Analysis of External Factors Impacting Vinatex Da Nang JSC Business

This report analyzes Vinatex Da Nang JSC, a Vietnamese garment company, examining the impact of the macro-environment on its business operations. The research explores political, economic, social, technological, environmental, and legal factors, providing both positive and negative impacts for each. Internal and external analyses are conducted to identify strengths and weaknesses, culminating in a SWOT analysis. The report delves into the relevance of these findings to macro factors, critically reflecting on their influence on decision-making. Finally, the report offers recommendations based on the analysis and concludes with a summary of the key findings and their implications for Vinatex Da Nang's future.

Table of Contents
1. INTRODUCTION....................................................................................................................2
2. RESEARCH FINDINGS..........................................................................................................3
2.1 VINATEX..................................................................................................................................3
2.2 POSITIVE & NEGATIVE IMPACTS THE MACRO ENVIRONMENT HAS UPON
BUSINESS OPERATIONS....................................................................................................................3
2.2.1 Political.........................................................................................................................................................4
2.2.2 Economics....................................................................................................................................................5
2.2.3 Social............................................................................................................................................................6
2.2.4 Technological...............................................................................................................................................7
2.2.5 Environmental..............................................................................................................................................7
2.2.6 Legal.............................................................................................................................................................8
2.3 CONDUCT INTERNAL AND EXTERNAL ANALYSIS OF ORGANISATION IN ODER
TO FIND STRENGTHS AND WEAKNESSES.....................................................................................9
2.4 SWOT ANALYSIS.........................................................................................................................10
4.1. Strengths......................................................................................................................................................10
4.2. Weaknesses.................................................................................................................................................11
4.3. Opportunities...............................................................................................................................................11
4.4. Threats.........................................................................................................................................................12
2.4 RELEVACE OF STRENGTHS AND WEAKNESSES TO MACRO FACTORS...................12
2.5 PRESENT A CRITICAL REFLECTION OF KEY FINDING AND EVALUATE HOW
THEY INFLUENCE THE DECISION- MAKING PROCESS.............................................................13
2.6 RECOMMENDATION............................................................................................................15
3. CONCLUSION......................................................................................................................16
Bibliography..................................................................................................................................17

1. INTRODUCTION
Vietnam's garment industry has a long history of development and has influenced the socio-
economic development of the country. The textile and garment industry accounts for 16% of the
country's export share. So this is one of the main export sectors. With the right strategies, the
Textile and Garment Industry is always in the top of the world leading textile exporting
countries. Recently, the textile and garment industry with high growth potential has attracted
many Indian companies to invest in (John, 2019).
But at the same time, the garment industry is revealing many weaknesses, of which the biggest
weakness is the very low penetration of the global apparel value chain in the knowledge and
technology intensive stages. However, it is also facing many challenges such as competition with
other countries in the markets (Nguyen, 2018).
Therefore, the Vietnam Textile and Garment industry is only in the early stage of its
development, a fertile land that has not been fully explored. With such a favorable transition
trend above, it will create favorable conditions for the development of Vietnam Textile and
Garment industry in general to achieve positive results in the coming time (voer.edu.vn, 2019).
As the business analysis assistant of Vinatex Da Nang JSC, I will investigateand show the
external environmental factors affecting VINATEX. In addition, the statement also reveals the
strengths and weaknesses of the organization and how they relate to external macro factors.
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2. RESEARCH FINDINGS
2.1 VINATEX
VINATEX Joint Stock Company is a famous company with the slogan "Towards perfection".
Vinatex Da Nang is a joint stock company with main office in Central Vietnam. With more than
20 years of establishment and development, VINATEX Da Nang has given itself a stable
development and own accomplishment on the domestic and export garment market (VINATEX,
2018).
Products that the company specializes in trading are jackets, shirts, sportswear, workwear. The
company always innovates in product design, working style and working mindset to meet
customer needs (VINATEX, 2007).
Address: No. 25 Tran Qui Cap Street, Thach Thang Ward, Hai Chau District, Da Nang City.
Phone: (+84) .236.3823725
Website: www.vinatexdn.com.vn
2.2 POSITIVE & NEGATIVE IMPACTS THE MACRO ENVIRONMENT HAS
UPON BUSINESS OPERATIONS
The constituents of the macro environment of businesses in general and Vinatex Da Nang in
particular are impossible administer (BRANDINFO, 2020). Factors in the macro environment
bring new opportunities as well as challenges for businesses. Therefore, organizations often
encounter problems and risks from external factors. Since the macro environment cannot be
changed, organizations have to find ways to modify it to continute and grow. Macro environment
includes six elements: politics, environment, economy, law, technology, society.
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2.2.1 Political
Political factors greatly affect the business strategy of the business. They can inhibit or promote
economic development. But without political stability, the long-term, sustainable development of
the business will be seriously affected (Seohoaphuong, 2020).
For example, during the 19 covid pandemic period, most countries in the world have border
closure policies, it is very difficult to export to other countries (Nguyen, 2020). The Government
of Vietnam has always helped and promoted the organization with business support policies such
as tax reduction from 12% to 0% on average for Vietnamese garment. In addition, it also helps
businesses recover losses including Vinatex.
Positive
 Keep close trade connection with other countries around the world
 Business relationships are always open
 Mechanism of protection for domestic production
 Having timely policies and strategies to help businesses
Negative
 High taxes on products imported into Vietnam
 There are no policies to invest in the production of essential products
such as premium yarn.
In October 2020, an online trade conference to promote trade and cooperation between Vietnam
and Germany will take place. That promises to have more foreign investors coming to Vietnam
(Bo Cong Thuong Viet Nam, 2020).
Mechanism to protect domestic production through measures such as tariffs, quotas, and
subsidies for domestic goods to help domestic organizations avoid or reduce competition and
external disadvantages. Besides, the government also imposes high taxes on foreign products
(Trần, 2018).
Despite being the main export industry, Vietnamese garment and textile can only do sewing and
depend on 90-95% on foreign raw materials. Vietnam's textile and garment industry is short of
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supply of high-grade yarn and finished textile. So the government should have a policy to solve
that problem, it will help partially reform businesses in Vietnam (Gatexco20, 2020).
2.2.2 Economics
Elements of the economic environment include monetary policy, fiscal policy, economic cycle,
growth rate, inflation, interest rate and exchange rate. These parts all affect more or less on
business operations and decision-making (Tuấn, 2020).
Positive
 The tendency of economic globalization
Negative
 Unemployment rate increased sharply
 Inflation increased
 Laborer income decreased
Today, the tendency of economic regionalization and internationalisation is very welcome.
Therefore, each organization in each country to compete with competitors in the market, they
must always update the market, improve technology, ensure product quality, increase employee
productivity, good price. (Tuấn, 2020).
The number of jobless people age in 9 months of 2020 is nearly 1,2 million humans, increasing
by 132,1 thousand person over the same time last year. Unemployment rate of employment age
in the first nine months of 2020 is 2.48%, 1.14 times higher than the same time last year (Tong
Cuc Thong Ke, 2020). In addition, the high unemployment rate is accompanied by increased
inflation and a decrease in GDP. This thing to a decrease in workers' income and social needs.
On the other hand, it also creates some opportunities to grow the organization if the organization
has the right vision and strategy
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2.2.3 Social
Between organizations and the social environment, there are close link, interacting with each
other. Society says to provide the organization with sources of input. And vice versa, the
products and services offered by businesses will satisfy consumers and society. Factors
belonging to the social environment affect activities.
Positive
 Golden population
 The hard work and intelligence of human
Negative
 Brain drain
 High dishonest dealings rate
 Start entering the "population aging" period
Vietnam's population size reaches 96.2 million people, with a golden population structure of
about 56 million people participating in the labor market. But Vietnam has entered the
"demographic dividend" structure period for 8 years and at the same time entered the "population
aging" period at an unprecedented rate in history. In addition, the shortage of skilled labor,
redundant labor, and the imbalance of sex ratio at birth is complicated (Thư, 2020).
Brain drain is a phenomenon that occurs very often in Vietnam. People with a high level of
knowledge and culture are migrating out of Vietnam (Nhan Dan , 2020). Therefore, the
Vietnamese economy is greatly affected, and there is a shortage of talented people to contribute
to the country's economy.
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2.2.4 Technological
In the current 4.0 era, the impact of science and technology is always innovating and affecting
some aspects of the business.
Positive
 Minimize costs for businesses
 More modern machinery
 Efficient productivity management
Negative
 The unemployment rate increased
 Initial capital is high
 Security risk
 Lack of interaction
Technological change affects corporate operations in terms of opportunities to reform business
operations, personnel policy, workplace tools and strategies, and more.
The biggest impact on the garment industry is to help businesses minimize the cost of manpower
and time. Today's machines are so advanced, it can replace people doing many things.
The iinfluence of the new industrial revolution has gave out modern tools and operating systems.
As a result, the organization can reduce costs while increasing labor productivity. In addition, it
also left some additional needs such as the increase in the number of unemployed people, and the
reform of policies on human resource training (Job street, 2019).
2.2.5 Environmental
The natural environment creates a market that provides business inputs as well as affects income,
employment and population. From there, it affects purchasing power, consumption, and sales of
businesses and sustainable development strategies of businesses and organizations (dnbvietnam,
2019).
Factors of the natural environment that should be considered include:natural resources, land,
climate, weather environmental pollution.
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Positive
 Monsoon tropical climate
 Inspiring the production of eco-friendly products
Negative
 Disasters
 Environmental pollution
In recent years, people have faced a huge problem that is environmental pollution. And it is
always loved and watched by everyone. And one of them is water pollution. It is not difficult for
us to search for reality in society. Multi has lots of individuals and organizations propagating
messages and actions through pictures and videos. But that is still not enough for today's earth.
(Tú, 2020).
Due to climate change, Vietnam has experienced 13 storms with very strong winds and this has
affected a part of businesses in Vietnam in general and Vinatex Da Nang in particular. Besides,
there are many other natural disasters such as floods and landslides that cost businesses a huge
amount of money (Bo Tai Nguyen Va Moi Truong, 2020).
2.2.6 Legal
Any juridical change that happens in a country can affect your business. For example, in 2020,
Edict 100 regulates the sanctioning of administrative breaches in the transport sector such as the
alcohol concentration. Many large and small businesses were heavily affected, a few went
bankrupt. The reason is that alcohol sales fell sharply. So foresight and business strategy in the
wall of this meeting is essential (seohoaphuong, 2019).
Positive
 Workers' fairness law
 Laws that prevent unfair competition
 Product copyright law to avoid counterfeiting
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Negative
 Counterfeiting is not strictly regulated
The first is to protect between companies. All business executives advocate for competition, but
try to neutralize it when the competition touches them. The State has many laws passed to
prevent unfair competition (Brandinfo, 2020).
In addition, product copyright law is to protect consumers from unfair trade transactions. There
are a number of factories that, if left alone, will make fake products, lie in advertising, cheat
through packaging, and cheat on pricing. Especially, the State does not tighten the strict handling
of counterfeiting in the current market.
Both employees in businesses today and even vinatex are government authorities to protect the
broad interests of society, from misbehavior.
2.3 CONDUCT INTERNAL AND EXTERNAL ANALYSIS OF ORGANISATION
IN ODER TO FIND STRENGTHS AND WEAKNESSES
Analyzing the business's internal and external environment is a very important part of the
business. Research will help businesses find strengths and weaknesses when analyzing the
business environment; opportunities and challenges from objective factors, thereby making
business decisions, shaping the competitive advantage of the business (Phuong, 2020).
Internal analysis is the assessment of the firm's capabilities and competitiveness with other firms
in the garment market and this should be done regularly (Phuong , 2020). Factors to conduct
environmental analysis within the enterprise include: human resources, professional ethics,
material resources, operator, working culture (Phuong, 2020).This is a process of bringing a lot
of information and data together. It helps businesses consolidate their organizational apparatus,
overcome weaknesses, realize the position of business. It also identifies the existing threats to
your business. And the data also helps the organization build its strengths, develop the business
(Williams, 2019). From analytical data outside and inside the organization, we can easily discern
strengths and weaknesses.
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Strength: Strengths include aspects that your company is proud of. A clear awareness of your
business's goals, capabilities, and capabilities is your biggest strength. It in part recognizes what
the organization has achieved and the efforts of the entire staff. For example, thanks to internal
and external analysis of Vinatex JSC, everyone can see the difference between Vinatex Da Nang
compared to other competitors through customer assessment and outstanding quality. product
(Thuong, 2012).
Weaknesses: In the easiest way, the weaknesses are the things you have not done well, the
problems that exist within the person or organization that are hindering the organization on the
path to achieving your goals. When you look directly at the truth, you will realize the limitations
of the business (myxteam, 2019).
2.4 SWOT ANALYSIS
An organization should clearly identify The Strengths, Weaknesses, Opportunities and Threats
for its business. This is known through The SWOT analysis model. This is a very important and
useful tool. SWOT analysis, helping businesses to more accurately understand their goals and the
factors that help them achieve them. High efficiency, making it easier to achieve your goals, and
having a more objective view of the benefits of using SWOT (myxteam, 2019).
4.1. Strengths
Strengths are an integral part of your organization. It gives the organization a more competitive
advantage in the market (The mind tools conent team, 2018).
For Vinatex, a special strength compared to other businesses is its internal structure. They
always have good policies and benefits to retain talented people. And so they build a healthy
competitive environment.
Also because the scale of vinatex operations is very large, they have promptly applied the online
management model, so employees' suggestions, complaints, ideas are promptly reflected,
creating favorable conditions for motivational staff.
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Besides, Vinatex Da Nang also has a strong point in the production of knitted products which are
very popular with US and EU consumers (Dunghanhgarment, 2019). With its existing strengths,
Vinatex is far ahead of its competitors in the textile market.
4.2. Weaknesses
Weaknesses, like strengths, are an inherent trait of your organization (The mind tools conent
team, 2018). Weakness is everything the company lacks or does not perform as well as other
competitors or the company is placed at a disadvantage. Analyzing the weaknesses of enterprises
to see that the production and business activities of the enterprises are not performing well, it is
necessary to have a temporary and long-term plan to overcome (Vinhthaicommunication, 2018).
In recent years, VINATEX Danang has focused on exporting to 5 major countries. But the
domestic market is also thriving, so they accidentally miss out on many capable opportunities
from the Vietnamese market. This is a school too familiar and familiar with the situation so it is
easy to develop.In addition, this organization is too dependent on supplies from abroad, making
the supply chain unbalanced
4.3. Opportunities
Opportunities include external factors that can give businesses a competitive advantage over
other organizations (Mitchell, 2020). They can arise as they grow in the marketplace. Be able to
discover and exploit opportunities that can make a huge difference to your organization's
competitiveness and leadership in your marketplace (The mind tools conent team, 2018).
In 2020, when the global pandemic is underway, masks and protective gear are essential for
society. Vinatex Da Nang has promptly seized the opportunities, making a lot of necessary
products also makes it easier to retail and distribute this product.
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4.4. Threats
The final element of SWOT analysis is Threats, everything that puts your own company at risk.
It includes things like emerging competitors, changes in regulatory legislation, financial risks,
and just about anything else that can hamper the future of a business (Mitchell, 2020).
Currently, Vinatex has many potential competitors in the garment export market. Because
Vinatex's labor cost is higher than other countries: India, Pakistan, and Bangladesh, Vinatex's
product cost is higher. Without appropriate development strategies, the possibility of Vinatex
losing potential customers is very large (Huy, 2020).
Covid 19 reduces the consumption of exporting countries, partially affecting the supply chain.
And social distance also limits the number of employees working in the factory, leading to
reduced productivity, threatening the development potential of Vinatex Da Nang.
2.4 RELEVACE OF STRENGTHS AND WEAKNESSES TO MACRO FACTORS
Strengths and weaknesses are the unique characteristics of each organization. Every day,
businesses are influenced a lot from external factors, both bad and good. They always bring new
opportunities for businesses to develop potentials, but they also bring businesses threats,
competition, things that are detrimental to the growth of the business. Strengths and weaknesses
oppose each other, and the correct analysis of strengths and weaknesses will bring great
achievements for the organization.
The organization's strengths and weaknesses are related to the micro- and macro-environment.
External factors such as economy, politics, society, technology, legal. The change of
environmental factors will affect the company's strategy and the decisions of the manager.
Economical: Economic items are inflation rate, market exchange rate, interest proportionality
and economic development pattern. These points are determinants of economic accomplishment
that straight affect the corporation and have lasting-term resonance effects. Therefore, the
company must always have enough financial resources not to be affected by economic changes.
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