Business Strategy Report: Binh Minh Plastic Joint Stock Company

This report provides a comprehensive analysis of Binh Minh Plastic Joint Stock Company (BMP), a leading plastic pipe manufacturer in Vietnam. It begins by establishing the strategic context of BMP, outlining its vision, mission, and objectives. The report then conducts a macro-environmental audit using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors affecting BMP. Furthermore, it employs Porter's Five Forces model to assess the industry's competitive landscape, including the threat of substitutes, buyer and supplier power, rivalry, and new entrants. A stakeholder analysis and mapping are also performed to identify key stakeholders and their influence. Finally, the report identifies and analyzes the main opportunities and threats facing BMP, offering strategic insights and recommendations for future business development. The report covers BMP's strategies, including its focus on market share, supply chain management, automation, and employee development.

ASSIGNMENT 1 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 32: Business Strategy (574)
Submission date June, 5th 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
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 signature:
Anh
Grading grid
P1 P3 M1 M3
Page | 1

 Summative Feedbacks: Resubmission Feedbacks:
Internal Verifier’s Comments:
Signature & Date:
Page | 2

Table of Contents
Introduction.................................................................................................................................................4
I. Determine the strategic context of Binh Minh Plastic Joint Stock Company...................................5
II. Implement a macro environmental audit for Binh Minh Plastic Joint Stock Company by using the
PESTLE framework...................................................................................................................................8
1. Political factors............................................................................................................................8
2. Economic factors.......................................................................................................................10
3. Social factors..............................................................................................................................15
4. Technology factors.....................................................................................................................16
5. Legal factors...............................................................................................................................17
6. Environment factors..................................................................................................................19
7. Comments on the importance of macro environmental analysis for the strategic development
of your chosen company...................................................................................................................20
III. Carry out the industry/sector audit for Binh Minh Plastic Joint Stock Company by using Porter’s
5 force model........................................................................................................................................21
1. Threat of Substitutes.................................................................................................................22
2. Bargaining Power of Buyers.......................................................................................................23
3. Bargaining Power of Suppliers...................................................................................................24
4. Rivalry Among Existing Competitors..........................................................................................27
5. Threats of New Entrance...........................................................................................................30
6. The critical success factors for a company in the Plastic market...............................................31
IV. Carry out a specific stakeholder analysis and devise a stakeholder mapping for Binh Minh
Plastic Joint Stock Company..................................................................................................................33
1. Stakeholder analysis..................................................................................................................33
2. Stakeholder mapping.................................................................................................................36
V. Identify and analyze the main opportunities and threats that Binh Minh Plastic Joint Stock
Company is currently facing..................................................................................................................37
1. Opportunities.............................................................................................................................37
2. Threats.......................................................................................................................................38
Conclusion.................................................................................................................................................39
Bibliography...............................................................................................................................................40
Page | 3

Introduction
Businesses that want to thrive in today's market must have a solid business strategy in place.
Business strategy is regarded as the key to operating a business in order to achieve specific
goals, plans, and success. With extensive experience in analysis and strategic planning for
companies in a wide range of industries, this report presents the findings of a comprehensive
audit of Binh Minh Plastic Joint Stock Company (BMP), which is leading and reputable
manufacturing and trading enterprise in Vietnam for plastic pipe products and plastic pipe
accessories of all kinds serving the water supply and drainage industry, post and
telecommunications, electricity, industrial and civil construction. use. The main content
includes an assessment of the internal and external environments. The report will also make
recommendations on the strategy that businesses should pursue in the future based on these
analyses. External analysis, Internal analysis, and Strategic planning and evaluation are the
three main sections in which the data and related information are presented.
Page | 4

I. Determine the strategic context of Binh Minh Plastic Joint Stock
Company
Visson: Maintain the position of the leading enterprise in Vietnam's plastic building
materials industry. Actively build capacity so that you can compete in the region and
internationally.
Mission: Provide products and services to meet the market's growing demand. Ensure that
the interests of customers, employees, shareholders, and society are all aligned.
Objectives:
Sustainable development objectives:
For production and business For the environment
Strengthen measures to save energy, save
water and treat wastewater.
Improve production processes, install modern
equipment to increase productivity, save raw
materials and reduce environmental pollution.
Adhere to business ethics rules.
Anti-counterfeiting, counterfeit goods.
Apply the latest standard environmental
management system.
Fully comply with the provisions of law and
other requirements on the environment.
Building an environmental monitoring and
management system, monitoring and
assessing the impact on the environment.
Identify and assess the risks of environmental
pollution to take measures to control and
reduce pollution, and apply waste separation
at source.
Build teams and processes that are ready to
respond to emergency situations.
Page | 5

For employees For the community
Evaluate the working environment every year
to take measures timely improvements.
Maintain and improve the quality of health
care activities health and life for workers.
Send employees to attend training courses in
and abroad to improve expertise to meet the
needs of development needs of the Company.
Raise employees' awareness about saving
reduce energy and preserve the environment.
Actively participate in community activities to
build a friendly and environmentally
responsible corporate image.
Maintaining regular charity activities such as
blood donation, taking care of Vietnamese
heroic mothers, martyrs' parents, seriously
wounded soldiers, donating salary days for the
fund to support difficulties...
Raise employees' awareness of humanitarian
and charity activities.
Key objectives of the company by 2025:
Consumption output: 137,000 tons.
Market share: accounted for 30% of the market share in Vietnam.
Deploying 5S management model for all employees and departments parts at 100%.
Deploying 3 automation systems at factories.
Implement employee competency management system to apply training programs,
capacity building training and career development for 100% of employees.
Implement periodic employee satisfaction surveys in BMP's working environment:
95% satisfaction.
(BMPlasco, 2020).
Page | 6

A business strategy is a set of business decisions and actions that direct an organization's
resources in response to external opportunities and threats. Depending on the
characteristics and business period of each business, different business strategies will define
different goals. To begin, it must be stated that all production and business activities must
be directed toward specific goals. That goal will be the primary motivator for businesses to
take action in order to achieve it; often, businesses in production and business activities
have the same goals of entering the market and increasing profits, market share growth,
and so on. As a result, having clear goals based on an assessment of the company's internal
and external markets is the most important factor when conducting business activities. The
second role of a business strategy is to coordinate all resources aimed at achieving a specific
business goal. The business strategy will capitalize on competitive advantages derived from
the coordination of organizational and enterprise resources, including various functional
departments such as the organization department, administrative department, finance
department, and department of human resources, material planning, marketing
department,… .The third function of a business strategy is to devise a method of acting that
is more realistic and effective. All production and business activities will be closely linked to
the company's current situation. Managers understand which competitive advantages will
be exploited and which opportunities will be capitalized on.
BMP has established specific business strategy for the entire company to coordinate and
implement in the past and even in the future. In particular, the Company has established
specific business strategies such as affirming the company's capacity and leading position in
the Vietnamese market, orienting to combine with other companies in the group, and
maintaining its leading position in terms of market share in the ASEAN region. BMP also
assigns the responsibility of establishing an average growth target that is not less than the
market's overall growth. To form the supply chain comprehensive application in corporate
governance, the company has used advanced management models and tools such as LEAN,
5S, in conjunction with the investment and application of modern technology, a high degree
of automation in production, and a high degree of automation in production (BMPlasco,
2018). In specific, the company focuses on creating an internally friendly and safe working
Page | 7

environment, as well as prioritizing employee benefits, so that the company can be included
in the top 50 best places to work in Vietnam. BMP has launched a lot of development
strategies on Human Resource in the past year. The company always evaluates the working
environment every year to take timely improvement measures. The strategy of maintaining
and improving the quality of health and life for employees of BMP includes many regimes
and policies. The company also implemented 5S activities, established an additional SHE
department to supervise, organize monthly and quarterly inspection and assessment on
occupational safety and health. In addition, there are professional training strategies, the
Covid-19 pandemic leave regime with salary and gender equality strategies. With the
successes achieved thanks to specific and reasonable business strategies over the years,
BMP continues to offer strategies for the period 2021-2025 as follows:
Become the leading company in the market share of consumption volume in Vietnam
and is in the TOP 3 leading companies in terms of market share in Southeast Asia.
Success in perfect operation of the entire supply chain through the application of 5S
management model, economical and lean production, applying automation with
modern technology.
Maintain the position of TOP 50 companies with the happiest workplace Vietnam.
(BMPlasco, 2020).
II. Implement a macro environmental audit for Binh Minh Plastic Joint Stock
Company by using the PESTLE framework.
1. Political factors
Government stability: Vietnam is regarded as one of the countries with an appealing
and promising business environment. Vietnam will create and consolidate countries'
confidence in their policy mechanisms by providing a stable political backdrop, a
comprehensive legal system, a dynamic economic development environment,
international integration, and acceptance of international laws and rules. This is a
Page | 8

favorable opportunity for BMP to be fully developed thanks to the appropriate
investment policies and economic indicators from the State.
Government policies: The government has issued tax policies that affect businesses such
as Vietnam, such as Decree 122/2016/ND-CP on Export Tariffs, Preferential Import
Tariffs, List of Goods and Levels Absolute Tax, Mixed Tax, and Import Tax Other Than
Tax, which went into effect on September 1, 2016. This is an opportunity for BMP to
take advantage of special preferential tariff commitments in FTAs to reduce input
production costs and increase competitiveness with regional partners. In 2020, the
Ministry of Finance has submitted a report to the Government and proposed not to
increase PP import tax. This proposal has also been approved by the Government, and
said it will keep the current 3% PP tax rate. This is very good news for the plastic
business community at the beginning of this new year. The retention of the PP plastic
raw material tax rate will be extended until 2022 (Tran, 2020). As a company that
imports large quantities of PP materials from foreign markets, the lower tax rate will
assist BMP in reducing its investment in importing materials. Furthermore, BMP can use
this opportunity to actively implement the policy of increasing inventory while raw
material prices remain low.
Foreign trade regulations: Currently, Vietnam has been negotiating and signing a series
of free trade agreements (FTAs) with many countries and organizations around the
world. According to the Government's report, Vietnam has officially joined, signed and
implemented 14 FTAs with effect and 01 FTA has been officially signed and is about to
take effect, and is currently negotiating 02 FTAs (Thanh, 2021). In particular, the Trans-
Pacific Partnership (CPTPP) is an important agreement signed in February 2016. The
CPTPP has brought about a comprehensive openness among its members, which has a
strong impact on the entire market, all industries, including the plastic industry. FTAs are
positive factors that help Vietnam's plastic products increase their competitiveness
when exporting to other markets. In particular, RCEP will help companies like BMP
Page | 9

expand the area of guaranteed materials to meet the rules of origin (reducing export tax
to 0%) (Tran et al., 2020).
Risk in foreign markets: In an update in March 2021, Rong Viet Securities Joint Stock
Company said that the average price of PVC powder in the first 2 months of 2021
increased to $1,085/ton, up 25% over the same period in 2020. According to the
Vietnam Plastics Association (VPAS) update, by the beginning of April 2021, PVC prices in
European markets had increased for the 11th consecutive month, and the price increase
is expected to last into the second quarter of 2021. Prior to that, PP and PE prices rose
significantly in March, surpassing all-time highs set in 2015. The high price of input
plastic materials is a big problem for BMP's profit in the context of high competitive
pressure in the market (Vu, 2021). To mitigate the risk of fluctuating inputs, BMP has
implemented specific measures such as updating information on foreign transactions. In
2013, BMP took part in exchange rate forecasting research in order to make informed
decisions (BMPlasco, 2013).
2. Economic factors
Inflation: The complicated and unpredictable developments of the COVID-19 epidemic
slowed growth in most industries, particularly the plastics industry, in 2020. The
disruption of international trade has an impact on Vietnam's production, export, and
import activities. However, by the end of 2020, Vietnam's economy would have reached
a turning point, with guaranteed macro indicators. In particular, the target of controlling
inflation has been and will be controlled at an increase of less than 4% as set out by the
National Assembly at the beginning of the year. Inflation trends are associated with
financial risks of enterprises. However, thanks to solutions to stabilize the macro-
economy through tightening macroeconomic policies, supporting production and
business development, and balancing supply and demand in the context of many raw
prices, however, materials in the international market tend to decrease and global
inflation is low. Low inflation presents a "golden" opportunity for plastic companies, in
Page | 10

particular, to shift their growth model toward more stable and sustainable growth (Luu,
2020).
Figure 1. Average Inflation rate in 2020 (%) (GSO)
According to Director Nguyen Ba Minh, Vietnam's inflation will remain within the target
set by the National Assembly in 2021. For starters, the global Covid-19 epidemic has
been gradually controlled, and international trade and production activities have
resumed. However, because global economic growth has not recovered as expected,
sharp increases in the prices of raw materials, fuel, and essential materials on the global
market are unlikely. Next, because Vietnam's entire political system is always proactive,
actively implementing measures to prevent epidemics, stabilize market prices,… (Dan,
2021). When the economy experiences high inflation, the government is forced to
implement a tight monetary policy by raising lending interest rates, making it even more
difficult for businesses to access bank capital. Furthermore, inflation is a significant
factor influencing the price of BMP’s input materials. The increase in input material
prices raises COGS while the selling price of products does not rise in lockstep, which
may affect BMP's business results (SCIC, BMPlasco, SSI and HOSE, 2018).
Page | 11

Figure 2. Scenario for Inflation in 2021 (GSO)
Tax and duties: Vietnam's tax system has been built quite fully, with 9 taxes. Over the
time of implementation, the tax policy system has continued to be revised,
supplemented and completed in accordance with the orientation and roadmap for the
implementation of the Tax System Reform Strategy, ensuring the following objectives:
reasonable encouragement to create favorable conditions. conditions to promote
domestic production (Nguyen, 2021). Vietnamese plastic products are not subject to
anti-dumping tax like other Asian countries (average tax is from 8-30%). Therefore, this
will be a favorable condition for plastic enterprises to continue to increase export
turnover in the coming time (Pham, 2019). The tax rate for BMP in 2020 is 20.5%, which
is a relatively stable level, not much different from 2011 to the present (BMPlasco,
2020). In general, Vietnam's tax rates are reasonable for all businesses and will continue
to maintain this level in the coming years. However, because BMP owns many
subsidiaries in various locations, differences in the understanding and application of tax
regulations in various locations can result in tax violations, businesses, and enterprises
being sanctioned by tax authorities during operation.
Page | 12