Tài liệu Improving the competitiveness of construction steel products of vietnam steel corporation in the period 2018 2022

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRẦN TUẤN DŨNG IMPROVING THE COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION IN THE PERIOD 2018-2022 NÂNG CAO NĂNG LỰC CẠNH TRANH ĐỐI VỚI CÁC SẢN PHẨM THÉP XÂY DỰNG CỦA TỔNG CÔNG TY THÉP VIỆT NAM TRONG GIAI ĐOẠN 2018-2022 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRẦN TUẤN DŨNG IMPROVING THE COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION IN THE PERIOD 2018-2022 NÂNG CAO NĂNG LỰC CẠNH TRANH ĐỐI VỚI CÁC SẢN PHẨM THÉP XÂY DỰNG CỦA TỔNG CÔNG TY THÉP VIỆT NAM TRONG GIAI ĐOẠN 2018-2022 Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. PHẠM VĂN HỒNG HÀ NỘI - 2019 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article. The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration. Date………………………….. Author Trần Tuấn Dũng ACKNOWLEDGEMENT The topic " Improving the competitiveness of construction steel products of Vietnam steel corporation in the period 2018-2022" is the content chosen by the author to study and make a graduation thesis after two years learning a master's program in business administration organized by Hanoi School of Business and Management (HSB) - Hanoi National University. First of all, I would like to express my sincere thanks to the faculty leaders, teachers who have devotedly taught in the course of studying. In particular, I sincerely thank Associate Prof. Dr. Hoang Dinh Phi helped me to gain valuable knowledge about the subject of Planning and Strategic Management and Technology and Innovation Management. I sincerely thank Dr. Pham Van Hong was very devoted to caring, guiding and instructing me in the process of implementing the graduation thesis. I also sincerely thank the staff of Vietnam Steel Corporation (VNSTEEL) for their help in providing information and giving favorable conditions for me to complete my research. Finally, I would like to thank my family and friends of the 13th MBA class who have always been with me, encouraging me to complete this course and thesis. Along with the help from many sides, author has also made great efforts to complete the thesis in the best way but due to certain limitations of knowledge, time, and information, the thesis certainly does not avoid limitations. I look forward to receiving sympathy, contribution and supplementation from teachers and readers to make the topic more complete. Sincerely thanks ! Date………………………….. CONTENTS ABBREVIATION ...........................................................................................................i LIST OF TABLES, FIGURES .................................................................................... ii TITLE CHAPTER ........................................................................................................ 1 1. RATIONALE ............................................................................................................. 1 2. LITERATURE REVIEW ......................................................................................... 2 3. AIMS OF RESEARCH ............................................................................................. 3 4. OBJECTS OF RESEARCH ..................................................................................... 4 5. SCOPE OF THE STUDY ......................................................................................... 4 6. RESEARCH METHODOLOGY ............................................................................. 4 7. THESIS STRUCTURE ............................................................................................. 6 CHAPTER I: BASIS THEORY ON COMPETITION AND PRODUCT COMPETITIVENESS .................................................................................................. 7 1.1. BASIS THEORY ON COMPETITION AND COMPETITIVENESS ............. 7 1.1.1 Concept of competition ........................................................................................ 7 1.1.2 Concept of competitiveness .................................................................................. 8 1.2. CRITERIA FOR EVALUATING COMPETITIVE RESULT OF PRODUCT ... 10 1.2.1. Market ................................................................................................................ 10 1.2.2. Market share ...................................................................................................... 11 1.2.3. Profit ................................................................................................................... 11 1.3. BASIC FACTORS OF PRODUCT COMPETITIVENESS ............................ 13 1.3..1. Technology ........................................................................................................ 13 1.3.2. Product price ...................................................................................................... 13 1.3.3. Distribution system ............................................................................................ 14 1.3.4. Promotion ........................................................................................................... 15 1.3.5. Financial capacity .............................................................................................. 16 1.3.6 Human resources ................................................................................................ 17 1.3.7. Management system .......................................................................................... 18 1.4. EXTERNAL FACTORS AFFECT PRODUCT COMPETITIVENESS ........ 19 1.4.1. Factors of macre environment ......................................................................... 20 1.4.2. Factors of industry environment ...................................................................... 21 CHAPTER 2: CURRENT SITUATION OF COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION ......................................................................................................... 23 2.1. OVERVIEW OF VIETNAM STEEL CORPORATION ................................. 23 2.1.1 General introduction .......................................................................................... 23 2.1.2. Business results of VNSTEEL 2015-2017 ........................................................ 29 2.2. THE CURRENT COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION. ........................................ 32 2.2.1. Situation of criteria to evaluate the competitive results of construction steel products of Vietnam Steel Corporation .................................................................... 32 2.2.1.1. Market ............................................................................................................. 32 2.2.1.2. Market share ................................................................................................... 33 2.2.1.3. Profit ................................................................................................................ 37 2.2.2. Current situation of basic factors affecting the competitiveness of VNSTEEL’s construction steel products .................................................................. 39 2.2.2.1. Technology ...................................................................................................... 39 2.2.2.2. Product price ................................................................................................... 43 2.2.2.3. Distribution system ......................................................................................... 47 2.2.2.4 Promotion ........................................................................................................ 48 2.2.2.5 Financial capacity ............................................................................................ 52 2.2.2.6 Human resources ............................................................................................. 54 2.2.2.7 Management system ........................................................................................ 56 2.3. ASSESSING THE COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION ......................................... 57 2.3.1. Strengths ............................................................................................................. 57 2.3.2. Weaknesses and causes ..................................................................................... 59 2.4. EXTERNAL FACTORS AFFECT PRODUCT COMPETITIVENESS ........ 62 2.4.1. Factors of macro environment ......................................................................... 62 2.4.2. Factors of the industry environment ............................................................... 65 CHAPTER 3: SOME SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION. ........................................................................................................ 68 3.1. ORIENTATION TO DEVELOP VNSTEEL'S STEEL PRODUCTS IN THE COMING TIME .......................................................................................................... 68 3.2 SOME SOLUTIONS TO IMPROVE THE COMPETITIVENESS OF CONSTRUCTION STEEL PRODUCTS OF VIETNAM STEEL CORPORATION ......................................................................................................... 69 CONCLUSIONS .......................................................................................................... 72 REFERENCES ............................................................................................................ 74 ABBREVIATION Abbreviated letters / Symbols Complete phrase WSA World Steel Association VSA Vietnam Steel Association FDI Foreign Direct Investment GDP Gross Domestic Product WTO World Trade Organization AEC ASEAN Economic Community ASEAN Association of Southeast Asian Nations EU European Union TNHH Limited Liability TNHH MTV One member limited liability Company VNSTEEL Vietnam Steel Corporation LD VNSTEEL Joint-venture Companies with Vietnam Steel Corporation TISCO Thai Nguyen Iron and Steel making Joint Stock Company SSCV Southern Steel Co., Ltd - Vnsteel VTM Viet-Trung Minerals and Metallurgy Company Limited VICASA Vicasa Steel Joint Stock Company - Vnsteel Hòa Phát Hoa Phat Group Joint Stock Company POMINA Pomina Steel Joint Stock Company Vina Kyoei Vina Kyoei Steel Company Limited HRC Hot rolled coil CRC cold rolled coil SBQ Special Steel BF Blast furnace (iron making) EAF Electric arc furnace (steel making) i LIST OF TABLES, FIGURES 1. TABLES: Table 2.1. Production and Consumption of Construction steel 2015-2017 ............ 29 Table 2.2. Consolidated business results of the Corporation 2015-2017 ................ 30 Table 2.3. Business results of the Parent Corporation 2015-2017 .......................... 31 Table 2.4. Consumption of construction steel by market in 2017 ........................... 32 Table 2.4. Situation of consumption and market share ........................................... 33 Table 2.5. Situation of consumption and market share in the Northern market .. 34 Table 2.6. Situation of consumption and market share in Central market ........... 35 Table 2.7. Situation of consumption and market share in the Southern market .. 36 Table 2.8. Situation of export and market share ...................................................... 37 Table 2.9. Business results of the Corporation 2015-2017 ....................................... 38 Table 2.10. Classify production capacity by technology .......................................... 40 Table 2.11. Comparison of technical indicators of blast furnace technology ........ 41 Table 2.12. Compare technical indicators of electric furnace technology ............. 41 Table 2.13. Comparing labor productivity in iron production ............................... 42 Table 2.14. Comparing labor productivity in billet production ............................. 42 Table 2.15. Comparing labor productivity in the production of coke .................... 42 Table 2.16. Comparing labor productivity in rolling ............................................... 43 Table 2.17. Situation of selling prices of southern producers ................................. 45 Table 2.18. Customer reviews of customer care services ......................................... 49 Table 2.19. Customer survey results on sales staff ................................................... 50 Table 2.20. Some financial indicators 2015 - 2017.................................................... 52 Table 2.21. Compare financial capacity of VNSTEEL with other enterprises ..... 53 Table 2.22. Labor quality statistics of VNSTEEL 2017 ........................................... 54 Table 2.23. Import situation of billet and steel products 2015-2017....................... 65 Table 2.24. Export situation of steel products 2015-2017 ........................................ 65 Table 2.25. Apparent construction steel consumption in Vietnam 2015-2017 ...... 66 ii 2. FIGURE: Figure 1.1. Product distribution system model ......................................................... 15 Figure 1.2. Factors affect product competitiveness .................................................. 19 Figure 2.1. VNSTEEL operating areas ..................................................................... 26 Figure 2.2. Organizational structure of VNSTEEL ................................................. 27 Figure 2.3. Production and Consumption of VNSTEEL ......................................... 29 Figure 2.4. Situation of consumption and market share.......................................... 33 Figure 2.5. Situation of consumption and market share in the Northern market 34 Figure 2.6. Situation of consumption and market share in Central market .......... 35 Figure 2.7. Situation of consumption and market share in the Southern market. 36 Figure 2.8. Situation of export and market share .................................................... 37 Figure 2.9. Technology process of construction steel production ........................... 40 Figure 2.10. Situation of selling prices of northern producers ................................ 45 Figure 2.11. Situation of selling prices of southern producers ................................ 46 Figure 2.12. Distribution model of other steel producers ....................................... 47 Figure 2.13. Distribution model of VNSTEEL ......................................................... 48 iii TITLE CHAPTER 1. RATIONALE In the current period, when the globalization of the world economy is going on strongly, we all have the recognition that in all activities there must be competition, competition is not only the environment and motivation for the development of society in general, but also promote production and business, increase labor productivity, increase the efficiency of enterprises in particular. The importance of competitiveness for enterprises today should be considered in a broad framework of the environment created by the forces of globalization and technological progress, in which knowledge is the most important resource. These factors add to new challenges and opportunities for businesses and policymakers in countries. The key to success is that businesses must set strategies to take full advantage of the potential advantages that globalization, technology and competition bring. The main issue is how to create, maintain and further improve the competitiveness of products and businesses effectively. Vietnam Steel Corporation is a joint stock company operating in the steel industry including more than 40 subsidiaries and affiliated companies operating in the country, with chartered capital of VND 6,780 billion, of which 93.93% is owned by the state, 6, 07% is owned by other shareholders, the corporation model was born in the pilot program of building strong economic corporations of the Government at the beginning of in 1990. Through over 25 years of operation under the corporation model, Vietnam Steel Corporation has achieved significant results with high growth rate, increased production capacity due to intensive investment and expand production. The competitiveness of Vietnam Steel Corporation has been gradually increased significantly. However, in recent years, the participation of many FDI enterprises and the private sector in the steel industry in Vietnam has been associated with a sharp increase in new investment capacity in steel production, causing oversupply for steel products in the country more severe. By 2017, the total capacity of billet production is 12 million tons/year; the total capacity of construction steel rolling has reached over 1 12 million tons/year, while total consumption for construction steel of Vietnam in 2017 reached 9.12 million tons. Private sector competitors have rapidly grown in terms of production scale, market share and operating areas (such as Hoa Phat, Pomina in long products segment and Hoa Sen, Dong A in flat, galvanized and pipe products segment). Foreign investment projects have become increasingly active and dominate the market in both segments of long and flat products (such as POSCO Vietnam, CSVC-Sumikin, Formosa...). Competition between steelmakers is increasingly fierce. In addition, competition with imported steel has been accelerated by the impact of international integration and trade liberalization. Therefore, the opportunities for steel products of Vietnam Steel Corporation are narrowing and the operating environment is increasingly difficult for the development of the market share of Vietnam Steel Corporation. In conditions and business environment increasingly fierce competition requires the steel enterprises in the country must constantly innovate, enhance competitiveness and improve its position in the market to maintain the market share and compete not only with domestic steelmakers and also with foreign steelmakers will enter the market in the near future. Based on mentioned reasons and analyzing, the author decides to select the research topic "Improving the competitiveness of construction steel products of Vietnam Steel Corporation in the period 2018-2022". 2. LITERATURE REVIEW As working on such topic, the author has studied some researches related to improving the competitiveness of product and service. The first research was the study of “Improving the competitiveness of petroleum products of Military Petroleum Corporation” prepared by Mr. Tran Ngoc Anh class EMBA (2013). In this study, the author focused on building theoretical framework on competitiveness of petroleum products, evaluation of the competitiveness of petroleum products of the Vietnam Petroleum Corporation and proposed solutions to improve the competitiveness of products of Military Petroleum Corporation. 2 The second research was the study of “Improving the competitiveness of Vinaphone mobile telecommunication services of Yen Thanh Telecom Center” prepared by Mr. Truong Van Thai, National Economics University (2013). The author Researched framework on competitiveness of mobile telecommunication services of telecommunication enterprises, assessment of the competitive capacity of Vinaphone mobile telecommunication services of Yen Thanh Telecommunications Center and propose some solutions to improve competitive capacity of Vinaphone mobile information services of Yen Thanh Telecommunications Center. The third research was the study of "Improving the competitiveness of plastic pipe products of Dong Nai Plastic Joint Stock Company" prepared by Mr. Hoang Anh Tuan class EMBA (2014). The research has defined the theoretical framework of competitiveness of plastic pipe products of plastic companies, analyzed the current competitiveness of plastic pipe products of Dong Nai Plastic Joint Stock Company and proposes some solutions to improve competitiveness of plastic pipe products of Dong Nai Plastic Joint Stock Company to 2017. Another research was the study of "Improving the competitiveness of stainless steel products of Nhat Quang Steel Co., Ltd." prepared by Mr. Pham Cong Danh class EMBA (2016). The research has defined 5 direct factors impacting the competitiveness of stainless steel products (human resources, financial capacity, technology, management system, marketing activities) and analyzed the current competitiveness of stainless steel products Nhat Quang Steel Co., Ltd and proposes some solutions to improve competitiveness of stainless steel products of the company. The above mentioned studies have given the author more insight knowledge on such topic to start working on the thesis. 3. AIMS OF RESEARCH The overall purpose of the thesis is to analyze the competitiveness of construction steel products of Vietnam Steel Corporation on the basis of identifying the basic factors impacting the competitiveness of construction steel products of Vietnam Steel Corporation. The aims of research are following: 3 - Reviewing related theories of competitiveness to identify the basic factors impacting product competitiveness. - Evaluate the capability of basic factors impacting the competitiveness of construction steel products of Vietnam Steel Corporation. - Giving some recommendations to improve the competitiveness of construction steel products of Vietnam Steel Corporation. RESEARCH QUESTIONS: 1. What is the current competitiveness of construction steel products of Vietnam Steel Corporation? And which factors affect competitiveness? Which aspects are advantages and disadvantages? 2. What should Vietnam Steel Corporation do to maintain and improve the competitiveness of construction steel products? 4. OBJECTS OF RESEARCH Objects of research are the competitiveness of construction steel products. In this study the author focus on the product competitiveness and the basic factors affect to the competitiveness of construction steel products. 5. SCOPE OF THE STUDY - Content: Research focus on assessing current the competitiveness of construction steel products of Vietnam Steel Corporation, identifying the strengths and limitations from which to propose solutions to improve the competitiveness of construction steel products of Vietnam Steel Corporation. - Research object: Research focus on the competitiveness and the major factors affect to the competitiveness of construction steel products of Vietnam Steel Corporation. - Timeframe: + Secondary data: 2015-2017 - Location: The study focus on the case at Vietnam Steel Corporation Head Office and its subsidiaries and affiliates. 6. RESEARCH METHODOLOGY 6.1. Theoretical framework 4 In order to evaluate product competitiveness, it is necessary to evaluate comprehensively on many factors: technology, product diversity, product price, distribution system, promotion, finance, personnel, management system and marketing system, security, culture etc. However, in this thesis, the author evaluates on 7 most basic factors that affect to the competitiveness of products, including: technology, product price, distribution system, promotion activities, financial capacity, human resources, and management system. Specifically, the theoretical framework evaluates as follows: 6.2. Research process The author follows 6 steps which are described in the figure following: 5 6.3. Data collection - Secondary data: In this study, secondary data is collected from literature review on previous studies and researches related to Vietnam steel industry. In detail, the study will use reports about steel industry in Vietnam and Vnsteel’s annual reports and other reports from various agencies such as Vietnam Steel Association, World Steel Association, Business Intelligent Monitor, World Steel Dynamic, and SEAISI… - Primary data: The author collects primary data through questionnaire survey and interview (if any). 6.4. Analyzing data The author uses several methods of analysis, synthesized as follows: + Composite analysis, time series comparison (Period 2015-2017) + Cross Comparative Analysis (comparable with other steel enterprises) + Comparative analysis with the potential of Vietnam Steel Corporation. + Comprehensive analysis by problem group, target group. 7. THESIS STRUCTURE Excluding the Introduction, Conclusion and Reference, the thesis includes three chapters as below:  Chapter 1: Basis theory on competition and product competitiveness.  Chapter 2: Assessing the competitiveness of construction steel products of Vietnam Steel Corporation.  Chapter 3: Propose solutions to improve competitiveness of construction steel products of Vietnam Steel Corporation. 6 CHAPTER I: BASIS THEORY ON COMPETITION AND PRODUCT COMPETITIVENESS 1.1. BASIS THEORY ON COMPETITION AND COMPETITIVENESS 1.1.1 Concept of competition In the view of political economy research, competition is a complex socioeconomic phenomenon with many different approaches. Therefore, there are many different concepts about competition. Two American economists P.A Samuelson and W.D Nordhaus in Economics (12th edition) stated that "Competition is the rivalry between companies for achieving customers or markets." According to the Vietnam Encyclopedia [4, Vol 1] defines: "Competition in business is a rivalry activity between goods producers, between traders, businessmen in a market economy, dominated by supply-demand relations, in order to gain the most favorable production, consumption and market conditions ”. According to the Marxist-Leninist political economics textbook [Vol 1], it defines the definition: "Competition is rivalry, struggle in economic between entities involved in production - business together to win the favorable conditions in production - business, consumption of goods and services to gain the most benefits for themselves. The goal of competition is to gain the greatest benefits and profits, ensuring the existence and development of the competing participants. Through the above concepts, the author found that competition includes some basic contents: - Firstly, competition is rivalry and contests in order to win of participants. - Second, the direct purpose of competition is often a specific object such as product, project, and customer. However, the ultimate goal of all competition is to maximize the benefits of competing entities. - Thirdly, competition always takes place in a specific environment with common constraints that all participants must comply with such as market, legal regulations, and business practices. 7 - Finally, in the competition process, competing participants can use different competitive tools such as product quality and characteristics, selling price, sales art, sales service and payment tools. Thus, in the most general sense, competition in business is understood as an economic relationship in which economic entities compete to find all measures including art and tricks to achieve economic goals. In fact, it is common to dominate the market, gain customers as well as the most profitable production and market conditions, with the ultimate goal of maximizing the interests of the subject. In the field of construction steel, competition is a rivalry between steel producers to achieve business goals. Therefore, in order to compete, each business must create advantages in providing products and applying it in business. The advantages can be better product quality, lower prices, better distribution systems, compared to other manufacturing enterprises to achieve specific objectives such as profit, market share, improving its position in the market than other businesses. 1.1.2 Concept of competitiveness The concept of competitiveness was first mentioned in the US in the early 1990s. According to Aldington Report (1985): "A competitive enterprise is an enterprise that can produce products and services with outstanding quality and prices are lower than other domestic and international rivals. Competitiveness means achieving long-term benefits of businesses and the ability to secure income for employees and business owners”. In 1998, the British Ministry of Commerce and Industry defined "For businesses, competitiveness is the ability to produce the right product, determine the right price and at the right time. That means meeting customer demands with more performance and efficiency than other businesses”. According to Randall, enterprise competitiveness is the ability to gain and maintain market share with a certain level of profit. According to Hoang Dinh Phi, 2015. Lecture on management of technology and innovation “Firm’s competiveness is a degree to which a firm, under normal market conditions, can develop its capabilities to produce goods or services that can be marketed with profit” 8 From concepts on competitiveness can be understood as the ability of a company to survive in competition, implying that companies succeed by trying to rise to the top, by reducing prices, by increasing Quality of current products and services and by creating new products. Competitiveness of a company is a function of factors such as: (i) The company's own resources (such as human resources, finance and technology); (ii) Market power of the company; (iii) The company's attitude toward competitors and other economic agents; (iv) The capacity of the company to adapt to changing situations; (v) The capacity of the company to create new markets and (vi) Institutional environment, widely provided by the government, including the physical infrastructure and the quality of government policies. Thus, in fact, there are many different views about the competitiveness of enterprises on many different perspectives. However, when approaching the competitiveness of enterprises, the author found that the competitiveness of enterprises is the ability to create competitive advantages, capable of creating higher productivity and quality than competitors, dominate large market share, create high income and sustainable development. Competitiveness of enterprises covers some of the following basic contents: - In a market economy, the requirements of customers (markets) must become the standard to assess the competitiveness of enterprises. This comes from the objective that the customer's request is both a goal and a driving force for production and business. - The main factor that creates the strength in attracting customers is the strength of the business. This force must be derived from the intrinsic factor of the business, reflected in the prestige of the business. - Competitiveness of enterprises, in itself, refers to the comparison with competitors operating in the same market. In order to create a real competitive power, businesses must create comparative advantages with competitors in order to attract customers. - The competitiveness of enterprises always has a binding relationship. A business has a strong competitiveness when it meets the requirements of customers in the best way. However, in fact, it is very difficult to meet the customer's requirements because sometimes the business has the advantage of this point but is weak in some 9 other areas. Therefore, finding and assessing the strengths and weaknesses of enterprises is important in proposing solutions to improve competitiveness. Competitiveness at the enterprise level includes enterprise competitiveness and product competitiveness. In this thesis, the author only focuses on product competitiveness. A commodity product is considered to be competitive when it meets the needs of customers in terms of quality, price, and brand ... far superior to products of the same type. But the competitiveness of products is determined by the competitiveness of enterprises. There will be no competitiveness of products when the competitiveness of enterprises is low. From the above approaches, it is understandable that product competitiveness is the ability of enterprises to create, maintain and develop the advantages of products so that they can maintain and develop market, market share and profits for businesses. 1.2. CRITERIA FOR EVALUATING COMPETITIVE RESULT OF PRODUCT 1.2.1. Market Market is a category of commodity economy. The market is defined by many economists. Some consider the market a market, a place to buy and sell goods. The American Society for Scientific Management considers: "the market is a combination of forces and conditions in which buyers and sellers make decisions to transfer goods and services from sellers to buyers". There are economists who conceive: "markets and exchanges in which buyers and sellers compete with each other to determine prices of goods and services", or more simply: the market is aggregated buyer's numbers for a product or service. Recently an economist has defined: "the market is a place to buy and sell goods, is a process in which buyers and sellers of a commodity interact to determine prices and quantities of goods, and is the place where buying and selling activities are conducted in a certain time and space ". In a market economy, the market plays an important role with a central position. The market is both a goal of producers and an environment of goods production and trading activities. The market is also a place to transfer production and business activities. In the market, buyers, sellers and middlemen meet to exchange goods services. 10