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485 Business and Business EnvironmentIntroduction In this exercise will analyze the modern examples to demonstrate the influence impact of positive and negative macro environment to business operations. Identify the internal strengths and weaknesses of particular firms and explain their interactions with external macro factors. For example, to apply the company to the above problems, Bao Viet Insurance Company will be selected for analysis. 4.1 PESTLE framework General introduction Analysis of PESTLE is a form of strategic planning to decrease market risk. Companies can achieve useful advantages in conceptualization, product creation, product releases, content marketing campaigns and other aspects by analyzing the political, fiscal, social, technical, legal and environmental aspects, which in turn help improve the effectiveness of the company. The benefits of the PESTLE analysis model include cost efficiency, a better understanding of industry, alertness to risks, and how to take advantage of them. This concept was applied by Bao Viet Insurance to create exclusive rewards and qualities for the business while marketing goods to users easily and better at the same time......
ASSIGNMENT FRONT SHEET Qualification BTEC Level HND Diploma in Business Unit number and title Unit 1: Business and Business Environment Submission date DateReceived1stsubmission Re-submissionDate DateReceived2ndsubmission Student Name Student ID Class Assessor name Student declaration I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism I understand that making a false declaration is a form of malpractice Student’s signature P4 Grading grid P5 P6 M3 M4 D2 rSummative Feedback:rResubmission Feedback: 2.1 2.2 Grade: AssessorSigna ture: 2.3 Date: InternalVerifier’sComments: Signature&Date: Table Content Introduction .2 4.1 PESTLE framework 4.2 Impacts of macroenvironment 4.3 Recommendations 5.1 SWOT analysis 5.2 Porter's Five Forces Model 10 6.1 Fiscal policy 11 6.2 Monetary policy 12 6.3 Trade policy 13 References 14 Introduction In this exercise will analyze the modern examples to demonstrate the influence / impact of positive and negative macro environment to business operations Identify the internal strengths and weaknesses of particular firms and explain their interactions with external macro factors For example, to apply the company to the above problems, Bao Viet Insurance Company will be selected for analysis 4.1 PESTLE framework General introduction Analysis of PESTLE is a form of strategic planning to decrease market risk Companies can achieve useful advantages in conceptualization, product creation, product releases, content marketing campaigns and other aspects by analyzing the political, fiscal, social, technical, legal and environmental aspects, which in turn help improve the effectiveness of the company The benefits of the PESTLE analysis model include cost efficiency, a better understanding of industry, alertness to risks, and how to take advantage of them This concept was applied by Bao Viet Insurance to create exclusive rewards and qualities for the business while marketing goods to users easily and better at the same time Political environment The growth of the insurance sector is deeply influenced by the political stability and value of the national economy The level of corruption in Bao Viet insurance - especially the regulation of the insurance industry is still high Vietnam's policies have a great impact on the development of insurance companies, especially Bao Viet insurance In terms of government administration, in general, after the transition to market mechanisms The government has made important efforts to shift the concept of operating the economy from public action to indirect regulation under law Previously the government did not pay attention to the insurance industry, but since recent years the government has been more actively interested in this industry Economic environment Vietnam has the following economic sectors, according to the new government definition: the state economy, the collective economy, the private economy (individuals, small investors, private capital), the private economy A variant of the administration, an economy of foreign venture money(Wekipedia,2020) The economy has a high level of government interference in the demand for goods The Government also agrees that a commercial system works according to the economy Vietnam has a mixed economy, as can be seen (WorldBank,2020) The outbreak of COVID-19 has brought unparalleled problems that are projected to have a major effect on the economic growth of Vietnam this year The pandemic also raises threats to the rapidly rising economy of Vietnam Pre-pandemic estimates indicate that Vietnam's GDP growth this year will hit 6.8 percent, but it has dropped to 0.36 percent in the second quarter of 2020 The pandemic and its related prohibitions have adversely impacted the employment of individuals Over 30 million employees were affected at the height of the so-called 'development slowdown' in April, according to the General Statistics Office of Vietnam Citizens employed in the industry were the hardest affected Services (72%), led by workers employed in the industries of manufacturing and construction (67.8%) and agriculture, forestry and fisheries (25.1%) Due to the incremental elimination of sanctions, of course, the bulk of firms, as well as leaders of small and medium-sized organizations and workers, have continued to operate The Covid 19 translation has significantly influenced market practices in the Bao Viet insurance sector in particular and the Vietnamese economy in general, lowering productivity and degrading the economy in all respects.(forbesvietnam,2020) Bao Viet 's 2020 insurance market is highly affected by the changes in Covid-19 For example, in the life insurance market, the growth rate of new insurance premium income and overall premium income also suffered a substantial decrease during the same period during the Covid-19 epidemic Specifically, in the first six months of the year, current mining insurance premium income fell by about half relative to the same time in 2019 (the first six months of 2019 saw a 20.4 percent rise compared to the same period in 2018) Complete fee income growth rates have declined from 25.3 percent to 19 percent (BaoViet, 2020) (WorldBank,2020) In statistics, Vietnam's per capita GDP in 2019 is 2715.3 USD (World Bank, 2020) It shows that compared to 2018, growth is more than 1.07, but this time is still very low compared to the region and the world Contribution of the private sector to GDP is very low (less than 10%), high corruption rate It is possible that in the next year, GDP will decrease slightly in the context of a still high population share, which will be a very big problem in maintaining and stabilizing the economy if improvement policies are not in place, and re-organize the operation process to keep up with the set schedule at the beginning (forbesvietnam,2020) Social environment Vietnam is a heavily populous nation in the world with several developmental benefits in terms of population By the end of 2018 , the population of Vietnam had reached more than 95 million people, of which the bulk were employees and children However, only around million people enter Bao Viet life insurance, the proportion of the population involved in life insurance is only around percent, although the average rate is 20-25 percent in nations, relative to countries in the region and across the world This is the presumption that life insurance in Vietnam is still very viable This shows that the Vietnamese market is full of opportunities for the growth of insurance firms such as Bao Viet.(BaoViet,2020) Technological environment In order to allow insurance firms to computerize their service systems, and the inefficient structure of insurance companies, diversify delivery channels and modes of service, and enhance customer experience with high-tech ancillary services, Bao Viet Insurance has applied information technology Moreover, Bao Viet has observed that a new market habit for consumers was created by the accelerated growth of information technology Increasingly , consumers need to find information by electronic forms of contact, such as the internet, phone , email, etc For general financial services, such as insuranceinvestment-payment, to be offered This is also an incentive for insurance firms such as Bao Viet to make good use of science and technology achievements, fulfilling the rising and diversified consumer requirements in terms of competitiveness and incorporation (BaoViet, 2020) Legal environment In the time from 1965 to 1993, the State exercised its monopoly on insurance undertakings with only one insurance undertaking, Bao Viet, both conducting insurance undertakings and performing the insurance country's home management role At present, more attention has been paid by the State and the Government to supporting the growth of the insurance industry in Vietnam With changes to the legal framework, the Government of Vietnam is committed to a fair and reliable insurance industry climate On December 2000, at the 8th session of the National Assembly, the National Assembly enacted the Law on Insurance Sector, which provided a significant legal framework for the stable and sustainable growth of the Vietnamese insurance industry Consistent with the regional integration pattern According to international standards, the system of legal documentation relating to the insurance industry was reasonably comprehensive The Ministry of Finance supervises insurance enterprises in business activities, from recruitment and agency training to a system of business monitoring indicators (BaoViet, 2020) Environmental problems The influence of the environment has a very strong impact on the business and operation of the Bao Viet insurance enterprise As in the recent fact, Covid 19 has had a great impact on Bao Viet's business activities, reducing the revenue of the whole enterprise, the revenue growth is poor because the company had to cancel many recruitment programs recruiting and training of new employees, sales and marketing events due to social outages during epidemics Social disparity causes customers' income to decrease, resulting in delayed premium payments The pandemic has put additional pressure on new premium growth to slow down (BaoViet, 2020) 4.2 Impacts of macroenvironment Positive effects Factors that positively affect Bao Viet's business activities as political factors is a strong advantage because the politics in Vietnam is very stable for long-term development, state policies have captured and invested more in the insurance industry Technology also positively affects the insurance industry because of the benefits it brings, boosting productivity and efficiency, reducing processing and operating processes, especially for the insurance industry such as Bao Viet products into technology to disseminate more widely to people by means of communication Law also plays a big role, the state has committed to building an equal and coherent insurance business environment with reforms of the legal system The legal document system on insurance business has been relatively complete according to international standards The Ministry of Finance supervises insurance enterprises in their business activities, from recruitment and training of agents to the system of business monitoring quotas Negative effects Factors that negatively affect the business operation of Bao Viet insurance such as economic factors such as in the last covid 19 epidemic, the Vietnamese economy has suffered a slowdown in all sectors, including the insurance industry Business activities decreased, the number of products sold to the market was not high while the government issued a law to suspend all activities, so Bao Viet Insurance was greatly affected in the recent covid service In addition, environmental factors also greatly affect business activities of Bao Viet, when environmental problems occur seriously, human needs are more concerned about health, but the impact of the environment impacts Therefore, it also affects Bao Viet's business activities when the demand for products with a narrow financial fund is a problem that Bao Viet is in the process of offering solutions 4.3 Recommendations In the course of business operation and development of insurance, there are still obstacles that have been overcome, such as those of insurance related to losses that the insurance company may incur due to the premium is not sufficient to cover covered events Bao Viet has dealt with by applying a full range of obstacle assessment measures in the design of new insurance products, exploitation, inspection and insurance payment or indemnity; Regularly review important assumptions (death rate sheet, technical interest rate, loss parameters), review risks of insured and reasonable subject of insurance; Tracking, evaluating insurance products (in terms of profits, sales) and analyzing scenarios to timely complete products, determine insurance premiums when actual detection is different from assumptions Obstacles such as information technology when operating IT systems centrally, disrupting business operations, greatly affecting competitiveness and reputation of the Group Bao Viet handled it by implementing centralized IT management; Regularly monitor new software to use to promptly handle the problems that may arise 5.1 SWOT analysis Strengths are positive or beneficial factors in the business that help achieve your goals Here the strong point of Bao Viet insurance is that real estate sources such as offices and headquarters of BAO Viet in the provinces have quite favorable locations The brand has a history of 25 years Network spanning provinces It is a special SOE and the state backing behind the corporation Projects using state budget funds will use Bao Viet's insurance products Strong financial strength 18% share is for state revenue (BaoViet,2020) Weaknesses are negative factors in the business or make it difficult to achieve your goals Here, the business results are not too impressive compared to other companies in the same industry There is no outstanding talent in human resources Mr Binh was sent down by the government The predecessor, who is very knowledgeable about the Vietnamese insurance market, is Mr Truong Moc Lam, who has been building for many years and has passed away The operating apparatus below is also not dynamic enough as the other joint stock venture companies like Mr Duc of BMI Low salary mechanism makes many employees go to foreign insurance companies Wide network and multi-sector operation if the staff is not well managed will be a real difficulty to smoothly operate the system The financial investment segment is still quite weak (BaoViet,2020) Opportunities are non-company entities (business markets, culture, government, etc.) who are helpful or helpful to help accomplish the objective Here, FDI inflows allow the non-life insurance income rise because of the fast economic growth The market for non-life insurance also rises as residential income increases The insurance industry in Vietnam is seen to be rich in opportunity and will record substantial growth over the next 20 years (BaoViet,2020) Threats are variables that are detrimental or find the target impossible to accomplish outside of the organization (business markets, culture, government, etc.) Bao Viet insurance entering the WTO lets the insurance and banking walls vanish, and the world's major giants leap profoundly Experience and financing for domestic insurance firms can be a daunting foe (BaoViet,2020) 5.2 Porter's Five Forces Model The first factor of the year affects the number and ability of competitors to cut a company The more number of competitors and the number of comparable products and services offered, the less the strength of the company Bao Viet insuarance current competitors come from big enterprises such as Dai- ichi, Manulife, Prudential, AIA, etc (Vinare,2019) Bao Viet Insurance was established in 1965 and operates based on the majority of the state's charter capital Therefore, it can be seen that most of the insurance products and activities that companies business here rely on Vietnamese state suppliers The State of Vietnam has the power to promulgate, control and manage the products that Bao Viet does business, and Bao Viet must also report annual business results and pay tax as other businesses branch (Vinare,2019) The negotiation power of customers is powerful in shaping the company of Bao Viet This element of the research model of Porter's Five Powers determines how customer buying choices and related perceptions and behaviors impact firms The strong buyer influence is dependent on external factors as follows: low switching costs, limited size of individual customers , high buyer knowledge It's quick for customers to shift labels, making them solid to ensure customer loyalty for appealing businesses such as Bao Viet This portion of the Five Forces review therefore illustrates that Bao Viet must have the bargaining power of customers or customers as one of the most significant strategic variables of the business (Vinare,2019) Risks found apply to life and non-life insurance, wealth management as well as the practices and conditions of the insurance industry Improvements of technologies are occurring However, technology, like smart grids or piping and hospitals, is often redundant in vital infrastructure areas As a consequence, insurance providers face greater liability escalation and the threat of unforeseen damages in the fields of collateral harm, personal injuries, market interruption, and network security threats G technologies can allow real-time wireless access to devices such as self-driving vehicles or sensorcontrolled factories with any network of items (IoT) Owing to possible elevated electric fields, existing issues are correlated with potentially harmful health consequences With central banks running out of options to boost the economy, there is a rising consensus that a financial solution would be required for another recession If policy changes result in financial growth and stabilization, the insurance / reinsurance industry can benefit However, the possible risk factor is uncertain growth, which induces higher uncertainty in capital markets and decreases asset prices Other threats include: vaccines, the difference of expertise between the dying generation and the replacement, traumatic sports injuries, the danger of tourism of plastic surgery, expanding the gap between urban and rural areas and toxins in our bodies and our climate.(Vinare,2019) Bao Viet Insurance faced mild pressure from the threat from the new entrant This portion of the research model of Porter's Five Powers points to the influence and potential of new business entrants, such as high capital needs, high cost of brand growth and capability of newcomers It needs a high degree of capitalization to start up a firm to compete with businesses like Bao Viet Insurance It is also incredibly costly to build a good brand to compete with major players like Bao Viet in the insurance business Digital standards, high branding prices, and the expertise of prospective new entrants comprise these external variables that are weak for new entrants Three considerations include these external factors that make the new entrant weak: First: You need a lot of resources It takes a great deal of investment to develop engineering equipment and manufacture operating systems Factor two: financial scale Since dealing with competing brands such as AIA, Prudential, Manulife, Dai-ichi is hard for new players Factor three: Time of accession is timing of entry as another factor that can be defined as a restriction for new entrants As a result, the building up of their client base would be challenging for potential entrants (Vinare,2019) 6.1 Fiscal policy General evaluations In macroecomics on, fiscal policy is the government's interventions on government tax and expenditure systems to achieve macroeconomic goals such as economic growth, job creation or stability, prices and inflation As such, the implementation of fiscal policy will be carried out by the government with regard to changes in government tax or / and spending policies Bao Viet insurance company is affected by the government's fiscal policies such as corporate income tax and increased income tax on enterprise products Impacts of fiscal policy on a chosen organization During the Covid 19 epidemic, Bao Viet Insurance received a loan with a 0% interest rate at the Bank for Social Policies Support for tax and land rental reduction, deferred payment of social insurance, welfare support and reduced electricity bill In addition, Bao Viet insurance enterprise is supported with loans with preferential policies to pay salaries for employees The State has extended the payment of taxes and budget revenues through the issuance of Decree No 41/2020 / ND-CP on extension of VAT payment In addition, according to the support content in Resolution No 42 / NQ-CP on measures to support people in difficulty caused by the Covid-19 pandemic, Bao Viet insurance enterprises are supported by the State such as: Employers with financial difficulties have paid at least 50% of the work stoppage salary to the employee according to Clause 3, Article 98 of the Labor Code during the period from April to June 2020, can not borrow Accepting a maximum of 50% of the regional minimum salary for each employee according to the actual pay period but not more than months with 0% interest rate The rate, the maximum loan term of 12 months at the Bank for Social Policies to pay the remaining salary and disburse directly to the person who resigns next month (Tapchitaichinh, 2020) 6.2 Monetary policy Effects of monetary policy on a chosen organization Vietnam's economy reached a new growth cycle in the 2016-2018 period and inflation was closely regulated Monetary policy has been sound, foreign exchange reserves have slowly risen, and liquidity in the financial sector has been good However, the interest rate on lending and mobilization fell, the interest rate on government bonds fell sharply in 2016-2017, especially in 2018, and the interest rate on government bonds fell to the lowest level since 2011 Huge success in the investment and operational performance of firms, especially the Bao Viet Insurance company A fast growth rate in the life insurance industry (32.1 percent / year) and a reasonably stable growth rate in the non-life insurance sector (12.3 percent / year) are achieved by the Bao Viet insurance market However, due to the impact of the monetary policy of the Country, it is imperative that in the period 2016-2020 Bao Viet must come up with new tactics and solutions to adhere to the growth directions Moreover, because of the impact of monetary policy, it is crucial that Bao Viet establish more affordable goods, implement a modern and more effective delivery channel, and create a satisfactory infrastructure for information technology International norms that fulfill the criteria of the system 's management and industry well.(BaoViet,2018) 6.3 Trade policy Impacts of exchange rate on a chosen organization There are fluctuations in the value of exchange rates on the balance sheet of Bao Viet Insurance, the impact of exchange rate fluctuations will cause Bao Viet to lose or increase profits Uncertainty financial markets can affect community members' output In fact, those financial losses are caused by increases in interest rates, stock market costs and exchange rates Bao Viet Insurance is required to regularly perform extensive marketing analysis, continuously update detailed information in the framework and closely examine developments in the consumer sector to minimize the impact of exchange rates exchange Furthermore, at the same time, diversification of goods and services, diversification of operations by region, and diversification of stock portfolios often rely on the use of derivative instruments to avoid and reduce activities Financial investments of many types of exchange rates and interest rate risk The tariff does not affect Bao Viet insurance company Under the provisions of Circular 84/2008 / TT-BTC of the Ministry of Finance guiding the implementation of a number of articles of the Law on Personal Income Tax and guiding the implementation of Decree No 100/2008 / ND-CP dated September , 2008 of the Government details a number of articles of the Law on Personal Income Tax, the insurance money paid by employees when participating in life insurance must not be deducted before paying personal income tax However, at Points and 12, Section III of this Circular, profits from life insurance contracts and income from compensation on life insurance contracts are exempt from tax Thus, the PIT incentives are applied to all types of life insurance in Bao Viet such as term insurance, mixed insurance, life insurance, and annuity insurance as well as other types of life insurance such as investment-linked insurance Current regulations also not limit the size of life insurance contracts to enjoy tax incentives Therefore, every year, Bao Viet insurance enterprises must pay taxes according to the State's regulations (about 20%) on the total value of their income from products sold on the market in a transparent and clear way Generally since equitization (2007) to 2020, the total tax and dividends paid by Bao Viet to the State budget amounted to more than 23,000 billion VND However, the impact of tariffs does not affect the Bao Viet insurance company Only fiscal policy affects Bao Viet insurance company (BaoViet, 2020) References Vinare.com.vn 2020 Những Rủi Ro Mới Mà Công Ty Bảo Hiểm/ Tái Bảo Hiểm Cần Phải Theo Dõi | Thông Tin Thị Trường [online] Available at: [Accessed 27 October 2020] vietnambiz 2020 Môi Trường Chính Trị (Political Environment) Trong Marketing Là Gì? [online] Available at: [Accessed 27 October 2020] Trang thông tin điện tử - Hội đồng lý luận TW 2020 Tác Động Của Đại Dịch COVID-19 Tới Nền Kinh Tế Việt Nam [online] Available at: [Accessed 27 October 2020] Ninhthuan.gov.vn 2020 CHÍNH SÁCH HỖ TRỢ DOANH NGHIỆP DO DỊCH BỆNH COVID [online] Available at: [Accessed 29 October 2020] TapChiTaiChinh 2020 Chính Sách Tài Chính Hỗ Trợ Doanh Nghiệp Phát Triển [online] Available at: [Accessed 29 October 2020] Baoviet.com.vn 2020 Bảo Việt - Hoạt Động Bảo Việt [online] Available at: [Accessed 29 October 2020] Powe re d by TCPDF (www.tcpdf.org) Index of comments 2.1 Format: This assignment is an individual report You must use font Calibri size 12, set the number of the pages, and use multiple line spacing at 1.3 Margins must be: left: 1.25 cm; right: cm; top: cm and bottom: cm The reference follows the Harvard referencing system The recommended word limit is 2000-2500 words You will not be penalized for exceeding the total word limit The cover page of the report has to be the Assignment front sheet => Achieved Plagiarism: https://www.turnitinuk.com/t_inbox.asp?r=12.3127100802776&svr=36&lang=en_us&aid=12414404 No more than 25 percent => Achieved ======================================================== Application: The same company in Assignment or a different company, regardless of the nationality (so-called the chosen company) => Achieved The country or a specific province in the country, where the chosen company provides its products or services, to make research for the affection of the external environmental factors => Achieved Identify the positive and negative impacts the macro environment has upon the chosen company => Achieved Conduct internal and external analysis of the chosen company in order to identify strengths and weaknesses => Achieved ======================================================== P4 Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples => Achieved P5 Conduct internal and external analysis of specific organizations in order to identify strengths and weaknesses => Achieved P6 Explain how strengths and weaknesses interrelate with external macro factors => Achieved M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro-environment within an organization => Not Achieved M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-making Index of comments => Not Achieved D2 Critically evaluate the impacts that both macro and micro factors have upon business objectives and decisionmaking => Not Achieved ======================================= General evaluations: - All criteria for the pass are reached The assignment is graded as P456 2.2 2.3 Powe re d by TCPDF (www.tcpdf.org) Nguyen Thi Thanh Nhan 3.11.2020 ... in 20 19 (the first six months of 20 19 saw a 20 .4 percent rise compared to the same period in 20 18) Complete fee income growth rates have declined from 25 .3 percent to 19 percent (BaoViet, 20 20)... to 19 percent (BaoViet, 20 20) (WorldBank ,20 20) In statistics, Vietnam's per capita GDP in 20 19 is 27 15.3 USD (World Bank, 20 20) It shows that compared to 20 18, growth is more than 1.07, but this... enterprises in business activities, from recruitment and agency training to a system of business monitoring indicators (BaoViet, 20 20) Environmental problems The influence of the environment has