05 3 0.15
geopolitical factors.
PVOIL does not have the opportunity to build new gas stations,
3 especially in big cities due to the continuous increase in the real 0.05 3 0.15
estate market
Petrol demand decreases due to travel restrictions due to
4 0.03 2 0.06
prolonged epidemic
PVOIL has to compete with foreign petroleum suppliers entering
5 0.03 1 0.03
the Vietnam market and who also operates in the retail channel.
Due to geopolitical factors, it is impossible to predict the movement
6 0.05 3 0.15
of world oil prices
The real estate market is increasing, suggesting a slim opportunity
7 0.05 3 0.15
to build new gas stations
The end of the COVID-19 pandemic cannot be predicted.
8 0.08 4 0.32
Therefore, this affects PVOIL's business strategy and revenue
9 PVOIL faces increasingly fierce competition in the industry 0.05 3 0.15
Fraud in petroleum business is a pressing problem in Vietnam's
10 0.08 4 0.32
petroleum market
Total EFE Score 1.00 3.11
3. CPM Matrix
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.05 1 0.05 3 0.15 1 0.05
Market Penetration 0.10 2 0.20 4 0.40 2 0.20
Customer Service 0.10 2 0.20 4 0.40 1 0.10
Store Locations 0.15 3 0.45 4 0.60 2 0.30
R&D 0.10 4 0.40 2 0.20 2 0.20
Employee Dedication 0.05 3 0.15 3 0.15 2 0.10
Financial Profit 0.10 1 0.10 4 0.40 2 0.20
Customer Loyalty 0.05 2 0.10 4 0.20 2 0.10
Market Share 0.10 3 0.30 4 0.40 2 0.20
Product Quality 0.10 3 0.30 4 0.40 3 0.30
Top Management 0.05 2 0.10 2 0.10 1 0.05
Price Competitiveness 0.05 3 0.15 3 0.15 3 0.15
Totals 1.00 2.50 3.55 1.95
4. QSPM Matrix
18
Market Penetration Market Development Product Development
1 Sales in retail channels compared to total sales are still low. 0.08 3 0.24 3 0.24 2 0.16
Although appearing in all provinces and cities across the
2 country, the coverage of PVOIL's petrol stations is still limited in 0.02 3 0.06 2 0.04 3 0.06
some distant areas
Most of PVOIL's petrol stations have not been utilized for
3 potential commercial services, such as advertising, convenience 0.05 0 0.00 0 0.00 0 0.00
stores, car washes, etc.
6 PVOIL faces high competition in the market 0.03 0 0.00 0 0.00 0 0.00
19
Market Penetration Market Development Product Development
20
5. Space Matrix
FP
Conservative 7.0 Aggressive
5.0 Petrolimex
3.0
PV OIL
1.0 Thanh Le
CP IP
-7.0 -5.0 -3.0 -1.0
-1.0 1.0 3.0 5.0 7.0
-3.0
-5.0
Competitive Position (CP) Average -2.6 Industry Position (IP) Average 5.0
6. IE Matrix
21
THE IFE TOTAL WEIGHTED SCORES
Strong Weak
4.0 1.0
High
4.0
THE EFE WEIGHTED SCORES
Petroleum
Crude oil
Coteccons
export/sales
trading
Low
1.0
7. Financial Statements
a. Income Statement
Income Statement (million VND) 31/12/2019 31/12/2020 Percent Change
Revenues 79,862,454 50,028,288 -37.36%
Cost of Goods Sold 77,088,388 48,070,683 -37.64%
Gross Profit 2,774,066 1,957,604 -29.43%
Operating Expenses 2,499,432 2,328,123 -6.85%
EBIT 274,634 (370,519) -234.91%
Interest Expense (73,784) (233,152) 215.99%
EBT 348,418 (137,367) -139.43%
Tax 70,886 55,234 -22.08%
Non-Recurring Events 47,688 26,482 -44.47%
Net Income 325,221 (166,119) -151.08%
b. Balance Sheet
22
Balance Sheet (million VND) 31/12/2019 31/12/2020 Percent Change
Assets
Cash and Equivalents 8,343,380 9,455,987 13%
Accounts Receivable 9,151,675 4,905,841 -46%
Inventory 2,445,158 1,827,498 -25%
Other Current Assets 165,755 155,835 -6%
Total Current Assets 20,105,969 16,345,161 -19%
Property Plant & Equipment 3,812,983 3,354,616 -12%
Goodwill 30,273 9,107 -70%
Intangibles 1,597,419 1,528,347 -4%
Other Long-Term Assets 934,375 837,733 -10%
Total Assets 26,481,019 22,074,964 -17%
Liabilities
Accounts Payable 10,426,246 7,912,040 -24%
Other Current Liabilities 4,876,613 3,316,052 -32%
Total Current Liabilities 15,302,859 11,228,091 -27%
Long-Term Debt 313,707 251,287 -20%
Other Long-Term Liabilities 19,227 29,730 55%
Total Liabilities 15,635,793 11,509,109 -26%
Equity
Common Stock 10,342,295 10,342,295 0%
Retained Earnings (750,643) (898,817) 20%
Treasury Stock 0 0 #DIV/0! #DIV/0!
Paid in Capital & Other 1,253,573 1,122,377 -10%
Total Equity 10,845,226 10,565,855 -3%
c. EPS/EBIT Analysis
(million VND) Common Stock Financing Debt Financing
Recession Normal Boom Recession Normal Boom
EBIT 8,840 11,050 13,260 8,840 11,050 13,260
Interest 0 0 0 16,000 16,000 16,000
EBT 8,840 11,050 13,260 7,160 4,950 2,740
Taxes 1,768 2,210 2,652 1,432 990 548
EAT 7,072 8,840 10,608 5,728 3,960 2,192
# Shares 1,047,718 1,047,718 1,047,718 1,034,295 1,034,295 1,034,295
EPS (thousand VND) 6,750 8,437 10,125 (5,538) (3,829) (2,119)
23
(million VND) 100% Debt 0%
Recession Normal Boom
EBIT 8,840 11,050 13,260
Interest 0 0 0
EBT 8,840 11,050 13,260
Taxes 1,768 2,210 2,652
EAT 7,072 8,840 10,608
# Shares 1,047,718 1,047,718 1,047,718
EPS (thousand VND) 6,750 8,437 10,125
d. Company Evaluation
24