Downloaded from ascelibrary.org by CITY UNIVERSITY OF HONG KONG on 07/03/13. Copyright ASCE. For personal use only; all rights reserved.
Strengths, Weaknesses, Opportunities, and Threats for Architectural, Engineering, and Construction Firms: Case Study of Vietnam Florence Yean Yng Ling1; Vu Min Chau Pham2; and To Phuong Hoang3 Abstract: After Vietnam became a member of the World Trade Organization, Vietnamese architectural, engineering, and construction A/E/C ﬁrms face competition from not only their domestic competitors but also from foreign A/E/C ﬁrms. As most Vietnamese ﬁrms are used to operating under a protected setting, they may face difﬁculties competing in the globalized environment. This study undertakes a strengths, weaknesses, opportunities, and threats SWOT analysis of Vietnamese A/E/C ﬁrms, investigates how they respond to opportunities and threats, and recommends how foreign A/E/C ﬁrms operating in Vietnam could respond. Using semistructured interview questions, face-to-face interviews were conducted with Vietnamese and foreign A/E/C ﬁrms. The SWOT analysis reveals that Vietnamese A/E/C ﬁrms are lagging behind foreign ﬁrms in ﬁnancial capacity, experience in complex projects, knowledge in advanced design and construction technology, and management ability. Industry practitioners from outside Vietnam who are contemplating entering the Vietnamese market can leverage on Vietnamese ﬁrms’ strengths by forming joint ventures with strong and reputable private Vietnamese ﬁrms. To improve their competitive advantage, it is recommended that foreign A/E/C ﬁrms offer superior products and services and familiarize themselves with local culture and regulations. They should be mindful of corruption and set up surveillance systems to curb wasteful spending. DOI: 10.1061/ ASCE CO.1943-7862.0000069 CE Database subject headings: Vietnam; International factors; Engineering ﬁrms; Construction companies; Agriculture; Economic factors; Case reports.
On January 11, 2007, Vietnam became the 150th member country of the World Trade Organization WTO . WTO member countries cannot normally discriminate between their trading partners, and imported and locally produced goods and services should be treated equally following the “national treatment” principle of giving others the same treatment as one’s own nationals World Trade Organization WTO 2005 . As a WTO member, Vietnam must allow WTO member-country’s architectural, engineering, and construction A/E/C ﬁrms to operate in its construction industry, albeit in a controlled way. Vietnam attracted a record of US$20 billion foreign direct investment FDI , rising by 70% over the previous year Blume Associate Professor, Dept. of Building, National Univ. of Singapore, 4 Architecture Dr., Singapore 117566, Singapore corresponding author . E-mail: email@example.com 2 Quantity Surveyor, KPK Quantity Surveyors Pte Ltd., 865 Mountbatten Rd., 07-01, Singapore 437844, Singapore. E-mail: mizchou@ yahoo.com.sg 3 Quantity Surveyor, Rider Levett Bucknall Pte Ltd., 150 Beach Rd., 09-01, Singapore 189720, Singapore. E-mail: firstname.lastname@example.org Note. This manuscript was submitted on July 24, 2008; approved on March 24, 2009; published online on March 26, 2009. Discussion period open until March 1, 2010; separate discussions must be submitted for individual papers. This paper is part of the Journal of Construction Engineering and Management, Vol. 135, No. 10, October 1, 2009. ©ASCE, ISSN 0733-9364/2009/10-1105–1113/$25.00. 1
2007 . Foreign A/E/C ﬁrms are expected to enter Vietnam to develop the facilities which are needed by foreign investors. In line with Vietnam’s WTO commitments to open up its construction market to foreign businesses, Vietnamese A/E/C ﬁrms now face intense competition from foreign entrants, when hitherto most of them are only used to operating under a protected environment. Vietnam’s construction market is attractive to foreign A/E/C ﬁrms because...
References: Asia Times Online. 2006 . “Vietnam’s WTO challenges.” Hanoi: ATO, http://www.atimes.com/atimes/Southeast_Asia/ HF06Ae03.html Feb. 10, 2008 . Badger, W. W., and Mulligan, D. E. 1995 . “Rationale and beneﬁts associated with international alliances.” J. Constr. Eng. Manage., 121 1 , 100–111. Blume, C. 2007 . “Vietnam attracts record amount of foreign direct investment.” Washington D.C.: Voice of America, http:// www.voanews.com/english/archive/2007-12/2007-12-31-voa7.cfm? CFID 16008504&CFTOKEN 97455739 July 23, 2008 . Central Intelligence Agency CIA . 2008 . “The world factbook: Vietnam.” Washington D.C.: CIA, http://www.cia.gov/library/ publications/the-world-factbook/print/vm.html May 26, 2008 . Cheah, C. Y. J., Kang, J., and Chew, D. A. S. 2007 . “Strategic analysis of large local construction ﬁrms in China.” Constr. Manage. Econom., 25, 25–38. Dapice, D. O. 2003 . Vietnam’s economy: Success story or weird dualism? A SWOT analysis, Harvard University Press, Cambridge, Mass. Dunning, J. H. 1988 . “The eclectic paradigm of international production: A restatement and some possible extensions.” J. Int. Business Stud., 19 1 , 1–31. Hymer, S. H. 1976 . The international operation of national ﬁrms: A study of direct foreign investment, MIT Press, Cambridge, Mass. Kaplan, B., and Maxwell, J. A. 1994 . “Qualitative research methods for evaluating computer information systems.” Evaluating health care information systems: Methods and applications, G. Anderson, C. E. Aydin, and S. J. Jay, eds., Sage, Thousand Oaks, 45–68. Kotler, P., and Keller, K. 2006 . Marketing management, 12th Ed., Pearson Prentice Hall, Upper Saddle River, N.J. Langford, D., and Male, S. 2001 . Strategic management in construction, 2nd Ed., Blackwell Science, Oxford, U.K. Ling, F. Y. Y., Ang, A. M. H., and Lim, S. S. Y. 2007 . “Encounters between foreigners and Chinese: Perception and management of cultural differences.” Eng., Constr., Archit. Manage., 14 6 , 501–517. Ling, F. Y. Y., Ibbs, C. W., and Cuervo, J. C. 2005 . “Entry and business strategies used by international architectural, engineering and con-
struction ﬁrms in China.” Constr. Manage. Econom., 23, 509–520. Long, N. D., Ogunlana, S., Quang, T., and Lam, K. C. 2004 . “Large construction projects in developing countries: A case study from Vietnam.” Int. J. Proj. Manage., 22 7 , 553–561. Low, S. P., and Jiang, H. 2004 . “Estimation of international construction performance: Analysis at the country level.” Constr. Manage. Econom., 22, 277–289. Lubien, G. 2008 . “Construction spending analysis and forecast for Vietnam.” Global Insight, http://www.construction-int.com/categories/ vietnam-construction-market.asp Nov. 10, 2008 . Luu, T. V., Kim, S. Y., Cao, H. L., and Park, Y. M. 2008 . “Performance measurement of construction ﬁrms in developing countries.” Constr. Manage. Econom., 26, 373–386. Male, S. 1991 . “Competitive advantage in the international construction industry.” Competitive advantage in construction, S. Male and R. Stocks, eds., Butterworth-Heinemann, Stoneham, Mass., 299–335. Myers, M. D., and Avison, D. E. 2002 . “Overview of qualitative research.” Qualitative research in information systems: A reader, M. D. Myers and D. E. Avison, eds., Sage, London, 1–5. Oster, S. M. 1999 . Modern competitive analysis, 3rd Ed., Oxford University Press, Oxford, U.K. Pearce, P. 1992 . Construction marketing—A professional approach, Thomas Telford, London. Porter, M. E. 1980 . Competitive strategy: Techniques for analyzing industries and competitors, Free Press, Boston. Porter, M. E. 1999 . On competition, Harvard Business School Press, Cambridge, Mass. Posner, M. V. 1961 . “International trade and technical change.” Oxf. Econ. Pap., 13 3 , 323–341. Seymour, H. 1987 . The multinational construction industry, Croom Helm, New York. Sornarajah, M. 1992 . Law of international joint ventures, Longman’s, London. Transparency International. 2007 . “2007 corruption perceptions index.” http://www.transparency.org July 21, 2008 . Vietnam Government. 2007 . “Construction industry statistics.” Socialist Republic of Vietnam: The government website, http://www. vietnam.gov.vn July 15, 2008 . Vinaconex Corporation. 2008 . “Export destinations of Vietnamese ﬁrms.” Vietnam Construction and Import Export Corporation, http:// www.vinaconex.com.vn July 18, 2008 . Weber, A. 1929 . Theory of the location of industries, C. J. Friedrich, translator, The University of Chicago Press, Chicago. World Trade Organization WTO . 2005 . “Understanding the WTO,” WTO, Geneva, http://www.wto.org/english/thewto_e/whatis_e/tif_e/ understanding_e.pdf Jan. 13 2007 . World Trade Organization WTO . 2006 “Working party on the accession of Vietnam. Part II—Schedule of speciﬁc commitments in services.” http://docsonline.wto.org/imrd/directdoc.asp? DDFDocuments/t/wt/acc/vnm48a2.doc Feb. 10, 2008 . Xu, T., Bower, D. A., and Smith, N. J. 2005 . “Types of collaboration between foreign contractors and their Chinese partners.” Int. J. Proj. Manage., 23 1 , 45–53. Yoshino, M. Y., and Rangan, U. S. 1995 . Strategic alliances: An entrepreneurial approach to globalisation, Harvard Business School Press, Cambridge, Mass.
JOURNAL OF CONSTRUCTION ENGINEERING AND MANAGEMENT © ASCE / OCTOBER 2009 / 1113
J. Constr. Eng. Manage. 2009.135:1105-1113.
Please join StudyMode to read the full document