Group Assignment Report Introduction To International Business - Ibi101 Hoa Phat Group.pdf

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<b>Group Assignment Report</b>

<b>Introduction to International Business - IBI101Lecturer: Nguyễn Hoàng Linh</b>

<b>Date Submitted: July 14, 2023</b>

<b>GROUP CHICKEN - IB1702</b>

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2. Entry mode for export... 13

3. Operational activities at the foreign division... 14

<b>Reference...17</b>

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Hoa Phat Group is a prominent Vietnamese conglomerate known for its leadership in the steelindustry. Established in 1992, the company has grown to become the largest steelmaker inVietnam, producing a wide range of high-quality steel products. With a strong focus oninnovation and customer satisfaction, Hoa Phat Group has expanded its operations intodiverse sectors, including real estate, agriculture, and renewable energy. Through itscommitment to sustainable development and a forward-looking approach, the companycontinues to contribute to Vietnam's economic growth and industrial advancement.

<b>II.Business environment (PESTEL framework)1. Political</b>

Value Added Tax (VAT): Vietnam applies VAT rates to all types of steel products producedand consumed domestically. The VAT rate for steel products is 10% and is calculated on thefinal product value and related costs.

As of May 2023, Vietnam's steel output has increased by 43.7% over the same period lastyear. At the same time, steel enterprises in Vietnam have exported to many markets aroundthe world, including Europe, America and Asia. However, domestic demand still accounts fora larger proportion than export demand.

Labor force: Vietnam is a place with an abundant labor force, however, if raising the standardof products means improving the quality of the labor force, This is both an advantage and adisadvantage for manufacturing companies, especially the steel industry.

The level of steel trading in Vietnam is at a high level and has potential for future growth.However, businesses need to face stiff competition and always innovate products, improveproduction technology and provide solutions to optimize production processes to be able tomeet the needs of customers. market quickly and efficiently.

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down 5% over the same period last year. Vietnam's iron and steel export market still mainlycomes from Southeast Asia, more than 42%.

Steel production is the core field that accounts for an important proportion of 90% of theGroup's revenue and profit. With a capacity of 8.5 million tons of crude steel per year, HoaPhat is the largest steel producer in Southeast Asia.

- Employment

Vietnam's labour force represents 57% of the population over 98 million. The country's mainindustries – manufacturing (16% of GDP), services (51%), and agriculture (14%) – employ amajority of the labour force, with Vietnam's unemployment rate in Q1 of 2021 being 2.19%.Currently, Hoa Phat Group has 11 member companies with 25,424 employees, operatingnationwide and 01 office in Singapore.

- HHIncome

Vietnam Annual Household Income per Capita reached 2,178.776 USD in Dec 2021.Vietnam Annual Household Income per Capita data is updated yearly, from Dec 1994 to Dec2021, with an averaged value of 813.323 USD. The data reached an all-time high of2,235.955 USD in Dec 2019 and lowest 183.956 USD in Dec 1994.

Retail Sales of Vietnam grew 10.089 % YoY in Feb 2023.- More:

Domestic steel consumption in 2023 can be supported by public investment and transportprojects. However, rapid inflation and tightening global monetary policy reduced investmentand consumption demand, weakening steel consumption.

Steel exports will not increase in the first and second quarters and will be difficult to recoveruntil mid-2023 in the face of pressure to raise interest rates and reduce global interest rates.Hoa Phat will be affected, there must be a policy to prepare to overcome this period.

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<b>3. Social</b>

About population, Vietnam has a large population and is in a period of population growth.Moreover, the uneven distribution of population by geographical area also affects Hoa Phat'sactivities. This creates great demand for housing, infrastructure, and other consumerproducts. Hoa Phat took advantage of this opportunity by expanding production andsupplying construction materials such as steel and cement. For example, high-rise buildings,new urban areas and industrial infrastructure in all 3 regions such as Empire City project,Sala town, Landmark 81 in the southern region. Two large-scale tourism - entertainment -resort projects in Da Nang city, Cocobay Da Nang and Sunshine Complex - Soleil Da Nang.About career view, Hoa Phat has created a favorable working environment for employees todevelop and advance in their careers. They provide training and development to enhanceskills for employees, helping them improve their capacity and meet job requirements. Theyregularly organize many training programs to improve skills and skills for employees. Inaddition, Hoa Phat also creates flexible working modes and encourages creativity, helpingemployees balance work and personal life.

About customer's style, Today's consumers seek products and services that are convenient,environmentally friendly and suitable for modern lifestyles. Hoa Phat has done somethinglike Hoa Phat has developed lightweight and durable high performance construction steel andstainless steel products. These products meet customer requirements for convenience,environmental friendliness and modern design. For example, Hoa Phat's stainless steel iswidely used in the food and pharmaceutical industries, meeting the requirements of foodhygiene and safety.

<b>4. Technology</b>

Hoa Phat Group has applied many advanced technologies to improve production productivity,product quality and environmental protection. Here are some of the technologies Hoa Phathas applied:

Automated production systems and robots in the production process.Automated analysis and control system in the iron and steel production process

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Using advanced exhaust gas treatment technologies and other environmental protectionmeasures such as: recycling wastewater, processing fly ash into powder, treating waste bybiodegradation method.

Hoa Phat invests and applies advanced waste treatment technologies, including recyclingtechnology and converting waste into reusable materials, but also includes traditional wastetreatment methods such as waste treatment. sludge treatment, wastewater treatmentHoa Phat also focuses on optimizing energy use, using modern technological equipment andmeans to minimize the impact on the environment from production activities.

<b>5. Environment</b>

- Climatechange

The manufacture of steel faces substantial challenges due to climate change. Extreme weatherand rising temperatures can degrade the quality of raw materials and interfere with logisticsand transportation. Hoa Phat Group should research low-carbon technology to lowergreenhouse gas emissions and take into account the long-term effects of climate change on itsoperations, including the requirement for resilience planning.

The manufacture of steel also greatly increases greenhouse gas emissions. In order to lessenits reliance on fossil fuels and cut down on wasteful inflation, Hoa Phat Group canconcentrate on using renewable energy sources, including solar or wind power.

- Ethical

Hoa Phat Group works in the steel business, which is governed by a number of environmentalstandards. Hoa Phat Group should make sure that all of its operations adhere to national andinternational environmental regulations and standards, particularly in regard to soilimprovement, waste management, water use, and emission control.

Social responsibility: Hoa Phat Group can show its moral commitment by taking part incommunity-building efforts, funding environmental protection programs, and enhancing thewelfare of community workers.

- Recyclinganddisposal

Hoa Phat Group seeks possibilities to use the concepts of the circular economy through therecycling and reuse of materials. This can lessen trash production and the negative effects ofits operations on the environment.

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Waste management: Using good waste management techniques, like waste segregation andtreatment, can assist Hoa Phat Group in lowering environmental pollution and ensuring thesafe disposal of hazardous items.

- Sustainability

Supply Chain Sustainability: The Hoa Phat Group's overall sustainability can be improved bycollaborating with suppliers who follow sustainable practices, such as ethical labor practicesand responsible sourcing of raw materials.

Product innovation may help Hoa Phat Group fulfill the rising need for sustainableconstruction materials. This can be done by creating sustainable steel products and solutionsthat improve energy efficiency, durability, and environmental protection steadily.

<b>6. Legal</b>

With the criterion “proactive to adapt”, Hoa Phat has always actively followed any legaldocument right from the first days when its draft was released for public opinion. Forexample, 11 Laws and Codes were passed by the National Assembly and officially tookeffect from January 01, 2021. These are important laws that greatly impact the social life ofVietnam and the operating activities of Hoa Phat in particular.

Decision No. 145/2007/QD-TTG of the Prime Minister: Approving the developmentplanning of Vietnam's steel industry for the period 2007-2015, with a vision to 2025. This is agreat opportunity for the steel industry to develop stronger.

Hoa Phat is particularly interested in: The Labor Code 2019, The Law on Securities 2019,The Law on Investment 2020, The Law on Enterprise 2020, The revised Law onAmendments to Construction law 2020 as well as their respective guiding documents.Therefore, since the early days when the draft laws were widely commented on, Hoa Phatcarefully looked into changes in legal regulations that may affect its activities to predict andanticipate, so as to make timely adjustment plans.

About the legal related to international,

The EU-Vietnam Free Trade Agreement (EVFTA) and the Regional ComprehensiveEconomic Partnership (RCEP) which have become effective since November 2020, andCPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)which

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was recently issued have boosted the steel export market. Hoa Phat prepared carefully toreceive opportunities as well as to meet committed technical standards; understood the legalframework of the market and technical barriers to be more proactive in exporting and toavoid trade remedy lawsuits. In fact, exports of construction steel in 2022 increased andexpanded to new markets.

In addition, under the management of Hoa Phat Group, more than 700 employees working atHoa Phat Steel Mill and Steel Rolling Factory have been trained on policies and laws onlabor safety and hygiene. Moreover, regulations on the use of labor protection, developmentof regulations on management and inspection of occupational safety, etc…

<b>III. Culture in Vietnam1. Language</b>

Language is intrinsic to the expression of culture. As a means of communicating values,beliefs and customs, it has an important social function and fosters feelings of group identityand solidarity. It is the means by which culture and its traditions and shared values may beconveyed and preserved.

The Vietnamese language is the official language in Vietnam. This is the mother tongue ofabout 85% of the Vietnamese population along with more than 4 million overseasVietnamese. Like many other languages in Asia, Vietnamese is a tonal language.

Vietnamese is strongly influenced by the Chinese because more than 60% of Vietnamesewords are borrowed from Chinese. In addition, Vietnamese also borrowed Latin and Greek inEnglish.

It now uses a Latin alphabet, or chữQuốcngữ,that is based on the French alphabet. It wascreated by European Jesuit missionaries so that the Bible and other Catholic books could bequickly translated into Vietnamese.

Before Vietnamese used the Latin alphabet, government documents were written usingclassical Chinese, but everyday Vietnamese was written with a writing system based onChinese characters, called chữNôm. Few people knowchữNômtoday

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<b>2. Social structure</b>

Social structure refers to the pattern of social relationships in a society. Such structureregulates the interactions among members of the society, providing guidelines within thecultural norms for achieving the goals defined by cultural values.

Vietnam is a socialist republic with a one-party system led by the Communist Party ofVietnam (CPV).

The yellow star centred on the red field symbolises one of five classes of society entrepreneurs, farmers, workers, intellectuals and soldiers representing each point of the star.The flag may also be flown with the flag of the Communist Party of Vietnam.

<b>-3. Education</b>

Vietnamese culture was influenced in some nations, especially by Chinese culture. Mostschools have slogan “Tien hoc le, hau hoc van” which was an elemental lesson for allstudents.

- Respectforteachers

The aim of education in Vietnam is to educate people to become good citizens in bothknowledge and morality. Teachers are regarded with high esteem and seen as role models.Students are expected to show deference and obedience to their teachers because theeducation system is teacher-centred

- Study-focusedculture

Vietnamese society has a culture of learning, considering education as the first responsibilityof students. It is generally believed that studying diligently and working hard can lead tosuccess and a better life. Therefore, Vietnamese students often face academic pressure andhave high expectations from their families.

- Traditionalteachingmethods

Traditional teaching methods in Vietnam often focus on learning stereotypes, memorizingand obeying orders. But nowadays, many people find that more interactive andstudent-centered teaching methods that promote critical thinking and creativity are a morepractical approach.

<b>4. Political Philosophy</b>

The main philosophy in Vietnam is Marxism-Leninism and is influenced by Ho Chi Minh'sideology. In addition, it has Vietnamese nationalism and a history of fighting for

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independence and the goal of achieving a classless society. It emphasizes the principles ofcollectivism, social equality and the pursuit of the common good.

The Communist Party of Vietnam (CPV) is the ruling party, playing a central role in shapingand implementing the country's political philosophy. The CPV follows the principles ofsocialism, collectivism and class struggle, in order to achieve a classless society and promotesocial equality.

However, Vietnam has experienced significant economic reforms since the late 1980s withthe introduction of the Doi Moi (Doi Moi) policy. These reforms opened the country tomarket-oriented economic activities, encouraged foreign investment and allowed privateenterprise. This change reflects a departure from the previous emphasis on politicalphilosophy in Vietnam.

<b>IV. Singapore Market1. External environmenta. Politics</b>

The Singapore government aims to maintain social cohesion and stability by seekingconsensus among different stakeholders.

Singapore's political system has been dominated by the ruling People's Action Party (PAP)since 1959. The legal and electoral framework developed by the PAP allows for severalpolitical pluralism. But it also has some limitations such as inhibiting the development ofopposition parties and restricting freedom of speech, assembly and association.

Singapore has strict regulations on political activities. Freedom of speech and assembly arerestricted, and political campaigning and public demonstrations are also restricted. Thegovernment argues that these measures are necessary to maintain social order and stability.For example, all newspapers, radio stations and television channels in the country are ownedby companies connected with the government.

<b>b. Economy</b>

Singapore follows a free-market economic model with limited government intervention. Itpromotes open trade, foreign investment and entrepreneurship. Singapore has activelypursued economic diversification such as encouraging the development of industries such asbiotechnology, clean energy, digital services. In 2021, Singapore's GDP is $397 billion. Inaddition, Singapore has always had a high employment rate thanks to a flexible, adaptable

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