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Table Of Contents LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact the macro environment has on business operation………… Task Identify the positive and negative impacts of the macro environment has upon business operations, supported by specific example…………………… .3 4.1 Introduction: PESTLE framework ………………………………………… 4.2 Evaluate the positive and negative impacts of the macro environment on business operations…………………………………………………………………………… 4.3 How the organization goes through the transformation process and overcome resistance to change in response to the changing market environment……………… LO4 Determine the internal strengths and weaknesses of specific businesses and explain their interrelationship with external macro factors .12 Task Conduct internal and external analysis of specific organizations in order to identify strengths and weaknesses 12 5.1 Applying SWOT analysis to evaluate internal environment 12 5.2 Introduction: “Porter’s five forces model” 18 Task Explain how strengths and weaknesses interrelate with external macro factors .20 6.1 Introduction: Government policies .20 6.2 Evaluate the impacts of government policies on organizations and business to make decisions .22 6.3 The application of SWOT analysis to evaluate external macro factors 26 GROUP PRESENTATION LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact the macro environment has on business operations Task Identify the positive and negative impacts of the macro environment has upon business operations, supported by specific examples 4.1 Introduction: PESTLE framework Political, the influence factor of the government intervening in the economy Business owners should consider the political environment as new policies or new laws so that business owners can tailor their businesses accordingly Business owners should consider to ensure that their business has complied with regulations while keeping the business operating smoothly Economic, Economic factors have a strong influence on business and business expansion It involves currency exchange rate changes, rapid or slow growth rates, economic environment and changing trends that affect changes in production and demand Sociological, Social factors have a strong influence on consumer behavior, which plays a decisive role in the enterprise It involves cultural and social change In today's modern society, consumer demand has a lot of influence from culture Technological, Technology includes factors such as research and development, automation, and improvement of relevant personnel It affects the way people search and access business information, the way businesses handle their information widely Legal, Businesses that want to operate, businesses must obey the laws of employment, competition, health, safety and business standards Laws affecting the organization and culture of a number of enterprises from the way employees are trained to the operation of the business are in accordance with the law Ecological, The production of the business concerned is not small to the ecosystem More production can cause environmental pollution such as smoke, dust, waste water,etc, or more production that depletes natural resources 4.2 Evaluate the positive and negative impacts of the macro environment on business operations Macro economics has many influences and impacts on business Most of the external factors have direct and indirect impacts on the business situation of the enterprise In addition, there are influencing factors such as inflation, exchange rate, bank interest rate, currency, unemployment rate The positive aspects are: Create opportunities to challenge the business, have stability in the way and economic policy The economy has many advantages to open and facilitate the exchange of exchanges Make a lot of money from people and businesses For negative wear: The main situation is unstable, affecting the labor force There is no economic stability Difficulties for businesses have many holes in the implementation of asynchronous for investors Typically the business organization of the vinamilk business Forexample: The first step of Vinamilk enterprises is to import into foreign goods 1991 'White Revolution', where the source provides milk in feeds with content for content After the development of the farm system across the country, connecting with the people expanding the area of livestock, Vinamilk helped the total cow herd in 2005 increased 38 times compared to 1991 Vinamilk has produced many top products Political situation There is no small impact on the market expansion, increased revenue, the advanced technology, modern production lines, improving the productivity of Vinamilk Policies on encouraging domestic investment in land lease, enterprise income tax, import of machinery and equipment Economic situation Has an important role in the development of the market Creating more jobs depends on the economic development of different sectors, the situation of saving inflation, changing the structure of consumption of different regions Factors include growth rate, economic inflation rate, income structure and income growth, changes in expenditure structure in the population, infrastructure and other service sectors Social situation The habit of using canned or milk related products Easy access to speakers, televisions, pictures, banners Makes people see the fulfilment of physical needs Therefore, Vinamilk company focuses on trust and prestige of quality when using the company's products Technical situation There are many opportunities and challenges that force businesses to look into marketing strategies Input of the production process is effective or not Therefore, Vinamilk uses the technology to promote the consumption of products on the market On the other side of science and technology of Vinamilk also affect the stage of advertising and propaganda about product information Meet the demand of products for consumers in terms of quality and quantity The legal factors and environmental The natural environment has a great impact with them, slow growth and poor quality of milk Temperatures affect behavior, ability to absorb and digest food, growth, reproduction and production of dairy cows Affects food sources and weather conditions that cause disease in cattle But due to the technological advancement, this is not a big concern for dairy processing companies that have Vinamilk In the natural environment, the climate in Vietnam is monsoon humid tropical causing many difficulties for the dairy industry.Disadvantages such as perishable, malformed, etc of milk if not preserved and timely processing It has a negative impact on consumers.But besides that, climatic factors also have advantages for dairy industry.It has the advantage of cultivating and supplying raw materials for production Vinamilk has exploited that advantage to create enough raw material to meet the production.Besides, although vinamilk is reducing the price but the quality of milk doesn’t change In vinamilk science and technology are international standards, using modern packaging technology, imported technology from well-known equipment suppliers such as Trota Pak in Sweden and APV in Denmark.The new equipment and technology, modern automatic control and semiautomatic meet the requirements of quality, hygiene and safety.Using high technology in farming as Ethemet network, wireless connectivity technology, identification technology live remote with RFID tags attached identification chips, biological sensor system,etc help dairy production increasing quality In society, Vietnamese consumers often use sweets and canned products or dairy products As a result, advertising and distribution to customers becomes more convenient.In addition, the views of Vietnamese people often use and feel assured is high quality and prestige.Many because of that, vinamilk has created trust with consumers, long-standing brand, strong brand and accounting for 75% of the domestic market, familiar to consumers As a result, consumers are increasingly inclined to use domestic products and create the trust for consumers, there will be loyal customers with the product or brand Political factors have a very important influence on the establishment, deployment and exploitation of vinamilk marketing strategy.In 1995, the United States joined Asean, Vietnam established diplomatic relations with 171 nations In January 2017, Vietnam officially became the 150th member of the WTO.These events impacted greatly on market expansion and attracted investors, increased sales, production, import and export, etc., from which to come up with marketing strategies Economic factors has an important role in the operation and development of the market Total purchasing power depends on economic growth, job creation, depending on the economic development of different sectors, the situation of inflation, change of consumption structure Therefore, it has a direct influence on the marketing of the company Vinamilk Economic factors such as growth rate or economic downturn, economic inflation rate, income structure, etc Exploring the economic environment helps the company to understand the desires, needs of the people and the ability to spend their customers, needs, financial savings Therefore, the economy is the factor that affects the purchasing power of the market If poor infrastructure increases the cost of production, consumption of products, increase the price of products, so that the product will reduce competitiveness in the market and if distribution services are slow and poor in the market, resulting in products difficult to be on the market and customers are difficult to access products of the company There are six macro factors that affect business objectives Firstly, Demographics is one of factors affects business Countries / regions; age; nation; academic level; family lifestyle; cultural traits and movements affect the market segmentation Businesses should be aware and closely monitor these changes so that they can be adapted to macro environment in a timely manner Economic factors also affects both production process of organization and decision process of customers The high growth of the national economy will affect businesses in two directions First, because growth makes the income of the elite population more affordable to their needs Secondly, as economic growth raises output and commodities of many businesses The national economy has stabilized its business activities at a stable level As the national economy recovers, it will negatively affect businesses Inflation, the level of unemployment also affects both production and consumption When inflation is high, it will negatively impact consumption, reduce demand, reduce consumption, discourage production and investment Social and culture forces also affect business objectives Some issue such as customs, lifestyle, educational level, religion, belief, etc deeply influence the structure of demand in the market This factors affect directly to travel business, textile business, consume traditional product However, social and culture also influence directly to establish culture environment of business as well as attitude and behavior of administrators Within the national economic environment, technology factor have an important role In the current trend of globalization of the economy, the rapid development of science, technology and technology in all fields has a direct impact on business activities of related businesses The development of technology is now closely linked to the development of information technology The application of information technology in the field of management will contribute to improved accessibility and updating of information, especially information about the market Regarding to natural/physical forces, business may be affect by them In addition to considering the renewal of natural resources such as forests, agricultural and marine products, non-renewable natural resources also affect the production of the organization This affects businesses in the direction that businesses must pay attention to the natural conditions Natural conditions influence different levels of intensity for different types of businesses in different locations and it also affects both negative and positive trends Finally, Impact of legal factors and state management on the economy Creating a healthy business environment depends entirely on the legal and economic aspects of state management The promulgation of a quality legal system and the introduction of life is the first condition to ensure a fair business environment, creating conditions for all businesses to have the opportunity to compete healthy; Establishing the right relationship, equality between producers and consumers Forcing all businesses to the right thing, they have to take responsibility for society and consumers Moreover, it also negatively affect the living environment, the life of consumers 4.3 How the organization goes through the transformation process and overcome resistance to change in response to the changing market environment Today, a business or business organization that wants to succeed in the marketplace must overcome transitions that must overcome the barriers to change in the business environment First they need to grasp the current market and the future market will develop in what direction to be able to keep up and overcome the changes in the business environment Second, they must learn what the changing business environment is to offer a quality product that fits the consumer And finally, a company that wants to ship more than one place must study the needs of those people Vietnam is opening up its economy called economy Open doors to sell products outside or buy products from outside for domestic consumption or assembling a new product to market e.t.c One of the failures of many Vietnamese businesses is not based on market research and investigation So, not you know how your competitors produce their products? Will the product of the production unit meet the demand of the market? need to innovate Innovation from thinking about the market, about how it works, about people To this, businesses need to boldly "change", the new "new" appears “The first tracking force of the Macro Factor is Population, because humans make up the market Entrepreneurs usually take interest in the rate of population growth in different cities, regions and countries Growth of the population is the factor affecting the business sector Census results for 2008 show that Vietnam's population is 86.160 million, third in Southeast Asia and 14th among the world's most populous countries” This is the population diagram in Vietnam over a few years (SOURCE: Duyentran, n.d viewed 16 October 2018) We can see that with a large population and rapid population growth, Vietnam is an attractive market for this company The educational level in Vietnam is relatively high, especially in urban areas Graduation rate of universities, colleges etc quite high compared to the whole country Moreover, intellectual labor in Vietnam excels in technology - so this is a good source of human resources for the company Besides, drinking milk is not only essential for developing height, enhancing intelligence and providing adequate nutrition for children to develop comprehensively Milk also boosts calcium for the elderly and helps their bones are strong Therefore, Vinamilk always offers many products with different types, meeting the needs of different ages Secondly is the economic At present, Vietnam is facing high economic inflation and this has greatly affected the company's investment capital In addition, the cost of raw materials and materials from suppliers also increased due to the impact of economic inflation So Vinamilk should have reasonable financial solutions to overcome this situation Next is the environmental The natural environment has a great impact on Vinamilk's business For example: Air pollution causes the milk to become contaminated with the toxin and affect the activities of many companies including Vinamilk The following is technical Thanks to modern science and technology, Vinamilk products are easily delivered to consumers with low cost and short time Technology gives businesses new ways of communicating with consumers For example: advertising on the Internet, advertising on the mass media As a result, Vinamilk's image has become increasingly close to consumers “Finally are political and legal factors A business that wants to stand on the international market faces a multitude of factors beyond its control Among these factors, political and legal factors are a matter of concern Businesses built in any country are affected by the laws and policies of the government in that country When doing business on an administrative unit, businesses will have to follow the legal organizations in that area Organizations with high stability will be able to facilitate good business and vice versa More than 90% of the company's revenue comes from Iraq The country's unstable economic and political situation has affected Vinamilk's export earnings Therefore, the company is expanding its export market to Australia, America, Canada, Thailand and other countries.” PERSONAL: NguyenTrongAnhTho_GBS17553 10 efficiency company good product government through quality collaboration service with colleagues Products and being added in services of Viettel is the the same department Parts Viettel in the are second company clients are fully licensed for domestic almost clear of and power and have international very clear lines telecommuni of work, very cation closely services At linked the government appreciated by after VNPT is of Viettel by is the constantly highly Organizational structure and and provided same time, department managers are most responsible for their labor productivity, so they often focus on the coordination, rhythm and efficiency of their department Weaknesses The leaders of not Viettel focus yet The only exploited on competitivenes the effectively Viettel basically has department s of the quality no 13 Financial is daily work, human reducing the resources communication, the and service of weaknesses So the company is in terms of labor limited exchange productivity is between weak physical capital relatively low departments Therefore, it can create conflicts in order priority of among components In addition, Viettel is very difficult to coordinate between departments When there is no consistency among in experts different departments, coordination and cooperation with other departments will be difficult Opportunities Reform of Abundant management apparatus It has the The economy Viettel is labor force and opportunity to is developing always of high expand the at a high rate supported Viettel and educational business and and modify the develop the growth 14 by stable the Ministry of will Defense in organization level image of the be mechanism company quickly economic a providing as condition for internet improving growth services is people's recovering to customers It is living also supported standards, by the Ministry building of Defense and infrastructure the State in and creating financial business matters conditions Threatens Viettel has Viettel will There almost no threat easily to lose many the human Because Viettel other infrastructure uses state competitors in is still low financial organizational resources if it the structure don't how are Viettel know such to market and almost resources, as does not have there are few use VinaPhone and the capacity threats human MobiFone So to own the resources if Viettel does technology properly not have plans Therefore, to develop the the Viettel image of the has to spend company then a lot in it is easy to improving lose customers the quality of its services (Source: author) 15 5.2 Introduction: “Porter’s five forces model” Porter’s model says that the structure of an industry and the ability of firms in that industry to act strategically depend upon the relative strengths of five forces: current competition, potential competition, the threat of substitute products, the power of buyers and the power of suppliers Each of these five forces will be examined in turn Businesses often use this model to analyze whether they should enter a particular market, or operate in a particular market However, because the business environment today is "dynamic," this model is also applicable to search in a certain sector areas need to be improved to produce more profit Government agencies, such as the Antitrust and Mergers Commission in the United Kingdom, or the Antitrust and Justice Department in the United States, also use this model to analyze whether 16 there are companies that are profitable public or not (Source of photo: CGMA, 11 June 2013, Viewed 19 October 2018) “The Porter’s five forces model of Viettel” Viettel Military Industry and Telecommunication Corporation is a defense economic enterprise of the Military Industry and Telecommunications Group, established under Decision No 2079/2009 / QD-TTg of the Prime Minister signed on December 14 2009 100% capital of the state, is responsible for inheriting the rights, legal obligations and legitimate interests of the Military Telecom Corporation Besides, it has legal personality, seal, symbols and organizational charters Viettel Military Telecommunications Corporation is exercised by the Ministry of Defense and is a military business enterprise in the field of post - telecommunications and information technology With the slogan "Let's talk your way", Viettel always strive to grow steadily during the operation (Source: VNR 500 Top 500 Company, n.d, viewed 10 October 2018) Firstly are suppliers: To operate in the field of telecommunication services requires a lot of investment in equipment and find the best and most suitable supplier for the company Moreover, there is changes to state policies and capital investment limited It has financial providers such as BIDV, MHB, Vinaconex, EVN Besides, it has several suppliers of raw materials and products such as: AT&T (US), Blackbarry Nokia, Huawei (China), Ericsson (Sweden), Nokia Siement Network (Finland) Secondly are customers: Clients will be able to change to other carriers’ mobile service if the service of Viettel is not good Clients always want to use services high quality but the price must be cheap Besides, clients are quite sensitive and choosy Therefore, both providing quality services and customer care are very significant Furthermore, Viettel must pay attention to customer feedback Next are potential entrants: Today, with the economic development and the explosion of information technology, human life is getting better and mobile phones are gradually becoming an essential product in life The attractiveness of the mobile information service industry is enormous, with huge numbers of clients and high profits Especially or Vietnam market today, beside large mobile information service business such as Mobilefone, Vinaphone and Viettel are 17 having stable footing Other businesses such as S-fone, Beeline, etc they have only got a very small market share So, potential entrants to Viettel are not worrying The following are substitute markets: In addition to mobile phones, internet is one of the fastest and most effective methods of communication use today So, the explosion of information technology has brought many application and products to replace such things as: texting, calling through the internet But now, computers and mobile phones are being used in parallel and supporting each other The utility of the computer and internet is very good and really convenient, but it cannot replace mobile phones and telecommunication services Finally are intra market rivalry: Currently in Vietnam as of 2009, the market share of mobile networks is divided as follows: Mobifone 41%, Viettel 34%, Vinaphone 20%, S-phone 3%, EVN 2% As such, Viettel’s main competitors are Mobifone and Vinaphone Government telecoms laws are also very tight to prevent market devaluation of new businesses ( Source: 123.doc, n.d, viewed 10 October 2018.) Task Explain how strengths and weaknesses interrelate with external macro factors 6.1 Introduction: Government policies Nowadays, goverment policies very significant in the business enviroment Government policies have three main parts: Fiscal policy, monetary policy and Trade policy Firstly is the fiscal policy The fiscal policy in macroeconomics is policy through taxation and public investment to influence the economy Fiscal policy and monetary policy are important macroeconomic policies aimed at stabilizing and developing the economy Fiscal policy involves: Taxation and other sources of income, Government spending, Borrowing whenever spending exceeds income and Repaying debt when income exceeds expenditure Fiscal policy that covers a government’s income and expenditure Gathering of government spending levels and tax government policy makers Fiscal policy involves the use of changes in government spending and taxation to influence the level and composition of aggregate demand in the economy and, given thec amounts involved, this clearly has important implications for business Expansionary fiscal policy: “An increase in G and/or decrease in T” 18 “Shifts aggregate demand (AD) right” Contractionary fiscal policy “A decrease in G and/or increase in T” “Shifts aggregate demand (AD) left” (T – G) > 0: Budget surplus (T – G)