Understand the behavior of organizations in their market environment

Table of Contents Introduction .2 Task Understand the behavior of organizations in their market environment 3.1 Explain how market structures determine the pricing and output decision of businesses 3.2 Illustrate the way in which market forces shape organizational responses using a range of examples 3.3 Judge how the business and cultural environment shape the behavior of a selected organization Task Be able to assess the significance of the global factors that shape national business activities 4.1 Discuss the significance of international trade to a Vietnamese business organization 4.2 Analyze the impact of global factors on a Vietnamese business organization Growth of world economy Global demographic patterns Distribution of world GDP International institutions TPP, WTO Economic relations between nations Global human resource-nature and quality of skills, mobility of labor .7 Global technology and quality standards 4.3 Evaluate the impact of agreement on Vietnam business organization .9 Conclusion 10 Reference 10 Introduction Tourism has long become the industry plays an important role in the economy Especially, Vietnam tourism is developing incredibly and considerably over the years One of the largest travel companies of Vietnam have to mention that the Saigontourist To get the position of today, Saigontourist has described several methods and strategies for the company, particularly in the period of integration and innovation in Vietnam Task Understand the behavior of organizations in their market environment 3.1 Explain how market structures determine the pricing and output decision of businesses There are main market structures: Perfect competition; monopolistic competition; oligopoly; monopoly and each has its own pros and cons  Perfect competition is a market structure has a massive number of small independent firms relate to each other In this market, type of product is equalizing Enterprises are very easy to get in or out of the market and deal with no barriers in marketplace The price need to be equal in this market, if the price is not balance between sellers, the one with highest price will be damaged There is no market power in these firms and has no long-run economic profit  Monopolistic competition is a market structure consisting of a large number of relatively small companies, with ties to enter the market or withdraw freely Type of product is differentiating It is possible to have non-price competition in this market structure The market power of monopolistic competition firms is between low and high in marketplace Long-run economic profit is not include in this structure  Oligopoly is a market structure consisting of a small number of relatively large companies, with significant barriers to entry for other companies Types of products are variety, standardized or differentiated However, it is difficult to get in or out of this structure because it is relate to other problems Price competition is difficult in this marketplace and usually base on Game Theory The effect of this structure’ market power is the middle between low and high Long-run economic profit is possible and subject to mutual interdependence  Monopoly is a market structure has only one firm at a time Type of product is unique and there are not any entrances for other companies to get in or no exit for firm to get out Price competition is not necessary for this structure Market power of firm in monopoly is very high and effect directly to the economic Long-run economic profit is high and subject to regulation Profit Maximization: Profit maximization help business executives foresee the scale of profits, which they will create, thereby helping enterprises plan to restructure business operations tasks and find solutions chalk fight done The profit maximization is one point or one important factor in analyzing the breakeven point of the business, developing the financial situation of enterprises 3.2 Illustrate the way in which market forces shape organizational responses using a range of examples Michael Porter provided a theory for analysis He modeled the business sector and it would have to bear the impact of five competitive forces Those are:  Threat of new entrants  Threat of substitute products  Determinants of supplier power  Determinants of buyer power  Rivalry among existing firms This analysis is considered useful tools and effective way to find the profits More important, this model offers competitive strategy for organization to maintain or increase profitability 3.3 Judge how the business and cultural environment shape the behavior of a selected organization PESTEL is a tool to analyze and monitor the external environment impact on the organization PESTEL stands for: P - Political E - Economic S - Social T - Technological E - Environmental L - Legal Political: This is the policy of the government intervention in the economy, such as government policies, political stability policy or foreign markets, tax policy, foreign trade policy, labor laws, etc These policies have a strong influence on businesses, organizations must be able to respond to current law and expect in the future, and to adjust their marketing policy Economic: These are the elements of the market economy such as economic growth, interest rates, exchange rates, inflation, the income of consumers and businesses It could the macroeconomic and microeconomic Macroeconomic: Businesses have to deal with government policies such as government control of interest rates, tax policy and government spending Microeconomic: this is factor about the way people use their income, it also affects the organization B2C Social: This is the element of social culture, it relates to people, attitudes, and beliefs it includes population growth, age, health conscious, attitude, etc Based on these factors the business will know the best way of marketing Technological: This is the factor change in technology, modern machinery to keep up with the world It directly impacts of business activities in production methods, delivery method and new ways of communicating with the target market Environmental: Environment, it has become important because of the growing scarcity of raw materials, pollution indicators, and the indicators of emissions must be prescribed by the government Nowadays, Consumers require product must have clear origins and sustainability Legal: This is a legal issue that businesses must follow as health and safety, equality for workers The advertising standards, consumer rights, antitrust issues and product safety will help businesses know what they must to comply with the law Task Be able to assess the significance of the global factors that shape national business activities 4.1 Discuss the significance of international trade to a Vietnamese business organization International trade is a form of exchange of goods and services between countries for the purpose of economic growth for both and creates a relationship between two countries To maintain the development of international trade and long-term effective, the countries should increase interconnect economic to make the relationship of mutual dependence and grow together  Advantage: Create condition for the countries involved in the international division of labor, economic development and enrichment for the country Some benefits are increasing the variety of product to customers; the market is extended, and the business will produce with large-scale, so the cost of product will decrease; the enterprise can learn from other countries, enhance new ideas; create conditions to keep up with new technologies and spread to the country  Disadvantage: the activities must take place in a new and unfamiliar environment, so the difficulties cannot avoid Some difficulties are establishing an overseas company with initial costs and high risks, high transport costs, tariff barriers, and many competitors A country engage in international trade will occur two cases are exports and imports Two factors will depend on the domestic price (Pd) and the world price (Pw)  Export: It happens when Pw> Pd, the manufacturer's supply surplus after domestic supply  Import: It occurs when Pd> Pw, the supply does not meet the domestic demand A measure of the interests of consumers is called consumer surplus (CS), is the sum of the difference between the price that consumers are willing to pay and the price they actually pay Producer surplus (PS) is the sum of the difference between the price that producers receive and the price they are willing to sell Formula: Total surplus = CS + PS Each country will have their own policies and rules, so a company engage in commercial activities will face trade barriers that they need to know as tariff, import quotas, etc to perform properly  Tariff: this is a tax on import When importing a product, beside the world prices, consumers have to pay a tax to the government The government prescribes the percentage of tax It leads to the price that buyer and seller must pay in domestic = Pw + T (tax)  Import quota: these are factors that have the same effect as tariffs It lays down limitations on the amount of imports, affecting domestic prices It can make a local business into a monopoly, resulting in reduced welfare of buyer - increases welfare of seller Quota does not bring revenue to the government, so it will cause negative in obtaining quota between enterprises 4.2 Analyze the impact of global factors on a Vietnamese business organization Growth of world economy Currently, until the middle of 2016, the world economic situation tends to decline over last year, the global GDP growth at only 2.4%, down from 2.9% at the end of the year Although the economic situation is unstable, the tourism industry still experience significant growth According to the World Tourism Organization (UNWTO) the number of international visitors last until mid-2016 has reached nearly billion people, rose more than 4% over the previous year In which the Asia-Pacific, Americas largest increase is 4-5%, followed by Europe with an increase of 3.5-4.5%, Africa and the Middle East are 2-5% Specially, in Viet Nam, with 6.6% contribution to GDP, Viet Nam tourism ranks 40/184 countries in scale direct contribution to GDP For example, in festival 30/4 and 1/5, Vietnam had more than 5000 visitors, and three cities with the largest number visitors are: Ha Noi welcomed 227,640 passengers International visitors reached 42,640 (increase 14% over the same period in 2015) Haiphong welcomed more than 598,000 visitors (increase 28,27% over the same period in 2015) In which, over 5,300 visitors had come from other countries (increase 11,79% over the same period in 2015) Khanh Hoa province welcomed 599,208 passengers (increase 14,89% over the same period in 2015), guests staying reached 118,952 (up 9,93% over the same period) In which, international arrivals have reached 19,498 (increase 30,08% over the same period 2015) The impression is just Saigontourist had more than 2000 visitors, based on that, we can see Saigontourist is a big and famous company in tourism and Viet Nam tourism industry is growing every year, keeping up the step of the world tourism, while the general economy tends to decrease, the tourism industry is still increasing Because, the developing countries on tourism, they meet all necessary conditions for tourists as agricultural, industrial, transportation and the development of science – technical According to statistics it occupies 10% of global GDP It shows that the tourism industry is very important with the development of the global economy Global demographic patterns Another factor also affects the tourism industry is the population The increase in population help the tourism industry will pick up the new arrivals every year, as well as to the variety of types of tourists The result show that Asia is still the most populous continent in the world with more than billion people It creates very good conditions for the countries of the region and particular in Viet Nam Distribution of world GDP Although the economic situation is unstable, some large countries such as China is still growing very well with GDP quarter 2/2016 of the country rose by 6.7% over the same period last year Especially in industry, transportation and the problem of environmental pollution improved very well Lead to meet the conditions for development tourism as food, transport, the environment, and other utilities The number of Viet Nam tourist travel to China reached more than four thousand people till middle of 2016 and Saigontourist had more than a thousand visitors International institutions TPP, WTO  TPP (Trans-Pacific Partnership Agreement) TPP is not only increased trade but also help investment tourism activities have more conditions to develop International visitors have the opportunity to facilitate procedures, faster and cheaper transporter by commitments temporary entry of business visitors under TPP TPP helps improve working conditions, improve the quality of human resources, including tourism workers Competition in the TPP creates competitive pressures, which forced workers to raise foreign language proficiency, skill, the spirit associated with specific labor groups and various social benefits Trend of intra-labor movement has a chance to search for new jobs, has increased pressure for tourism workers Therefore, developing labor market institutions, quality is and will increasingly become demanding urgent and effective tool to support and develop human resources Vietnam The important thing is 5/12 of the TPP member countries are on the list of ecologically diverse countries leading tighten the requirements on hygiene and environmental and combat wildlife trafficking, by that habitat and infrastructure, natural tourism will be improved as the implementation of commitments in the TPP This promotes sustainable tourism and responsible  WTO (World Trade Organization) In fact, Vietnam joined the WTO has caused great attention of the international community, revitalizing the international tourism market by the image of a safe destination, attractive and open More and more foreigners come to Vietnam to know more and business with Vietnam Data from the Vietnam National Administration of Tourism show that international arrivals to Vietnam in recent years continued to grow If in 2000, Vietnam has attracted about 2.12 million international passengers, then by 2006, this figure had reached nearly 3.6 million It is expected that by 2010, international visitors to Vietnam will reach million passengers, increasing income from the current billion to 4-5 billion dollars At the WTO, due to the characteristics of different tourism markets with commodity markets should travel with high independence in global competition, not being dependent on the US market as well as unaffected by the agreement on tariffs and international trade as normal goods Forecasts, in the coming years, the Asia - Pacific region will be the influx of tourists attracted the most with an average growth rate of 78% It is a condition for Vietnam to promote and attract tourists Economic relations between nations The second big chance for Vietnam travel is we can take advantage of the integration with the international economy is attracting increasing foreign investment in tourism infrastructure development, improves customer service domestic and foreign, especially the MICE Vietnam is considered a rising star in the region, with an annual economic growth to the highest level in Asia, after China For small and medium-sized enterprises, as well as other industries, integration is accompanied by a purge of weak business competitiveness and professional; minimize the situation "worm ointment "as in recent years But for now has affirmed and brand names, this is the best opportunity for them to improve their position Global human resource-nature and quality of skills, mobility of labor Humans are an important resource for country Therefore, some countries have methods to develop the human resources as well as attract talented people from around the world Method plays an important role in the development of human resources is the development of education and training One of the key countries appreciate enhance human resources including the US To develop human resources, the US focuses on creative and practical of students instead of heavily theoretical American students can say is capable of critical and opened thinking than students of other countries In addition, Americans also supports jobs for newly graduated students and scholarships or funding to attract talent from other countries That is why today the United States is a country with many of the world's leading scientists In Asia, Japan is a country poor in capital resources, so the workforce is considered extremely important Difference from US, the Japanese education is considered quite heavy for students, especially the electronic industry Students have to clear both the theory and practical skills This is easy to understand because the electronics industry is the core industry in Japan However, the human resource after graduating in Japan was extremely qualified and skilled In Singapore, the leaders of the nation believe that human resources are well trained, so the economic will develop strongly The education system focused on developing the capacity and skills of each individual In addition, the Singapore government also attracts international students by supporting tuition, exemption of visas and creating a modern academic environment of international standard Most countries in the world have been equipped with human resources skills and good knowledge This is probably the hard process for Vietnam in the integration process Be a country with abundant human resources but low literacy levels This makes Vietnam human resources become weak and rent at labor cheaper than other countries Moreover, the government does not have any methods to keep the talent stay or create a developed environment appropriately They will look to other countries to work This is a reason why Vietnam is brain drain of labor Human resource is an important factor in tourism However, because of low qualified workers in terms of language, experience and knowledge, and these factors are the essential characteristic of this industry So, Saigontourist often opens training courses and coaching staff of professional qualifications, the language of communication, especially English Each year, Saigontourist sponsor 45 employees to study in countries such as USA, France, Australia, Belgium, Germany, etc In addition, Saigontourist also giving employees in the company travels to many different countries around the world to improve the experience for employees This led the organization to spend a considerable cost to invest in the company's workforce The opening to the world of Vietnam has made a number foreign tourists as well as the labor of other countries in the world for this business This helps enterprises can increase revenue and open more trips to other lands Not only in the country, Saigontourist has more than 400 employees distributed in different countries such as America, China, Malaysia, Japan, Korea, Singapore, Europe, etc Creating conditions for enterprises to open foreign tours However, the massive immigration of foreign workers, especially China, has created some disadvantages for the tourism industry in general and the organization in particular The Chinese tour guide impersonated a member of the organization and had been distorting Vietnam history was a typical example Therefore, the government needs more laws to severely punish and eliminate this situation Global technology and quality standards Technological factor is also one of the characteristics of the tourism industry The travel agency must provide clear information about tourist destination; contact to the hotels and restaurants in tourist places That is all thanks to information technology The application of information technology tourism has become popular around the world One of them is the Inter-Organizational System (abbreviated as IOS) allowing travel companies may exchange information cross-border with the subsidiaries; agents or customers who are members of the organization Saigontourist is one of the leading travel companies in the application of information technology on management and marketing system in Vietnam Customers can book a tour directly on the website of Saigontourist where trips are designed to provide information and reasonable pricing Thanks to the positioning system, Saigontourist also be easily linked to the system of domestic and international hotels However, to improve service quality, Saigontourist should have information storage system of customers to identify whom and where using the service regularly to devise appropriate marketing measures Moreover, all hotels from stars or more of Saigontourist will reach international standards already set 4.3 Evaluate the impact of agreement on Vietnam business organization International economic integration, expand exchanges trade relationships with countries and organizations around the world has created opportunities as well as challenges for the economy of Vietnam We cannot deny that joining organizations of the world have helped push some important industries in Vietnam The growth rate also increased significantly Currently, Vietnam is a member of several organizations such as WTO, TPP, etc WTO is also known as the World Trade Organization This organization was established in 1995 with the goal of maintaining a business card and global trade freedom, convenience and explicit between the member countries in the world Currently, there are about 162 organizations members Vietnam is a 150th member participated in 2007 Joining WTO helps domestic businesses can access the markets widely with low tax rates The enterprises can improve and develop of products and services by learning from other members In addition, the organization also creates a fairly competitive environment that Vietnam has the opportunity to develop in the international market However, Vietnam businesses have to accept the fierce competition from international rivals In addition, the investment and the rapid development of domestic and foreign enterprises can lead to damage to the environment and natural resources in the country To remove the taxes and barriers for goods and services as well as tightening of economic relations between countries, Trans-Pacific Partnership Agreement (or TPP) was founded in 2005 include 12 members After TPP, taxation reaching 0% will contribute to increase the revenue and profitability for Vietnam enterprises Moreover, joining TPP, domestic enterprises will have the opportunity to attract foreign investment to improve technology in the country However, beside these advantages, Vietnam still copes with many challenges The tax reduction is also an opportunity for foreign companies to import goods cheaply and quality, this will make up the pressure on internal businesses Conclusion The global factor is both the opportunity and the challenge for businesses of Vietnam in general and Saigontourist in particular To maintain its position as well as quality of service, this enterprise should be innovations and trends world caught up to offer services to please tourists Reference Minh, V (2016) Viet Nam tang truong cham van hon toan the gioi Available at: http://vietnamnet.vn/vn/kinh-doanh/dau-tu/316525/viet-nam-tang-truong-cham-vanhon-toan-the-gioi.html [Accessed on August 26, 2016] Thuy, Ng (2016) Nhung tac dong cua hiep dinh thuong mai tu doi voi kinh te Viet Nam Available at: http://tapchitaichinh.vn/nghien-cuu 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