Contents

P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples....................................................................................1

The impact of political factor.......................................................................................................1

Economic factor...........................................................................................................................3

Impact of social factors................................................................................................................6

Technological factor:...................................................................................................................7

Legal factor..................................................................................................................................8

Environmental factor....................................................................................................................9

P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses..............................................................................................................................10

Strength:.....................................................................................................................................11

Weakness:..................................................................................................................................12

Opportunity:...............................................................................................................................12

Challenge:..................................................................................................................................12

P6 Explain how strengths and weaknesses interrelate with external macro factors......................14
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
The macro environment impacts directly on the business operations that include the factors:
Political, Economic, Social, technological, legal, and Environmental factors.

The impact of political factor

The first is a political factor that includes government, the law and the organization that has the
greatest power. ... Any business must obey the law and be limited by politics. Therefore, any
decision, strategic plan or marketing plan of a company is affected by law and politics. For
example, once a year, a company or organization must pay enough taxes otherwise the company
will be closed down and company leaders will be arrested. In Vietnam, bureaucracy, corruption
levels and the stability of the government are the main reasons that affect business operations.

Bureaucracy & Corruption:

Context: According to the report from The Department for Monitoring Corruption Prevention
and Fighting in 2012-2015, the Committee has evaluated this situation is alarming. The
seriousness of corruption and bureaucracy in Vietnam, its dilemma, the difficulty of its treatment
is explained by the weakness of the institution, the half-heartedness in the direction of the
implementation and the degradation of many officials and civil servants in machinery, even
corruption in the judiciary, in investigating, prosecuting, adjudicating, executing judgments. On a
scale of 0-100 of the CPI, the problem of corruption in the public sector in Vietnam is still
considered to be very serious. In 2016, Vietnam was 33/100 points, ranking 113/176 on the
global rankings. This is the first time in four years that Vietnam scores a slight increase (a 2-
point increase from 31 per cent during 2012-2015). Status law exists, legislation also exists but
rule of law is not or weak and form, is a common practice today. According to the ranking
Transparency International (TI), Vietnam reached 35/100, ranking 107/180 globally. TI's
National Focal Point in Viet Nam said that there is a slight increase in the CPI for two
consecutive years (2016-2017) and was a positive indicator of efforts to anti-corruption in recent
years. This result also reaffirms the Party and State's assessment of corruption in Vietnam:
"Corruption and waste are still serious in many sectors, levels, sectors, Complexity, bad
consequences in many aspects, reduce the confidence of the people.

On one hand, small corruption and trivial harassment in forms of bureaucracy intentionally
causing troubles to people, including delay and process for civil-administrative affairs at the
basic level, the purpose is to force people to accomplish their work faster by providing the
officer an amount of money. The trick of this type of corruption is to deliberately complicate
simple things, taking advantage of the cumbersome regulations and form of administrative
procedures for the people. On the other hand, major corruption happens in job searching,
transferring, promotion and appointment of officers. The higher the position, the more profitable
the level of corruption is. These deals usually come with brokers, intermediaries which later
creates and forms unspoken, hidden rules.

Moreover, maximum corruption and bureaucracy intertwines and combines both individual and
organizational corruption, called group interests. This is a form of organized corruption which
mastermind and be manipulative institutions, policies and competent and authorized officers and
leaders. This type of corruption often occurs in project activities, tendering, economic contracts,
real estate, banking and finance, import-export, infrastructure construction, industrial zones,
education, health, science and technology, enterprises, economic groups. Land and land
acquisition, land clearance, real estate business is just one of those cases, but is the outstanding
scenarios in a myriad of cases and present situations of corruption.

In fact, in many places have been occurring the state of running status, running titles, running
rights – a way to enhance their position in the system. This has paved more ways for bureaucracy
to corruption level. There are other types of "running", from small, large to huge: running for
educational institutions, running for class, to running for project and running the verdict or
sentence. This is the focus point of the aches and pains in the spiral of money and power, trade,
crime and vices.

Some infamous cases can be mentioned such as the abuse of position and authority while
performing public duties occurred in the urban infrastructure development project of Bac Thang
Long - Van Tri, Hanoi, estimated damage of about 14 billion; The abuse of position and
authority while performing public duties occurred in Ben Cat district, Binh Duong province,
causing damage of nearly 11 billion; land corruption in Do Son and in Quan Nam, Hai Phong
city ... It is said that the allocation of land for projects has the phenomenon of lubrication for the
authorities (Development Company Bac Lieu province, Mr. Nguyen Van Khoe, Chairman of
People's Committee of Hoc Mon district, Ho Chi Minh city accepts bribes to allocate land
illegally. A part of the staff in the banking industry, especially commercial banks or banking
sector staff connects with external objects through lending, guarantee and financial leasing
activities, financial investment, entrusted loans, investment commission... to appropriating assets,
causing large losses. For example: Le Hoai Phuong, Bank for Investment and Development of
Vietnam, Cau Giay branch, Hanoi, embezzlement 24 billion; Phan Van Tuong, Techcombank
banker and co-defendants embezzleed over 10 billion; Doan Tien Dung, Deputy General
Director of Bank for Investment and Development of Vietnam received VND 5 billion from
customers, which is deducted from 3% - 10% of the amount borrowed by the Bank; Nguyen Thi
Thuy Van's case was over VND24 billion at Saigon-Hanoi Commercial Joint Stock Bank; Hoang
Thi Thu Ha, director of the northern branch of the Saigon Jewelry Corporation (SJC) took
advantage of his position and authority while on duty, causing losses of 19 billion dong; Vu Viet
Hung, director of development bank Dak Lak - Dak Nong, received $ 92 billion, $ 100 thousand
and a car BMW of Cao Bach Mai and Tran Thi Xuan to lend in accordance with regulations.

Negative impacts: Corruption is a global challenge - a recognition recognized worldwide.

Corruption is one of the biggest obstacles to growth and poverty reduction. In Vietnam,
corruption has also been deeply realized that it is a serious impediment to national development
strategies, as it undermines the effectiveness of governance, erosion of the rule of law, hindering
economic growth and poverty reduction efforts.

General impact in terms of:

For politics: Undermining people's confidence in the Part and the Institution. Making the
political regime weakened from within creates conditions for hostile forces to oppose the state,
leading to collapse if not resolved in time. Undermining the Party and the State, threatening the
life of the Party and the survival of the regime, as indicated by the Party Central Committee's
Fourth Plenum Resolution XI.

For the economy: Corruption is a behavior that seriously affects the sustainable development of
the country. Especially for developing countries like Vietnam. It causes economic slowdown,
loss, waste of property of the people, damage to the state budget, causing economic disorder. For
personal gain, corrupt people are willing to enter a backward production line or a ship can only
sell scrap metal, unused construction works are damaged. Economic retardation, potential
recurrence and crisis have shown signs of improvement. Bad debt, increased public debt,
dangerous limits. Corruption can ruin both the prestige and prestige of Vietnam in the
international arena, seriously diminishing foreign investment in Vietnam, causing great damage
to the development of national potential.

For society: Increasing the gap between the rich and the poor in society. Poverty is worse. To
worsen the image of our country in the international arena. Social insecurity, unrest, potential
conflicts, conflicts that threaten to destroy the cause of innovation and development goals of our
country. Social morality, family ethics, personal morality fall into the state of decadence.
Fundamental spiritual values are overlooked, rampant insensitivity, beliefs, beliefs of the people
diminished.

That is typical of some of the effects of corruption on different industries, corruption as a virus is
spreading across all sectors not only in these areas but also in the education sector. security and
defense of social order. The underlying cause, arising from the current economic situation is
complicated, the life of officials and party members have not been enhanced without the political
spirit of gold, thinking clearly, it is easy.

Government stability:

Under the regime of the Socialist Republic of Vietnam, Vietnam has diplomatic relations with
187 countries of all continents and has a normal relationship with all major countries, permanent
members of the United Nations Security Council. Among the countries that have established
diplomatic relations, Vietnam has announced the establishment of a Comprehensive Strategic
Partnership with three countries: Russia (2012), India (2016), China (2008); In principle,
according to the Political Report of the Central Committee of the Communist Party of Vietnam
Xth in Congress nationwide Eleventh raised foreign policy: Implement consistently the foreign
policy of independence, self-reliance, peace, cooperation and development; Multilateralization,
diversification of relations, active and active integration into the world; Be you, your trusted
partner and your responsible member in the international community; for the national interest,
the nation, for a powerful socialist Vietnam.

In the area of trade and economic development, bilateral trade has improved, bilateral trade has
been increasing steadily over the years since 2007. India is now one of the 10 largest trading
partners of Vietnam, with bilateral trade growing at an average annual rate of 16% in 2008-2013.
Bilateral trade turnover in 2017 is about $ 7.5 billion, up 37.7% over 2016. In terms of
investment, India ranks 28th among 126 countries and territories investing in Vietnam. By the
end of November 2017, India had 168 investment projects in Vietnam, with a total registered
capital of $ 756 million. Security and defense cooperation between the two countries continues
to develop well. Cooperation in other fields, such as finance - credit, petroleum, science -
technology, has been improved. Cooperation on education, culture and sports is promoted.
Cooperation on tourism, exchanges of people increasingly linked. Viet Nam and India are well-
coordinated, trusting, understanding and supporting each other on a number of regional and
international issues; Good cooperation in multilateral forums. As a coordinator of ASEAN-India
relations for the period 2015-2015, Vietnam supports India's implementation of the "East
Action" policy and regional connectivity initiatives.

Economic factor: Performance of the construction industry, real estate is directly affected by
economic growth. As the economy enters recession, unfavorable factors such as high interest
rates and inflation, exchange rate volatility, slower GDP growth, and declining consumer
demand create obstacles to the economy. Developing business activities of enterprises.

Economic factors include two important factors: economic conditions and trends in global trade
liberalization.

Economic condition:
Since the 2000s, the Vietnamese economy has been experiencing dynamic economic growth,
driven by international trade and foreign investment. The country experienced a growth rate of
6.3% in 2017 and is expected to maintain a similar progression in 2018 and 2019. Exports
constitute a significant contribution to Vietnam's GDP and certain sectors, such as industrial
production, textile, electronics and seafood production have been growing rapidly. Vietnam has
been going through an economic renovation since 1986. In 1992, the Amended Constitution
recognized the role of private sector in the economy, and in 2001 the U.S.-Vietnam Trade
Bilateral Agreement (US-BTA) was signed. Since then, the government has been launching
reforms in all key sectors of the economy and privatising public companies. Currently, Vietnam
is speeding up its privatization drive as it copes a budget deficit and growing public debt, as it
focuses on investing more money to developing the nation’s infrastructure. Altogether, the
government has said they intend to sell stakes in at least 533 companies by 2020 through direct
sales or IPOs.

Through FDI, Vietnam now produces high-value technology assets. Vietnamese foreign trade
continues to benefit from the relocation of Chinese factories. Inflation reached 4% in 2018, a
relatively low rate for the country. Controlled inflation and improved access to credit sustained
the consumption of Vietnamese households. However, the banking system is fragile, which
hampers business investment. The tourism sector has been growing rapidly, showing an increase
of 29.7% in foreign visitors during the first two months of 2018 over the same period in 2017
(Vietnam National Administration of Tourism). Industrial production decreased, reaching 6.4%
in 2017, compared to 7.5% in the previous year. In order to ensure sustained growth, the
Government has launched several major projects since 2011: infrastructure development,
training the young people and modernizing institutions. To reach these objectives, still on the
agenda in 2018, the country will have to continue to reform public companies, while the gap
between large private enterprises benefiting from FDI and unprofitable state enterprises has been
growing wider.

In 2017, public finances remained fragile while the public deficit was still high. However, it
should be reduced as the privatization program continues. Despite a large public debt (which, in
2017 was estimated to be 62.3% of GDP - CIA World Factbook; 61,5% according to IMF), the
country's external accounts have improved as the exports have risen. Nevertheless, foreign
exchange reserves remain insufficient and only covered two months of imports in 2017. Lastly,
Chinese activity in the South China Sea remains a concern for Hanoi, which has been deepening
its relations with the Philippines and Japan. Vietnam's future prospects remain positive.
Alongside its skilled and inexpensive workforce, the country has solid potential in terms of
agriculture and natural resources, and its development strategy is based on the opening and
diversification of its economy. The unemployment rate is particularly low. It reached 2.3% in
2017 and it is expected to remain the same in 2018 and 2019.

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

Main Sectors of Industry

The declining agricultural sector is dominated by cultivation and plantations (rice, coffee,
cashew nuts, corn, pepper, sweet potatoes, peanuts, cotton, rubber and tea) as well as
aquaculture. It represented 18.1% of the GDP in 2016, which dropped to 15.9% in 2017 and it
employed 41.8% of the workforce in 2016, however, that number increased to 48% the following
year. Industry accounts for 36.4% of the GDP and employs 22.9% of the population, remaining
the driving engine of the Vietnamese growth, even though its importance has been declining. The
sector remains dominated by large state-owned groups. The country's main industries are textiles,
the food industry, furniture, plastics and paper. The energy sector has been booming for the past
several years (coal, hydrocarbons, electricity, cement, steel industry). Despite being a 'newcomer'
in the oil industry, Vietnam has become the third largest Southeast Asian producer. The country
has also invested in high value-added industries such as cars, electronic and computer
technologies (software). The services sector is driven by tourism and telecommunications. These
profitable sectors contributed strongly to the economic health of the country in recent years and
should continue to do so in the future. The tertiary sector represents 45.5% of the GDP and
employs 35.2% of the Vietnamese workforce.

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages
may be smaller/greater than 100%.

In 2017, the world economic and political situation is expected to be complicated, but in general,
it will not significantly affect the socio-economic situation of Vietnam. Last year, gross domestic
product (GDP) was up 6.21% from the previous year, considered successful in the context of the
adverse global economy, falling prices and global and domestic trade. Faced with many
difficulties due to weather, marine environment is complicated.

The performance of the construction industry, real estate is directly affected by economic
growth. Vietnam's economy in 2017 is forecasted optimistic by most domestic and foreign
organizations, with a growth rate of 6.2-6.4%. In particular, the resort will have spectacular
changes in January, the Politburo issued Resolution No. 08-NQ / TW on tourism development
becomes a spearhead economic sector. Targeted to 2020, Vietnam will attract 17-20 million
international visitors, 82 million domestic visitors, contribute 10% of GDP, total revenue from
tourism reached 35 billion USD. The FLC Group will benefit from economic factors, economic
growth facilitating the organization in the real estate sector. In particular, government policies
focus on tourism development; In addition, people's incomes are rising, leading to tourism real
estate that promises to bring enormous revenue to the company.

Inflation in December 2016 increased by 0.11% over the previous month and up 1.87% over the
same period last year. The average inflation in 2016 will increase by 1.83% over the average in
2015. The high inflation rate, leading to higher material prices, leads to higher market prices,
people will consider more when shopping. In general, this will inevitably affect the business
operations of the business.

The focus of FLC is primarily on the real estate sector, which requires a large amount of capital
mobilized from banks, leading to an increase in borrowing costs that affect the profitability of the
business. In recent years, interest rates in the market have fluctuated with many policies such as
tightening monetary policy, imposing interest rate ceilings, supporting interest rates for
enterprises, etc. However, the bank's interest rates have been adjusted downward by 1%,
according to the 2018 finance report of Monetary Policy Department, State Bank. With the
amplitude of +/- 3% being applied, the ceiling exchange rate applied by banks on June 27 was
23,319 VND / USD and the floor exchange rate was 21,961 VND / USD. The reference
exchange rates at the central bank were bought and sold at 22,700 dong / US dollar and 23,284
dong / US dollar. This can help businesses, organizations and individuals access loans, continue
building material prices and warm up the real estate market. Advantages for the implementation
of projects, works. Many housing development projects have been completed and handed over in
the year together with the construction of residential houses in the high increase contributed to
improve the production value of the sector.

The global trend of free trade liberalization

Vietnam-Japan: The Vietnam-Japan Economic Partnership Agreement (VJEPA) was signed on

25 December 2008 and came into effect on 1 October 2009. This is the first bilateral FTA in
Vietnam, with both Vietnam and Japan giving more preferential treatment than the ASEAN-
Japan Comprehensive Economic Partnership (AJCEP). However, VJEPA does not replace
AJCEP, but both FTAs are both effective and businesses can choose to use FTAs more
effectively. (AJCEP) to the 4th of April 2008. AJCEP includes commitments on trade, services,
consultancy and commercial cooperation.

With a strong economic structure, the VJEPA Agreement provides the opportunity for businesses
and consumers of the two countries to access the most efficient sources of capital, technology,
raw materials and commodities. In line with previous agreements between Japan and ASEAN,
the VJEPA Agreement will complete the value-added supply chain of Japanese and ASEAN
businesses in the region. Thus, in the short term, the Agreement does not cause negative
disturbances while in the long term it will affect the positive movement of the economic
structure of the two countries in relation to the regional economies and the world.

The VJEPA, which is based on the World Trade Organization (WTO) standards, represents a
balance of interests and is consistent with the level and capacity of each party. Over a period of
10 years, Vietnam and Japan will basically complete the tax reduction roadmap to build a
complete bilateral free trade area. Accordingly, 94.53% of Vietnam's exports and 87.66% of
Japanese exports will be exempted from import duties (2006 figures). Seafood, agricultural
products, textiles, steel, chemicals, electronic components will have the strongest liberalization
commitments. Commitments on investment and trade in services under the BIT and the WTO
will be integral to the Agreement.

Positive impact:

Bilateral trade and investment relations between Vietnam and Japan have been active. In 2007,
two-way trade turnover reached more than $ 12 billion, up more than three times from 2000. In
2008, this figure is expected to exceed $ 16 billion, breaking the $ 15 billion mark in 2010 that
the two governments planned out. FDI in Japan is also growing strongly. Japanese companies,
including many prestigious corporations, are expanding their presence in Vietnam with a
growing scale of investment. In 2008, the total registered FDI of Japan reached over USD 17
billion, ranking third among countries with investment in Vietnam and being the leading investor
with USD 4.8 billion in terms of implemented capital.

Impact of social factor

Population growth: Vietnam is a country with a golden population, more than 88 million people,
this is a good opportunity for development since the labor market will be diverse and each
profession can take advantage of recruiting and training for sustainable development. In 2018,
the domestic labor market increase by 40%, in which the percentage joining the market remains
76%. The unemployment rate is relatively low at 3%, and the number of employed people has
raised to 1.6 million. Along with opportunity, a challenge for the economy arrives which
involving downfall living condition due to population expansion in the urban and lowering
standard in the rural area. Besides, government also deals with society problems such as resource
exploitation, environmental pollution: water, air, land… and decreased infrastructure.
Advantage:

Vietnam is at the golden age of the population structure with the largest number of young people
ever, with an average of one million turning 18. Specifically, there are 62 million people in
working age, accounting for 68.5% of the population. According to the General Statistics Office,
by 2049, the proportion of the labor population is 64.42%. In the golden population structure
phase, Vietnam will have a young workforce. If this force is fully utilized in mind and the
workforce, it will create a large wealth of wealth, increase per capita income and create great
value for the future. Social security responds to the aging population, serving the cause of
industrialization and modernization of the country.

Recent research shows that the golden opportunity population contributes about a third to
economic growth in some countries. Japan, South Korea and Singapore have made good use of
this demographic opportunity, spurring spectacular economic growth and becoming Asian
dragons.

Disadvantage:

However, the level of technical expertise, sense of labor discipline, strength, management skills
are limited. According to the 2009 Population and Housing Census, among the population aged
15 and above, up to 86.7% have no qualifications. The number of people with undergraduate and
graduate degrees is only a fraction, about 4.4%. This is an alarming figure for Vietnam's labor
force. That is not to mention the training does not meet the requirements of the labor market, not
meet the requirements of the employer. The story of not producing screws for the Samsung
Group is just one example of our global production capacity, competitiveness and global value
chain. If we cannot take advantage of the golden population We will lose the opportunity to
change ourselves, because according to statistics, Vietnam is in the period of aging population
with access to elderly population in the year 2050 is the fastest in the world.

Opportunities for businesses: It can be seen that the population of Vietnam is increasing, the
speed of urbanization is fast, the income of people is higher each year, leading to the demand for
housing is very necessary. And the house is very meaningful to the Vietnamese people,
according to Vietnamese custom is to have a house and then do business, so there are people who
strive for a lifetime to build a house. This is one of the factors that help FLC exploit and further
develop into the residential real estate market.

Technological factor:

Today, technology 4.0 is taking place and is gradually becoming popular in developing
countries. It gives humanity the opportunity to change the face of the economy, the potential for
unpredictable risks. Revolution 4.0 technology will take place on 3 main areas including
Biotechnology, Digital and Physics.

The core elements of Digital 4.0 in CMCN will be: AI, Internet of Things (IoT) and Big Data.In
the field of biotechnology, the Industrial Revolution 4.0 focuses on research to create leaps in
agriculture, fisheries, medicine, food processing, environmental protection, renewable energy,
chemistry and materials.

Finally, the field of physics with new robots, 3D printers, self-driving cars, new materials
(graphene, skyrmions ...) and nanotechnology.

Currently the Industry Revolution 4.0 is taking place in developed countries like USA, Europe,
part of Asia. In addition to the new opportunities, the industrial revolution 4.0 also pose
challenges for mankind to face.

Technology revolution 4.0 is everything connected by the internet, connected via telephone to all
devices in the world. The 4.0 technology revolution has made human life more convenient,
through mobile devices, the future home will also have artificial intelligence, with eyes and ears,
the home will know their employer tired. Straight through the heart rate and blood pressure of
people, and then they automatically turn on the appropriate music, automatically adjust the
temperature in the room to best fit, bring comfort. for their owners. The consequences of not
grasping the technology trend lead to the loss of the market.

As we all know, about 4 years ago, traditional taxis dominated the market and were just a
competition between traditional companies. But then very quickly Uber & Grab has almost
occupied the whole Taxi market all over the world. There have been many cases, struggles,
demonstrations of traditional taxis but all are meaningless. With Uber and Grab users able to
calculate the route, they will not need to stand outside the waiting line, all in just a few simple
cases on their mobile phones. Uber & Grab are two great examples of corporate failure. As one
of the largest corporations in Vietnam, FLC, if you do not want foreign competitors to dominate
the real estate market with smart housing technology, FLC should be carefully prepared.
Preparation is a high quality human resource, machinery and equipment, as well as a long-term
strategic roadmap.

Legal factor

Advantage: The law guarantees fair competition for businesses. Ensure the rights and obligations
of employees as well as businesses.

Disadvantage: Laws in Vietnam are still unclear, there are overlapping legal inconsistencies as
well as many loopholes so that businesses can exploit the law. In addition, legal difficulties cause
difficulties as well as reduce the competition of enterprises. The law also makes foreign
businesses afraid to invest in Vietnam. In addition, Vietnamese law is not fair when private firms
are not given the government the same development conditions as state-owned enterprises.

Vietnam is primarily a civil law country. The Law on Organization of the People's Court of 2014
(which took effect on 1 June 2015) recognized court precedents as a source of law. In two years,
the Supreme Court of Vietnam issued ten court precedents on commercial, civil and criminal
matters for the lower courts to consider and apply.

 1992, constitution recognized for the first time the development of a market economy
 1996 a new law on foreign investment was passed.
 2000 a bilateral trade agreement was signed between Vietnam and the United States.
 2005 a new civil code and commercial law was passed.
 2005 a new law on investment and law on enterprises which establishes a common
regime and unified company law for domestic and foreign investment in Vietnam

Legislation is a legal constraint set by the government, and the business must comply. The law of
the government can create conditions or cause difficulties for businesses. Laws include
government policies that affect business operations such as tax policies such as VAT,
environmental taxes, and corporate taxes. Other policies also affect the business operations of the
business such as high interest rates that cause businesses to increase production costs, which
makes business more difficult. State policies may include increased minimum wages, companies
must build a pathway for people with a disability, or provide consumer protection policies ...
generally these policies the government made the business costs more incurred.

Environmental factor
1. Main factor:

Vietnam is a long and narrow country, lying in the tropical zone climate. The eastern border
consists of more than 3,000 km of coastline, facing the East Sea and the Pacific Ocean. To the
North, Vietnam shares its border with China, while to the west, with Cambodia and Laos.
Environment sustainability is included in Vietnam’s Comprehensive Poverty Reduction and
Growth Strategy (CPRGS) and the accompanying Vietnam Development Goals, which together
with other government’s strategies and action plans identify steps to address the environmental
challenges as a result of rapid economic growth. Despite these signs of progress, there is a need
for substantial improvements in the policy framework for environmental sustainability and the
arrangements to achieve this due to rapid climate change these years. Progress in achieving
results has been slow due to weak commitment by sectorial agencies, low awareness in local
departments and officials, and capacity challenges at all levels Vietnam is facing a combination
of environmental problems including air, water and solid waste pollution. Major factors
contributing to these problems include high population growth, rapid urbanization, accelerating
industrialization, and weak enforcement of the Law on Environmental Protection and
Development. Most cities and provinces have no centralized wastewater, solid waste or
hazardous treatment plants. This means that storm water and household wastewater discharge
through combined and out-dated drainage systems into canals and rivers making them seriously
polluted. The prime Minister stated in decision No. 1336 dated September 2008 that it was
mandatory for new urban residential areas and industrial parks to develop a plan and construct
separate drainage systems for storm and wastewater (Anh, 2010). Non-renewable goods of FLC
mostly come from travel and recreation activity, and this caused much problems to the
environment.

2. Potential Impact
The geographical terrain of Vietnam poses its own set of unique considerations for companies
looking to enter the market. Poor transport links and mountainous areas can make links between
north and south challenging. Extremes in weather conditions also need to be considered
carefully. Violating manufacturers are beginning to feel the negative impacts of boycotts by their
partners and customers. Polluting companies have also had difficulty in accessing bank funds as
more banks are adjusting their policies to reject lending to clients on the environmental black list.
These environmental problems create a lot of opportunities for exporters to Vietnam.

Nowadays, there are many modern machines and equipment that help businesses save much
money in business. It is possible that investing in machinery and equipment is costly but
businesses will be more likely to lose as input costs are reduced. For example, modern
machinery will not use fossil fuels such as gasoline. , instead of cheap materials. It also helps the
company protect the environment, contributing to a sustainable business environment. However,
not every business owner understands the importance of protecting the environment as well as
not everyone can update the information, the new technology trend helps to save costs. And most
of the businesses do not have high quality workforce to meet the changes. In addition, the
Vietnamese government does not have strong penalties to deter the businesses from setting the
example for other businesses that businesses are not focused on this issue.

P5 Conduct internal and external analysis of specific organisations in order to identify

strengths and weaknesses.

Number Criteria for Strength of the company Weaknesses of the company

analysis

1 Brand name Famous brands with solid The brand is used in many
foundation different activities, resulting in
diluted brand

2 Financial -In 2017, FLC Group achieved FLC still cannot legalized all
strength total consolidated revenue and financial reports due to sudden
consolidated profit after tax of problems during business. Some
VND11,645 billion and VND385 details in the report do not match
billion. Compared with 2016, with the publicized annual report.
revenue reached 87.8%, but profit The problems come from the
after tax decreased 62%. sources of partnership and
shareholders. Shareholders often
-The Group will also pay 2017
ignore the revenue or business
dividends in shares at the rate of
result to invest in FLC, lead to the
4% / charter capital. According
downturn of bonds and share. The
to, FLC plans to issue 27.3
risk of real estate investment is
million ordinary shares in the
significant. FLC Group's bank
third quarter of 2018 after
debt was 3.6 trillion VND, and
receiving the approval of the
equity was nearly 8 trillion VND,
State Securities Commission.
FLC stock in the market is being
FLC's chartered capital will
undervalued.
increase from VND6,827 billion
to VND7,100 billion. As a result, earning after tax of
2017 is nearly 20 billion VND,
As of 31/12/2017, FLC Group has
which is lower by 8.8 billion
total assets of VND 22,795
VND in comparison to 2016.
billion, an increase of 27% over
Selling and administrative
the same period of 2016. FLC's
expenses totaled VND 411
book value is VND 13,358.
billion, slightly down from Q4 /
-By 2017, total revenue from real 2016. Net operating profit was at
estate sales reached over 402 billion VND. However, other
VND5,563 billion, achieving expenses surged to over 53 billion
119% of the plan and accounting VND, making FLC's Q4/ 2017 net
for 47.8% of total revenue. profit just 248.2 billion VND,
down 43.8% from the fourth
-Debt to pay 13.972 billion,
quarter of 2016.
mainly short-term debt 10.955,7
billion. Long-term debt is more Long term debt is expected to pay
than 3.017 trillion VND, all in 2018 but cannot be
accounting for the majority and completed due to the loss of some
 long-term loans of 2.985 trillion shareholders leading to revenue
dong. loss.

3 Physical By the end of December 2017, With such a large scale of

assets the company has implemented financial activity, FLC and its
many real estate projects in 8 subsidiaries, affiliates or
provinces of Quang Ninh, Vinh companies with a capital
Phuc, Hanoi, Hai Phong, Thanh contribution have created a very
Hoa, Nghe An, Quang Binh, Binh difficult financial model for
Dinh, with a land area of 7,300 financial modeling because the
hectares and more than 40 sink is located in many
kilometers of coastline, it offers subsidiaries and affiliated
over 2,000 commercial companies, and it is difficult to
apartments, 1800 villas and know exactly the financial
townhouses, 2800 hotels. investment in these companies,
Typical projects: FLC Sam Son because no detailed audit report.
beach & golf resort 15 floors
For example, Hai Chau Co., Ltd.
including 3 floors commercial
before September 2012 is also a
and 588 rooms 5 star standard;
subsidiary of FLC, after which
FLC Star Tower with 37 floors, 4
FLC transferred its ownership in
basements offers 455 apartments
Hai Chau to another subsidiary,
to the market; FLC Halong Golf
FLC Travel. Van Long Company
Club & Resort: 18-hole golf
(FLC) acquired a 49% stake in
course, 1500-seat convention
KLL by 2013 and reduced its
center, 22-storey hotel; FLC
ownership to 24% by June 2014.
Garden City (Phase 1), FLC Twin
Most of the familiar names in the
Tower: 5 floors of commercial
portfolio of affiliated companies,
center, 50-storey apartment tower
affiliated companies or FLC-
and 38-storey office tower. ,
affiliated partners are in the same
offering 420 luxury apartments,
category as KLF.
36,270sqm for Grade A office
space, 26,498sqm for high class
 business center. The project has Besides, due to the downturn in
completed its crude construction, business, some plants and
which is expected to be factories are left unused, lead to
completed in 2018. The project the downgrade of facilities and
establishes Bamboo Airways to infrastructure. FLC has to sell the
purchase 24 Airbus A321NEO unqualified area to invest in other
aircraft ready for flight operations profession, which again generate
from 2019. more burden.

4 Distribution FLC Group (FLC), which was Some recreation destinations are
network officially formed from the merger too far for tourists to travel and
of its subsidiaries in 2010, is settle down. Besides, the real
mainly engaged in real estate estate market is plunged down,
business, especially real estate. in; lead to the consequences that this
Resort property; Commercial aspect of FLC lost 3 billion of
center, office for lease; Real capital in late 2017. Meanwhile,
estate industrial zone. In addition, the golf resort chain has not
FLC also provides hospitality attracted much customers due to
services; Trading in sports its inconvenient location.
facilities and other commercial
business. Typical projects that
FLC has implemented: FLC Sam
Beach and Golf Resort, FLC Star
Tower, FLC Halong Golf Club &
Resort, FLC Twin Tower and
many other large projects.

5 Cost Allocating well capital on FLC still receives complaint from

management construction while gaining other customers for poor service and
profit from each independent rude manner staff, which means
aspect such as travel, recreation to the cost on recruitment has some
compensate for the loss from real drawbacks that the board of
estate department. Overall,
 revenue is still able to cover for management cannot see through.
loss.

6 Technologica FLC is one of top group can FLC is hoping to innovate its
l base utilize the use of technological system to be the most efficient
base such as booking reservation one among their competitors.
for hotel, golf players, There are still some minor
recommendation and review the problems such as slow and stuck
service after use. The website and service flow due to overloaded
system are coherent and friendly users.
for users.

P6 Explain how strengths and weaknesses interrelate with external macro factors.

1. Brand name

When combining two brands, customarily there are several plausible strategies to consider. They
range from building a “house of brands,” as is the case with Proctor & Gamble, to creating a
single “branded house,” such as Harvard University. This is what FLC should do, by giving each
division a separated name but remark a FLC copyright below. In that way, customers and
partners feel free and refresh to cooperate since there will be no dark footprints from FLC’s bad
rumors and reputation, if there is any. To determine the most appropriate solution for your
merger, a brand manager is often required to build a business case for each. Engaging a branding
expert who is knowledgeable and conversant in the pros and cons of numerous merger scenarios
can expedite the process and result in a game-changing recommendation. It’s all about the
customer: know what they think and feel about each brand and the merger

It is essential that brand managers understand how the individual brands currently cultivate,
nurture and retain customers. The more knowledgeable they are about each company’s
respective customers, the better they understand the levers that determine customer choice. The
swiftest way to understand the all-important customer is through qualitative research, specifically
one-on-one interviews, with each brand’s best customers. Findings and insights revealed during
this exercise will inform the selection of a competitively sustainable brand portfolio strategy.
2. Financial strength

FLC should stop use other aspects’ revenue to cover for the rest whenever there are any loss
happened. Therefore, they may consider these solutions:

a. Acquire Loyal Customers with Recurring Payment Software Systems

Research from small and large businesses alike proves that a customer is less likely to cancel a
membership or switch to a different provider if they are set up with recurring payments.
Recurring payment systems are the most reliable way to provide your customers with reliable
services. Furthermore, they provide small businesses with the potential to drive far more revenue
than one time billing and payments. Without a gap between billing cycles, customers are alerted
as to when they will be charged, making their purchase decision simple and easy. Payment
software is the single most effective change small businesses can implement to streamline their
operations.

b. Build, and Maintain Customer Relationships

Customer service goes hand in hand with financial management. If customers are not happy, they
will not stick around for long. It’s important to understand and anticipate customers’ needs,
maintain contact, and be completely transparent. Building an optimal customer experience is the
first step to a mutually beneficial relationship between your business and its customers. Once
businesses have put the time and effort into educating customers on your business, they can
focus efforts on working to understand their goals and how they can help them achieve those
goals moving forward.

c. Use Payment Tracking to Create Reliable Cash Flow

Running a small business requires owners to wear many hats. As a result, it can be easy to have
certain responsibilities fall through the cracks. The last thing business want to neglect, though, is
payment tracking. Using digital tracking to make sure business and its employees are getting
paid on time is the most essential factor in ensuring financial success for small business.
Tracking profit and sales for business, through reports and online tracking systems, is a great
way to go.
3. Physical assets

Choosing an Asset Tracking Solution. Effective asset tracking starts with getting the foundation
in place: the tools, systems and applications that enable asset tracking and software solutions that
streamline data collection and analysis. These asset tracking tips will help you select the best
asset tracking tools and software to meet your company’s needs. Besides, FLC should put this
their mind: Know what you need to track, Consider the full project management life cycle,
Evaluate and prioritize your company’s requirements, Gain visibility by selecting software with
reporting and analytics functionality, Asset management aids in aging infrastructure concerns.

4. Distribution network

What FLC can do right now is to carefully consider constructing site and hire a consultant from
ministry to avoid over charging when building centers and recreations.

5. Cost management

Cost reduction solutions to help drive growth. Not all business costs are the same since they
drive results in different ways. Therefore, there is no "perfect" portfolio of costs or investments.
An effectively managed portfolio is one that balances short-term and long-term objectives, so
making radical changes in cost performance is typically a challenging proposition.

6. Technological base

Even though small business owners aren’t expected to be experts in the finance, accounting, or
legal sides of the business, they are expected to be constantly researching technological
advancements and acquiring new skills that will help the overall success of their business.
Technology can go a long way toward easing the stresses of a business owner by automating
repeatable tasks and providing more insight into financial. FLC doesn’t have to be one of the
many that fail or go bankrupt — it can survive and succeed if it remembers to implement
recurring payments systems, build mutually beneficial relationships with customers, and
continuously use payment tracking systems.

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