Business Environment Assignment 1 BTEC Nguyen Huu Phong 2017

 Retake

ASSIGNMENT FRONT SHEET <No 1.>
Qualification

BTEC Level 5 HND Diploma in Business

Unit number and title

Business Environment

Assignment due

Assignment submitted

Learner’s name

Nguyễn Hữu Phong

Learner’s code

Class

Assessor name

Nguyen Thi Thanh Nhan

Learner declaration:
I certify that the work submitted for this assignment is my own and research sources are fully acknowledged.
Learner signature

Date

29/11/2016

Grading grid
P1.1

P1.2

P1.3

P2.1

P2.2

P2.3

M1

M2

1

M3

D1

D2

D3

Assignment title
In this assignment, you will have opportunities to provide evidence against the following criteria.
Indicate the page numbers where the evidence can be found.

Assessment criteria

Expected evidence

Task
no.

Assessor’s Feedback

1.1

 Achieved

LO1.Understand the organizational purposes of businesses
Criteria No.1.1
1.1 Identify the purposes of
different types of
organization.

To distinguish their mission, objectives, and values of organizations. In
details, student should clearly identify:
□ Mission and vision
□ Goals and objectives
□ Measuring objectives

Criteria No.1.2

Your organization should satisfy Key performance indicators (KPIs)
regarding to environmental, industry and competitor analysis, predict
future success of the business.

1.2 Describe the extent to
which an organization meets
the objectives of different
stakeholders.

+ KPI should also be
Derived form, predictive of stakeholder requirement
Exhaustive
Reliable and repeatable
Timely
Aggregation of information

Revised as stakeholder

2

Not achieved

 Achieved
1.2
Not achieved


Criteria No1.3

1.3 Explain the
responsibilities of an
organization and strategies
employed to meet them.

Responsibilities
□ Social responsibilities
□ Environmental responsibilities
Resources depletion
Genetic diversity
Pollution concerns
Acid rain

Ozone depletion
Waste
Climatic change
Energy resources
□ Ethics and Business
□Management responsibilities: R&D, technology advance, staff welfare.

 Achieved
1.3
Not achieved

LO2.Understand the nature of the national environment in which businesses operate

Given opportunity costs, the allocation of resources among competing
claims is related to:

Criteria No 2.1.
2.1 Explain how economic
systems attempt to allocate
resources effectively.

□What to produce?

 Achieved

□How to produce?

2.1
□From whom to produce?

Not achieved

□Where to produce?
□How to distribute?

3

Criteria No.2.2
2.2 Assess the impact of
fiscal and monetary policy
on business organizations
and their activities.

Fiscal policy
Fiscal policy involves:
Taxation and other sources of income
Government spending
Borrowing whenever spending exceeds income

Repaying debt when income exceeds expenditure
Monetary policy
Monetary policy involves attempts to influence economic activity through:
• Interest rates
• Exchange rate
• Control of the money supply
• Controls over bank lending and credit

 Achieved
2.2
Not achieved

Analyze the above factors to business organizations

Criteria No. 2.3
2.3 Evaluate the impact of
competition policy and other
regulatory mechanisms on
the activities of a selected
organization.

□Analyze Porter’s Five Force Model of Competition.
+ Threat of new entrants
+ Threat of substitutes

+ Supplier power
+ Buyer power
+ Degree of rivalry
Regulatory includes:
Legislation
Competition policy
Competition commission
Office of Fair Trading (OFT)
Regulation of former nationalised industries
Self-regulation
The Civil Aviation Authority

4

 Achieved
2.3
Not achieved


Assessment criteria

Merit descriptor No. (M1)
Merit descriptor No. (M2)

Expected Evidence

□Provide the company SWOT analysis with the data supported.
□Good evaluate the impact of competitive policy and other mechanism with data
supported in a business context.

Feedback
(note on
Merit/Distinction
if applicable)
 Achieved
Not achieved

 Achieved
Not achieved
 Achieved
Not achieved
 Achieved
Not achieved

Merit descriptor No. (M3)

□Clear assignment structure with appropriate level of academic English writing

Distinction descriptor No. (D1)

□Provide critical analysis of information for business environment

Distinction descriptor No. (D2)

□Relevant theories concerning the business environment have been applied
□Sources of information are correctly cited and Good sources of references.

 Achieved
Not achieved

□ Smart recommendation for improving the business environment.

 Achieved
Not achieved

Distinction descriptor No. (D3)

Summative feedback

5


Assessor’s Signature

NhanNTT

Date

6


<ATTACHED EVIDENCE>


Introduction

9

1. Understand the organizational purposes of businesses.
1.1 Identify the purposes of different types of organization.

12
12

1.2 Describe the extent to which an organization meets the
objectives of different stakeholders. 18
1.3 Explain the responsibilities of an organization and strategies

employed to meet them. 22
2. Understand the nature of the national environment in which
businesses operate. 24
2.1 Explain how economic systems attempt to allocate resources
effectively. 24
2.2 Assess the impact of fiscal and monetary policy on business
organizations and their activities. 32
2.3 Evaluate the impact of competition policy and other regulatory
mechanisms on the activities of a selected organization. 35
Conclusion

36

References

37

8


The world in general is growing constantly every day, every hour, and Vietnam in
particular is also caught up in the whirlpool of the development. In that context, change is
the only way to survive in an era when people often say: "Change or die", that has
prompted the local firms required to constantly innovate business if it wants to stand in a

market full of fierce competition.
As a leading enterprise in the production of footwear of Viet Nam, in the very
difficult period of the economy, the limited liability company manufacturing consumer
goods Binh Tien - Biti's has changed itself and has new steps beyond the core areas and
achieved proud success. For more than 33 years of business activity with the ups and
downs and challenges, now, Biti’s has great power and development go up along the
country, become a reputable brand, trusted and familiar to consumers and is the pride of
the people of Vietnam on a "National brand" in the field of footwear about quality and
reputation.

For its core areas, Biti's is one of the private enterprises have the longest history in
Vietnam. Established in 1982 with two production teams are only with 20 workers

specialized in producing kinds of simple rubber shoes. Biti’s has gone through the phase of
the subsidized economies with much difficulty. However, more than 33 years, as a "fatigue
footsteps", Ltd. Manufacturing Consumer Binh Tien (Biti's) has gradually built himself a
strategic manufacturing and exporting, create a footwear brand - Biti's tied to the needs and
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tastes of consumers. Currently, Biti's become a strong unit, represent a breakthrough in the
field of footwear production; sufficient human, material and financial resources for career
development and ensuring greater achievements.
With a product distribution system stretching from the South into the North, Biti's
has 07 branch Centre, 68 marketing Shop and more than 1,500 retail distribution

intermediaries, have created stable jobs for the more than 9,000 workers in the Corporation
and Dona Biti's with annual production of over 20 million pairs. Brand Biti's whereby also
increasingly the popular domestic market and exported to more than 40 countries, there is a
majority of revenue from capital markets that Vietnamese enterprises unanswered - China.
Biti's is also international clients with well-known brands such as Decathlon, Clarks,
Speedo, Skechers, Lotto,...etc, believed to be a partner selection process more orders with
great value.
Besides strong growth, breakthrough. Biti’s also suffered a lot of pressure from a lot
of competitors in the field of footwear not only within the country but also to the countries
that have the technological boom. Of course we can't not mention the giant - Addidas.
Adolf Dassler returned from World War I in 1920, started the business start-up by
the passion with his sports shoes. In July 1924, together with his brother Rudoft Dassler,

they founded Gebruder Dassler Schuhfabrik. In 1947, Rudolf founded the new company
and become a competitor of his brother, now known as the famous brand Puma. As for
Adolf, since June 1948 is converted into a formal company name Addas, but by having a
few problems with copyright, it was continued to renamed by Adolf, until July 1949, then
the Addidas official name is used. After many ups and downs, overcome difficulties and
develop properly, Addidas now is a large corporation is no longer limited to the field of
sports shoes production although it is still their core fixed array.

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For the Asian market in general and Southeast Asia in particular, the value of the

Adidas brand in the Southeast Asian market is highly valued and trusted more than the
other competitors. In 2009, Adidas officially established Adidas Vietnam and now Adidas
is one of the first choice and popular in Vietnam. Addidas currently has 50 outlets across
the S-shaped country and bring more than 80,000 jobs for Vietnam.
Overall the two enterprises, for my opinion, although the two companies go two
goals and another own way, but in some specific areas that produce shoes, they are rivals.
As if Biti’s is trying to improve themselves and reaching the continent as well as the world,
the Addidas must also constantly improve and change themselves to not be caught up or
fall down before the other rivals, especially here is Biti's.

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1. Understand the organizational purposes of businesses
1.1 Identify the purposes of different types of organization.
Biti’s is a limited liability company manufaturing consumer goods is run by Mr.
Vuong Khai Thanh and Mrs. Lai Khiem .The couple had taken Biti’s became Vietnam's
proud brand with the right steps and the powerful transformation. Because as a business
has family tradition deep in the culture of Biti's, so many investment funds have wanted
access but was rejected and was not listed on the stock market makes more prominent role
in the current the couple's power in Biti's.

Mrs. Lai Khiem – Source: Internet

Mr. Vuong Khai Thanh – Souce: Internet

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About Adidas, a brand that was too familiar to customers worldwide with the
management apparatus fully effective at the present time with the leadership of Herbert
Hainer during 15 years since 2001, the great leader was to take the Adidas's ship in the
right direction and Adidas has always maintained its position.

Herbert Hainer – CEO of Adidas

Structure organization of adidas – Souce: Creately.com

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In a market full of fierce competition today, a company or organization that wants to
survive, maintaining our position in the market or more is to become the market leader, it
must develop a long-term strategy and correctness. The business must correctly identify the
vision, mission, goals and objectives for activities that are directed to. As Biti's, throughout
more than 33 years of establishment and development, they always build for themselves a
long term strategy and the right steps. The result, up to the present time, Biti's was a proud
brand of Vietnam. Even Giant -Adidas, they also have a proper strategy in nearly a century

to now they are one of the most successful brands in the world in the field of the
production of sporting goods. Any business, in a market full of fierce competition,
enterprises must have own vision, its own goals and build a plan to improve and change if
it wants to survive.
Vision
By a definition of vnheadhunter blog, vision is an image, standard, unique image and
ideals in the future, is what businesses want to achieve or become. The leader must ask
questions such as 5 years from now, 10 years from now. "What do we want" and "Which
purpose will we lead our organization to?"
For Biti's, they always want to be forever a reputable brand and quality not only in
the hearts of Vietnamese consumers but also in the hearts of consumers around the world.
For Adidas, they want to become part of the life of every person, the influence of

Adidas products for life, environment and society.
Mission
Mission is the reason for existence. The organization often expresses its mission
with a "mission statement" pithy, briefly, explains that organizations exist to do and will do
anything to survive. Replied to the question: "what would we exist to do?".
With Biti's, the tasks they set out is to meet the increasing needs of customers with
products of prestige and quality, constantly improving product improvement to bring the
best quality products to the consumer.
And for adidas, they wanted to bring the best products surpass customer
expectations especially sports athletes, providing the best experience and have a
responsibility to the environment and society.
Goals and objectives

This is simply short targets in the near future that a business needs to achieve in
view of the tremendous business that is looking to the future. The goals that a business
needs to achieve as a step in a way of long-term development.
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As for Biti’s, their current target is standing out of Vietnam with the new step into
the market to the countries in the region and Asia, specially as the foothold in the Chinese
market - tough market for companies from abroad and Biti's goal is to bring the
Vietnamese brand expansion outside.
Also for the own Adidas, they was a giant in the field of sports products industry so
their goal is to expand the market share growth, as well as becoming a leader in this area,

increasing competition advantages with others "giant" such as Nike, Puma,...etc.
Organizational values
Be understood as the value that a business geared to and rely on it to grow up. This
defination is understood as a culture of the organization, a value that organizations pursue.
Specifically, for Biti's, they always have 6 values as development platform:
credibility, quality assurance, constantly innovation, together make a profit, promote
development company, contribute to building strong and prosperous society. They are
viewed as guideline to put Biti's organizational values increasingly consolidated and
developed.
For Adidas, the value of the organization is in the product, the quality surpasses the
expectations of customers, contributing to building and good influence to environment,
social. They offer the best product and from the future.

With a distribution system that stretches across the country from North to South with
over 7000 employees, Biti's are really developing very rapidly and achieved much proud
achievement. According to statistics, Biti's is one of the leader of the footwear enterprises
in Vietnam accounted for 15 percent of the domestic market with domestic sales of 1,000
billion in 2012. The growth of the domestic market, Biti's share gain around 20 percent per
year. With relentless thirst for development and innovation, product innovation, the 2016,
Biti's has launched the product line Biti's Hunter direct competition with rivals such as
Adidas, Nike, Puma, ... when they spent approximately 5 million dollars investment in
production processes and research. Biti's Hunter would also promise strong growth. Has a
very long time, Biti's always focused on the segment of high school students with these
products bring durability and fit when going to school, as well as of 2012, there were up to
70 percent of students in the country to use the product of Biti's. It's time for Biti's to do

something, and the answer is Biti's Hunter.

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Source: Statista

And giants Adidas, the scale of Biti's a lot smaller than Adidas. Specifically with
more than 55000 employees worldwide and 14 percent market share in the world of
athletic footwear in 2012. Sales of Adidas in 2015 was approximately 9 billion dollars - a
very large number, Adidas has always been one of the most powerful companies in this
field.

Market share of 5 companies in 2012 – Source: Internet

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Starting late is better than never starting, Biti's after more than three decades has
transformed itself and change themselves. Not fair to compare Biti's with Adidas, there is
not only Adidas, but also the other large success companies of the world in this field are
the rivals that Biti's headed. Scaling, reached out in the region and the world, to confront
the leading brands, Biti's will have long-term strategy and the right ways to achieve
success.

Strengths







Biti's is a brand renowned for reliability and quality in Vietnam.
Products Varied, plentiful and of high quality.
Promotion of investment and joint venture development. In particular, the investment to other sectors
such as real estate investment, construction works and services bring abundant financial resources.

Extensive distribution system across the country, exports more than 40 countries and including the
Chinese market.
Have varied marketing strategies: sustainable human resources strategy, a policy, ... etc.
Great customer service.
Weaknesses




Raw materials and ancillary industrial underdevelopment. In particular, there is up to 80% of the raw
materials used to produce footwear is imported but is still not in control of the quality.
Designing and search the output for the product lacks.

Opportunities



Is the business going after will easily learn more experience.
Reception more science and technology development to improve the product.

Threats




High tax rates in the country of export. That is the difficulty not only Biti's but also other businesses in
the negotiation and receiving orders.
Many problems persist are not yet overcome while the opponent has made gigantic strides.
The pressure on prices. The price is always the stiff competition between domestic products and
exports.

SWOT analysis of Biti’s – Source: Author

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1.2 Describe the extent to which an organization meets the objectives of
different stakeholders
According to Business dictionary, it is stated that: "Stakeholder is a person, group or
organization that has interest or concern in an organization. Stakeholders can affect or be
affected by the organization's actions, objectives and policies."
There are three broad types of stakeholder in an organization:
First, Internal stakeholders such as employees, management. Second, Connected
stakeholders such as shareholders, suppliers, customers, financers. Finally, External
stakeholders such as the government, community, pressure groups.
Each stakeholder will have some impact on the organization. To determine the
effects of the stakeholders for the organization or company, we use a stakeholder mapping.

Power

Interest

Low

High

Low

Minimal Effort

Keep Informed

High

Keep Satisfied

Keep Players

Power / Interest Grid (Mendelow, 1991) – Source: 12manage

Based on Stakeholder mapping above, we have a table about the influence of the
stakeholders on Biti's:

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Stakeholder Mapping
Types

Stakeholder
Key Players

Keep
Satisfied

Employee

Keep
Informed

X

INTERNAL
STAKEHOLDER

CONNECTED

STAKEHOLDER

EXTERNAL
STAKEHOLDER

Managers

X

Owner

X

Shareholders

X

Suppliers

X

Customers

X

Financiers

X

Trade Union

X

Community

X

Government

X

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Minimal
Effect


First, about Internal Stakeholder, the employees - Keep Informed, their work is

completed target, to perform the tasks set out from on high, so the influence of employees
on the company's strategy is low. For the managers - Key Players, this is the Group of
people make decisions directly to the operational strategy of the company. The success or
failure of the companies are directly affected from the managers. The Mission of this group
is the management decisions and take the implementation of that task to the employee, and
the owner is similar to managers. For example, the Senior Manager of Biti's decisions
produce a product line focused on the market of athletic footwear to compete directly with
Nike, Adidas, ... then they are making a decision and implementing it due to the labor
group. The workers and designers will research and produce the product.
Second, about Connected Stakeholder, for shareholders, suppliers and customers Key Players, people who belong to the parties concerned directly affects the company's
strategy. Shareholders have the right to act on the decision of the company because they
keep share of firm and they decide whether to invest in the company or not, suppliers have

the right to choose a company that should provide resources for the company or not if the
company's strategy did not meet expectations and customers have the right to decide
whether to buy a company's products or not if the products of the company does not meet
the needs or expectations.
Finally, about External Stakeholder, Community - Keep Informed, they do not
directly impact to the company's strategy but to help promote products, corporate images to
consumers. Government - Keep Satisfied, they directly impact to the company's strategy by
changing the fiscal policy or monetary policy. For example, the Chinese Government
increased import tariffs to make the competition on price and access to the Chinese market
of Biti's more and more difficult, so it makes Biti's change strategy.
The influence of the stakeholders is extremely important factors and a business must
fully meet the needs and expectations of stakeholders to help businesses grow. The table

below will evaluate achieves the objectives of the stakeholders of Biti's:

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Types

Stakeholders

Objectives

Achieved

Stable job
INTERNAL
STAKEHOLDER

Employees

Bonus/reward

High salaries

High quality

CONNECTED
STAKEHOLDER

Customers

Good price

X

X

X

X

X

Good customer
services

X

Tax

X

Local employment

X

Social activities

X

Government

EXTERNAL
STAKEHOLDER

Community

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Not achieved


First, about Internal Stakeholder, for employees, Biti's has brought people a job with
high salary for each position and multiple modes, the support staff are very good and that's

the thing Biti's had completed for stakeholders are the employees. However, the problem of
bringing a stable job, Biti's has yet done when that Biti's be sued for firing employees
contrary to law (2003), as well as many other negative things.
Second, about Connected Stakeholder, for customers, Biti's has brought a quality
product and high reliability have been recognized by consumers. Besides the quality, the
reasonable prices of the Biti's product to pockets of the majority of consumers in Vietnam,
especially pupils and students. In addition, the customer service has always been
improving and enhancing the quality of service is also a factor that Biti's has met the
expectations of the customer.
Finally, about External Stakeholder, for government, Biti's always full taxes and
have never been accused of tax evasion as well as bring jobs to more than 7000 people
across the country, beneficial and meet the Government's expectations for the company.

For the community, Biti regularly organize social activities such as Contributions building
stones of Changsha, House sponsor for the program "to honor the generations of
Vietnamese people to preserve Sea Island home town", disaster prevention activities and
community responsibility, join child sponsorship remote areas to "relay the children to
school" in The South Cat Tien Foundation, or join the support program "Spring Border Tet sentimental". Meet the expectations of the community.

1.3 Explain the responsibilities of an organization and strategies employed
to meet them.
Whether a large business or a business recently founded, which is considered to be
be part of society. The business must be accountable to all the people around, the
surrounding environment and must show that their business ethics in the business
environment. The table below will clearly analysis on the tasks and strategy that Biti’s has

applied.

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Types

Specific Responsibilities of

The tasks and strategy that

Biti’s

Biti’s has applied
Create a lot of jobs across the

Provides jobs for everyone

country
Bring the diverse of product

Social responsibilities
Meeting the needs of society

design, style and quality, durable
To organize community activities,

Care about the community

Production activities always

Environmental
responsibilities

Do not pollute the environment

compliance with environmental
protection rules

Enhance work skills and
encouraging creativity of employees

Management responsibilities

help the needy

Bringing a stable life about
physically and mentally for

employees
Respect the idea of employees

Train staff and encourage
innovation of products
High wages, environment and
company culture of comfort,
support staff
Always listen to opinions and
receiving employee contributions
Paying taxes in full, not fraud,

Ethic and Business

Compliance with the law

evading the law and violate the
law

Do not lie in the production of the
product

Bring true quality products

First on social responsibility, Biti's has brought over 7,000 jobs nationwide helping
to improve the life of many people. Besides, Biti's regularly organizes many community
activities to support students who are disadvantaged, to contribute billions to support the
scholarship helps the children to school or help the people in the regions hit by natural
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disasters and many other social activities that Biti's has participated. Biti's always meet the
needs of society with quality products and diverse styles, bringing products to meet the
needs of the people.
About environmental responsibility, Biti's always complied with the rules rules to
protect the environment during production. The proof is in over three decades, the Biti's

has never been accused of polluting the environment around the production area. Besides,
Biti's is also always working to bring the products with environmentally friendly materials.
On the responsibility of management, Biti's bringing thousands of stable life for
many people. Biti's bringing jobs with high incomes and friendly working environment,
corporate culture of openness, always support the best employees in all cases. Help
improve job skills and encourage creativity of employees. Specifically, the product line
launched Biti's Hunter, Biti's has to give its employees the creative freedom to design and
brings a youthful for the product. In parallel, Biti's always respects comments of staff to
improve the product better and change the limitations that the company is facing.
On ethics and business, always obey the law properly. . Biti's always pays the taxes
and never used measures of spleen to benefit. Because in the past there had been mistakes
in the fired employee is unlawful but Biti's has changed and acknowledged their mistakes

to perfect morals and culture of the company. The products that Biti's bring are proven
through the process of using, brings a true quality product.

2. Understand the nature of the national environment in which
businesses operate
2.1 Explain how economic systems attempt to allocate resources effectively
According to Business Dictionary (2016) stated that: "Economic system is an
organized way in which a state or nation allocates its resources and apportions goods and
services in the national community.". We have 3 types of economic system and that are
Free Enterprise Economy, Government-Controlled Economy and Mixed Economy.
Free Enterprise Economy: "This economic system works on the principle of laissez
faire system, i.E., The least interference by the government or any external force. The

primary role of the government, if any, is to ensure free working of the economy by
removing obstacles to free competition." (Pondicherry University, n.d, p.21)
Government-Controlled Economy: "The government-controlled economies are also
called as ‘command, centrally planned or socialist economies’. Such economies are, in

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contradiction to the free enterprise economies, controlled, regulated and managed by the
government agencies." (Pondicherry University, n.d, p.22)
Mixed Economy: "A mixed economy is one in which there exist both government
and private economic systems. It is supposed to combine good elements of both free

enterprise and socialist economies. A mixed economy is widely known as one, which had
both “Public Sector” (the government economy) and “Private Sector” (the private
economy). " (Pondicherry University, n.d, p.22)
In Viet Nam, the economic is the mixed economic system - which in the majority of
countries in the world. Vietnam used to be considered a poor country due to economic
backwardness and stagnation because self-use the resources in the country. However, until
the period of renovation that the government applied, the Vietnam economy has many new
features when converting to mixed economy. That is the reason leading to the
establishment of many private businesses although still in the control of the government.
Beside that, in 2011, Vietnam joined the WTO gives positive signs of economic growth.
Vietnam recently joined TPP signatories in 2016, such as a further step for Vietnam's
economy in the future.

Any country, any society would also have production resources whether less or
more. The resources of this production is also known as factors of production and is
divided into 3 main groups: natural resources, sources of raw materials available in nature
or land, source of labor, capital or financial resources.
1 Natural resources, sources of raw materials available in nature or lane
Vietnam has a geographical position extremely conducive areas in South East
Asia when South East Asian sea traffic passes. Vietnam once considered a golden
land of many countries and Vietnamese History has a lot of time talking about that.
With a coastline about 3260 kilometers and a wide territory to 226000 square
kilometers and hundreds of small islands and two islands have a strategic position is
extremely important are Hoang Sa and Truong Sa. Vietnam has up to 3/4 area of
hills and forests cover over 40 percent of the land area and has more than 100 nature

reserves. Vietnam has over 39 million hectares of land, the land area was used on the
socio-economic purposes is 18.881 million ha, accounting for 57.04 percent of
natural land, including agricultural land accounted for 22.20 percent of land area and
38.92 percent of natural land is being used. The time was 14.217 million hectares of
unused land, accounting for 43.96 percent of natural land. About mineral resources,
Vietnam is located between two large mineralization belt of the world are Pacific
and Mediterranean. Geological exploration works during the past 40 years have
discovered and reviews 5000 reserves mines with 60 kinds of minerals such as coal,
Iron, Tin, Boxit, with abundant oil reserves. Also, with thousands of years of

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