APPENDIX

INTRODUCTION

This project was designed to highlight both the good and negative effects of the macro
environment on company operations using current examples, as well as to identify the
internal strengths and weaknesses of individual firms and their interrelationships with
external macro variables.

SECTION I: VIGLACERA MACRO ENVIRONMENT ANALYSIS

A. PORTER’S 5-FORCES ANALYSIS

1. The Threat of Substitutes:

Substitute products are goods or services that have the same utility value and can meet
the same client demands. When two products or services exist in the same market,
customers can rank and pick from a choice of products and services to replace them. One
of the key reasons why firms face the threat of rivals providing identical items at a lower
price is because of this. If a firm's goods or services can only be substituted by a small
number of alternative possibilities, the company will have more control over its selling
prices and the amount earned will rise. On the other hand, if a firm is competing against a
big number of rivals that provide the same product line and can replace the company's
products in the same market, the company's position and earnings will suffer. The reason
for this is that buyers now have more alternatives from which to select a product that best
meets their needs. (Brujil, 2018) In the case of Viglacera, their goods are always
competing with those of other firms in the construction materials sector, particularly in
overseas markets. Vicostone Joint Stock Company competes directly with Viglacera in
the domestic and foreign markets for building materials, particularly flooring goods. In
the sector of wooden flooring goods, An Cuong Wood Joint Stock Company competes
directly with Viglacera - another material favoured by some customers. (Duc, 2020)

2. The threat of New Entrants:

Existing rivals aren't the only issue a firm must contend with; new entrants pose a
substantial concern as well. To mitigate this risk, firms will evaluate how simple it is to
join and quit the market, taking into account factors such as cost, time, and the possibility
of new entrants. participation. The number of new enterprises entering the competition
will be large in a market with low entry barriers. This can be detrimental to enterprises
who do not have a strong market position or lack the financial and human resources to
withstand the storm. However, if a company has the capacity and strength to construct
long-term, robust barriers to entry, it can defend its position in a dynamic market while
also taking advantage of shifting possibilities. Turning hazards into opportunities to
expand the company's commercial activity. This offers firms confidence that they will be
able to maintain their market position. (Brujil, 2018) Many businesses are contributing to
the growth of the construction industry, such as Dana Tiles and Viethome, which have
just lately began to produce and provide building materials to the market. However, these
enterprises pale in comparison to Viglacera in terms of image and product technology,
making it impossible to compete with Viglacera. Viglacera, on the other hand,
concentrates on supplying goods for huge real estate projects involving large
organizations. (Duc, 2020)

3. Bargaining Power of Suppliers:

Suppliers frequently have a substantial influence on the capacity to control expenses.

This is because if a supplier raises or lowers the cost of raw materials utilized in
manufacturing, the overall cost of the company rises or falls. Furthermore, companies
will be charged a fee if they want to transfer providers. The amount of reliance on
supplier variables grows for organizations with a fewer number of suppliers. On the other
hand, the market contains a large number of suppliers that may help the firm keep input
costs in accordance with its existing financial status, allowing it to enhance earnings.
(Brujil, 2018) The business model of Viglacera Corporation was created from the start as
a whole process ecosystem. As a result, the components used in Viglacera's goods are
acquired directly from the firm, without the participation of any other mining company as
a middleman, allowing them to save money on raw materials. As a result, Viglacera's
manufacturing costs will be more consistent than those of other firms. (Duc, 2020)

4. Bargaining Power of Buyers:

Customers are the most crucial factor in determining a company's financial success or
failure, hence they may be regarded to have a significant impact on enterprises. The
amount of consumers who use the firm's products and services, the quantity of those
customers, and the prices the company will have to pay to attract future customers all
influence a customer's bargaining power. and keep your existing consumers. These are
the most important criteria to consider when calculating negotiating strength. If the
number of consumers is minimal, the capacity to negotiate on pricing and product quality
will be dependent on client preferences. When there are a lot of consumers, the supplier
has less power and the client has greater power. On the other hand, if a business has a big
number of clients, it will be simpler for it to charge greater prices for its products,
resulting in more earnings. (Brujil, 2018) According to Viglacera, the firm distributes its
goods to over 40 nations throughout the world. This might suggest that the business has a
sizable customer base. As a result, client price negotiation nearly never occurs, unless it
is required for significant real estate projects, in which case it is vital since it can result in
benefits other than income. (Duc, 2020)

5. Competitive Rivalry:
Businesses frequently utilize measures such as the overall number of rivals and the extent
to which those competitors constitute a threat to their organization when performing
competitor research in a specific market. surname. When a market has a big number of
rivals, the strength and position of a firm in the market is harmed. As a consequence, both
customers and suppliers will have more alternatives, resulting in more competition,
particularly in terms of product costs and pricing. If there are fewer enterprises in your
field, on the other hand, you will have more control over the pricing of your items,
resulting in more consumers and more profitability. (Brujil, 2018) Faced with a slew of
rivals in the building materials manufacturing and distribution business, Viglacera has
created a line of products to meet a wide range of client needs in order to strengthen and
improve the company's position in both domestic and international markets. Because
Viglacera has been in business for a long time and has a strong position in this industry,
they have a loyal customer base and a large number of potential customers, particularly in
the domestic market. As a result, the Company is constantly ranked among the top
construction materials manufacturers and suppliers in Vietnam. (Duc, 2020)

B. PESTEL ANALYSIS

A PESTEL study is a strategic framework that is often used to assess a company's

operating environment. The framework was previously known as a PEST analysis, which
stood for Political, Economic, Social, and Technological elements, but in more recent
history, it was expanded to include Environmental and Legal issues as well.

1. Political factors:

With the policies issued by the state in 2021, businesses are given the opportunity to
develop more comprehensively, making up for the damage caused by the Covid-19
epidemic of the previous year.
Government enterprise development policy through 2021:
- Develop a plan for long-term economic recovery that includes urgent,
comprehensive, and long-term remedies to help businesses recover through 2023.
- Encouraging the Prime Minister's Special Working Groups' efforts to alleviate
challenges for companies and persons affected by the COVID-19 outbreak
- In the year 2021-2025, accelerating the deployment of digital transformation
support activities for enterprises, cooperatives, and business families.
- The Ministry of Justice is urgently completing and supplementing a number of
pieces of legislation in order to conclusively settle legal issues, assure uniformity,
and eliminate implementation roadblocks.
Faced with the detrimental economic impact of the Covid-19 outbreak, the government
has proposed plans to assist enterprises, notably Viglacera, in regaining their footing in
the future. Although Viglacera has been less impacted by the virus than other enterprises,
the company has quickly installed and put into operation its own online trade platform,
recognizing that the online business approach is progressively taking control. Viglacera
has shown excellent growth in comparison to 2020.

2. Economic factors:

According to the General Statistics Office, GDP is expected to rise 2.58 percent in 2021
over the same time in 2020. In real terms, labor productivity in the entire economy is
expected to be 7,398 USD/labor in 2021, up 538 USD from 2020. Labor productivity will
grow by 4.7 percent at constant prices in 2021 as employees' credentials improve.
The GDP growth rate and worker productivity reflect that Vietnam's economy has
improved since the epidemic began in 2020. This is a positive indicator for Vietnamese
firms since it indicates a thorough and long-term recovery of the economy, which will
help to expand commercial prospects. (Toàn cảnh kinh tế-xã hội Việt Nam năm 2021,
2021)

Accordingly, the average CPI forecast in 2021 compared to 2020 is about 2.07%-2.18%.
CPI in December 2021 compared to December 2020 increased by about 3.02%-3.28%.
The average CPI in 2021 will increase due to the following main reasons. Firstly,
domestic petrol and oil prices increased by 31.74% over the previous year, gas prices by
25.89%. Secondly, rice price increased by 5.79% over the previous year due to the
increase in domestic rice price in line with the price of export rice. Thirdly, the price of
housing maintenance materials increased by 7.03% over the previous year due to the
increase in the price of cement, iron, steel and sand And lastly, the price of educational
services increased by 1.87% over the previous year due to the influence of the tuition fee
increase for the new school year 2020-2021 according to the roadmap of Decree No.
86/2015 /ND-CP dated October 2, 2015 of the Government. (Ha, 2022)
This is a bad signal for most businesses, especially distributors, transporters and
businesses that have raw materials supplied from long distances because of the dramatic
increase in gasoline prices. For other indicators, it may be a negative signal for one
business, but it may not have any effect on another, depending on the business line and
field of operation of that business. Viglacera Corporation is more affected by inflation
and demand than by supply. As a result, the company has decided to hike product costs
this year in compared to last year. Furthermore, when people's housing needs expand, the
company is obliged to strike hard when the market demands it, reaping a variety of
benefits.

3. Social factors:

It's also been a time of profound change for businesses of all sizes, as they look for new
ways to stay afloat and grow while remaining connected to their customers. Brands have
helped enrich the online experience by showing up more where customers are and trying
out new formats and communication channels.
 a. user trends

Social commerce: The year 2021 is the year of social commerce. People learn about
things they like through their friends' feeds, and they expect to be able to contact
businesses in the same manner they message their friends. As a result, being a firm
capable of communicating and interacting with consumers will be critical to any
company's development. E-commerce platforms and social networking sites account for
more than half of all online purchases in Vietnam. When studying or researching
information on a product, 59 percent of consumers prefer to speak with a company.

Digital content creators: As the virus spread, individuals were forced to stay at home and
occupy themselves for extended periods of time. The quantity of information kids view at
home has increased dramatically, covering a wide range of themes and media. According
to the report, by 2021, the number of macro influencers (those with 100,000 to one
million followers) in the region would have climbed by 66%. Influencers have a large
following in Vietnam, with 85 percent of customers stating they follow them, which is
7% more than the Asia-Pacific average. 67 percent of Vietnamese customers believe that
influencers have an impact on what they buy.

b. Labor force:
The average population of the whole country in 2021 is estimated at 98.51 million
people, an increase of 922.7 thousand people, equivalent to an increase of 0.95%
compared to 2020. This is an opportunity for businesses to recruit more potential
employees to develop the core elements of the business, enhance development and find
new opportunities for the company. (Yuksel, 2012)

Viglacera has its own market focus, and investigations and research have revealed that
Vietnamese consumers like items with warm, natural tones. Pattern that is easy to clean
and lasts a long time. Since then, the company has successfully infiltrated the residential
market with granite tile products that are suited to local needs.

4. Technological factors:

Today, before the development of society, any business that wants to survive must also
change according to the general development. Technology is an important factor in the
development and improvement of productivity, quality and competitiveness for
enterprises. With the industry-construction machinery technology mainly of China, and
European countries. With advanced technologies, ensuring efficiency and prestige for
businesses in competitive times when the market is open. (Yuksel, 2012)
Viglacera has teamed up with other industry heavyweights like Sacmi and Collorobbia to
create a manufacturing chain that is equipped with cutting-edge technology in order to
keep up with the growing trend of digitising production and commerce. This allows
Viglacera to boost production while maintaining product quality, resulting in the
establishment of the most successful building materials firm in Vietnam.

5. Legal factors:

This is a factor that affects all business industries in a territory, institutional and legal
factors can threaten the viability and development of any industry. When doing business
in an administrative unit, businesses will be required to comply with the legal
institutional elements in that area.
- Commercial laws: are legal restrictions issued or recognized by the state to control
their trade labels and commercial operations.
- Environmental laws: Environmental law is a specialized field of law that includes
legal norms and principles governing the relationships that arise between entities
in the process of exploiting, using, or affecting one or more environmental factors
using a variety of adjustment methods in order to effectively protect people's
living environments.
- Enterprises laws: A legal document comprising a system of legal normative
requirements on the circumstances, order of formation, organization, and operation
of limited liability corporations, joint stock companies, and partnership businesses
is known as Enterprise Law. private businesses and brand names
- Labor laws: Labor law is a component of Vietnamese law that regulates employer-
employee relationships as well as social connections that are directly connected to
labor relations. (Sidel, 2010)
Even a multinational corporation like Viglacera must adhere to Vietnamese norms when
conducting business in Vietnam, such as business model limits, company rules, and other
regulations, such as the government's Enterprise Law 2020. In order to compete fairly,
Viglacera must accept all criteria, including the number of members on the board of
directors necessary to be recognized as a joint stock company and the taxes that must be
paid. As a result, Viglacera must go through a series of stages and invest a significant
amount of time and money in order to be permitted to create a joint stock company,
which it must then list on the stock exchange in order to obtain the certificate and reap
the benefits of investment.

6. Environmental factors:

The environmental situation in Vietnam is having bad changes, such as the deterioration
of air quality, water pollution due to industrial waste and depletion of natural resources
due to unplanned exploitation. With that situation, enterprises need to pay more attention
to the treatment of waste from production and mining before releasing it into the
environment according to the standards of the law and come up with a specific
exploitation plan suitable to the source of the waste. supply of natural resources. (Yuksel,
2012) The Viglacera Company now owns 11 industrial parks, ten in Vietnam and one in
Cuba. The establishment of a plant in Vietnam will significantly simplify the
management of the production line and the firm's work schedule. The establishment of a
manufacturing facility in Vietnam both simplifies and enhances product distribution
choices. This is due to Vietnam's proximity to a large number of prospective markets that
may absorb a significant amount of their output.

SECTION II. VIGLACERA EVALUATION:

In order to well conduct a analysis of strengths and weaknesses of Viglacera’s operation,

SWOT analysis is a great tool for providing both internal and external insight. Therefore,
bring a better information to evaluating Viglacera’s operation.

A. SWOT ANALYSIS:

1. Strengths:

Financial strengths of the organization: As a member unit of Viglacera Corporation, the

firm has a solid and tight connection with the majority of banks in the Vietnamese
financial system, and the parent corporation backs it up. Another strength is that, the
company's appropriate investment and production expansion efforts, as well as its yearly
revenue and asset growth of 10-15%, are consistent growth that gives shareholders and
banks trust. From 2020 to 2021, the management of short-term capital and inventory has
improved, demonstrating the company's leadership's prudent management.

Strengths of Manufacturing Management of Viglacera:

- Invest in technology and equipment to produce high-quality Sacmi Granite tiles.
A continuous synchronous production line is ideal for big batch manufacturing
because it reduces expenses.
- Kaolin, feldspar, clay, and other raw materials used to make Granite bricks come
mostly from Vietnam, accounting for 90% of the raw materials used to make high-
end goods with special needs such as Chinese and Indian imports.
- Color glaze raw materials, fritz mostly uses high-quality materials sourced from
Spain and Thailand.
- Fuel: spray-drying mixed powder, drying wood goods after pressing, and heating
items utilizing coal gasification technology in gas generators (Chinese
technology). As a result, compared to utilizing Gas LPG and DO oil, you may
save 40% on fuel costs and manufacturing costs. Production costs are lower, and
pricing are quite competitive.
- Product creation technology: A modern automation system uses multiple feed
technology to create two layers of natural decorative objects on the surface of big
size products (600 - 1000 mm), printed with high pressure (3000 - 6200 tons), and
burned at heat to produce high quality massive tile granite products with lower
manufacturing costs since the bottom layer can use raw materials.
 - Product polishing technology: purchasing a contemporary polishing line with high
productivity and consistent grinding quality saves money on power and grinding
materials.
- Polished items are treated with Nano spray coating, which increases the value of
high-end products by improving shine and anti-fouling on the surface of tiles.

Supply chain management strengths: The organization establishes a small number of

suppliers (about 10 raw material suppliers) based on the evaluation of highly capable
suppliers who fulfill the evaluation criteria. Moreover, the supplier's mine and warehouse
are in charge of raw material quality control, and quality supervisors are appointed on site
to work with the supplier to create the preliminary processing and processing process.
The firm excels at turning components into products, as seen by the following outcomes:
o Consistent input fuel quality, consistent output quality
o Reduce the company's raw material inventory and working capital.

Strengths of the company's marketing strategy:

- Viglacera's product lines are huge in size, have a high manufacturing output, are
modern in design, and of excellent quality, and can be used to replace imported
goods at a low cost to service major projects and metropolitan areas.
- The quality of Viglacera Granite tiles is well regarded in the market due to
remarkable characteristics like durability, precision, shine, and beauty, making
them ideal for everlasting and opulent building.
- Despite the fact that there are few Granite product models, we can supply a
complete tiling and finishing solution.
- The Viglacera brand is well-known among customers in the domestic construction
materials sector.
- Distribution system: creating a network of large distributors for specific areas and
exporting, cutting service costs and providing clients with actual product value.
products of customers As a consequence, this distribution strategy is suitable for
the local market, where the majority of domestic clients may be supplied at a
lower cost than the rest of the world.
- Encourage people to shop online during the pandemic, which is excellent for the
majority of people because in-person transactions are limited during periods of
social isolation.
(Đại học quốc gia Hà Nội, 2012)
2. Weaknesses:

Performance flaws inside the firm: Firstly is the significant debt-to-capital ratio (203
percent in 2020 and 165 percent in 2021), implying a high interest rate risk. (Viglacera -
bao cao thuong nien 2020, 2020) (Viglacera - bao cao thuong nien 2021, 2021) Secondly,
receivables and inventory are both large, increasing working capital and lowering the
company's efficiency. Thirdly, because the raw material source and domestic raw
material providers have limited capability in terms of exploitation and quality control,
their ability to deliver high-quality, stable raw materials remains restricted. Due to their
low management level and remote location, collaboration and involvement in these
suppliers' quality management systems is extremely challenging. Lastly, there is still a
lack of awareness in the management and steady construction of suppliers, and there are
still shifting providers. (Đại học quốc gia Hà Nội, 2012)

3. Opportunities:

Most nations have employed granite goods for pavement building projects in recent
years. However, in industrialized nations with high labor costs, the government has
consistently implemented measures such as natural resource conservation, environmental
protection, and energy security, among others. Faced with the aforementioned scenario,
wealthy countries have lobbied for promoting granite imports from developing countries
rather than domestic manufacturing.
Secondly, due to labor concerns, political regulations, environmental rules, and currency
rate policies, China's building material business confronts several challenges.
Lastly, only a few producers of Granite goods, particularly high-end product lines, are
eligible for export in Vietnam's building material production business. (Đại học quốc gia
Hà Nội, 2012)

4. Threats:

Because of the growing demand for granite tiles in the market as a result of rapid
urbanization, which has resulted in an increase in construction projects, manufacturers of
ceramic tiles are shifting their investment structures to produce granite tiles more and
more, increasing the level of competition in the industry. Another reason is due to
unstable coal and power prices, particularly gasoline prices, have risen substantially,
affecting the company's business plan significantly because coal fuel costs account for
30% of production expenses. The company's competitiveness will be harmed by coal.
(Đại học quốc gia Hà Nội, 2012)

SECTON III. VIGLACERA’S SUGGESTED STRATEGIES:

Strategies Combination Analyse and evaluate

Increasing investment Strengths + The team, production management system,
with a planned Opportunities and technology must increase investment in
expansion strategy growing output, with a focus on establishing
modern facilities to create large-scale items,
with the help of market demand. Polished
goods with two times the present design in
massive sizes of 600-800 mm. In the
 concentrated position in the north, the
advantages of land, numerous and affordable
labor, available bone supply, and abundant
coal are all utilized.
Export to Taiwan, Strengths + The advantages include lower production
India, Thailand, and Opportunities prices in Vietnam compared to China and
Europe is encouraged. Thailand, as well as the government's export
support program. Taiwanese and Indian
governments have regulations prohibiting or
restricting the import of Chinese goods. It is
critical to focus on exporting to these
countries since they have a significant
demand for large-scale grinding items.
Improving the Strengths + Improve the company's production
company's internal Threats management capability, construct a lean and
capacity through effective management apparatus to enhance
developing the productivity and quality, lower costs, and use
manufacturing new models and financial measures to
system. increase efficiency. competitiveness of the
firm
Focus on the South Strengths + Changing domestic consumers' tiling habits
and penetrate the Threats with ceramic tiles through marketing and
home market. promotion, counseling on the construction
and use of granite tiles, promoting the
qualities and strengths of granite tiles, and
reducing drawbacks when constructing and
using the company's goods.
Creating a corporate Weaknesses + For long-term success, cultivate a business
culture for the Threats culture that is centered on being a
organization disciplined, collaborative, and learning firm.

CONCLUSION
Using contemporary examples, this research haveto emphasize both the positive and
negative effects of the macro environment on corporate operations, as well as identified
specific enterprises' internal strengths and weaknesses, as well as their interrelationships
with external macro factors.
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