(Solution) Banking Academy of Vietnam International School of Business
Added on 2021-01-07
12 Pages5144 Words138 Views
FinanceLanguages and CultureEconomics
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Banking Academy of VietnamInternational School of BusinessBUSINESS AND BUSINESS ENVIROMENTTeacher:Vu Thi Kim ChiStudent: Nguyen Minh TrangClass: F13C
Hanoi, 05/01/2021
A. IntroductionHoa Phat is a leading industrial manufacturing group in Vietnam. Starting from a companyspecializing in trading construction machines since August 1992, Hoa Phat in turn expandedinto other fields such as furniture, steel pipes, construction steel, refrigeration, real estate andagriculture. Hoa Phat officially listed shares on the Vietnamese stock market with the stockcode HPG. In 2007, Hoa Phat officially listed shares on the Vietnamese stock market with thestock code HPG. Currently, Hoa Phat Group has 11 member companies of about 20,000employees, operating across the country and 01 office in Singapore. Steel production is thecore business that accounts for over 80% of the Group's revenue and profit. For many years,Hoa Phat was recognized as a National Brand, in the Top 50 largest and most effectiveenterprises in Vietnam; Top 10 largest private companies in Vietnam, Top 50 most valuablebrands in Vietnam ... With the business philosophy of "Harmony with Development", HoaPhat spends a budget of tens of billions of VND per year to fulfill its responsibilities tocorporate society with the community (HPG, 2020). Hoa Phat has applied PESTLE andSWOT well in business. Then give suggestions about the company's strengths andweaknesses, thereby reducing the company's weaknesses and threats occurring now and inthe future. That is clearly shown in the report below. I. PESTLE 1. Political * Positive - Stable politics: Political stability, opening up the economy, increased strengthen cooperation and exchangewith other countries in the region to facilitate good conditions for HPG to expand businesscooperation with partners foreign. Specifically, the amount of Hoa Phat goods imported fromAustralia this year is estimated at 700 million USD, an increase of 2.2 times compared to2019. With this turnover value, Hoa Phat becomes the largest Vietnamese customer ofAustralia (Ha Khanh, 2020). - Tax concessions: Steel production planning is an open plan Government policy to encourage investment instages: steel refining from ore, production of billets and production of special steel. HungYen province where HPG is headquartered has many policies to support HPG by exemptingcorporate income tax in the first 2 years since the company made a profit, exempted frompaying land rent for 6 years (since 2003), reducing % of payable tax amount for the next 4years, the tax incentive to pay is 25 (while other companies have to pay 28%) (DeterminantsInfluencing Liquidity of Listed Steel Firms in Vietnam, 2019).* Negative3
- Lax regulations on trademark rightsSanctions against regulations on trademark infringement in Vietnam are still lax, enterprisesface a high risk of trademark infringement. The director of An Phat General Steel Joint StockCompany had the act of forging 53 steel pipes of Hoa Phat brand with a total volume of morethan 1,110 kg, which was a trademark owned by Hoa Phat Group Joint Stock Company andwas approved by Department intellectual property issues national registration certificates ofprotected trademarks in Vietnam for the purpose of making a profit (Hanoi People’sProcuracy, 2019). Hoa Phat is the main business affected by this behavior, causing thebrand's reputation to drop sharply in the Vietnamese consumer market.- Policy has not been developed to protect the steel industry:Steel industry many countries in the world are protected by the State, because steel isconsidered as the most important material in the construction of infrastructure for thecountry's development. But Vietnam has not yet developed a mechanism and policy toprotect the Vietnamese steel industry, it is difficult for Vietnamese steel enterprises tocompete with foreign enterprises due to the long history of development of the foreign steelindustry, with technical skills modern art... (Statement of Purpose, 2020).2. Economical * Negative - The market has many fluctuationsThe financial market in Vietnam has many fluctuations. In case HPG prepares investmentprojects and intends to finance these projects through capital mobilization plan in the stockmarket, HPG will find it difficult to mobilize capital to implement the project whenfluctuating. The steel industry market in 2019 has not yet come out of an unstable periodbecause raw steel prices remain unpredictable, product growth and consumption are only4.4% and 6.4% compared to 2018. , well below the double-digit growth of 14.9% and 20.9%in 2018 (VSA, 2019).- Weakness in freight transportVietnam's transport and technical infrastructure is still weak, and the transshipment of goodsby enterprises is time consuming and costly. In 2018, iron ore prices fluctuate in the range of65 USD/ ton, in 2019, it has soared to about 85 USD/ ton, even up to 90 USD/ ton,corresponding to an increase of about 30-35%. The price increase makes the input cost ofsteel soar because to make 1 ton of steel, Hoa Phat needs 1.6 tons of iron ore, equivalent to anadditional input cost of about 800,000 dong/ ton of steel (VSA, 2019).- Exchange rate fluctuations greatly affect the companyHPG participates in importing billets, steel plates, and sheets for the production of steel pipes,furniture and spare parts, so there is a fluctuation in the price will affect the process ofsecuring raw materials for production and business processes. HPG member companiesparticipate as distribution agents for foreign firms such as HP Equipment Parts Co., Ltd. todistribute products of Mikasa construction machines, Vito concrete mixers ... so whenexchange rate fluctuations will affect the sales and sales of member companies in particularand the Group in general (ONLINE, 2021).4
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