Diploma in Business (PDF)

ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 32: Business Strategy (574)
Submission date 18/06/2021 Date received (1 st submission)
Re-submission date Date received (2 nd submission)
Student name NGO HOANG ANH Student ID GBH190038
Class GBH0904 Assessor name DO THACH ANH
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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand
that making a false declaration is a form of malpractice.
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Table of Contents
I. Introduction.........................................................................................................................................4
II. Identify the strategic capabilities of Binh Minh Plastic Joint Stock Company by using benchmarking,
the value chain & the value system.............................................................................................................4
1. Strategic Capabilities.......................................................................................................................4
1.1. Definition.................................................................................................................................4
1.2. The capabilities of Binh Minh Plastic Joint Stock Company.....................................................6
2. Benchmarking analysis....................................................................................................................8
3. Value chain analysis.......................................................................................................................15
3.1. Primary activities...................................................................................................................16
3.2. Support activities...................................................................................................................24
III. Carry out the strategic capability analysis by using VRIO framework............................................29
1. Strong and sustainable financial resources....................................................................................31
2. Production process........................................................................................................................32
3. Distribution network......................................................................................................................33
IV. Identify and analyze the main strengths and weaknesses that the Binh Minh Plastic Joint Stock
Company is currently having.....................................................................................................................34
1. Strengths.......................................................................................................................................34
2. Weaknesses...................................................................................................................................37
V. Inconclusion.......................................................................................................................................39
Bibliography...............................................................................................................................................40

I. Introduction
The market constantly appears new companies and changes business trends which making
businesses always have to innovate and create. A business strategy is built up not only for the
purpose of capturing markets and customers, but also to be competitive with competitors.To
build an appropriate business strategy, businesses need to understand the company's resources
to assign and allocate human and financial resources to implement specific tactics. Therefore,
this report will focus on analyzing the internal factors of Binh Minh Plastic Joint Stock
Company. The data and information will be updated from reliable sources and divided into 3
main parts: Outline of strategic capabilities, Analysis of strategic capabilities and Analysis of
strengths and weaknesses.
II. Identify the strategic capabilities of Binh Minh Plastic Joint Stock
Company by using benchmarking, the value chain & the value
system
1. Strategic Capabilities
1.1. Definition
Strategic capability includes resources and competences that a firm utilises to contribute to
its long-term survival and compete in its business environment. It can therefore constitute a
firm’s strengths and weaknesses, and be a source of competitive advantage or disadvantage
over its rivals (Whittington et al., 2017).
Certain assets are used by the organization's activities and processes. These assets are
referred to as resources. Within the organization, these resources can be created. These
generated resources are unique to each organization. Otherwise, they could be
obtained from external suppliers in the resource markets. Also resources can be broadly

classified as tangible and intangible. The physical assets that an organization possesses
are called tangible resources. The physical resources, human resources and final
resources come under this category. The intellectual resources, technological resources
and the organizational reputation together form the intangible resources (Prachi, 2015).
An organization should posses some good characteristics in order to have the ability to
compete with other organizations in the market place. These characteristics form the
competencies of the organization. For any organization to survive in an industry
competencies are must. At the same time competencies cannot be useful to an
organization when they stand alone. It is when they combine together in the right
combination that they help the organization to attain competitive advant age (Prachi,
2015).
There are various definitions of dynamic capabilities from various authors, each with their
own point of view. Teece et al. define dynamic capabilities as a firm's ability to integrate,
build, and reconfigure internal and external competencies in response to rapidly changing
environments. Processes within the firm that use resources – specifically, processes to
integrate, reconfigure, gain, and release resources – to match or even create market change
(Teece, Pisano and Shuen, 1997). In a nutshell, dynamic capability is an organization's ability
to renew and recreate its strategic capabilities in response to changing environments.
Threshold capabilities are the minimum capabilities needed for the organisation to be able
to compete in a given market .
An organization’s resources which are critical in imparting it with competitive advantage are
called distinctive capabilities. When the capabilities originate from an attribute which other
firms do not have then they form an organization’s distinctive capabilities. In addition to
having a distinctive characteristic it should also be sustainable and appropriable (Prachi,
2015). Competitive advantage is explained by the distinctiveness of capabilities:
Distinctive resources are indispensible element of organization to create competitive
advantage. These unique resources should be hard to imitate or obtain. A powerful

brand can be seen as a distinctive resource for organization as it cannot be imitated
easily (Johnson, Scholes and Whittington, 2008). A powerful brand related to a long
term development of culture and history of organization.
Distinctive competences are the ways of doing things that are unique to that
organization and effectively utilized so as to be valuable to customers and difficult for
competitors to obtain or imitate.
Core competences refers to a firm’s know-how that allows it to integrate its skills, activities
and resources to offer its best services, processes and products to customers, thus
obtaining competitive advantage and potentially, can be extended and developed as
markets change or new opportunities (Enginoğlu and Arikan, 2016).
1.2. The capabilities of Binh Minh Plastic Joint Stock Company
Resources Competences
Number of employees over
1.400 people 47% of employees have vocational
certificates and higher
Dynamic
capabilities
Production infrastructure BMP owns 2 representative offices
and 4 large production factories.
BMP's infrastructure capacity is
relatively solid

Product quality - BMP's products are always improved
and more diverse than the market.
- In 2018, BMP's products were
awarded the Asia - Pacific
International Quality Award
- BMP is awarded the National Quality
Gold Award in 2017.
New management system - The system is optimized for
information technology.
- BMP uses the overall management
of enterprises ERP - the system
selected based on the technology
platform of Oracle EBS solution, one
of the leading solutions in the world
today.
- BMP uses intelligent reporting
system to serve leaders.
Threshold
capabilities
Administration apparatus BMP is run by talented
administrators. Headed by the
General Director - Nguyen Hoang
Ngan, who was voted as the Typical
Young Enterprise of Ho Chi Minh City
in 2002, was repeatedly selected by
the Ministry of Industry and Trade as
an emulation soldier, and in 2012 was
awarded a certificate of merit by the
Prime Minister.

Organizational structure BMP has a full range of functional
departments to facilitate
development, work processing, and
maximum efficiency in production.
Distinctive
capabilities
Production process - BMP became the first and only
manufacturer in Vietnam certified by
WRAS to successfully apply the latest
additive system.
- BMP has introduced 13 automatic
manipulators into the production
process (robots) on the injection
molding machine and is expected to
add 50 robots in 2021.
Long-standing brand reputation - BMP has been operating for over 40
years.
- BMP achieved many great
achievements such as the Labor
Medal, the Independence Medal, ...
- For the 5th time in a row, BMP was
honored in the List of 50 Leading
Brands organized by Forbes Vietnam.
Strong and sustainable financial
resources.
- Revenue and profit increase steadily
every year.
- Low loan rate.
- High payment capacity.
- Financial resources focus more on
development investment.
(BMP, 2021).

2. Benchmarking analysis
With a fast development speed, the plastic industry is being considered as a dynamic
industry in the Vietnamese economy. That growth comes from a large, potential market.
According to statistics of the Vietnam Plastics Association (VPA), currently the plastic
industry is close to 4.000 enterprises, of which the number of enterprises in the
construction plastic segment is smaller but generates the highest revenue scale – as of 2019
(FPT Securities, 2019). Typically, the two leading enterprises in revenue in the construction
plastic segment are Binh Minh Plastic Joint Stock Company (BMP) and Tien Phong Plastic
Joint Stock Company (NTP). The following benchmarking table will show the different BMP
and NTP metrics for Finance, Technology, Product and Human Resources of the two
companies, thereby identifying the business strategies and organizational activities that the
two companies have. this company is using. All data is collected from Annual report 2020
and official website of these two companies.
Key performance metrics BMP NTP
Financial
Market share
28% of the country's market
share.
43% of the South.
5% of the North.
Nearly 30% of the country's
market share.
Nearly 60% of the North.
Revenue 4.686 billion VND 4.393 billion VND
Profit 523 billion VND 435,8 billion VND
Capital
structure
12.7% debt 37.5% debt
ROA 17.8% 11.45%
ROE 21.2% 17.27%

Inventory 497 billion VND 430 billion VND
Distributors 1900 distribution stores 16309 distribution stores
Production
technology
Unique
technology
application
The only company today that
manufactures a full range of PVC-
U pipes and fittings that do not
contain heavy metal components,
are environmentally friendly and
safe for consumers
The only company currently
producing HDPE pipes with
a diameter of 2000mm and
MPVC pipes according to
Australian technology
Factory capacity 4 factories 3 factories
Total capacity 160.000 tons/year 190.000 tons/year
Product
Production 110.574 tons/year 91.014 tons/year
Product
portfolio
PVC U, HDPE, PPR, Ribbed tubing,
adhesives and rubber seals,
aerosols and protective gear
UPVC, MPVC, PP-R, HDPE,
PP-PE, engineering control
box
Product price
(PVC-U pipe) 28.000 VND 32.000 VND
Unit product
cost
25.595 VND/ton 34.037 VND/ton
Human
Resources
Number of
employees
1407 employees 1500 employees
Average salary
18.65 million VND
/employee/month
13.7 million VND
/employee/month

Training hours 11.45 hours/employee 10.55 hours/employee
(BMPlasco, 2020) (Tien Phong Plastic,2020).
In terms of finance, comparative factors are given to consider the growth of the two
companies. It can be seen that both BMP and NTP have the same national market share in
manufactured plastics – nearly 30%. BMP is mainly concentrated in the South market with
43%, while NTP is dominating the North market with 60%. However, the difference in the
strategy of the two companies is that BMP is expanding and penetrating the Northern
market and has achieved a market share of about 5%, while NTP has not yet made any
move to enter the South market. However, VDSC found that BMP's counterpart in the
North, NTP, proved more flexible in exploiting this market. Although this customer group is
characterized by bringing less profit and more cash flow risk to building material
manufacturers in general, VDSC still believes that this is a consumption market that will help
developers plastic pipe production in general, especially in the context of falling incomes
due to COVID, and expected government spending and driving demand for construction (Ta,
2020).
Therefore, NTP remains a major barrier for BMP's entry into the northern market. However,
in 2020, BMP has had good revenue growth to be able to expand the market. BMP's
revenue in 2020 is up to 4,686 billion VND, slightly higher than NTP's about 293 billion VND.
According to analysts, although businesses have to go through the difficulties of Covid-19 in
2020, BMP and NTP still belong to companies with growing profits. However, the profit of
BMP is much higher than that of NTP. This is thanks to BMP's efforts, including an active
strategy of manufacturing plastic household products. When social distancing caused
production to stall, BMP achieved positive revenue growth. This is thanks to an increase in
the market for home repair materials, agencies, etc. When people gather at home and
have time to repair housing projects, this will be a trend for BMP's consumer and
construction plastic product business strategy.

Figure 1. Profit of BMP (2020)
Figure 2. Profit of NTP (2020)
The capital structure of BMP and NTP is clearly different. This shows that BMP is not too
dependent on creditors, banks, etc. In recent years, interest expense has also increased
quite high. That's why NTP's revenue is close to BMP's but profit is much lower. This can
also be a strategy to contribute to the financial safety of NTP, because the company has
switched to finance mainly with its own capital, instead of using borrowed capital as before
(Le, 2020).
BMP's ROA indicator shows that for every 1 dong of assets used in the production and
business process in 2020, it will generate 0.178 dong of after-tax profit. Compared to the
NTP of 0.1145, the BMP shows better investment with greater returns and better asset

utilization efficiency. BMP's ROE is 0.212 in 2020, much higher than NTP's 0.1727. This
shows that BMP generates greater returns for business owners, helping the company to
attract more investment capital.
Inventory turnover represents the efficiency of inventory management. At this point, NTP
has a bit better governance than BMP. Inventory of BMP and NTP is relatively equal. It
proves that both businesses have a strategy to import inventory during the time when input
material prices are low. Both companies' input materials can be stored for a long time. This
is considered an effective hedging material input price strategy of both companies at this
time. Thanks to that, BMP won the award of Top 50 Most Effective Business Companies in
Vietnam. This award is based on measuring business results of enterprises for 3 consecutive
years as the foundation, based on 03 growth indicators: sales, return on equity (ROE) and
only earnings per share (EPS) (VBCSD, 2020).
Regarding the distribution system, BMP has far fewer distribution stores than NTP. This
shows that the business strategies of the two companies are different. BMP focuses on
selling to large partner companies, besides, NTP focuses on retail distribution systems. In
addition, BMP restructured the distribution system to reduce errors in the commercial
stage. Reducing the number of distributors makes it more efficient to manage these
customers, particularly debt. This is believed to be one of the factors contributing to BMP's
high cash flow from operations (Ta, 2020). This is also a point affecting the profit results of
the two companies in the past year.
Regarding technology of BMP and NTP, both companies have a strategy of investing in
many technologies. The special feature of these two large enterprises is that each company
has its own monopoly on modern technology in Vietnam. BMP is the only company that
currently manufactures all PVC-U pipes and fittings that are free of heavy metals,
environmentally friendly and safe for consumers, while NTP is the only company that
produces PVC-U pipes and fittings can produce 2000mm diameter HDPE pipes and MPVC
pipes according to Australian technology. It is easy to see that the investment in production
technology is focused a lot by both businesses, but BMP's proprietary technology shows

that the company is looking for environmentally friendly technological innovations. This is
also BMP's eco-friendly plastic production strategy in recent years. In terms of production
capacity, both BMP and NTP have relatively good production capacity compared to the
market. Accelerating the construction of production plants helps the two companies reduce
imported input material.
Regarding the products of the two companies, the product portfolio diversity is considered
to be similar. BMP and NTP are doing well in product diversification, which improves the
weaknesses of both companies quite well. Product output in 2020 of BMP is about 10,000
tons more than NTP. Proving that BMP has come up with appropriate business strategies,
besides also thanks to the good quality of BMP's products. The PVC pipe offered for
benchmarking is the product that accounts for the highest proportion of sales of BMP and
NTP. With the higher production cost per product, this is the reason why NTP's PVC pipe has
a higher price than BMP's. This shows that BMP's production process has been managed in
the most streamlined way to bring to the market low-cost products with high quality.
Figure 3. BMP's product revenue structure in 2018 (FPT
Securities, 2019) Figure 4. NTP's product revenue structure in 2018 (FPT
Securities, 2019)
BMP and NTP are both companies that attract the attention of many employees because of
their excellent incentives and experience development opportunities for employees.

Because the operating scale of the two companies is similar, the number of employees is
also equal. However, BMP has more advantages in human resource management. With a
higher average salary, BMP shows more attractiveness to employees, which creates more
motivation for employees and is a competitive point with competitors. BMP also adjusted
its human resource management policy better than competitors when receiving the trust of
employees with the achievement of TOP 50 companies with the happiest workplace in
Vietnam and Top 50 best places to work in Asia by HR Asia Magazine 2019 (VBCSD, 2020).
3. Value chain analysis
Michael Porter explains that a value chain is a collection of activities that are performed by
a company to create value for its customers. Value Creation creates added value which
leads to competitive advantage. Ultimately, added value also creates a higher profitability
for an organization (Porter, 2008). Value chain analysis can be used to formulate
competitive strategies, understand the sources of competitive advantage, and identify or
develop the linkages and interrelationships between activities that create value (Prescott,
2001). The approach of Porter's Value Chain Analysis is its strength. The central principle of
the Porter's Value Chain Analysis is systems and activities with customers, rather than
departments and accounting expense categories. It connects systems and activities and
demonstrates how this affects costs and profit. As a result, the Value Chain Analysis
identifies the sources of value and losses in the organization.

Firgue 1. Value chain map
3.1. Primary activities
3.1.1. Inbound logistics
BMP is a company that needs to import a lot of raw materials. Natural gas, crude oil, coal,
and other raw materials are used in the production of plastic. However, the majority of the
company's plastic pellets are imported from foreign markets such as Boruoge, Sabic, Basell
from ASEAN, Korea, and Saudi Arabia,… However, the company still has some domestic
plastic resin suppliers such as TPC VINA, ACVN, HOA THINH Trading - Production and
Service Co.,Ltd,... These raw material suppliers are all reputable and long-term BMP
partners, assisting the company in ensuring the quality of the materials supplied. Plastic
particles are transported to Vietnam to be used in the production of goods. BMP is
promoting the strategy of importing raw materials in large quantities because this item
can be stored for a long time and its prices are low at the moment.
BMP currently has 4 plastic factories with a total capacity of more than 160,000 tons/year,
which are located in major domestic markets. Investing in manufacturing plants helps BMP
reduce input material costs. In addition, thanks to the ability to forecast on material input

price which includes react accordingly parsing currency exchange rate and the use of
currency futures contract. BMP is proactive in quality assurance production processes and
produces a variety of products to meet the needs of customers.
(BMPlasco, 2020).
3.1.2. Operations
As of 2021, BMP holds 28% of the country's plastic pipe market share according to SCG
Research (Vu, 2021). Currently, the company has 4 production factories in Ho Chi Minh City,
Binh Duong, Long An and Hung Yen which meet the needs of supplying goods to the
national market, promoting research and development, diversifying product types and sizes.
BMP's factory focuses on manufacturing plastic pipes and associated protective equipment.
The imported plastic particles will be fed into the extrusion factory to form a tube, which
will then be vacuum cooled, letter printed, pipe drawn, and expanded. All kinds of Binh
Minh Plastic products are only manufactured from genuine raw materials and use a small
percentage of recycled materials from waste products in the production process at the
company, not using recycled materials purchased from outside. This contributes to
minimizing the generation of scrap during the production process at BMP. Besides, the
company also sells imported products that do not need to be manufactured such as PVC-U
pipe fittings,...
Currently, BMP uses QMS, EMS, ISO 9001, ISO 14001, Lean and 5S in production to
improve product and service productivity and quality, shorten production and service cycle
times, reduce tangible and intangible waste, and improve equipment and space efficiency .
Furthermore, it improves the ability to respond quickly. Thanks to more modern and high-
tech factories and production lines than domestic competitors, BMP has achieved great
advantages in shaping high-quality plastic products for consumers.
(BMPlasco, 2020).

Figure 5. BMP's plastic pipe production process (Le, 2019)
3.1.3. Outbound logistics
Outbound logistics are a very critical part of BMP’s value chain. BMP's large factories are
located in convenient locations, making it easy for BMP to stockpile warehouses and
distribute to major domestic markets. The product distribution system of Binh Minh Plastics
is increasingly expanding. By the end of 2020, the Company has nearly 1.900 distribution
stores nationwide, ensuring quick and timely supply of goods at the request of customers.

Through the distribution network of SCG, some products of Binh Minh Plastics have initially
penetrated firmly into Southeast Asian countries. Expanding the product distribution
market helps BMP achieve many benefits not only in terms of corporate brand but also in
financial profit. In 2020, BMP has a revenue of up to 4,686 billion VND, of which revenue
from distributors accounts for nearly 10% (BMPlasco, 2020).
Figure 6. Distribution system of BMP (BMPlasco, 2020)

3.1.4. Sales and Marketing
Currently, domestic plastic enterprises have stopped increasing discounts for distributors,
but BMP still decided to increase discount prices so that the company's distributors have a
better competitive advantage than rivals. In terms of product pricing strategy, BMP still
maintains stable prices for customers to ensure high quality products at reasonable prices
for Vietnamese consumers.
As of now, the marketing strategies of Vietnamese plastic enterprises in general are still
very poor, with little investment, as evidenced by BMP. However, in recent years, BMP has
attempted to overcome this weakness. The marketing department division has
strengthened the distribution system's services, monitoring, evaluation, and development,
resulting in improved regulatory compliance, reduced internal competition, and increased
business efficiency. In 2020, the company's revenue and output increased significantly. The
activities that BMP participates in are for social development, besides the corporate brand
is also better known. In 2020, activities can be mentioned such as Relief for the Central
People, Humanitarian Blood Donation, Binh Minh Sunny program, Truong Sa - Stone
Contribution, etc. The above strategies have helped BMP retain old customers, attract and
penetrate new and potential customers for the company (BMPlasco, 2020).
BMP also has an official website for business partners and customers to update information
about the company's history, activities and products. The company also established an
official Youtube channel with 200 followers to post interview videos, company
introductions, product introductions, etc. Moreover, in order to enhance brand promotion
and official information on the social networking site Facebook, BMP officially operates the
Fanpage: BINH MINH PLASTIC with the link: www.facebook.com/binhminhplastic . BMP’s
fanpage page has the function of posting pictures of events, community activities and
receiving direct feedback from all individuals interested in the brand of Binh Minh Plastic.
Currently, with relevant and meaningful postings, BMP's fanpage has attracted nearly 3.000
followers (BMPlasco, 2021).

Figure 7. BMP's official website
Figure 8. BMP's official Youtube channel

Figure 9. BMP's facebook fanpage
3.1.5. Service
BMP's Marketing department values and prioritizes customer service and complaint
resolution. BMP is dedicated to improving the customer service experience. As a result, the
policies for customers, such as the Payment Policy, Shipping Policy, Warranty Policy, and
Return Policy, have been fully updated. The information on BMP's website and at
distribution agents is updated on a regular basis.
Furthermore, BMP is concerned with customers' experiences when purchasing and using
plastic products. BMP creates videos to guide customers to use the product that are posted
on the business's media pages. Because plastic products must have their own requirements
for transporting, storing, and using them, they must be accompanied by Buying Instructions
and Transporting - Storage Instructions. Thanks to dedicated service to customers, BMP has

always received the trust of the majority of the consumer market to help affirm its position.
BMP's hotline is also public so that customers can call for advice and support. As a result,
BMP is the leading enterprise in the industry for 22 consecutive years, winning the title of
High Quality Vietnamese Goods voted by consumers (BMPlasco, 2021).
Figure 10. BMP's product instruction video

Figure 11. BMP Plastic Pipe User Manual
3.2. Support activities
3.2.1. Firm infrastructure covid 19
BMP is headquartered in Ho Chi Minh City - Vietnam, and has domestic production and
business locations across the country. The main infrastructure includes 1 office in Hau Giang
and 4 large manufacturing plants. Besides, there are nearly 2000 distribution stores in all
provinces and cities of Vietnam.
The organizational structure of BMP is built according to the functional organizational
structure model. General Meeting of Shareholders, Board of Directors and subcommittees
to supervise the General Director. Followed by departments such as Human Resources,
Supply Chain, Finance - Administration, Engineering, ... . BMP has a comprehensive set of
functional departments to help the company grow. This enables managers and employees
to write to the best of their abilities, based on their knowledge of the department. This

enables BMP to maximize the working capacity of the entire company's personnel
(BMPlasco, 2020).
Năm 2020, gặp khó khăn bởi Covid-19
Figure 12. Organizational structure (BMPlasco, 2021)
3.2.2. Human Resource Management
A sustainable business is one that is more resilient and responsible to its employees, which
is considered an important element of the Company's strategy. In 2020, the number of
official employees of BMP is 1,407 people.
BMP's recruitment process is also very strict to ensure that the quality of new employees is
always at a good level. To be able to officially work and become an employee at BMP,
candidates need to go through 3 rounds of selection. Round 1, after receiving the
candidate's application information, the company will conduct the screening of applications,
any unsuitable application will not be answered. Round 2, the company will conduct a

preliminary interview to filter candidates again, in this round candidates will be tested on
professional knowledge. Round 3 is a face-to-face interview round and there is a great
chance to become a member of BMP .
BMP has focused on building a team of high-quality personnel to meet the requirements of
qualifications and experience in the working process. Employees at BMP regularly
participate in professional and intensive training programs according to international
standards. With the training content researched by the company closely with the actual
work in each different position, employees have the opportunity to improve their
professional qualifications, strengthen their knowledge and improve their competitiveness.
Apprenticeship programs and job rotation policies are opportunities for promotion to future
levels that BMP brings to employees who fully meet both capacity and professional ethics.
The company has a clear, public, transparent and continuously improving salary, bonus and
welfare regime to ensure it is suitable for the market as well as stabilizing the lives of
employees. The legitimate rights and interests of employees are always respected, which is
reflected in the Company's development of the Regulation on democracy, the collective
labor agreement, and the Regulation on anti-sexual harassment.
In addition, BMP always focuses on building a specific corporate culture with high internal
consensus. The working environment at BMP is considered friendly and professional, which
is the pride of all employees. To manage employees effectively, BMP also applies
management models such as ERP, BI, E-ordering, E-invoice, CRM, SCM,... Thanks to the
application of these models, labor productivity in 2020 increased by 6% compared to 2019,
it was significantly improved.
(BMPlasco, 2020).

Figure 13. Average labor productivity chart (BMPlasco, 2020)
3.2.3. Tech development
Technology and product quality both are important components of BMP’s production strategy.
Currently, Binh Minh is continuing to invest and operate the factory entirely on modern
equipment lines and European technology. The automatic Silo feeding system was put into use
at the factory, which shortened the operating time, saved labor, packaging costs, and reduced
material loss in production. As a manufacturing company, the use of energy has not been much
limited, however, BMP is prioritizing investment in production equipment using power-saving
servo technology. Human resources in 2020 increased slightly compared to previous years -
reduced employee growth rate from 12.4% to 2.3%, this is the result of the application of
modern technology - Robots in production to help arrange reasonable labor arrangement.

Figure 14. BMP's personnel chart 2016 – 2020
The company continues to promote investment in technology, equipment automation, process
automation. According to data in 2020, BMP achieved 23% of the planned plan. Thanks to
innovative technology, products diversify and stabilize quality. BMP can also organize a variety
of field improvement activities to fully meet the needs of the market, cut costs and realize
company goals. Currently, BMP is in the process of optimizing management by information
technology (BMPlasco, 2020).
No Targets Unit Plan of 2020 Perform
A B C D E
BILLION VND %
1 EQUIPMENT
Include
Billion VND 210 46 22
A Investments from the previous year carry
over to 2020
Billion VND 44 33 75
B Investment plan for 2020 (Including
goals that do not need to be prioritized)
Billion VND 166 13 10
2 MOLDS Billion VND 28 7 25
Total Billion VND 238 53 23
Figure 15. Invest in technology equipment (BMPlasco, 2020)

3.2.4. Procurement
Good quality products are made from good quality raw materials. At BMP, quality is a very
important focus and therefore there is an entire Supply Chain Management team dedicated
to this task to analyze and evaluate qualified suppliers. BMP holds only those suppliers who
can guarantee more than the minimum quality requirements. Raw materials are purchased
from a number of countries such as ASEAN, Korea, Saudi Arabia, ... . BMP's long-term
partners include: SCG Chemicals, Battenfeld cicinnati, Borouge, etc. Most of the above
suppliers are affiliated with Nawaplastic Industries Co., Ltd - this company is the largest
shareholder of BMP. BMP. Therefore, policies on buying and selling input materials are also
supported by suppliers in bargaining (BMPlasco, 2018).
Figure 16. BMP's Shareholder structure (Stockbiz, 2021)
III. Carry out the strategic capability analysis by using VRIO
framework

BMP has become one of the leading and reputable plastic enterprises in Vietnam's plastic
industry. The BMP clearly states that the important point for businesses is to build trust with
customers and differentiate competitive advantages from competitors in the market.
Strategic
Capabilities VALUE RARITY INIMITABILITY ORGANIZATION Strategic
advantage
Strong and
sustainable
financial resources
Yes Yes Yes Yes
Sustainable
Competitive
Advantage
Production
process
Yes Yes Yes Yes
Sustainable
Competitive
Advantage
Distribution
network
Yes Yes Yes Yes
Sustainable
Competitive
Advantage
Product quality Yes No No No Competitive
parity
Long-standing
brand reputation
Yes No No No Competitive
parity
New management
system
Yes No No No Competitive
parity

1. Strong and sustainable financial resources
BMP's financial management is considered prudent and has maintained a safe financial
structure in recent years. BMP is competitively equipped with a good financial background:
a strong cash position along with almost no debt use in its financial structure, strong cash
flow from operations creating more room, where necessary, for increasing discounts to
boost sales in a slowing sales environment. BMP is currently unburdened with interest
expenses, while strong cash flow from operations and a strong cash position are generating
a strong source of interest income (DONGA Securities, 2020).
Value: Strong financial potential not only creates competitive value but also is the
foundation for developing other values. Good finance helps the company to promote
production and develop new and diversified products. Sustainable financial potential brings
great benefits to owners, investors, and employees. Thanks to strong finance, even in the
face of the Covid-19 pandemic, BMP is still able to pay dividends to shareholders and pay
salaries to employees (Vu, 2021).
Rarity: In the current construction plastic production segment of Vietnam, there are very
few enterprises with such large and sustainable financial assessment as BMP. To have such
financial capacity requires other businesses to have a unique business strategy and manage
a reasonable business financial index.
Imitability: In fact, it is difficult for other companies to develop sustainable financial
resources like BMP. Because the current plastic industry is a very competitive market. The
potential like BMP is formed from the main factors such as: long-time large shareholders
and partners, large market share, long-standing brand, advanced invested technology, ...
Organization: BMP is implementing the ERP system of Enterprise Resource Management.
This system helps the company to have fast, consistent and transparent information,
control accurate data and support quick and flexible decision making. Besides, BMP's Board
of Directors is also divided into sub-committees such as Human Resources, Investor
Relations, Development Strategy and Risk Control. As a result, BMP can better manage
financial resources.

2. Production process
BMP is a plastic manufacturing company that focuses on applying environment friendly
technology, investing in modern machinery and equipment, and having modern technology
of the most advanced European generation. In 2020, BMP will become the first and only
manufacturer in Vietnam certified by WRAS to successfully apply the latest additive system,
which does not contain heavy metals to produce PVC-U plastic pipes and fittings, the
product is absolutely safe for drinking and domestic water (Le, 2019).
Value: BMP is constantly learning modern technologies to improve the production level of
products. Advanced production processes create high quality products in the Vietnamese
market. With the opportunity to use good quality domestic products, this is a great value
that BMP's production process brings to consumers and customers. After applying this
technology, BMP's revenue and output in 2020 both grew well.
Rarity: There is no company in Vietnam plastic market has green and environmentally
friendly technology like BMP. To achieve WRAS APPROVED MATERIAL certification, BMP
had to pass the rigorous review procedures and processes required by WRAS. The
company's products must fully meet all the strict criteria of testing on water quality effects
according to BS 6920 standard conducted at reputable testing organizations in the UK and
directly designated followed by WRAS. Therefore, up to now, only BMP has the potential to
use this unique technology (Nhu, 2019).
Imitability: The production technology that BMP is applying requires businesses to have a
large investment. This is difficult for most companies that do not have a solid financial
background to invest in. Nguyen Hoang Ngan - CEO of BMP also shared that investing in
lead-free plastic pipes is a clean production trend that both improves quality and protects
the environment, but the company will have to accept to increase production costs so
much. And this is the point that makes businesses with less capacity than BMP unable to
apply this technology (Nhu, 2019).

Organization: BMP is organized to capture value from this capability. The engineering
department is trained to enhance experience using advanced manufacturing processes.
Team leaders or managers are trained to monitor and manage the performance of
employees and machines. Send employees to participate in training courses at home and
abroad to improve their expertise to meet the development needs of the Company. With an
average training time about 17 hours/person/year, BMP's employees directly involved in
production can easily access new technology.
3. Distribution network
Products manufacturing enterprises want to bring products to reach target customers
through distribution channels. The distribution channel system is always of special interest
to BMP. Currently, BMP owns 1,900 distribution stores nationwide, and this is an impressive
number compared to other businesses.
Value: Having a quality distribution system creates great value for BMP and customers.
Retail customers will easily access BMP's products through the distribution channel without
having to go through the steps of placing orders directly at the corporation. BMP also
derives great value from its strong distribution network. Specifically, BMP has a revenue of
up to 4,686 billion VND, of which revenue from distributors accounts for nearly 10% in
2020.
Rarity: In the field of construction plastic production, only a few typical companies such as
BMP, NTP,... have a strong distribution system. Because of its long-standing reputation and
good product quality. BMP is considered to be the second largest distribution system in
plastic pipe enterprises (after NTP) and the largest in the South (FPT Securities, 2019).
Imitability: BMP has a budget every year to train distributors on sales skills. The company
almost spares no money for that because BMP understands that the smooth or inefficient
operation of the distribution system completely depends on people, namely the sales staff,

sales supervisors. In 2020, BMP discounts payments to distributors up to VND 123,740
billion and selling costs of the distribution system up to VND 318,046 billion.
Organization: In 2020, BMP focused on promoting support for the distribution system has
become more stable, and competition within the distribution system has been reduced. To
do this, BMP has established a Marketing Business Division that has strengthened the care,
monitoring, evaluation and development of the distribution system, so compliance with
regulations has been better, thereby improving efficiency. The company's business through
revenue and output has grown well in 2020.
(BMPlasco, 2020).
IV. Identify and analyze the main strengths and weaknesses that the
Binh Minh Plastic Joint Stock Company is currently having.
Strength Weakness
Strong human resources Risks from the internal management system
Technology is promote to modernize Slow technology development
Large market share Marketing has not been given much attention
Good financial indicators Management human resources are always
overloaded
1. Strengths
BMP's human resources are regarded as one of the company's greatest assets. To ensure
adequate human resources to meet the growing demands for technical, production, and
business qualifications, the company has increased its recruitment and training efforts, as
well as implemented policies encouraging employees to train themselves to improve their
own qualifications. According to the evidences, the number of employees with college

degrees and vocational certificates increased significantly in 2017. It demonstrates that the
company has increased its resources to participate in direct production, which contributes
to the company's goal of improving modern production (BMPlasco, 2018).
Figure 17. Graph of personnel structure by qualification (BMPlasco, 2020)
The company uses cutting-edge technology to manufacture PVC pipes. BMP factories' large
production scale results in high production efficiency. Binh Minh is currently investing in and
operating the factory entirely on modern equipment lines and European technology. The
factory implemented an automatic Silo feeding system, which reduced operation time and
labor costs while also lowering material loss in production. In addition, BMP also have the
latest additive system, which does not contain heavy metals to produce PVC-U plastic pipes
and fittings, the product is absolutely safe for drinking and domestic water. This is a
competitive advantage and a source of strength for the company (BMPlasco, 2020).
BMP currently holds a high domestic market share (60% of the domestic PVC pipe market
share). This is one of the factors that determine the success of the company. Besides, the

local distribution network is widespread in the company's target market. BMP's distribution
system has more than 1.900 stores across the country. To have such a market share, it is
also necessary to rely on BMP's brand, which has a leading position, and products are
positioned in the high-quality segment, in line with international standards. This easily helps
the company to accomplish the set goals (BMPlasco, 2020).
Despite dealing with risks such as Covid-19, BMP collected a very good financial position in
2020. BMP's revenue, profit, and so on have all steadily increased from 2018 to the present.
As of the end of 2020, BMP's cash position and bank deposits are 1,163.6 billion (38.7% of
total assets), while it is almost unlevered with some short-term debt of 55 ,3 billion. Cash
flow from operating activities remained strong, as evidenced by the low cash conversion
cycle of 66 days compared to the 2015-19 average of 83 days (Tuan, 2020). Hedging
strategy on inventory risk was also performed very well by BMP in the last year, so that the
company's business is also more favorable. This is a significant and stable strength that will
allow the company to promote production investment and expand market share in the
future (BMPlasco, 2020).

Figure 18. Economic results of BMP (BMPlasco, 2020)
2. Weaknesses
Weaknesses from the internal management system of the enterprise: The company's
management system is maintained in accordance with ISO 9001: 2015 and ISO 14001: 2015.
Besides, the company has deployed more advanced management software such as: ERP;
CRM ; HRM,… and gradually integrated into the existing management system. However,
these integration activities can cause disturbances affecting operational results if the new
systems are not suitable for the existing system (or the existing system has not been
improved to conform to the new system)

Currently, BMP's marketing activities do not have many outstanding points. Communication
methods through social networking platforms or modern methods have not been focused
on by the company. This is the point that BMP needs to improve to be able to increase
brand recognition to more customers, especially at a time when BMP is having a strategy to
expand market share in the North.
Although BMP is investing heavily in technology, but the speed of investment to increase
production capacity and increase warehouse space has not yet met the growing demand of
the market. Currently, the world has developed technology much further than BMP.
Especially the plastic resin production processes are not yet usable and BMP still has to
import from foreign markets. This is the common weakness of the whole Vietnam plastic
industry.
The organizational structure with too many departments is sometimes a weakness of BMP,
especially during the Covid-19 epidemic. Currently, BMP's employees mainly do "Work from
home", but the company still pays enough salary for employees. This poses a challenge for
the company's financial management, when BMP has to pay more than VND 70 billion in
expenses for employees.
(BMPlasco, 2020).

V. Inconclusion
In the final analysis, this report has provided the theory of strategic capabilities, from which to
use to find the capabilities of Binh Minh Plastic Joint Stock Company. Next, after using
Benchmarking to compare financial factors, technology, products, and human resources
between BMP and NTP, the competitive points of BMP compared to the competition were
clearly shown. To find out the internal elements of BMP, Value chain theory and model were
applied in this report. The production activities, internal management of BMP are studied and
included with specific data. The report analyzes BMP's Value chain through primary activities
and support activities. After applying theories to analyze the internals of an organization, the
strengths and weaknesses that BMP is facing are clearly pointed out. Thereby, it is found that
the analysis of internal factors of the company has a great influence on shaping and developing
business strategy.

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