Phu Thai Holdings’ blueprint for sustained profit growth

A special pitching

During a recent event hosted by JCI Hanoi, Pham Dinh Doan, Chairman of Phu Thai Holdings, showcased his company’s decisive investment strategy. When a young entrepreneur asked if he could approach him for investment in the future, he immediately initiated a "Shark Tank" style pitch session in the middle of the discussion.

The entrepreneur presented a project aimed at providing high-quality workforce solutions to the maritime industry, targeting foreign clients. Doan, looking directly at the young businessman, asked if he could make the company a leader in the field.

Although the business had not officially launched, the entrepreneur confidently asserted that he was currently the top trusted individual in Vietnam’s maritime sector and pledged to bring his company to the forefront.

“If that’s the case, I’ll invest,” Doan responded.

While the outcome of this journey remains uncertain, the young entrepreneur successfully passed the first round with the head of Phu Thai Holdings, which has nearly 50 subsidiaries across various industries. This rapid investment decision reflects Doan’s SALLE investment principle.

The SALLE principle comprises five key criteria.

Firstly, the business must have a marketable product or service (Sellable).

Secondly, the business should not be significantly impacted by artificial intelligence or face insurmountable competition from industry giants. (Avoid)

Thirdly, the business should aim to be a leader in its field, or at least among the top three. (Leading)

Fourthly, the business should have the potential to leave a lasting impact. (Legacy)

Finally, the business must demonstrate increasing profitability, with each year surpassing the last. (Efficiency)

Defining ‘5-star’ talent in Phu Thai Holdings

The pitching session also highlights Doan’s experience in selecting top talent, based on his “5-star” human framework. This model evaluates individuals on five aspects: ability, ethics, ambition, teamwork, and commitment.

Ambition is particularly emphasized. For Doan, regardless of whether a business operates in a major market or a niche, it must strive to reach the top three in its field. This drive not only earns the respect and trust of colleagues but also propels the company toward its goals.

A “5-star” individual must also possess strong teamwork skills, the ability to collaborate effectively with partners, and the capacity to integrate into society. Leaders must be able to unite those involved in the company’s mission, guiding them towards achieving the organization's overarching objectives.

Commitment is another critical trait, encompassing dedication to the organization, the team, the company’s goals, and personal aspirations. According to Doan, individuals who shy away from challenges or avoid responsibility can never become reliable and successful leaders.

Phu Thai Holdings' success is further driven by its adherence to key principles: respecting people; fostering cooperation, efficiency, and sincerity; creating a workplace environment that nurtures talent and achievement; promoting innovation; and complying with the law to ensure sustainable value creation.

Anticipating trends

Phu Thai Holdings has also excelled in staying ahead of market trends, with a strong emphasis on research and development (R&D) to keep up with industry shifts. Investment in R&D is a crucial factor in the success of many companies, with Samsung serving as a prime example, allocating over 9 per cent of its revenue to product research and development.

“You can’t chart the right course without investing in research or consulting on where to go in the coming years,” Doan explained.

In addition to R&D, Phu Thai Holdings has aggressively pursued digital transformation. The company’s approach to digitalization is proactive, reshaping its strategy to align with new trends rather than merely reacting to market changes.

Digital transformation at Phu Thai Holdings is being implemented across all business sectors, from internal management to customer service and expanding distribution and sales channels.

Notably, instead of allocating budgets to purchase external digital solutions, Phu Thai invests in digital transformation companies within its ecosystem, utilizing their products across its operations.

To stay ahead, Phu Thai Holdings closely monitors both domestic and international trends, continuously adjusting its strategy toward greater globalization. Collaboration with strong partners and top talents is another critical element of the company’s approach.

“That’s a smart way to go. Business is like a marathon; you need to run with someone who can keep up and pass the baton to you,” Doan said.

Phu Thai Holdings currently has over 10 foreign joint ventures, with four partners being billionaires from large multinational corporations.

Facing the crisis head-on

The global economic downturn and the crisis caused by the Covid-19 pandemic have forced many companies to exit the market, suffer losses, or merely survive.

Phu Thai Holdings has continued to grow, with annual revenue increasing by nearly 170 per cent from 2020, reaching over VND10 trillion in 2022.

Doan attributes this success to three main factors.

Firstly, investing in core strengths. This includes focusing on areas where the company has a competitive edge, ensuring flexibility in supply chains, distribution systems, and customer relationships.

Secondly, enhancing internal capabilities by continuous improvement through training and development, alongside a commitment to becoming a one-stop total service solution provider.

Thirdly, implementing robust risk management practices to navigate and mitigate potential threats.