Business Environmental Analysis - Assignment

NATIONAL ECONOMICS UNIVERSITY
INTERNATIONAL SCHOOL OF MANAGEMENT AND ECONOMICS
HIGHER NATIONALS
BTEC HIGHER NATIONAL DIPLOMA IN BUSINESS (RQF)
Unit Code, Number and Title L/508/0485 RQF level 5 - Unit 1: Business and the Business
Environment
Semester and Academic Year Semester 2 / Academic year 2019 - 2020
Unit Assessor(s) Daniel Vanhoutte/ Dao Minh Hoang
Assignment Number and
Title
BBE A2.1: Business Environmental Analysis
(Assessment 2 of 2, Individual assignment)
Issue Date Thursday, May 21st, 2020
Submission Date 10:00 am on Monday, Jun 15th, 2020
IV Name Trinh Thi Thu Giang
IV Date May 20th, 2020
Student name Le Tuan Minh
NEU Student ID 10190569 Pearson ID
Plagiarism is a particular form of cheating. Plagiarism must be avoided at all costs and students who
break the rules, however innocently, may be penalised. It is your responsibility to ensure that you
understand correct referencing practices. As a university level student, you are expected to use
appropriate references throughout and keep carefully detailed notes of all your sources of materials for
material you have used in your work, including any material downloaded from the Internet. Please
consult the relevant unit lecturer or your course tutor if you need any further advice.
Student declaration
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.
Student(s) name(s) /
Signature LE TUAN MINH Date: 15/6/2020
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Submission format and Instructions:
This written assignment (Assessment 2 of 2) covers Learning Outcome 3&4 (LO3, LO4).
This is an individual assignment.
The submission format is in the form of a written report.
The assignment should have a cover page that includes the assignment code, number, tittle,
assessors’ names and student’s name and ID. Attach all the pages of assignment brief with your
report and leave them blank for official use.
Ensure that authenticity declaration has been signed.
Include a content sheet with a list of all headings and page numbers.
Plagiarism is unacceptable. Students must cite all sources and input the information by
paraphrasing, summarising or using direct quotes. A Referral Grade is given when Plagiarism is
identified in your work. There are no exceptions.
Your evidence/findings must be cited using Harvard Referencing Style. Please refer to Reference
guiding posted on Moodle.
This assignment should be written in a concise, formal business style using Arial 11 or Times New
Roman 12 font size and 1.5 spacing.
The word limit is 5,500 words (+/- 10%). If you exceed the word limit (excluding references and
administrative sections) your grade will be penalised.
You MUST complete and submit a hardcopy and softcopy of your work on the due dates stated
on Assignment brief. All late work is not allowed to submit. This rule is not waived under any
circumstances. The softcopy must be submitted to Turn-it-in via Moodle; the hard copy to
Assignment Box, Room 404A, D2 building.
Read ALL Instructions on this Page and review the Pass, Merit and Distinction criteria carefully.
To pass the assignment, you must achieve ALL the Pass Criteria outlined in the marking sheet. To
achieve a Merit, you must achieve ALL the Merit criteria (and therefore the Pass criteria). To
achieve a Distinction, you must achieve ALL the Distinction criteria (and therefore the Pass and
Merit criteria).
Unit Learning Outcomes:
LO3: Use contemporary examples to demonstrate both the positive and negative influence/impact the
macro environment has on business operations
LO4: Determine the internal strengths and weaknesses of specific businesses and explain their
interrelationship with external macro factors
Assessment Brief and Guidance:
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Scenario and activities:
After joining WTO in 2007, Vietnamese government simplified the policies and opened for the FDI in
banking and finance, especially banks with 100% foreign capital (Pham and Nguyen, 2020). Few years
later, the number of banks in Vietnam increased to 52 banks and 50 foreign bank branches. However, in
order to develop the quality of banking business, the project named 254, stage 1 (2011 – 2015) and
stage 2 (2016 - 2020) to re-engineer the credit system has been implemented. By improving the M&A
among banks, decreasing bad debts and reducing the lending interests to approximately 5% per year, in
2019, there were 49 Vietnamese banks and 50 foreign bank branches (State bank of Vietnam, 2020).
The high productivity of foreign banks resulted in the spill-overs to domestic ones and led to incentives in
the business quality of the domestic organizations (Girman et al, 2001, De Backer and Sleuwaegen,
2003; Thompson and Zang, 2018). In addition, the integrated process of Asean Economic Community
(AEC) also motivated Vietnamese banks to improve the competitive capability due to the free-barriers in
banking and finance in AEC.
Until January 2020, 16 Vietnamese banks have achieved the Basel II, 3 join stock commercial banks are
in Top 500 Brand Finance in the world, which are BIDV, VietinBank, and Vietcombank (Brand Finance
Banking 500, 2019). Techcombank, with other 13 Vietnamese joint stock banks, is one of the best banks
in Asian according to The Asian Banker, 2018 (AB500Rank, 2019).
Although Vietnamese banks have attained respectable results these years, the fact is that in comparison
with other countries in Asian as well as other middle-income countries in the world, they still get many
weaknesses. For instance, the number of banking account ownership for adults (above 15) in Vietnam
increased from 21.37% (2011) to only 30.86% in 2014 or the number of ATM was 24.01 per 100.000
people (World Bank, 2018). These data are both under the average number in Asian.
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Table 1. Adults with banking accounts (WB, 2018) Table 2. Adults with debit card (as % of all adults) (WB, 2018)
You have been employed as an assistant business analyst by Techcombank. Your company planned to
expand the services and improve the competitive capability so you are required to do a report to analyse
the business environment. The Board of Directors would like to know the current factors that impact
Techcombank as well as the banking industry of Vietnam. You need to produce a report to analyse and
evaluate both of positive and negative influences by clarifying the followings:
1. Applying Porter’s 5 forces to discuss the competitiveness in banking industry of Vietnam;
2. Using PESTLE to analyse the various factors of macro environment that impact upon your
organization;
3. Applying SWOT to a) evaluate the influences of macro and micro environment on the business
objectives and b) suggest some strategies/decision-making that the bank should implement in the
current business environment.
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Explanation of the command verbs:
- Discuss: Consider different aspects of a theme or topic, how they interrelate, and the extent to which they
are important.
- Apply: Put into operation or use.
Use relevant skills/knowledge/understanding appropriate to context.
- Analyse: Present the outcome of methodical and detailed examination either:
Breaking down a theme, topic or situation in order to interpret and study the interrelationships
between the parts and/ or
Of information or data to interpret and study key trends and interrelationships.
Analysis can be through activity, practice, written or verbal presentation.
- Critically Evaluate: Make a judgement taking into account different factors and using available knowledge/
experience/ evidence where the judgement is supported in depth.
- Identify: Indicate the main features or purpose of something by recognising it and/or being able to discern
and understand facts or qualities.
- Explain: To give an account of the purposes or reasons.
Source:
http://tapchitaichinh.vn/ngan-hang/su-hien-dien-cua-ngan-hang-nuoc-ngoai-va-hieu-qua-hoat-dong-cua-ngan-hang-
thuong-mai-viet-nam-318072.html
http://thitruongtaichinhtiente.vn/danh-gia-nang-luc-canh-tranh-cua-cac-ngan-hang-viet-nam-trong-boi-canh-hoi-
nhap-kinh-te-asean-23703.html
http://tapchinganhang.gov.vn/sap-xep-lai-he-thong-ngan-hang-viet-nam-trong-boi-canh-tai-co-cau.htm
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Contents
I. Introduction..................................................................................................................................6
II. Applying Porter's 5 forces method to analyze and evaluate the competition between Techcombank and
other banks in Vietnam....................................................................................................................6
Definition of Porter's 5 forces......................................................................................................6
1. The threat of new entrants:......................................................................................................6
2. Bargaining power of suppliers.................................................................................................7
3. Bargaining power of buyers.....................................................................................................7
4. Threats of substitute goods......................................................................................................8
5. Rivalry among existing competitors........................................................................................8
III. Using PESTLE to analyze the various factor of microenvironment that has an impact on Techcombank
.........................................................................................................................................................9
Political / Legal............................................................................................................................9
Economical................................................................................................................................10
Sociological...............................................................................................................................10
Technological............................................................................................................................12
IV. Applying SWOT Model..........................................................................................................13
Strengths....................................................................................................................................14
Weaknesses................................................................................................................................15
Opportunity................................................................................................................................16
Threats.......................................................................................................................................17
Interrelationship.........................................................................................................................17
Strategies for Techcombank......................................................................................................18
V. Conclusion................................................................................................................................18
References:....................................................................................................................................19
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I. Introduction
In the first few months of 2020, there were many incidents around the world such as the Hong Kong
protests, wildfires in Australia, the outbreak of corona virus around the world, and most recently are
protests in America. All of these events have greatly affected the world economy, causing it to decline
dramatically. And when the economy slumps, the banking industry will be one of the first to suffer. The
banking sector and Vietnam's economy are also in the same situation(Do Chi, 2020). Banks in Vietnam
have made great strides and achieved many awards in recent years such as Techcombank which won the
best bank award in 2018 by Euromoney, or Vietcombank received the best Asian bank award in 2019 by
Asiamoney, and many other banks have achieved great titles abroad. With such developments, how will
banks handle the volatility of events that have taken place? This report will evaluate the internal and
external parts of Techcombank by using various methods to give a better overview of how the bank
operates and organize.
II. Applying Porter's 5 forces method to analyze and evaluate the competition
between Techcombank and other banks in Vietnam.
Definition of Porter's 5 forces
Porter's 5 forces is a model used to analyze and identify 5 competing forces in an industry or business
market to help find strengths and weaknesses. This framework is based on the assumption that there are
five sectoral environmental forces which will determine the degree of competition and the attractiveness of
the industry, and those 5 forces are: Threats of new entrants, Bargaining power of suppliers, Bargaining
power of customers, the threat of substitutes, and competitive rivalry (Porter, 1975).
1. The threat of new entrants:
According to Circular No.40/2011/TT-NHNN, in order to get the license for establishment and operation
issued by the State bank of Vietnam, a bank must follow these terms: Commercial bank means a form of
bank that carries out all banking and other business activities for profit purposes in compliance with the
provisions of the Financial Institutions Act. Joint-stock commercial bank means a commercial bank set up
and structured in the form of a joint-stock company, and the bank must have an equity of at least VND 500
billion in the 05 consecutive years preceding the year of applying for the license (State Bank of Vietnam,
2011).
A bank must also have sufficient capital to meet the requirements of Circular No. 41 of the State Bank of
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