(PDF) Vietnam: Transition to a Market Economy

REDO
Introduction
In today's society, commercial operations in the Vietnamese market, as well as the rest of the
globe, are highly interesting. According to the General Statistics Office, Vietnam set a new
record in 2018 by establishing 131.1 thousand enterprises. Furthermore, over 12.5 thousand
enterprises in Vietnam fail each year. As a result, understanding the business environment and
the structure of many different types of organizations is recommended before establishing a firm.
The influencing elements that are directly connected to company operations are referred to as the
business environment. These elements have an impact on the company's outcomes, performance,
and growth, both within and outside. As a result, BE is the key to enormous success.
As an assistant business analyst at Vinatex Da Nang Joint Stock Company, I'm in charge of
producing a report to the CEO regarding researching and describing three distinct sorts of
companies: Vinatex DaNang JSC, Vinamilk JSC, and Vietjet Air.
This article will provide an overview of each of the three companies mentioned above, as well as
clear information and explanations. It will also evaluate the various business functions for
Vinatex Da Nang JSC, as well as the benefits and drawbacks of how they relate to and impact
the company's structure. The conclusion and reference list are included in the final section.
Types and Purposes of Organizations
The Public sector refers to the portion of the economy that is impacted by the government to
some extent. This group includes the military, civil service, police, and other civil servants, as
well as any publicly controlled economic businesses. While the public sector varies every
country owing to the regulations that govern public institutions, the public sector in general is
more focused with providing services that benefit society as a whole. It is only available to those
that utilize the service[ CITATION Weg14 \l 1033 ].
Volunteer sector: The phrase voluntary sector refers to non-profit organizations whose main
purpose is not to benefit but to provide a beneficial societal influence. It is also known as the
non-profit, civilized or third-sector sector. Despite the distinction between the voluntary sector
and the government, various organizations work with governments at every level to support them

in implementing programs and services. Organization, including corporations, partnerships and
sole proprietorships, also have a number of legal forms[ CITATION Pri16 \l 1033 ].
Private sector: the private sector refers to the component of the economy operated by non-
governmental, non-profit persons and enterprises. This includes any non-government owned or
managed profitable firms as well as private individuals and corporations that own, control and
manage portions of the national economy[ CITATION Tea20 \l 1033 ].
Sole trader: One individual trader is an autonomous person who also owns a company.
Individuals will have the right to profits generated when taxes have been paid and will be liable
for any loss. A sole trader is defined by sole ownership and control of his company and is fully
responsible for every decision of the company. There is no limitation on the responsibility of a
single owner. The owner shall bear all losses caused by the company. His personal property is
also accountable for the obligations of his firm[ CITATION Chr19 \l 1033 ].
Partnership: Partnership means a corporate partnership in which a law practice is operated by
two or more individuals and the profit and losses are divided between them. All partners shall be
responsible for the management and operation of the company, or any of them acting on behalf
of all partners. The eight features of the partnership are membership, unlimited responsibility,
division of profit and loss, mutual agency, voluntary registration, continuity, contractual and
transactions of interests[ CITATION Bus21 \l 1033 ].
Private limited company: A private limited company is one in which the members own the
company in their individual names. The members' responsibilities in a Private Restricted
company is restricted to the number of shares they possess. The shares of a private limited
corporation cannot be traded. Members, limited liability, perpetual succession, index of
members, number of directors, paid-up capital, prospectus, and minimum subscription are only a
few of the features of a private limited company (Neha, 2021).
Public limited enterprise: limited responsibility is with owners and management of a limited
liability enterprise. As a government corporation, a company can offer investors shareholdings to
help raise funds. A public limited company has all the advantages of a private limited company
plus a wide range of members, easy share transfer and more openness [ CITATION HAR21 \l 1033 ].

Micro business: a company with less than 10 employees and yearly turnover of less than $25
000 in annual sales (money taken during a given amount of time) (Murray, 2020).
Small business: Small firms are private companies that need less money, fewer staff and little or
no machinery. All of them are exemplary small companies, including grocery, medical, retail,
bakeries and small industrial units.
Medium Business: a medium-sized business employs fewer than 250 people and has less than
€50 million in yearly revenue or below €43 million in budgets. SMEs that meet different needs
can benefit (Enterpriseireland, 2007).
A Big Company, which has an annual sales of minimum EUR 1.5 billion and a total balance of
at least Euro 2 billion, meets at least one of two criteria: the employer employs 5,000 people
(Sangoma, 2019).
Industries Sector
Primary Industry: agriculture, forestry, animal and fisheries are genetic industries which, in the
area of the National Economics, are sensitive to scientific and technical advancements in
renewable resources. All mining companies are instances of mining ores, quarries and mineral
fuel extraction. Primary industries dominate the undeveloped and developing economies
(Britannica, 2020).
Secondary industry: this business, commonly referred to as manufacturing, uses primary
industry raw resources and converts them into consumer products or processes that are already
supplied by secondary industry. Convert into products or build means of production to make
consumer and non-consumable goods. Energy companies also fall under the classification of
secondary industries (Britannica, 2020).
Tertiary industry: This industry, often known as the service industry, includes companies that
provide services, acquire intangible assets, or generate revenue without producing physical
goods. The private and governmental sectors are commonly integrated in free market and mixed
economies (Britannica, 2020).
Business scope

• International business: Activities that take place outside of a country's borders are referred to as
international business. Money, labor, technology, and intellectual property such as patents,
trademarks, know-how, and copyrights, as well as international trade in products and services,
are all covered.
• Local business: A local business sells its products and services to individuals who live in the
same city, town, or area. A local business benefits by knowing the interests, needs, and culture of
its community, as well as offering goods and services that its inhabitants will buy.
• National business: A national business is one that operates solely inside the borders of a
country. A national company, like a local company, is cognizant of the country's culture and
develops goods and services to satisfy the demands of its target market.
Purpose
• Profit: Profit is the financial benefit received when the revenue generated by a commercial
activity exceeds the costs, expenses, and taxes connected with operating the business. Any
profits earned will be returned to the business owners, who will have the option of keeping or
reinvesting the funds. To arrive at profit, entire income is deducted from total costs (Kenton,
2020).
• Nonprofit: A nonprofit organization is one in which no profit is made by the owners. All
monies earned or donated to a nonprofit organization are used to help the organization achieve
its goals and stay afloat. Nonprofits are typically tax-exempt charities or other types of public
service organizations, which means they are exempt from paying most taxes (Kenton, 2020).
Legal Status
Refers to a recognized individual's, legal entity's, organization's, or corporation's legal identity in
relation to themselves and other parties, allowing them to carry out their obligations and actions
with full legal liability[ CITATION Eus19 \l 1033 ].

Vietjet Air
1) History
VietJet Air is a low-cost carrier based at Noi Bai Airport in Hanoi, Vietnam. The carrier began
service on December 25, 2011, after many delays, with three A320 aircraft flying to Ho Chi
Minh City and Da Nang. When obtaining an investment from the Malaysian LCC, VietJet
planned to use the AirAsia name, but decided to go with the VietJet brand after AirAsia was
refused regulatory permissions. The airline provides services all throughout Asia. VietJet Air
became the first airline in Vietnam to undertake an initial public offering (IPO) on the Ho Chi
Minh City Stock Exchange on February 28, 2017. (HOSE: VJC). The company raised VND30
trillion (USD1.3 billion) in charter capital, with each share valued at VND90,000 (USD3.95) On
February 28, 2017, VietJet Air launched an initial public offering (IPO) on the Ho Chi Minh City
Stock Exchange, making it the first airline in Vietnam to do so (HOSE: VJC). The business
issued VND30 trillion (USD1.3 billion) in charter capital, valued at VND90,000 (USD3.95) per
share (VietJet Air, n.d.).
2) Today
Vietjet Air launched new international flights to China, Taiwan, South Korea, and Malaysia in
2016. Routes to Japan's Tokyo and Osaka have been established. Signed MOU (Memorandum of
Understanding) for long-term engine maintenance service with CFM International. In France, a
USD 7.3 billion agreement was signed with Safran - CFM, GECAS. In 2018, an agreement was
signed to create a nonstop service between Vietnam and Sydney, Australia. New connections
between Vietnam and Japan were established in 2019. A total of 100 million passengers have
been transported both domestically and internationally. The airline's flight network has been
expanded to 143 destinations, including 48 domestic and 95 international routes. Airbus has
secured a purchase deal for 20 A321XLR aircraft of the next generation. Joined the Japan
Business Federation - Keidanren as an official member (VietJet Air, n.d.).

Unit: Million Dong (Source: https://finance.vietstock.vn/VJC-ctcp-hang-khong-vietjet.htm)
3) Overview
Company Vietjet Air
Ownership (Private Sector or Public
Sector)
Private Sector
Key players ( stakeholders) Shareholders, Employees, Diretor
Profit or Not for Profit Profit
Size Large enterprise
Business Activity (s) Air transport for passengers and
freight.
 Ancillary services.
Aviation training
Technical services
Commercial aircraft trading