describe primary internal and external influences on business

Table content
Introduction……………………………………………………………………………… 2
Task 1: Describe primary internal and external influences on business………………… 3
Internal factor…………………………………………………………………………… 3
External factor…………………………………………………………………………….6
Task 2: Global political change………………………………………………………….10
i. How political change influences policies and decision-making within Veesano…… 10
ii. Evaluation of the effectiveness of organization’s or industry response………………11
iii, Demonstrate some areas for improvement in the response of organization or industry
sector…………………………………………………………………………………….13
Conclusion……………………………………………………………………………….13
Reference……………………………………………………………………………… 14
Word account: 3,316
1
Introduction
Veesano established in 2005 and joint stock company soon become one of leading
firms in Vietnam specialized in manufacturing and distributing of wooden toys,
educational and intelligent toys for children from age 0 to 15. Veesano is the sole
distributor of BENHO which popular over the world for wooden toys since 1973.
Veesano has network with more than 100 sale points nationwide, mainly in Hanoi and Ho
Chi Minh city, Vietnam. Company products are perfectly designed from safe and non-
toxic wooden materials to help children develop their talent skills such as their
imagination, creativity in logical thinking and also team working spirit.
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Task 1: Describe primary internal and external influences on business
Internal factor:
Mission: to be the most recognized brand for wooden education and intelligent toys
for children in Vietnam.
Vision: to be the most trustful destination for parents and children.
Objective: to be the number one brand for wooden educational and intelligent toys
which serving highest quality and best services for children in Vietnam

Strategies: providing safe product, highest quality and services for customer. Besides,
company focuses on targeted customer and satisfies their need based on individually
approach to customers. (veesano.com/vietnamese)
Veesano culture is building base on outside in inside country. Following in steps of
advanced foreign business culture become Veesano culture. Company product represent
the civilized nature and modern but suitable with Vietnamese culture. Moreover,
employees of the company are able to have knowledge specialized in his or her job and
also communication with others, public relation, etc as well. Veesano consider human
resource the most essential asset determining company success and prosperity. Company
gathers a professional team who are well-trained and enthusiastic and partnered with a
network of energetic associate staffs. Company all looking forward to objective ‘creating
a dream world for children’ (veesano.com)
Company structure model
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This model shows functional structure of Veesano Company. The structure helps
company to stay flexible and responsive to customers’ demands
The ‘HR & Administration department’ is to plan and control employees, recruit and
train the sources of the whole system. It is responsible for planning and managing
administrative support to serve the need of the office operations. This section is also able
to take responsibility for optimizing the success of Veesano business through the
effective management and deployment of its people.
The ‘Financial department’ is responsible to all the finance of Veesano. The main
areas covered by the financial department include 5 factors. First one is book keeping
procedure is responsible to keep record of the purchases and sales made by Veesano
business as well as capital spending. Second one is to create balance sheet and profit and
loss account. Financial statements need to be produced at given time intervals, for
example at the end of each financial year. Balance sheet shows the assets and liabilities of
a business at the year end. In addition, records of purchases and sales are totaled up to
create a profit and loss account. Third one is providing management information.
Managers require ongoing financial information to enable them to make better decisions.

Sale
Dept
Sale
Dept
Board of Director
Board of Director
Advisory
dept
Advisory
dept
Commercial
dept
Commercial
dept
Distribution
Distribution
Than
Dong
club
Than
Dong
club
Service dept
Service dept
Financial
Dept
Financial
Dept
Production
Dept

Production
Dept
Marketing
Dept
Marketing
Dept
HR &
Administration
HR &
Administration
Trang Nhi
shop
Trang Nhi
shop
CEO
CEO
Design
dept
Design
dept
QA
Dept
QA
Dept
R&D
dept
R&D
dept
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For example, they will want information about how much it costs to produce a particular

toy or service. , Luu Van Quang, general director of Hanoi-based toy production firm
Veesano, also said his company was enjoying an average yearly growth of 20% in 2009
(Nhip cau dau tu).in Vietnam toy market, 20% of scale are mainly in mid-range and high-
end toy. Forth one is management of wages. The wages section of the finance department
will be responsible for calculating the wages and salaries of employees and organizing
the collection of the income tax and national insurance for Veesano revenue. Last one is
raising of finance. The finance department will also be responsible for the technical detail
of how business raises finance e.g. through loans, and the repayment of interest on that
finance. In addition it will supervise the payment of dividends to shareholders. (The time
100)
The ‘Marketing department’ is responsible to organize and control activities of its
department follow company orientation. It has to do company PR, events and build up
relationship with others to promote company image and products.
The ‘Production department’ is responsible to design, produce product. The quality
assurance (QA) in this part has responsibility not only to check the quality of the material
input and material usage but also after producing as well. In this section, the R&D plays
an important role of production process. It is of special importance in the field of
marketing where Veesano keeps an eagle eye on competitors (Chinese toys) and
customers in order to keep pace with modern trends and analyze the needs, demands and
desires of their customers.
The ‘Sale department’ of the company has job to manage the sale performance in
their territory: approach, negotiate and sign contract or communicate with the customers.
Customer care is the responsibility of the local sales team. They are sellers of Veesano
and advisors of customers that help them to choose which toy is the best choice. For
example, the sale local teams can help customer to pick up the right toy and suitable for
their children base on their ages. Besides, their parent can be help in solving problem
with their kids like how to deal when baby not stop crying, etc. and babies’ nutrition.
Company distributes its products to Trang Nhi shop and Than dong club. Customers can
send their children to Than Dong club to have them develop skills and talents.
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All the products of Veesano have raw material from natural wood with over 200
kinds of different toys which are designed base on educational need of kid from 0 to 8.
Customer should have not worry about product material because Veesano’s material
reaches international standard and Vietnam standard such as: ISO 9001:2000; ASTM,
EN-71; ST; TCVN 6238:3-1997. ( />catalog=infor_shop&shop_id=622&sl=EN )
External factor:
PESTEL
Politic and legal contribute to the stability of operation and development of the
company. The politic has significant influence on the psychology of investor. Being
member of WTO (2007) is one potential chance for Vietnam market. It will attract more
foreign direct investment (FDI). Indeed, Vietnam toy market is potential because most
toys of Vietname have 90% from China. However, Chinese toy has not been consumed
recently for its quality. Currently, inland toy is having affection but poor design make
product from inland has not show it position of hostess (tinmoi.vn). Due to
overexploitation in the past years, Vietnam’s wood resources have become scarce. The
situation has been worsened with increasing illegal logging combined with land clearing
for housing and agriculture. This situation has forced government to implement a strict
regulation on wood lumbering. In 2000, the Vietnamese government issued a policy to
limit the exploitation of natural forest, which has reduced the exploitation to only
150,000 cubic meters in 2004 (vietnamnews). This shows us the true situation of limited
wooden resources in Vietnam. The company will have lack of raw material in long-term
to produce the wooden intellectual toys. It becomes problem for Veesano that need to be
solved by importing wood.
Environment issues such as earth’s climate is warmer, environment damages like
depression of forest, etc affect people health will continue to increase in importance to
Veesano’s strategy. As we know, most of Veesano product is made from wood and with
overexploitation in the past year make environment stay in people care is indispensable.
Therefore, the company wants to reduce product’s environmental impacts in three main
areas: material usage, take back and recycling. This brings direct economic benefit to
consumer and long-term benefit to environment. By taking back and recycling, Veesano

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can repair to avoid material usage in manufacturing and money spends for input.
(veesano.com)
Social-cultural plays an important role because it determines the goods, service,
standards that society values. Vietnam has rate of children less than 14 years old take
quarter of 86 billion people. Recently, Vietnamese is afraid of reputation of Chinese toy
because of the cheap and its harmful quality. Chinese toy is losing position in Vietnam
market. Moreover, wooden toy becomes favorable nowadays, Vietnamese tend to make
purchase of wooden toy but inland toy has poor kind and it is not satisfied customer need.
It is chance for investor to concern property in toy industry (tintuc.xalo.com.vn).
Technology is an impact that scientific processes used in changing input such as
resources, labor, and money to output: product and services. With advanced technology,
Veesano has products with high quality which are accepted by consumers. Labor force is
abundant and high lever will increase quality of Veesano’s employee. Veesano has
employees of 50 to 100 people. They are all trained carefully due to company culture.
The other factor is economic .High tax policy of product influences negatively on
Veesano’s operation. The price of product will increase due to material and product
imported. High income tax implies that the consumer will spend less money for
purchasing Veesano’s product and company’s sales will decrease. Most of the employees
in Veesano are influenced directly by high tax of government. Hence, Veesano has to
adjust wage policy to ensure the benefit of the staff.
PORTER FIVE FORCES
• Supplier Power: here we assess how easy it is for suppliers to drive up prices. This is
driven by the number of each key input (wood), the uniqueness of Veesano wooden
intellectual toys, company strength and control over the cost of switching from one to
another, and so on. It is determined by the supplier volume, concentration, density
and the presence of substitute inputs. The fewer the supplier choices Veesano has,
and the more Veesano needs suppliers’ help, the more powerful of Veesano’s
suppliers are.
• Buyer Power: how easy it is for buyers to drive prices down, especially in satisfaction

survey. Again, this is driven by the number of buyers, the importance of each
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individual buyer to Veesano manufacturing, the cost to them of switching from
company toys to those of someone else, and so on. If Veesano deal with few,
powerful buyers, they are often able to dictate terms to company. in this forces, price
sensitivity may control the power.
• Competitive Rivalry: what important here is the number and capability of China toys
producers. This rivalry defends on the market share (5%), fixed costs expectation,
Vietnamese brand identity and sometimes the lack of differentiation. It suppliers and
buyers do not get a good deal from Veesano; they will go to some elsewhere (e.g.
Etic). On the other hand, if no-one else can do what company does, then company can
often have tremendous strength
• Threat of substitution: this is affected by the ability of consumers to find a different
way of doing what Veesano does. This threat is based on the buyer propensity to
substitute, relative price of substitute is viable, and then this weakens company
power.
• Threat of new entry: power is also affected by the ability of people to enter
Vietnamese market. If it costs little in time or money to enter Vietnam’s toys market
and compete effectively, if there are few economies of scales in place, or if we have
little protection for company key technologies, then new competitors can quickly
enter Vietnam market and weaken Veesano position. It means that there will not be
only Chinese producers, but also have Thailand, Singapore and Malaysia, etc for
competing. It company has strong and durable barriers to entry, and then company
can preserve a favorable and take fair advantage of it.
Besides the Five Forces Analysis, I also carry out the competition analysis by the four
levels of competition, which includes the product from competition, product category
competition, generic competition and budget competition.
• Product from competitor: narrowest from includes wooden toys of the same wooden
toys type which carry the educational characteristic (Etic).
• Product class/category competitor: wooden toys with similar features that provides

the same basic function.
• Generic competitor: wooden toys that fulfill same basic need.
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• Budget competitor: wooden toys that compete for the same discretionary budget
dollars.
According to the four level of competition, it is easy to identify that if Veesano can apply
the first two levels of toy from competitor and product category competitor, company can
get the benefit in taking advantages to compete with China procedure and other
Vietnamese producers that have occurred. Additionally, the case supports that there are
some company in Vietnam produce the same types of wooden toys like Veesano such as
Duc Thanh wooden toys, Gamma join-stock Company, Etic.
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Task 2: Global political change.
i. How political change influences policies and decision-making within Veesano.
Vietnam is the developing market and has it own potential when joining WTO. The
market will have various demands and various customer targeted, which help Veesano to
have more potential business options.
Vietnam birth rate will be the factor of opportunities for Veesano to decide the levels
of products. According to the information of Vietnam News, we have the number below
(Index Mundi, 2008)
year Birth rate rank Percent change Date of information
2003 19.58 113 2003 est.
2004 17.07 128 -12.82% 2004 est.
2005 17.07 129 0.00% 2005 est.
2006 16.86 131 -1.23% 2006 est.
2007 16.63 128 -1.36% 2007 est.
2008 16.47 130 -0.96% 2008 est.
In this table, we can see that the rate of birth is decreasing significantly. It means that
Vietnam’s birth rate continuing its downward trend. This could be because of the
different incomes of different families. However, this rate of 16.67 births/1,000

population (2008 est.) is still at the high rate. Education is one of the main cases that give
company opportunity for intellectual toys. Each family will have more children, so higher
demands of educational toys are preferred and required. Therefore, the company can
increase the level of production of wooden intellectual toys to satisfy the quantity of
Vietnamese demands. This leads to the increase of sales revenue and net profit for
company.
Currently, Vietnamese toy market is sourced China. Most of them are made of plastic,
wood, metal, etc, with very low and uncontrollable standard. This makes customer to
rethink about the wooden toys that are going to be produced. We ought to consider
whether the toys apply all the educational criteria and healthy standard or not. These are
the tendency of Vietnamese market in general and Vietnamese wooden toys’ market in
particular.
However, Veesano toy do have various kinds and reach international standard,
sources of company just count on some individual, and company products are mostly
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imported. Hence, building up a strong position in Vietnam market is still long way to go
when lacking of investment.
Before Vietnam joined WTO, Company problem was lack of investment. Hence
company position can not be asserted in Vietnam toy market. In addition, being a
member of WTO is a chance for Veesano. There will be a lot of foreign investment in
Vietnam market. According to the FDI review in 2005, Vietnam attracted foreign direct
investment (FDI) of 5.8 billion USD in 2005, a record high for the past eight years. Of
the total figure, almost four billion USD comes from 771 newly licensed FDI project and
the rest from additional investment injected into existing projects (vietpartners,2005).
Besides, Vietnam’s effort to mains its socio-political stability and step up and
professionalize investment promotion activates also play a crucial role in increasing the
FDI flow.
Indeed, Managing directors all agree to evaluate the economic grow in Vietnam at
first rate and want to invest in this country. By catching up Vietnamese tendency and
using WTO advantage, Luu Van Quang, CEO of Veesano proposes to corporate with

BENHO to open up an exported manufacturing for wooden toy in Vietnam. Besides,
Company also opens its network to Quang Ninh, Ha Tay, Vinh Phuc, Hochiminh city
(veesano.com.news).
ii. Evaluation of the effectiveness of organization’s or industry response.
Veesano manufacturer intellectual toys company has to face the threats of limited
resources, competitors and in Vietnam.
Due to overexploitation in the past years, Vietnam’s wood resources have become
scarce. The situation has been worsened with increasing illegal logging combined with
land clearing for housing and agriculture. This situation has forced the government to
implement strict regulations on wood lumbering. In 2000, the Vietnamese government
issued a policy to limit the exploitation of natural forest, which has reduced the
exploitation to only 150,000 cubic meters in 2004. This shows us the true situation of
limited wooden resources in Vietnam. The company will have lack of raw material in
long-term to produce the wooden intellectual toys. It becomes the problem for the firm
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that needs to be solved by importing wood. Therefore, the cost for material will be higher
and lead to Veesano’s product.
Additionally, the biggest issue that threatens our company is Chinese products of toy.
They support that there was about 90% toys in Vietnam come from China manufacturer
and domestic toys take only about 5% of the market share. Vietnamese producers have
been trying to put out ‘made-in-Vietnam’ products, but their products prove to be
uncompetitive with Chinese ones in terms of price and design. China producers easily
catch the needs and the demands of Vietnamese children and parents with the toys for
cheap price and colorful models. However, some kinds of China toys do not apply the
criteria of safe and health for their children. As a result, Vietnamese customers are now
ignored Chinese toy because the scandal of harmful quality. This can be the good point
for Vietnamese producers in some ways but inland toy is cheap with primitive material
and unattractive color and poor kinds do not meet the need of little customers.
Following the newly-published United Nations Development Programme, UNDP,
Human Development Index provides a snap shot of how the quality of life has improved

in Viet Nam. It shows that the proportion of school-aged children attending school
increased to more than 97 per cent between 2003 and 2004 (Vietnam News, 2005).
Vietnam achieved its target of high gross domestic product growth for 2005 as the
economy grew 8.4%. ''It is a relative high economic growth rate in the years since 1996
when the country scored growth of 9.3 percent,'' Le Manh Hung, general director of the
office, said. Vietnam's GDP reached 837.86 trillion dong ($53 billion), bringing per
capita income to $636 per year (Bnet Business Network, 2008). With the high standard of
life, the income of each family will also rise. There have lots of people go abroad and
bring back for their children expensive toy even it worth of millions dong.
By using disadvantage of big-competitor, Chinese toy and inland toy and wood
problem, just a little expensive but not too expensive toy are not a big deal. Moreover,
Veesano opens up an exported manufacturing for wooden toy in Vietnam help Company
save money of taxation for imported. In fact, the new exported manufacture makes
company growth rate from 25 percent to 30 percent each year (tin 247.com). In addition,
open exported manufacturing and agents all over country are effective strategies.
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iii, Demonstrate some areas for improvement in the response of organization or
industry sector.
The information above explains every aspect Veesano has to face in Vietnam market
such as competitors, limited sources and customer buyer tendency. In addition, by using
disadvantages of competitor, Chinese toy and inland toy, providing customer best quality
and product which meet customer demand when Vietnam toy market needed is advantage
of Veesano Company. It is very politic and clear-sighted of Veesano. Moreover, by
opening the exported manufacturing and agents over country are the effective strategies
to bring company profit and well-known brand name. Hence, there has not any area for
Veesano need to be improved.
Conclusion
In conclusion, this is the report of Veesano Company which assesses the impact of
internal and external factor. Then, the report assess how political change influence on
company policies. It evaluates the effective of company policies and improves areas in

organization response.
Reference:
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[Internet], assessed 3 April 2010, < aims-
finance-department 113.php >
[Internet], assessed 3 April, 2010, < 3/4/2010>
[Internet], assessed 3 April 2010, < />catalog=infor_shop&shop_id=622&sl=EN>
[Internet], assessed 3 April, 2010, <www.veesano.com.vietnam/>
[Internet], assessed 4 April 2010, < />tren-san-nha-Vi-sao-1064153.html >
[Internet], assessed 4 April 2010,
< />4/4/2010>
Vietnam News, 2005, Vietnam behind 2005 fertility target, [internet], assessed 4 April
2010 < />Index Mundi, 2008, Vietnam Birth rate, [Internet], assessed 5 April, 2010
< />[Internet], assessed 7 April 2010,
< />21215904.html>
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