Business and Business Environment A2 Environmental Analysis

10 Government policies ...................................................10 Evaluate the impacts that both macro and micro factors have upon business objective and decision-making...............................11 General evaluation ......................................12 The important of political environment..............................................13 References.....................................................14 Task 3: Demonstrate both the positive and negative impact the macro environment has on business operations The PESTLE framework In the environment business, there are a lots of factors impact directly to business operations. In addition, the development of business depends on

ASSIGMENT 2
UNIT 1 BUSINESS AND BUSINESS ENVINROMENT
A2 Environmental Analysis
Lecturer: Soumitra Chowdhury
Student name’s : Nguyen Duc Vinh Hoan
TABLE CONTENTS
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Task 3
I. The PESTEL framework …………………………………………. 3
II. The positive and negative impact the macro environment on
business operation ……………………………………………...... 5
Task 4
I. The internal and external analysis of specific organizations in oder
to strengths and weaknesses…………………………………….. 7
1. Using SWOT analysis to evaluate internal environment…... 7
2. Five forces model analysis…………………………………..... 9
II. Explain how strengths and weaknesses interrelate with external
macro factors………………………………………………………..10
1. Government policies ……………………………………………10
III. Evaluate the impacts that both macro and micro factors have upon
business objective and decision-making………………………….11
1. General evaluation ………………………………………………12
2. The important of political environment…………………………12
Conclusion……………………………………………………………13
References……………………………………………………………14
Task 3: Demonstrate both the positive and negative
impact the macro environment has on business operations
I. The PESTLE framework
 In the environment business, there are a lots of factors impact directly to business
operations. In addition, the development of business depends on many factors of
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business environment such as political, economic, sociological, technological,
legal and environments. The most of business always analyze about business
environment through PESTAL analysis before they make decision investments .
Business should needs to forecast about needs, cultural , political , social to
achieve the successful in business .
1. Political
 With a transnational company, they need to know about the government stability
of a national that they will invest in it. The government stability of a national is
very important to attract the foreign companies because these companies want
to a stability environment to ensure that they can operate in the long term.
Nowadays, the developing countries often have a lot of incentive policies to
attract FDI. In addition, the Government also come propose the tax policy
towards foreign companies.
 For example: Metro cash and carry opened the first supermarket at Viet Nam in
2002. Metro cash and carry revenue increased more than 20 times based on the
stability political of Viet Nam. In the Covid-19 pandemic, the government had
controlled very good the spread of corona virus based on the political regulation
of Viet Nam in comparison with Western countries.
2. Economic
 Economic play an important role in the development of business and it affects to
direct to the business’s revenue. The multinational companies often chose the
countries which have a good economic growth, low interest rates, stable
exchange rates. Interest rates have a big influence on capital costs and on
business expansion strategies. On the other hand, the driving of the inflation will
help company is able to maintain on stable salary cost and other cost .
 For example: Metro cash and carry entered Viet Nam in during the period of Viet
Nam’s economic growth about 6% every years. Based on this economic growth,
Metro’s revenue grew from $30 million to $650 million. The inflation rate will also
control quite good in this during time , it helps the price of production don’t impact
to customer.
3. Sociological
 The most of companies always have an evaluation about sociological because it
relates to the consumer habits, behaviors, the customer’s preference. Social
cultural factors affect to the total demand for goods and services of the business
and how business meets the needs of customers. In addition, Demographic
provides companies the information about age, population to companies can
evaluate the marketing strategies.
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 For example: Cultural of Vietnamese people go to the street market every
morning to buy foods and essential items. However, Metro cash and carry
changed the habits of Vietnamese people that is buying foods and items in the
supermarket and they succeeded.
4. Technological
 Technology is affecting to every aspects of people on over the world. Technology
always be opportunities and risks towards organization. The appearance of new
technology creates many new products to replace the traditional products with
many advance technologies to be suitable with the global trending. However, the
new technologies will make an economic pressure for organization because they
always have to rival to competitions about technologies and products. In addition,
the development of new technologies will help business reduces the production
costing but high quality. Technological influences to 2 basic factors of business
that is the competitiveness on the market and the consume products of business.
 For example: Metro cash and carry applies the new technologies in transport the
products to customers through application on the web or smartphone faster and
more convenient compare with the traditional transport.
5. Legal
 Legal factors influence very big to the business operations in every organization.
The organization have to comply the legal of government in every national that
they invest. The legal of every national is dissimilarity, it depends on a lot of
factors such as political, economic, history. However, the legal of government
often include the policy of business tax, business license to suitable with the
different industry. In addition, government also propose about the remission policy
of tax and the import tax. In contrast, the increase of the business tax will bring
many risks of profits in the organization
 For example: Metro cash and carry invested in Viet Nam will be received a policy
of business income tax and the import tax. Globalization bring to the commercial
policies which is helpful for Metro cash and carry.
6. Environmental
 The natural environment always be an important factor to the business
operations. Nowadays, air pollution is a topic of interest on over the world. In
every organization, they often evaluate a place which can response the demands
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about location, climate. Organizations need an environment that don’t be affected
too much by natural disasters. On the other hand, business should remark to the
environment resources to ensure that materials always enough for business
process.
 For example: Metro cash and carry uses the paper bags instead of the plastic
bags to reduce the decomposition of plastic. They also encourage uses many
types of materials friendly with the environment such as biological bags, stainless
steel straw.
II. The positive and negative impact the macro environment on business
operation
1. Political
 Positive: Metro Cash and Carry Viet Nam get benefit from the political
institutions of Viet Nam in the long time. The political of Viet Nam is very stable to
invest with foreign companies and Viet Nam’s government also make condition
for transnational companies, multinational companies. Metro cash and carry
overcomes barriers and difficulties to suitable with the business environment in
Viet Nam.
 Negative: Some countries have not still a stable political and civil war (Syria,
Yemen) so investors need to consider clearly about their investment if they want
to expand the market share. In addition, some national companies will make an
unfair competition with the different organization. The corruption rate will
influence negative in the competition between organizations.
2. Economic
 Positive: Viet Nam’s economic is almost growth about 6% every years and
among the most stable growth economics in the world. With a stable economic,
Viet Nam is attracting many investors on over the world through the policies of
tax. In addition, the inflation rate of Viet Nam is under control quite good based
on the management of government.
 Negative: The world economic is growing very slowly because the affection of
Covid-19 pandemic and the inflation rate increases rapid. Metro cash and carry
also affected by Covid-19 when the government ordered a blockade. On the
other hand,
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3. Social
 Positive: Metro cash and carry had successful in the habit changing of
Vietnamese people. Nowadays, Vietnamese people often go to the supermarket
than in the past because in the traditional market don’t have many kind of goods
as supermarket. Metro cash and carry creates a comfortable space for
customers than Big C and Coop Mart which is very crowded.
 Negative: In the Viet Nam countryside, Metro cash and carry can’t expanse
many supermarkets in the countryside because people still like going to
traditional market than supermarket. Traditional market is associated with culture
in the countryside and Metro will be very difficult to change the habit of people in
the countryside.
4. Technological
 Positive: The supermarket industry, the application of touch technology helps
the store maximize productivity, revenue and profit. In addition, AI is expected to
improve key points in the retail industry including customer engagement,
business intelligence, profit margins, competitiveness and innovation.
 Negative: With the development of technology, Metro cash and carry will have to
compete very fierce based on technology to suit with the trending of world.
Technology changes from day by day so organizations need to catch
opportunities and trending to head the market.
5. Environmental
 Positive: Metro cash and carry opened many supermarkets in the south of Viet
Nam where there is a mild and pleasant climate. The natural disasters affect very
little to operations business in the south of Viet Nam.
 Negative: Environmental pollution is a big issue for every business because the
increased cost of environmental protection means that the revenue will decrease.
The government are going to monitor more rigorously for each business on the
environmental protection issues.
Task 4: Determine the internal strengths and weaknesses of Metro
Cash&Carry Vietnam and explain their interrelationship with external
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macro factors. You MUST use one of the Internal Environment Analysis
models taught in the class.
I. Conduct internal and external analysis of specific organizations in
order to identify strengths and weaknesses.
1. Using SWOT analysis to evaluate internal environment
A. Strengths
 Organizational structure: Metro cash and carry was organized by structure with
other departments. The departments have a different task and function about the
general objective of business. The CEO is who manage all activities of the
business and the function of CEO solves the problems relevant to the business
operations. Assistant director have to complete their mission about manage of
production process. Administrators are created to raise the efficiency of business
through the combination between employees and companies.
 Human resources: Metro cash and carry has 5,000 employees in Viet Nam. The
employees of Metro cash and carry improve day by day based on the training
and education of companies. The employees always discuss in all matters when
they work in the group. In addition, the policies of employees always ensure that
they will be happy and comfortable in the organization.
 Physical capital: Metro cash and carry Viet Nam has many advantages about
physical capital based on the development of business in recent years. Metro
had to 19 supermarkets in Viet Nam and can expand in the next years. Metro
cash and carry also receives capital from the foreign investors.
 Financial resource: Metro cash and carry Viet Nam has a profuse financial
resources from business activities. Based on this financial come up with the
policies about prices, marketing, distribution. The financial resource is based on
the efficient business activities over the years. Metro always have a firm foothold
in the domestic market.
B. Weaknesses
 Company image: The image of Metro Viet Nam is fading in the eyes of
costumer in Viet Nam because the marketing strategies don’t attract to customer
as Vinmart or CoopMart. In addition, the tax issues of Metro in the last years
may be probably can’t create sympathy with Vietnamese people.
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 Organization structure: The leadership of organization often focus on the
development of Metro so that organization structure don’t have a stable between
departments. It makes the preparation between the departments which
disturbed in the working environment. When the companies can’t connect
between employees and different departments, it makes a big problem with
business operations.
C. Opportunities
 Human resource: Human resource department of Metro is doing very good their
mission and function in attracting the talent based on an effective recruitment
process. In addition, the employee always have a high income, employer’s
liability insurance. Metro Viet Nam create a dynamic and friendly environment for
employees.
 Population: Viet Nam has about 96,2 million people and the young population
structure is 58,5 %. It will be chance to retail industry growth up in the near
future. According to the World Bank’s forecast, household spending increases
about 10,5 % per year with a strong growth rate of the middle class. The
opportunities of Metro will be very large if they catch these opportunities.
D. Threatens
 Locations: In the retail industry, there are a lot of large organization compete
with Metro Viet Nam such as Vinmart , BigC , CoopMart . Especially , Vinmart
owns a chain of stores which are present everywhere in Viet Nam . In addition ,
grocery stores also make a large pressure in the market share of Metro in Viet
Nam .
 Services: The service plays an important in the connection between customers
and companies. The good services will make a number of loyal customers. The
improvement of services has always been a core issue of the companies with the
competitors. It depends on very much Human Resource Management
department in the companies.
2. Five forces model analysis
A. Customers
 Metro cash and carry have to be instrumental in changing the Vietnamese
habits about supermarket. However, the competition in the retail industry is
very fierce between companies, Metro cash and carry rival competitors in
every aspect. The price competition will bring for customer a best choice to
evaluate the price. In addition, the aim of Metro Viet Nam creates the
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supermarkets which can supply for customer a good quality of productions
and a competitive price.
B. Competitors
 In the market of Viet Nam , the main competitors of Metro are CoopMart,
BigC , Vinmart . Metro cash and carry was lost the head position from Vinmart
, they just ranked 8th at now . If based on the size of business may be the
largest competitors of Metro are Vinmart and CoopMart. Vinmart has an
outstanding ecosystem compared with Metro and Coopmart. However, The
planning of Metro Viet Nam will directly compete with Vinmart at supermarket
than is small stores .
C. Suppliers
 The suppliers always want their items to appear at the supermarket. The
power of suppliers includes the existence of alternative suppliers and the
concentration of suppliers. However, the quality input depends on the supplier
price with companies. At Metro cash and carry, there are over 90% of
products are made in Viet Nam, Metro supports for farmers and local
manufacturer have the quality standards to create opportunities for export.
D. Substitutes
 With the development of technology, the online retail model will be the biggest
threat with the traditional retail. The suppliers can sell their products on the
ecommerce applications and website. However, it depends on the behavior of
customer with the price and convenience of the ecommerce. The
supermarket has still a large advantage about distribution consumption of
products
E. Potential entrants
 Viet Nam has a large market and competition between organizations aren’t
high. Metro cash and carry focus on the middle segment on the market with
the different price. On the other hand, a low threat of entry makes the retail
industry less competitive and increase the potential profit for the companies in
the industry. The expected retaliation from existing competitors will be large
barriers with the potential entrants. Grocery store such as Ministop , Family
mart,7-eleven can bring many challenging for Metro cash and carry Viet
Nam .
II. Explain how strengths and weaknesses interrelate with external
macro factors
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1. Government policies
A. Trade policy
 Trade policy is government policy that is designed to impact on trade activities
such as tariffs and quotas. The goal of trade policy is adjustment the import and
export activities to achieve macroeconomic goals.
 Economic closure:
 Advantages: The government will protect the domestic production from
the competition of foreign products. All resources of the country will be
focus to develop the domestic resources.
 Disadvantages: The country will be slow the economic development by
economic closure. The products aren’t going to be exported lead to the
decreased of company revenue and development of the country.
 Economic opening:
 Advantages: The trade agreements can make a large impulse about
export to countries. It contributes the development of economic and
earning many foreign currencies.
 Disadvantages: The domestic economy will become dependent on the
foreign countries. In addition, the domestic productions have to compete
with the import productions
B. Fiscal policy
 Fiscal policy is the government's decision on public spending and taxation to
direct the economy to achieve the goals of the macro economy such as
economic growth, controlling inflation, price stabilization. Fiscal policy impacts
direct to organizations and social because two reasons:
 In the case of budget surplus, the government can use surplus money to
pay debts to help reduce interest payments and stabilize the economy in
the future. In addition, the budget surplus may be the result of cost or
expense reductions. Tax increases also help increase budget surplus.
The budget surplus reduces consumer demand and consumer goods
and slows the economy.
 In the case of budget deficit, the government have to borrow to offset the
deficit and issue of government bonds. If the budget deficit is very large,
the government will have to increase interest rate . The increased
interest rate will impact organizations and social in the interest payment.
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In addition, inflation can influence to the interest rate and income of
workers
C. Monetary policy
 Monetary policy is the policy of using the tools of credit and foreign exchange
activities to stabilize the currency, thereby stabilizing the economy and
promoting growth and development. The central bank is the body that
organizes the implementation of monetary policies. Monetary policy aims to
stabilize prices, increase GDP, and reduce unemployment
 The policy of monetary expansion: help increasing money supple and
lowering interest rate thereby the impulse production of business and
reducing the unemployment rate for worker
 The policy of monetary tightening: reduce money supply and raise
interest rate. The unemployment of worker will increase and the
production of business will go down.
 The objective of monetary policy includes stabilize of the value of money,
increasing employment and economic growth. Growth economic has always
been the object of government in shaping the economic policy of the macro
environment. On the other hand, the increasing employment will help the
government is able to control the inflation.
III. Critically evaluate the impacts that both macro and micro factors
have upon business objective and decision-making
1. General evaluations
 The government promulgate many policies for the business process after that
organizations have to base on these policies to develop the business activities.
Every years, the government always change the policies to suitable with the
domestic economic. Therefore, organizations have to obey the changing of
government policies. It will be also opportunities and risk to the organizations. If
the government propose many advantage policies for business , it will create
many benefits for the development of organization .
1. The importance of political environment
A. Government policies impact on the Economic
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 The development of organizations depends on the government policies over
every year. An advantage policy will help the business operation becomes very
smooth. Companies based on the government policies define the planning
strategy in the year. The large influence on budget of the government will
create many different policies over every year.
B. Changes in regulation
 The government policies can change the rules and regulations in business to
suit with every industry. Organizations have to change business structure to
make balance between business and regulation. Regulation is changed to
create a competition environment on the market that doesn’t greatly effect to
the government policies
C. Political stability
 The political stability brings to organizations a long-term investment. A country
doesn’t have a political stability which will not attract investors in spite of
obtaining a good policy. However, the government can interfere with the
business if they find it necessary.
D. The taxes in the business environment
 The government can build a system of the taxes to suit with the business
environment. Organization will be enjoy the tax policy if they create many jobs
and investment. The tax policy of government always tax with the unhealthy
products such as tobacco, wine. The government always encourage many FDI
organizations invest in their country by land tax exemption.
Conclusion
This report helps me understand about PESTAL and SWOT analysis in the business
environment. In addition, environment business in every country is very different and it
depends on many factors influence to micro and macro environment. Therefore, we
need to know clearly about impact the macro environment on the business operations.
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analysis
[Accessed 10 TH DECEMBER 2020].
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Lynch, W., 2020. SWOT Analysis. [Online]
Available at: https://medium.com/@warren2lynch/from-swot-to-tows-analysis-55ac394064b7
[Accessed 10th DECEMBER 2020].
STAFF, I., 2020. Macro environment. [Online]
Available at: https://www.investopedia.com/terms/m/macro-environment.asp#:~:text=A%20macro
%20environment%20is%20the,and%20monetary%20and%20fiscal%20policy.
[Accessed 6TH DECEMBER 2020].
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