Mid term report subject strategic management topic strategic management of hoa phat group

Startingfrom a company specializing in trading construction machines in August 1992,Hoa Phat gradually expanded into other fields such as Furniture, steel pipes,construction steel, refri

NGÂN HÀNG NHÀ NƯỚC VIỆT NAM BỘ GIÁO DỤC VÀ ĐÀO TẠO

TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP HỒ CHÍ MINH

MID-TERM REPORT SUBJECT: STRATEGIC MANAGEMENT

Topic:

STRATEGIC MANAGEMENT OF HOA PHAT GROUP

Class: IBP20D02Lecturer: TS Trần Ngọc Thiện Thy

Student:

Dương Phạm Hoàng Nam-MSSV: 110102210012

Trần Khánh Linh-MSSV: 110102210066Nguyễn Thị Quyền Nhi-MSSV: 110119200018

Ngô Thị Thuỳ Tiên-MSSV: 110119200030

I Organization Direction 5

1 Corporation: HOA PHAT GROUP 5

Introduction: 5

Mission 5

Vision 6

Core Values 6

Objectives: 6

2 Subsidiaries 10

Hoa Phat Steel 10

Hoa Phat Agriculture 10

Hoa Phat Land: 11

Hoa Phat Electrical Appliances 13

Recommendations: 14

II Business environmental analysis 15

Hoa Phat Steel 15

MICRO: Porter 5 Forces 15

MACRO: PESTEL Analysis 16

EFAs 18

VRIO 18

VALUE CHAIN 19

IFAs 20

Hoa Phat Agriculture 20

Micro: Porter 5 Forces : 20

Macro: PESTEL 22

IFAs: 24

EFAs: 24

V.R.I.O 25

VALUE CHAIN : 25

Hoa Phat Land: 27

MICRO: Porter 5 Forces 27

MACRO: PESTEL 29

EFAs 30

VRIO 30

IFAs 33

Hoa Phat Electrical Appliances 34

MICRO: Porter 5 Forces 34

MACRO: PESTEL 35

VRIO 37

IFAs 38

EFAs 38

Value Chain 38

III Strategic Formulation 42

Corporation Strategy 42

Hoa Phat Steel: Market development 43

Hoa Phat Agriculture : 44

Hoa Phat Land: 47

Hoa Phat Electrical Appliances: 47

Business Portfolio (BCG Matrix) 49

Hoa Phat Steel 49

Hoa Phat Agriculture : 51

Hoa Phat Land: 54

Hoa Phat Electrical Appliances 57

Parenting FIT 58

Hoa Phat Steel 58

Hoa Phat Agriculture 60

Hoa Phat Land 61

Hoa Phat Electrical Appliances 62

Business Strategy 64

Hoa Phat Steel 64

Hoa Phat Agriculture 65

Hoa Phat Land: 67

Hoa Phat Electrical Appliances 68

Build - Buy - Borrow Framework 70

Hoa Phat Steel 70

Hoa Phat Agriculture: 71

Hoa Phat Land: 72

Hoa Phat Electrical Appliances 73

Functional Strategy 74

Hoa Phat Steel 74

Hoa Phat Agriculture: 75

Hoa Phat Land: 77

Hoa Phat Electrical Appliances 79

IV Strategic Implementation 80

Organization design (Organizing) 80

Hoa Phat Steel 80

Hoa Phat Agriculture 83

Hoa Phat Land: 87

Hoa Phat Electrical Appliances 89

Organizational governance (leading) 90

Hoa Phat Steel 90

Hoa Phat Agriculture 93

Hoa Phat Land: 94

Hoa Phat Electrical Appliances 95

IV References 96

I Organization Direction

1 Corporation: HOA PHAT GROUP

Introduction:

“For Hoa Phat, sustainability is important.”

Hoa Phat is the leading industrial manufacturing group in Vietnam Startingfrom a company specializing in trading construction machines in August 1992,Hoa Phat gradually expanded into other fields such as Furniture, steel pipes,construction steel, refrigeration, real estate, and agriculture Karma OnNovember 15, 2007, Hoa Phat officially listed shares on the Vietnam stockmarket with the stock code HPG

Currently, the Group operates in 05 fields: Iron and steel (construction steel, hotrolled steel) - Steel products (including steel pipes, galvanized steel sheets, wiredrawing steel, prestressed steel) - Agriculture - Real Estate – Householdappliances Steel production is a core area accounting for 90% of the Group'srevenue and profit With a capacity of 8.5 million tons of crude steel/year, HoaPhat is the largest steel manufacturing enterprise in Southeast Asia

Hoa Phat Group holds Vietnam's No 1 market share in construction steel andsteel pipes; Top 5 in galvanized steel Currently, Hoa Phat is in the Top 5largest private enterprises in Vietnam, Top 50 most effective listed enterprises,Top 30 enterprises with the largest contributions to the State budget in Vietnam,Top 3 enterprises with the largest charter capital in the market stock market,Top 10 stocks with the largest market capitalization in the Vietnam stockmarket

With the business philosophy of "Harmony and development", Hoa Phat spendshundreds of billions of VND each year to carry out its corporate socialresponsibility to the community

environment for the people and a safe investment and developmentenvironment.

● Hoa Phat Security has become a trusted companion in the community ofbuildings, hotels, banks, restaurants, industrial parks, etc What we aretoday is a process of contributing and building by Enthusiasm andcommitment to success along with a sense of responsibility andinheritance of the Company's achievements

● With the mission "Protecting your safety is our mission" Hoa Phat hopes

to bring a more beautiful life to everyone

● Sustainable development to become the leading security service provider

in Vietnam and Southeast Asia

Vision

Vision statement: “Hoa Phat aims to be an industrial production group withleading quality, in which Steel is the core field” Hoa Phat's vision statementsuccinctly outlines its ambition to become a preeminent industrial productiongroup, emphasizing leading quality, Hoa Phat signals a commitment toexcellence in its products and services While the statement mentions steel asthe core field, it leaves room for potential diversification into other industrieswithin the broader realm of industrial production This flexibility can beadvantageous for adapting to market dynamics and seizing new opportunities

Core Values

The core value of Hoa Phat Group is the philosophy of Harmony andDevelopment This is reflected in the relationships among employees, betweenthe Group and its partners, agents, shareholders, and social community,ensuring harmony of stakeholder's interests on the same boat, towardssustainable development In particular, Hoa Phat Group has built a sustainable,long-term, trusting partnership as a family with sales agents accompanying theGroup since the early days of its establishment

Objectives:

- Hoa Phat strives to consume all products produced in 2022, continuing to leadthe national market share in construction steel and steel pipes :

● As for the galvanized steel segment, the group plans to run the factory at

a maximum capacity of 400,000 tons/year in Hung Yen, and at the sametime build a color-coated, galvanized, and cold-coated steel factory in theSouth to serve the market school in this area

● With steel pipes, Hoa Phat plans to build the largest factory in Long Anprovince in the period 2022 - 2025 The group's goal by 2025 is to reach

an output of 1.25 million tons and increase its market share to 35% Thestatistics below show that Hoa Phat currently holds about 28% of thesteel pipe market share while its competitor, Hoa Sen, holds about 15%.Hoa Phat Dung Quat 2 Steel Production Complex Project (Dung Quat 2 Project)has a scale of over 280 hectares, located adjacent to Hoa Phat Dung Quat 1 Ironand Steel Complex, design capacity includes 5.6 million tons of hot rolled steelcoil (HRC)/year, total investment capital of the project is 85,000 billion VND.The factory is expected to officially come into operation in the first quarter of2025

- As of December 2023, Dung Quat 2 Project has reached 40% progress,according to the proposed plan When completed, the Group's steel productioncapacity will reach more than 14 million tons of crude steel/per year, bringingHoa Phat into the Top 30 largest steel enterprises in the world by 2025

- The project will create more jobs for over 8,000 workers, strongly promoteVietnam's mechanical and supporting industries, and positively contribute to thegrowth of industrial production value and budget revenue of the country QuangNgai province in the long term

- The group's executive board stated that in 2024, revenue is expected toincrease compared to 2023, largely from output due to the expectation of thereturn of real estate developers after the 2024 Land Law is issued Raw fuelprices tend to increase, selling prices increase disproportionately, and financialcosts are large due to the forecast that interest rates will continue to remainhigh

- The Group's Board of Directors aims to gradually increase production output

in accordance with market developments and ensure the consumption of allproducts produced

- Manage inventory well, closely monitor raw material price developments, andhave reasonable regulatory policies The Group will update fluctuations in theworld and domestic economic situation, especially exchange rate and interestrate trends to have the policy to manage safe debt thresholds, minimize risks ofexchange rate fluctuations, and effective cash flow fruit

- Dung Quoc 2 project:

+ It is expected that by September 2026, the entire Dung Quat 2 projectwill be completed Investment capital is enough for both Dung Quat 1and 2

+ Soon, Hoa Phat will be able to produce HRC by the end of this year, ifslow, it will be in the first quarter of 2025 Initially, the corporation willtake time to test run In 2025, it is estimated that more than 2 million tons

of HRC can be produced in Dung Quat 2 plus 3 million tons in DungQuat 1

+ After the Dung Quat 2 project comes into operation, the group willhave an additional output of 5.6 million tons of HRC, bringing the totalHRC production capacity to 8.6 million tons With the current sellingprice (600 USD/ton), the group will have an additional 70,000 billionVND plus current revenue, the total group revenue can reach about200,000 billion VND.

- The Group's Board of Directors commented: In 2024, raw fuel prices will tend

to increase, selling prices will increase disproportionately, and financial costswill be large due to the forecast that interest rates will continue to remain high.The Group's Board of Directors set the following goals:

• Continue to invest in the construction of the Hoa Phat Dung Quat 2 Ironand Steel Production Complex Project

• Gradually increase production output in accordance with marketdevelopments and ensure consumption of all products produced;continues to lead the national market share in construction steel and steelpipes

• Manage inventory well, closely monitor raw material pricedevelopments, and have reasonable regulatory policies

• Update fluctuations in the world and domestic economic situation,especially exchange rate and interest rate trends to have policies tomanage safe debt thresholds, minimize risks of exchange ratefluctuations, and effective cash flow

• Research and develop in-depth each field of activity to promoteresources and experience

• Invest in digital transformation in corporate governance

- Regarding the 2024 business plan, HPG's board of directors commented thatthe Vietnamese and world economies still have many unknowns, unclear signs

of recovery, fluctuations in exchange rates, interest rates, and other factors onthe world market

- On that basis, Hoa Phat closely monitors market developments to manageproduction and business accordingly Specifically, the Group sets a target of140,000 billion VND in revenue and 10,000 billion VND in profit after tax in2024

Objective Specific Measurable Achievable Relevant Time-bound SMART?

products produced

in 2022

Hoa Phat Dung

Quat 2 Steel

Complex Project

Hoa Phat plans to

build the largest

● Combine advanced manufacturing technologies andautomation systems to improve production efficiency,improve product quality, and reduce labor costs

● Explore Industry 4.0 solutions such as artificial intelligence,machine learning, and data analytics to optimize operationsand better understand market trends

- Hoa Phat Dung Quat 2 Steel Production Complex Project (Dung Quat 2Project)

● Time-bound: The factory is expected to officially go intooperation in the first quarter of 2025 It is expected that inSeptember 2026, the entire Dung Quat 2 project will becompleted With the current selling price (600 USD/ton), thegroup will have an additional 70,000 billion, plus currentrevenue, the total revenue of the group can be reached about200,000 billion VND

● Optimize production processes and use advancedtechnologies to minimize waste, reduce production costs andimprove resource utilization

● Explore the use of renewable energy sources and saving technologies to reduce the project's carbon footprint

energy-● Continuously invest in research and development to discovernew technologies, improve products and production

processes to improve efficiency, sustainability, and productquality

- With the existing strengths of a Group with financial potential andlarge-scale closed-chain production technology, Hoa Phat Agriculture hasquickly affirmed its reputation and leading position in the industry HoaPhat's quality Australian beef source is occupying the No 1 position with

a market share of 50%, and clean chicken eggs are leading in output inthe Northern region Animal feed factories use modern, synchronizedlines from Europe, do not use banned substances, and ensure no antibioticresidues in food Pig, beef, and poultry farm systems across the countrystrictly apply biosecurity procedures Pigs, chicken breeds, and cows areimported from Denmark, England, America, and Australia to ensure clearorigin, fresh, nutritious, and safe product quality for consumers Up tonow, Hoa Phat has is operating 02 animal feed factories with a capacity

of 300,000 tons/year/factory in Hung Yen, Dong Nai The entireequipment line is imported from Europe to ensure high quality and safetyfor pets and consumers

Objectives:

- Hoa Phat's goal by 2025 will be to reach an output of 1 million tons

of animal feed/year; 750,000 commercial pigs/year; 200,000 beef cowsand 300 million clean chicken eggs every year

- In fact, Hoa Phat has been involved in the agricultural sector for 7years Specifically, in March 2015, the group announced its investment inthe agricultural sector, targeting the production of animal feed and proteinproducts The goal of the "steel king" at that time was to capture 10% ofthe market share of the animal feed industry with an estimated scale ofabout 6 billion USD, within 10 years The group also plans to focus onraising pigs and beef cattle in a closed model.

Recommendation for company direction

-Hoa Phat's goal by 2025 will be to reach an output of 1 million tons of animalfeed/year; 750,000 commercial pigs/year; 200,000 beef cows and 300 millionclean chicken eggs each year:

● Invest in advanced feed production technology to increase efficiency,improve feed quality, and reduce waste

● Apply modern pig farming practices such as biosecurity measures,precision feeding and automated environmental control systems toimprove animal health, reduce mortality, and increase productivitycapacity

● Partner with experienced livestock farmers and apply sustainablegrazing practices to ensure animal welfare and protect the environment

● Explore opportunities to expand into branded beef products to capturehigher market value and differentiate from competitors

-Target to capture 10% market share of the animal feed industry within 10years:

● Identify key market segments with high growth potential andunderserved customer needs

● Create a unique value proposition that highlights Hoa PhatAgriculture's competitive advantages, such as high-quality ingredients,innovative recipes, sustainable practices or specialized products foranimal groups specifically

● Cooperate with reputable distributors, retailers, and agriculturalintermediaries to expand market reach and reach new customers

● Develop a strong brand identity that resonates with target customersand conveys Hoa Phat Agriculture's commitment to quality, innovationand sustainability

Hoa Phat Land:

Introduction

In 2001, Mr Tran Dinh Long's business officially entered the real estate field,starting with the establishment of Hoa Phat Construction and UrbanDevelopment Joint Stock Company based on Hoa Phat's Basic ConstructionDepartment Land is the second main economic sector of Hoa Phat Group HoaPhat has been involved in real estate for more than 20 years with two mainareas: industrial park real estate and urban real estate Currently, Hoa Phatowns and operates 3 industrial parks

Objectives

Because, having captured a significant domestic iron and steel market share,Hoa Phat needs to find a new driving force for growth, which is the real estatesector with the goal of becoming the top 3 real estate enterprises in Vietnam.Hoa Phat used to invest in real estate, but only in the last three years has thisbusiness segment been identified as one of the strategic areas

At last year's annual meeting, Mr Long, Chairman of Hoa Phat, affirmed toshareholders that "no one can make steel forever"

"With such a scale, sooner or later Hoa Phat will have to move towards a industry model," Mr Long said, adding that one of the group's key directions isresidential real estate

multi-Accordingly, Hoa Phat plans to go on two legs in this segment Part of thegroup will find suitable locations in localities to build urban areas, taking stepsfrom the beginning such as land auctions, planning applications, projectplanning

In addition, Hoa Phat also considers M&A options for existing projects to

shorten the time However, the group's leaders affirmed that they will not do

M&A at any cost and "only do it when they see benefits"

At this year's General Meeting of Shareholders, when asked again about theirambitions in the real estate sector, Chairman Tran Dinh Long emphasized thatHoa Phat entered real estate not following a trend

"At the present time, the group is highly focused on the Dung Quat 2 projectwith more than 75,000 billion VND Once again, I affirm that the real estatestrategy has not changed, but the steps are cautious and steady sure," Mr Longsaid

“Hoa Phat's strategy is to actively go to localities to participate in bidding for

urban development programs, then develop the project The prospect of the

real estate sector is good because Hoa Phat works from the ground up, does nothave to spend money to buy projects, and does not have pressure on cost

prices," Mr Long said.

Recommendations:

Focus on residential real estate segment:

● Develop diverse housing projects, suitable to the needs of manycustomers

● Improve product and service quality

● Apply new technologies to project development and management.Expand to other segments:

● Development of industrial park projects, urban areas, and touristresorts

● Search for investment opportunities in new markets

Strengthen cooperation:

● Cooperate with reputable domestic and foreign partners

● Search for new investment capital sources

Improve corporate governance:

● Complete the business management system

● Improve the management capacity of the staff

● Apply international management standards

Hoa Phat Electrical Appliances

Introduction

Hoa Phat Refrigeration Company was established in 2001 and has 22 years ofexperience in developing and manufacturing product lines offreezers/refrigerators, refrigerators, and air conditioners under the Hoa Phat andFuniki brands Currently, Hoa Phat Refrigeration is operating 3 large productioncenters in key economic regions: Hung Yen, Ha Nam, Ba Ria - Vung Tau Thesystem of production and assembly lines and equipment is imported fromfamous brands in the world, modern and fully automated In particular, productsfrom the Hoa Phat - Funiki brand are trusted and remembered by consumersbecause of the "Durable" and "high performance" factors

In September 2021, Hoa Phat Group established Hoa Phat Electrical AppliancesJoint Stock Company with a charter capital of VND 1,000 billion, of which HoaPhat holds 99.9% of the capital with the purpose of making large andmethodical investments in the electrical industry household appliances

At the end of November 2021, Hoa Phat Electrical Appliances Joint StockCompany started construction of the first household goods production center inHoa Mac Industrial Park, Ha Nam province This center will have an area of

more than 14 hectares, specializing in manufacturing products including aircoolers, water purifiers, and air purifiers The estimated capacity is about 1million products/year.

In addition, the Company has built a production center in the South located in

Ba Ria - Vung Tau province It is expected that 2 production centers in the tworegions will begin operating in the second quarter of 2022

Objectives

The group, headed by billionaire Tran Dinh Long as Chairman of the Board ofDirectors, has set a target of revenue from household appliance manufacturingactivities reaching 1 billion USD by 2030 and becoming the largest homeappliance manufacturer in Vietnam

In the first 6 months of 2023, Hoa Phat Refrigeration's air conditioner productsgrew strongly, contributing to an increase in sales of nearly 30% over the sameperiod Air conditioner sales nationwide will grow by 50% over the same period

in 2022

In just the last 3 months of 2023, Hoa Phat Electrical Appliances continuouslylaunched new lines of household electrical products to the market In particular,for the first time, many kitchen appliances were launched such as range hoods,slow juicers, rice cookers, pressure cookers, electric kettles The brand's keyproduct lines also include Many additional improvements, focusing on features

to support family health such as 11-level water purifier, set of 3 quick andconvenient one-piece molded cores, new generation hot and cold waterdispenser with integrated RO filter core

With the philosophy of "Living healthily and peacefully", new product lines arenot only invested in sophisticated design, durability, and features but also helpimprove the health and beautify the living space of each family

At electronics stores, Hoa Phat's Funiki air conditioner line stands out in themid-range segment Notably, this year, Funiki has risen to 6th place among 14air conditioner brands doing business at Dien May Xanh

=> Building a strong brand:

Clearly identify target customers and their needs

Brand positioning is based on differences compared to competitors

Enhance brand promotion through diverse communication channels

Update market trends and consumers need to adjust business strategiesaccordingly

Increase investment in brand promotion and marketing to raise consumerawareness of the Hoa Phat brand

Participate in social and environmental protection activities to enhance thecompany's image

2024

After more than 2 years of investment, Hoa Phat Ha Nam Electrical AppliancesFactory with an area of 15 hectares has now come into operation in phase 1 with

a capacity of 300,000 water purifiers/year and 200,000 air coolers/year

In the future, Hoa Phat will continue to invest in expanding this factory to reach

a maximum capacity of 1.5 million products/year in phase 2

II Business environmental analysis

Hoa Phat Steel

MICRO: Porter 5 Forces

Threat of New Entrants

High barriers to entry:

● Requires large investment capital

● High fixed costs

● Requires technical capacity through the process of accumulatingexperience

Besides, steel businesses that already exist in the market like Hoa Phat oftenhave strong brands and long-term customer relationships This causessignificant obstacles for new businesses wanting to enter the market

→ Threat of new entrants is at a Low level

Threat of Substitutes

The threat of substitutes for Hoa Phat Steel Company is moderate Somealternative materials and products can fulfill similar functions as steel, such asaluminum, concrete, and composite materials However, in some specificapplications, there are no suitable substitutes for steel, especially in

infrastructure construction and other industries.

→ Threat of Substitutes is at a Low level

Threat of Rivalry

The intensity of competitive rivalry in the steel industry is high due to factorssuch as price competition, product differentiation, and capacity utilization HoaPhat competes with other steel producers both domestically and globally,including state-owned enterprises and multinational corporations The industry'scyclical nature, overcapacity, and market saturation further contribute tocompetitive pressures Several big competitors such as:

● Hoa Sen Group Joint Stock Company

● Vietnam Steel Corporation (VNSTEEL)

● Pomina Steel Joint Stock Company

● Formosa Ha Tinh Hung Nghiep Iron and Steel Company Limited (FHS)

→ Threat of Rivalry is at Moderate to High Level

Bargaining power of Suppliers

Hoa Phat depends on suppliers of iron ore, manganese ore, and other rawmaterials If there is a fluctuation in supply or an increase in raw material prices,

it can affect the company's profit margin

However, supplier power is usually not too high due to the diversity of the steelindustry At the same time, large enterprises like Hoa Phat will often sign long-term cooperation contracts with suppliers, which can reduce their influence

→ The bargaining power of Suppliers is at a Moderate level

Bargaining power of Buyers

The bargaining power of buyers in the steel industry tends to be high due to thestandardized nature of steel products and the presence of multiple suppliers.Buyers, such as construction companies, automotive manufacturers, andinfrastructure developers, often have the flexibility to switch between suppliersbased on factors such as price, quality, and delivery terms As a result, Hoa Phatmay face pressure to offer competitive pricing, quality, and value-addedservices to retain customers and maintain market share

→ The bargaining power of Buyers is at a High level

MACRO: PESTEL Analysis

1 Political

● Domestic political stability creates an easier business environment forHoa Phat

● The government is implementing Industrial policy and investment ininfrastructure, promoting disbursement of public investment capital, andhas many solutions for the steel industry to overcome difficulties

2 Economic

● The impact of the Russia-Ukraine war has profoundly impacted the worldenergy industry Fluctuations in energy prices may affect Hoa Phat'sproduction costs and profits

● Input raw material prices are deeply affected by exchange ratefluctuations

● Banks are reducing lending interest rates to create favorable conditionsfor manufacturing enterprises like Hoa Phat to access capital atreasonable costs

● The proportion of foreign direct investment capital in the real estateindustry in 2023 is large, this has created a driving force for the steelindustry to develop

3 Social

● Population growth, urbanization, and lifestyle changes influence thedemand for steel products in construction, automotive manufacturing, andconsumer goods industries

● Hoa Phat may have to meet community expectations as concern for theenvironment and sustainability issues increases in society

4 Technological

● The development of digital technology and artificial intelligence canprovide Hoa Phat with new tools and methods to optimize productionprocesses, predict market demand, and optimize the supply chain

● The world is gradually shifting to using clean energy and renewable rawmaterials

● Vietnam's steel production industry mostly uses electric arc furnace(EAF) technology The use of closed interlock blast furnace technologyhas helped Hoa Phat reduce electricity consumption by 10-15%

5 Environmental

● Steel manufacturing activities' carbon emissions, dust, solid waste,wastewater, and contribution to climate change are significantenvironmental concerns

● Effective waste management practices are essential for Hoa Phat tominimize environmental pollution and comply with regulations.

6 Legal

● Hoa Phat must comply with various regulations and laws governing thesteel industry, including environmental regulations, safety standards,labor laws, and trade regulations

EFAs

→ Indicate the company at Opportunities (O)

b Operations: At its manufacturing facilities, Hoa Phat engages in primaryoperations such as ironmaking, steelmaking, casting, rolling, and finishingprocesses The company utilizes advanced technologies and efficient productionmethods to transform raw materials into high-quality steel products.

c Outbound Logistics: After production, Hoa Phat manages outbound logistics

to distribute its steel products to customers across various industries, includingconstruction, automotive, machinery, and appliances The company ensuresefficient transportation, storage, and delivery to meet customer demands

d Marketing and Sales: Hoa Phat engages in marketing and sales activities topromote its steel products and attract customers The company employs sales

teams, advertising campaigns, and customer relationship management strategies

to identify market opportunities, generate leads, and secure sales contracts

e Service: Hoa Phat provides after-sales service and support to customers,including technical assistance, product customization, and warranty services.The company aims to enhance customer satisfaction and loyalty by addressingtheir needs and ensuring product performance

Support Activities:

● Firm Infrastructure: Hoa Phat's firm infrastructure encompasses corporategovernance, strategic planning, and financial management functions Thecompany establishes governance structures, formulates businessstrategies, and manages financial resources to support its growth andsustainability objectives

● Human Resources Management: Hoa Phat manages its workforce throughrecruitment, training, and development programs to ensure skilled andmotivated employees The company fosters a culture of continuouslearning, innovation, and collaboration to enhance organizationalperformance

● Technology Development: Hoa Phat invests in research and development(R&D) to innovate and improve its production processes, product quality,and efficiency The company explores new technologies, materials, andtechniques to stay competitive and meet evolving customer needs

● Procurement: Hoa Phat engages in procurement activities to source rawmaterials, equipment, and services from suppliers The companyevaluates supplier performance, negotiates contracts, and managessupplier relationships to ensure reliable and cost-effective supply chainoperations

IFAs

→ Indicate the company is at Strengths (S)

Hoa Phat Agriculture

Micro: Porter 5 Forces :

1.Threat of New Entrants:

● Barriers to market entry:

○ Capital barriers: The agricultural sector requires largeamounts of investment capital

○ Barriers to accessing supply: difficult to access high qualityraw materials

○ Technology barriers: The agricultural industry isincreasingly applying advanced technologies such asbiotechnology, automation and IoT New businesses need to

be able to access and apply these technologies to competeeffectively

● Economic advantages of scale

● Access to distribution channels

=> The agricultural industry has relatively high barriers to entry due tothe need for capital, land, expertise, and regulatory approvals This

makes it difficult for new entrants to compete with establishedcompanies such as HPG-Agriculture.

→ Threat of new entrants is at a Low level

2 Threat of Substitutes:

● Availability of substitutes: There are several substitute products foranimal feed and livestock, such as plant-based proteins and insects.This could pose a threat to HPG-Agriculture if these substitutesbecome more affordable or desirable to customers

+ Ha Bac Fertilizer Investment and Development JointStock Company (DHC)

+ De Heus Group+ Dong Tam Agriculture Joint Stock Company (DTC)

● Regional and global competition: HPG-Agriculture facescompetition not only from domestic players but also frominternational companies that can leverage economies of scale andglobal distribution networks to gain a competitive edge

→ Threat of Rivalry is at a High level

4 Bargaining power of Suppliers:

● The agriculture industry has a large number of suppliers,including farmers, cooperatives, and agribusinesscompanies This gives HPG-Agriculture some bargainingpower over its suppliers

● The products of many agricultural suppliers are relativelysimilar, giving HPG-Agriculture more bargaining power

→ Threat of Bargaining power Suppliers is at a Low level

5.Bargaining power of Buyers:

● HPG-Agriculture sells its products to a wide range ofcustomers, including farmers, feed mills, and livestockproducers This gives the company some bargaining powerover its buyers.

● HPG-Agriculture has a reputable brand in the animal feedand livestock market However, some competitors also haveequally strong and reputable brands, so HPG-Agriculture'sbrand awareness does not create too great a competitiveadvantage

→ Threat of Bargaining power Buyer is at a Medium level

Macro: PESTEL

POLITICAL :

● Government policies: Government policies related to agriculture,livestock, food safety, and environmental protection, governmenthas many policies to support agricultural development, such asloan support, tax reduction, price subsidies, can significantlyimpact HPG-Agriculture's operations and profitability

● Trade policies: Trade policies, such as tariffs, quotas, and tradeagreements, can affect HPG-Agriculture's import and export costsand competitiveness in international markets

● International political tensions in recent years have affected theprice of input materials for agricultural production, causing productcosts to increase and Hoa Phat's profits to be affected

“For example, the prices of corn and soybeans - two main inputmaterials for animal feed production - have increased sharply in recenttimes due to political tensions between Russia and Ukraine”

ECONOMIC :

● The demand for food, especially high quality agricultural products,

is increasing in Vietnam and around the world This is a greatopportunity for Hoa Phat agriculture

● However, the agricultural market is also highly competitive, withmany domestic and foreign businesses participating Hoa PhatAgriculture needs an effective competitive strategy to attractcustomers and gain market share

● In 2023, bank interest rates in Vietnam will increase sharply,negatively affecting Hoa Phat's profits

SOCIAL :

● Urbanization: Urbanization trends can lead to increased demandfor processed food and convenience products, which may benefitHPG-Agriculture's business

● Consumer demand: Vietnamese people's demand for meat, eggs,and dairy products is increasing, especially in big cities

TECHNOLOGY :

● The emergence of new technologies: Emerging technologies, such

as artificial intelligence, big data, and blockchain, can offer newopportunities for HPG-Agriculture to optimize its operations,enhance customer service, and gain competitive advantages

● Livestock farms thoroughly apply biosafety technology andVietGap standards in livestock production, ensuring the cleanestand safest supply of pig, beef, and poultry egg products toconsumers

ENVIRONMENT :

● Environmental regulations: Stricter environmental regulations canincrease HPG-Agriculture's compliance costs and requireinvestments in eco-friendly practices

● Climate change: Climate change can impact agriculturalproduction, leading to fluctuations in raw material prices andsupply chain disruptions

● Water scarcity: Water scarcity can pose challenges for Agriculture's operations, especially in areas with limited waterresources

HPG-LEGAL :

● Animal welfare regulations: Animal welfare regulations caninfluence HPG-Agriculture's livestock farming practices andrequire investments in animal welfare standards

● Food safety regulations: Compliance with food safety regulations

is essential for HPG-Agriculture to protect consumer health andmaintain market credibility

● The promulgation of the 2014 Environmental Protection Law withstrict regulations on environmental protection forced Hoa Phat toapply environmentally friendly production methods

● Regulations on greenhouse gas emissions are becoming stricter,requiring Hoa Phat to minimize greenhouse gas emissions duringthe production process

IFAs:

EFAs:

With the existing strengths of a Group with financial potentialand large-scale closed-chain production technology, Hoa PhatAgriculture has quickly affirmed its reputation and leadingposition in the industry

Hoa Phat Agriculture is one of the leading agricultural enterprises

in Vietnam, operating in the field of production, processing and

trading of high-quality agricultural products.

Outbound

Logistics

Hoa Phat Agriculture has a systematic and effective exportlogistics system to bring products to international customersquickly, safely and cost-effectively

Marketing

and Sales Hoa Phat Agriculture has a nationwide distribution system,

including a network of agents, retail stores, supermarkets,traditional markets and online sales channels

Hoa Phat Agriculture has a nationwide distribution system,including a network of agents, retail stores, supermarkets,traditional markets and online sales channels

The business also exports products to international markets

Customer

Service Hoa Phat Agriculture has a wide retail store system across the

country Customers can go directly to the store to buy products,experience services and receive advice from professional staff.Hoa Phat Agriculture has a flexible product return policy toensure customers' rights

Hoa Phat Agriculture always strives to improve the quality ofcustomer service to bring customers the highest satisfaction Thebusiness is committed to meeting all customer needs quickly,effectively and professionally

2.Support Activities :

Firm

Infrastructure Hoa Phat Agriculture applies a modern corporate management

system, ensuring effective and transparent operations

The enterprise has a Board of Directors and Board of Directorsthat are professional, experienced, have strategic vision and are

highly responsible for the development of the enterprise.

Technology

Development HPG applies an automatic mechanical irrigation system, uses

water economically and effectively, and monitors and adjusts theamount of irrigation water appropriate to each stage of plantgrowth

Precision farming technology: HPG uses modern equipment tomonitor and analyze data on soil, water, climate, pests, to helpprovide appropriate and optimal farming measures productivityand product quality

HPG commits to continue investing in technology developmentand innovation to improve operational efficiency, affirm itsleading position in Vietnam's agricultural industry and contribute

to ensuring national food security

Procurement HPG's Procurement activities are highly appreciated for their

efficiency and professionalism The business has applied manyeffective strategies to ensure supply, optimize costs and improveproduct quality HPG is a typical example for Vietnamesebusinesses in applying effective Procurement activities

Hoa Phat Land:

MICRO: Porter 5 Forces

1 Bargaining power of Suppliers

The Suppliers here can be construction, design, environmental serviceprovider, security service provider, As a large corporation with manybusiness fields, Hoa Phat has high bargaining power with suppliers Thecompany can order in bulk and negotiate competitive prices, withoutrelying on a single supplier for any raw material This helps the companyeasily choose the supplier with the best price and quality

→ The Bargaining power of Suppliers is at a Medium level

2 Bargaining power of Buyers

The real estate market has many suppliers, however, Hoa Phat is one of thereputable suppliers with high-quality projects, attracting a certain number ofcustomers Buyers can bargain prices to a certain extent, especially whenbuying multiple products or when buying at a time when the market has fewbuyers Housing conversion costs are relatively high, however buyers can stillchoose other alternative products on the market Hoa Phat is a large corporationwith strong financial potential, so it has certain bargaining power in the market

→ The Bargaining power of Buyers is at a Medium-High level

3 Threat of New Entrants

- The barrier to entry:

High capital requirements: The real estate industry requires large amounts ofinvestment capital for land purchase, construction and project development.Legal barriers: Regulations on real estate investment, construction licensing,and the environment are quite complicated and time-consuming

Difficulties in accessing land resources: Land resources, especially in primelocations, are increasingly scarce and expensive

Brand and reputation: Building a brand and reputation in the real estate industryrequires a large investment of time and resources

Although there are some barriers to market entry, Vietnam's real estate market

is still very attractive with great development potential

→ The Threat of New entrants is at a Medium level

4 Threat of Rivalry

-Weakness of Hoa Phat Real Estate

● The number of projects is limited

● Mainly focusing on the industrial park real estate segment

● Little information about the project construction progress

-Competitors:

● Vingroup: Vingroup has strong financial potential, a reputablebrand, and product diversity, creating great competitive pressurefor Hoa Phat

● Sun Group: Sun Group is Vietnam's leading real estate and tourismgroup, owning many high-end real estate projects in primelocations

● Novaland: Novaland is one of the reputable real estate developers

in Ho Chi Minh City, owning many high-end housing projects

→ The threat of Rivalry is at a High level

5 Threat of Substitutes

There is no practical substitute for real estate with living needs Regardinginvestment, there are other forms of investment such as bonds and stocks thatcan be considered alternative products but are not immediate threats

→ The Threat of Substitute is at a Low-Medium level

MACRO: PESTEL

Political

● Vietnam maintains a stable political environment, creating favorableconditions for the development of the real estate industry and attractingforeign investment into the real estate sector

● The Vietnamese government has many policies to support housingdevelopment, such as social housing programs, handling administrativeprocedures related to real estate, etc

Economic

● Vietnam's economy is in a period of rapid development, drivingdemand for housing and other real estate products

● Vietnam's per capita income is increasing, improving people's ability

to pay for housing

● Bank interest rates in Vietnam are low, creating favorable conditionsfor people to borrow money to buy houses

● E-commerce is growing strongly, creating new sales channels for realestate products

● Social networks are an effective marketing channel to promote real

estate products to potential customers

warehouse

Y N - - Competitive parity

CompetitiveAdvantageEngineers

Disadvantage Collateral Y N - - Competitive parity

Secrets competitive

advantage Designs N - - - Competitive

● Operations: HPG land operates mainly in the field of real estatedevelopment in industrial parks and urban areas HPG Land currentlyowns and manages many large industrial parks and urban areas across thecountry

● Outbound Logistics:is an important part of the supply chain of Hoa PhatReal Estate Company It includes activities related to the delivery ofcompleted real estate products to customers

● Marketing and Sales: Hoa Phat uses many different media channels topromote its real estate products Hoa Phat regularly organizes seminarsand real estate exhibitions to introduce products and attract potentialcustomers Hoa Phat Phat owns a team of well-trained sales staff withhigh professional knowledge and understanding of the real estate market

● Service: Hoa Phat's real estate projects are methodically invested ininfrastructure and utilities, ensuring high quality and meeting customerneeds Reasonable prices Hoa Phat has a team of professional staff,Enthusiastic, and always ready to advise and support customers

Support Activities:

● Procurement: Hoa Phat Real Estate Company's procurement process isdesigned to ensure efficiency, transparency and compliance with legalregulations This process helps the company ensure effective budget useand improve the quality of goods and services

● Technology Development: Hoa Phat Real Estate Company is alsoresearching and applying new technologies such as artificial intelligence(AI), and blockchain, to improve operational efficiency and create realestate products and services High-quality products, meeting theincreasing needs of customers.

● Human Resource Management: To attract, develop and retain talents,HPG Real Estate has built a modern and effective Human ResourcesManagement (HRM) system.HPG Real Estate provides employees withthe best benefits, building a clear and transparent reward and punishmentsystem to encourage employees to work effectively

● Firm Infrastructure: built according to a centralized model, with theBoard of Directors as the highest executive body responsible to the Board

of Directors, ensuring high concentration in decision-making andimplementation of large projects, simultaneously while still creatingconditions for creativity and flexibility in the operations of departments

IFAs

Hoa Phat Electrical Appliances

MICRO: Porter 5 Forces

1 Threat of New Entrants

● There are not many types of products: Compared to newly developedproducts such as Aqua, Hoa Phat has a limited number of householdproducts.

● Marketing activities are not strong: Hoa Phat's marketing activities arenot strong, leading to low brand recognition

● Sales channel is mainly through agents: Hoa Phat's sales system is mainlythrough agents, there is no effective online sales channel to reachpotential customers

● Competing on competitive prices: Hoa Phat has not been able to optimizeprices so that consumers have a special view of Hoa Phat

=> Therefore, with many newly developed machine brands in the Vietnamesemarket, Hoa Phat is not really a priority choice for consumers

→ Threat of new entrants is at a HIGH level

2 Threat of Substitutes

● Currently, household electrical products are too popular amongVietnamese consumers, so replacement products for Hoa Phat productsare no longer so important

● However, in Vietnam there are still frequent problems with people losingelectricity, so replacement products are still needed

→ Threat of Substitutes is at a Moderate level

3 Threat of Rivalry

● Vietnam's home appliance market has a high level of competition withmany big competitors such as Sunhouse, Asanzo, Samsung, etc

● These competitors have advantages in:

● Long-standing brand, trusted by customers

● Wide distribution network

● Diverse product line meets many different needs

● Competitive pricing policy

→ Threat of Rivalry is at Moderate to High Level

4 Bargaining power of Suppliers

Because there is no specific information about HPG's supply base and the phonemarket in Vietnam, it is difficult to accurately assess their commercial strength.However, based on the development of household appliances, Hoa Phat is stillcheap in the Vietnamese market

→ The bargaining power of Suppliers is at a High level

5 Bargaining power of Buyers

Because Hoa Phat's home appliance products are not really a priority forconsumers, with many other competitors, buyers will force prices, only thenwill Hoa Phat's products stand out from other competitors competition

→ The bargaining power of Buyers is at a High level

MACRO: PESTEL

1 Politics:

Political stability: The stable political environment in Vietnam creates favorableconditions for HPG's business activities

Tax policy: Tax policy can affect product prices and profits of HPG

Trade regulations: Trade regulations, including import and export taxes, mayaffect HPG's ability to compete in international markets

2 Economy:

● Economic growth: Economic growth in Vietnam boosts consumerdemand, benefiting HPG

● Average income per capita: Increased average income per capita leads to

a higher ability to pay for household electrical products, benefiting HPG

● Bank interest rates: High bank interest rates can affect consumers' ability

to borrow money and spend, affecting HPG's sales

● Inflation: High inflation can lead to increased raw material prices andproduction costs, affecting HPG's profits

● Brand awareness: HPG brand awareness is still limited

● Consumer preferences: Consumer preferences for household electricalproducts change over time, HPG needs to adapt quickly to meet marketneeds

4 Technology:

● Technological advances: Technological advances in manufacturing andproduct design help HPG improve operational efficiency and providemore innovative products

● Automation: Automation of production processes can help HPG reducecosts and improve productivity

● E-commerce: E-commerce is growing strongly in Vietnam, opening upnew sales channels for HPG

● Information technology: Effective application of information technology

can help HPG improve supply chain management, customer service and

marketing activities

5 Environment:

● Environmental regulations: Increasingly strict environmental regulations

may force HPG to invest in more environmentally friendly production

technologies

● Climate change: Climate change may affect HPG's supply chain and

production activities

● Demand for energy-saving products: Demand for energy-saving products

is increasing, creating opportunities for HPG to develop environmentally

friendly products

6 Legal:

● Consumer protection laws: Strong consumer protection laws can affect

how HPG markets and sells its products

● Intellectual property rights: Effective intellectual property protection is

important for HPG to protect its innovative products and technologies

● Labor laws: Labor laws need to be followed to ensure a safe and fair

working environment for HPG employees

warehouses,offices

Machinery, equipment Y Y N - Competitive Disadvantag

Financial Revenue and profit Y Y N - Competitive Disadvantag

Collateral Y Y N - Competitive Disadvantag

advantage

IFAs

EFAs

Value Chain

❖ Primary activities :

Inbound Logistics Sourcing materials: Hoa Phat Electrical Appliances

Company sources materials from both domestic andinternational suppliers The company has a team ofexperienced buyers who are responsible for negotiatingwith suppliers, ensuring quality, and securing the bestpossible prices

Transportation: Hoa Phat Electrical AppliancesCompany uses a variety of transportation methods tomove materials to its manufacturing plants Thesemethods include shipping by sea, air, and land Thecompany also has its own fleet of trucks to transportmaterials between its plants and warehouses

Warehousing: Hoa Phat Electrical AppliancesCompany has a network of warehouses locatedthroughout Vietnam These warehouses are used tostore raw materials, work-in-progress, and finishedgoods The company uses a warehouse managementsystem (WMS) to track inventory levels and optimizewarehouse operations

Operations Manufacturing: Hoa Phat Electrical Appliances

Company manufactures a wide range of householdappliances, including refrigerators, washing machines,air conditioners, and televisions The company hasseveral manufacturing plants located in Vietnam Theseplants use state-of-the-art equipment and technology toproduce high-quality products

Quality control: Hoa Phat Electrical AppliancesCompany has a strict quality control process in place toensure that all of its products meet its high standards.The company has a team of quality inspectors who areresponsible for testing and inspecting products at allstages of the manufacturing process

Supply chain management: Hoa Phat ElectricalAppliances Company uses a comprehensive supplychain management (SCM) system to manage its supplychain This system helps the company to optimize itsinventory levels, reduce costs, and improve efficiency

Outbound Logistics Order fulfillment: Hoa Phat Electrical Appliances

Company uses a variety of methods to fulfill customerorders These methods include shipping productsdirectly to customers, shipping products to retailers,and shipping products to distributors The companyuses a warehouse management system (WMS) to trackorders and shipments

Transportation: Hoa Phat Electrical AppliancesCompany uses a variety of transportation methods toship products to customers These methods includeshipping by sea, air, and land The company also has itsown fleet of trucks to deliver products to customers inVietnam

Delivery: Hoa Phat Electrical Appliances Companyoffers a variety of delivery options to its customers.These options include standard delivery, expediteddelivery, and white-glove delivery The company alsooffers tracking information so that customers can trackthe status of their orders

Marketing and Sales Marketing: Hoa Phat Electrical Appliances Company

uses a variety of marketing channels to reach its targetaudience These channels include televisionadvertising, print advertising, online advertising, andsocial media marketing The company also participates

in trade shows and other events

Sales: Hoa Phat Electrical Appliances Company sellsits products through a variety of channels Thesechannels include retail stores, distributors, and onlineretailers The company also has a team of salesrepresentatives who sell products directly to businesses

Customer Service Customer support: Hoa Phat Electrical Appliances

Company offers a variety of customer support options

to its customers These options include a phone hotline,email support, and live chat support The company alsohas a knowledge base on its website where customerscan find answers to frequently asked questions.Returns and repairs: Hoa Phat Electrical AppliancesCompany offers a generous returns and repairs policy.Customers can return products for a full refund within