ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date 28/04/2021 Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Le Minh Thanh Student ID GBD201651

Class GBD0903 Assessor name Phan Tran Phuong Trang

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Table of Contents
I. INTRODUCTION ................................................................................................................................................... 4
II. THE EXTERNALS ANALYSIS ................................................................................................................................... 5
1. FIVE-FORCES MODEL ....................................................................................................................................... 5
1.1. Potential competition ................................................................................................................................... 5
1.2. Current Competition..................................................................................................................................... 6
1.3. Threat of substitute products......................................................................................................................... 7
1.4. Power of suppliers .......................................................................................................................................... 8
1.5. Power of buyers ............................................................................................................................................. 9
III. PESTLE .......................................................................................................................................................... 10
1. Political factor ............................................................................................................................................... 10
2. Economics factors ......................................................................................................................................... 11
3. Social factor .................................................................................................................................................. 11
4. Technology factor ......................................................................................................................................... 12
5. Environmental factor .................................................................................................................................... 12
6. Legal factor ................................................................................................................................................... 13
IV. THE INTERNAL ANALYSIS ............................................................................................................................... 13
1. Vision, Mission and Core Values of the company........................................................................................... 13
2. Organizational structure ............................................................................................................................... 16
4. Brand equity ................................................................................................................................................. 19
5. Financial strength ......................................................................................................................................... 20
6. Physical assets .............................................................................................................................................. 21
7. Market resources .......................................................................................................................................... 21
8. Technology base ........................................................................................................................................... 22
V. SWOT OF THE COMPANY.................................................................................................................................... 23
1. STRENGHT..................................................................................................................................................... 23
2. WEAKNESS .................................................................................................................................................... 25
3. OPPORTUNITIES ............................................................................................................................................ 26
4. THREATS ....................................................................................................................................................... 26
VI. EXTERNAL IMPACT ON COMPANY’S DECISION ............................................................................................... 27
VII. CONCLUSION ................................................................................................................................................. 27
VIII. REFERENCES .................................................................................................................................................. 29
 I. INTRODUCTION
As a business analyst in Wells Fargo, an American multinational financial services company, we can
analyze a large number of aspects, including Vietnam Germany Steel Pipe JSC (VGS)'s business, size and
category. This company claims it has a chance to be a profitable venture. Companies and competitive
companies. The world is changing constantly. Strategies need to be evaluated and updated on an
ongoing basis to stay in the company. Therefore, the combination of a SWOT evaluation with TOWS
approaches has the enormous. Effect on the company's construction and production. This research will
investigate the internal and external world that has a major impact on VGS. In addition, this task also
includes the positive and negative impacts of the macroclimate on VGS will be explained.

Vietnam Germany Steel Pipe JSC (VGS) is a long-standing company in the steel industry in Vietnam.
Established in 2002, after 18 years of establishment and development, VGS has grown and gained trust
from customers (VGS, 2020).
 II. THE EXTERNALS ANALYSIS
1. FIVE-FORCES MODEL

The greater the degree of competition, the greater the position and business challenge. Industry study of
FIVE FORCES MODEL helps to assess how and how firms function in the competitive market.

Market share for the company. The degree of the five competitive pressure variables of VGS in today's
steel industry.

Be appraised as follows:

• Potential competition
• Current Competition
• Threat of substitute products
• The power of suppliers
• The power of buyers

1.1. Potential competition

The entry barrier of the steel industry is usually very high at the cost of market entry (VSA report,
2021), So the competition from new companies is low.
 The steel industry in Vietnam is an existing industry. Although VGS is a young company compared to
other big companies in the same industry as Hoa Phat or Hoa Sen, but with a foothold in the market
and a market share of about 7.3% (VGS, 2019), VGS has been taking advantage of Loyalty of existing
customers to access a new source of customers to sell more products. This leaves VGS not
significantly affected by new entrants into the industry. This proves that VGS is a perfectly
competitive company.

Besides that, for new businesses wishing to enter the steel market, they will have to face great
barriers when entering as well as when wanting to exit. Requiring an investment in a modern
production line of international standards for products to meet the same standards as comparable
products on the market, it will be difficult for new companies if one day they want to leave because
they would have to find someone else to buy the line and the factory. On the other hand, since
companies supplying construction materials have been encouraged to develop by the Vietnamese
government, leaving the market will also be a difficulty when the policies do not support this.

1.2. Current Competition

Since steelmaking companies like VGS all share the same product, price level and line meeting the same
standards, so when analyzing the competition among companies in the same industry, the angle of
branding will be the key.

The Southern Steel Company is a major player in the iron and steel sector and is also one of VGS's
competitors. This company produces and supplies to the market a wide range of products, including
steel pipes, galvanized steel sheets, and colored galvanized steel sheets. In fact, this company only
focuses on supplying products in the southern market. Currently the company's market share accounts
for over 50% Southern steel markets (thepmiennam, 2017). Considering the national market, it seems
that the Southern steel brand has not created and portrayed a clear and different image in the mind of
its target audience and its body. That may be due to the fact that the Southern brand name has not been
widely communicated in the national market.
As for VGS, the company has a certain independence, its own development strategy. Positioning criterion
of VG Pipe is positioning based on the high quality characteristics of the product. That is partly shown
through the slogan: "European class" (VGS, 2018). VG Pipe's logo is a circle containing two stylized VG
letters inside with gray and charcoal purple color combined to remind customers of the color of iron and
steel. VG Pipe currently carries out brand communication activities through website www.vgpipe.com
and through catalogs. The comprehensive development in both product quality and brand promotion
gives VGS the coverage and potential of finding more customers than the Southern Steel Company.

This is also a great opportunity for VGS to develop new products, new strategies to compete with leading
companies like Hoa Phat or Hoa Sen. VGS has been gradually finding a foothold in the Vietnamese steel
market with breakthrough new products in terms of quality and designs (VGS, 2020).

In conclusion, it can be seen that the steel industry can start to grow and increase the degree of rivalry in
the future.

1.3. Threat of substitute products

As for the substitutes threat:

Material substitution has been one of the hardest challenges confronting the steel industry. Plastic,
aluminum, wood, and bamboo have been replacing steel in different application regions. For the final
one-and-a-half decade, the car segment, which holds a 23-25% showcase share in worldwide steel
utilization, has been toying with the thought of expanding aluminum utilize to help weights, boost fuel
productivity, and cut down emanations (Financial Express, 2013).

A typical alternative to steel is bamboo. Bamboo has been used in the construction field for a long time,
even before its tensile strength was known. People used to build houses, furniture, fences, etc. with
bamboo. Modern-day researchers and engineers are looking forward to replacing steel with bamboo due
to its tensile properties. In terms of price, bamboo is an available material in nature, so the exploitation
cost and production line will of course be much cheaper than steel. In fact, one meter of bamboo is
priced from 10,000 VND to 15,000 VND, while similar product price of VGS will be from 17,500 VND to
23,000 VND. For that reason, many modern projects with economical and eco-friendly factors will prefer
bamboo material over steel. However, we cannot use bamboo to replace steel directly as the tensile
strength alone is not enough, even though bamboo is found to be stronger and stiffer than other
construction materials. The plant, however, is prone to attack by insects and can degrade in the presence
of water. Long-term durability and shrinkage are also factors to consider (Interesting Engineering, 2020).

In addition, VGS's customers are mainly major local and national projects, so steel is always the number
one choice because its durability comes with time. So, although bamboo has recently emerged as one of
the best steel alternatives, it will only be temporary when it is impossible to endure at the same time as
steel. This also shows that the substitute material market for steel is very diversified, but it will not be
possible to exclude steel from the main material market.

That is why VGS will also be less affected by those alternative products. However, in order to minimize
the risks that this problem brings in the future, VGS has been developing new products that are less
competitive in alternative products such as steel pipes, corrugated iron (VGS catalogue, 2019).
1.4. Power of suppliers

Currently, Vietnam's steel industry in general as well as VGS in particular has close cooperation links with
foreign partners to ensure high quality raw materials with high stability (VSA report, 2019). At the same
time, this is also a period of extensive economic integration, especially the implementation of new world
free trade agreements such as CPTPP, EVAFTA, RCEP ... which will create good conditions for the import
of raw materials (VSA, 2019).

This long-term synchronous cooperation ensures the quality of both the raw materials and the
consistent products; production lines and product sales will also be easier to manage. This will enhance
the quality and reputation of VGS.
1.5. Power of buyers

The consumer is the last point in the chain, so product quality is the standard that always comes first.
The characteristic of the industrial materials industry is that the quality of the product must meet a high
standard of durability, quality of machining or composition. VGS products play an important role in many
fields, so with the long-term commitment to customers, when the price of materials increases,
customers will still adapt over time.

Most organizations will prioritize industrial customers for projects that are large-scale and stable.

However, the retail market is also a delicious cake to explore. With VGS increasingly trying to expand the
market with many new products and segments to meet more customers, retail customers are
indispensable. With the buzz from offering products to large-scale industrial customers, VGS has
attracted retail customers as consumers tend to be attracted to reputable products.
 III. PESTLE

1. Political factor
In Vietnam, the president is the elected head of state and the commander-in-chief of the military, while
the prime minister is the head of government. It is a country where the role of the Communist Party of
Vietnam (CPV) is asserted virtually in all spheres of life. However, many analysts argue that though
Vietnam is socialism-oriented from the standpoint of political philosophy, many of its economic policies
have adopted capitalist principles (M Rahman, 2020).

Vietnam pursues a policy of building and maintaining good relations with many country in the world
regardless of their political outlook on global affairs. It is a member of the United Nations (UN), World
Trade Organization (WTO), Association of Southeast Asian Nations (ASEAN), and some other prestigious
institutions.

On January 11th, 2007, Vietnam joined the World Trade Organization (WTO) becoming its 150th
member. This symbolized Vietnam’s acceptance into the global economy and the wider international
community. Besides benefits from joining the WTO, Vietnam’s steel industry also has to deal with the
challenges of weak legal framework, restrictive environment, and weak intellectual property protection
laws, etc. (WTO, 2007)

Despite all the weaknesses above, the government is still trying to make the best business environment
posible.
Currently, the billet price increases, the state has adjusted the import tax to reduce the domestic steel
price. VG PIPE also commits to keep its prices to ensure the benefits for customers. In addition, new
regulations on advertising, revised corporate law 2014... are also applied by VG PIPE in its activities. The
government's application of anti-dumping with imported steel creates opportunities for steel enterprises
including VG PIPE to be able to compete on price, thus increasing product volume. The State's policy of
expanding diplomatic relations creates many opportunities for VG PIPE to contact with activities from
abroad, expand research, and search for new markets for export.

2. Economics factors
Vietnam is the 46th largest economy in the world. Its nominal GDP in 2018 was worth $245 and is
expected to reach $265 billion by the end of 2020 (Trading Economics, 2020). The country has made a lot
of progress in poverty eradication and lifted 45 million people out of it between 2002 and 2018 (The
World Bank Group, 2020). Its economic outlook for the next few years is positive and robust. It is
interesting to note that Vietnam has come out as one of the largest beneficiaries of the trade dispute
between China and the USA. In fact, the trade war between these two powers has given Vietnam's steel
industry a great opportunity when China accounts for 50% of world steel production (VOV, 2019). And
VG PIPE is one of the companies facing that development opportunity.

However, it should also be noted that Vietnam has been struggling with high price increases for years.

The standard corporate income tax (CIT) rate in Vietnam is 20%. However, the tax rate varies from 32%
to 50% for organizations that operate in the oil and gas industry. On the other hand, the personal income
tax (PIT) rate varies from 5% to 35% (PwC, 2020). Tax incentives for construction companies are natural
as Vietnam is on the path of modernization and industrialization.

Growth rate of the construction industry greatly affects the speed of steel consumption. Recognizing
construction trends, upcoming projects will be a good opportunity for VG PIPE to advertise its image,
have a good strategy to sell goods. The trend of market saturation, therefore, needs marketing activities
to create the difference of VG PIPE. Advertising and PR are the main tools for image promotion and
branding.

3. Social factor
As of February 2020, the total population of Vietnam is around 97 million (Worldmeter, 2020). Buddhism
is a major religion, and Vietnamese is the major language in the country. The life expectancy for men is
93 years, while 81 years for women (BBC, 2019).

An emerging middle class is growing rapidly in the country and is expected to reach 26% by 2026 (The
World Bank Group, 2020). The rise of decent to high-income earners gives the steel market a great
opportunity as construction demand comes from this customer class. Seizing this opportunity, in
addition to heavy materials products for construction such as construction steel, steel pipes, VGS has
developed new products suitable to the needs of the majority of Vietnamese people such as
steel corrugated iron roof.
4. Technology factor
Flourishing start-up culture, international investments, low costs, government initiatives, and an
educated workforce have been driving a technology revolution in many industries in Vietnam for a long
time. The country has a number of tech parks such as Da Nang Hi-Tech Park and Saigon Hi-Tech Park (M
Rahman, 2020).

For VGS, the company also enhanced the application of new achievements in production, especially
product orientation in accordance with ISO 1400. The machines were continuously improved and applied
successfully from Germany and America. In fact, VGS owns all 25 steel pipe production lines and 5
modern defrost lines according to advanced technology with a very high rate of automation.
Furthermore, the company considered to be the most modern in Vietnam today, hot-dip galvanized steel
pipeline is equipped with a system of pre-plating pipe treatment tanks.

However, the cost of buying and using advanced technology equipment is enormous. Besides that, the
biggest weakness of VGS is the quality of local experts and operators. New technology requires high
qualification of expertise from the workforce, a fierce battle for skilled labor is well underway,
exacerbating an existing shortage of skilled labor.

5. Environmental factor
Vietnam is one of the most beautiful countries in Asia. It houses 8 UNESCO heritage sites and received
around 18 million international tourists in 2019. However, it is worth noting that the fear of corona virus
(COVID-19) has been a threat to many industries and public health (M Rahman, 2020).

Rapid economic development has led to unsustainable exploitation of natural assets that may impact the
future potential for growth. Raw materials for VG PIPE's steel production process are mostly billets, coal
... in addition to exhausting resources, the company has to import, the price increases, affecting the
current price of the company.

In addition, based on weather and climate, the company will adjust its product volume according to each
season, more in the dry season, less in the rainy season. Product research and development activities
must rely on climatic conditions of heavy rain and high humidity. Before each season of high steel
consumption it is necessary to increase individual sales.

Vietnam is badly affected by air pollution. Similarly, water pollution is a big problem and has a significant
impact on human health. Vietnam is highly exposed to natural disasters such as volcanic eruptions,
floods, droughts, earthquakes, floods, and typhoons. That is why the problem of pollution is an urgent
problem posed to VG PIPE, if not handled well, affecting people's health and the company's reputation.
In reality, VGS uses the most advanced waste treatment technologies under the supervision of state
inspectors on a regular basis. Along with promoting production and meeting the needs of customers
well, VGS always pays attention to environmental factors and social responsibility. Therefore, VGS has
planned from the beginning of the working office, factory, and warehouse systems are built with
moderate density to save large spaces to plant trees; always interested in social, humanitarian, and
charitable activities such as donations to support flood victims in Central Vietnam; Visiting and giving
gifts to the families of cadres and employees in extremely difficult circumstances (VGS, 2020).

6. Legal factor
Foreign companies are permitted to operate in Vietnam and is often encouraged by the government to
invest through direct or indirect investment. In fact, the company law has become quite easier
noticeably in recent years. International investors can now swiftly create limited liability companies.

In November 2019, the National Assembly of Vietnam adopted a New Labor Code to be effective from 1
January 2021. This new code revises and supplements several provisions across all chapters of the
current Labor Code (Baker McKenzie, 2020). Since its birth, VGS has fully complied with the Vietnamese
government's laws and regulations on production and business (VGS, 2017).

However, changing Vietnamese laws to implement FTA commitments is both an opportunity for VGS,
and a challenge (NOIP, 2020).

IV. THE INTERNAL ANALYSIS

1. Vision, Mission and Core Values of the company
Vision

• Building a leading steel manufacturing corporation in Vietnam bearing the brand name: VIET DUC
STEEL - EUROPEAN LEVEL (PIPE, 2019).

Mission

Based on VGS annual report (2019) (PIPE, 2019):

• For the market

Providing European quality products and services suitable to the needs and tastes of consumers.
Products - services are always classy, anticipate and dominate the market, giving partners and
customers satisfaction and success.
 • For partners and shareholders
Uphold the spirit of cooperation for mutual development, always being a prestigious companion
of partners and shareholders, striving to increase good and sustainable investment values.
• For employees
Building a professional, dynamic, creative and humane working environment, creating high
income conditions and equal development opportunities for all employees.
• For society
Harmonizing corporate interests with social interests, making a positive contribution to
community-oriented activities, demonstrating the spirit of civic responsibility and national pride.

Core Values

Vietnam’s intergrating process into global economy creates challenges while establishing great
opportunities to VG PIPE in assure its core values which was built base on positive and stable
developmental principles.

• Always be the leader in manufacture and supplying industrial steel pipes, VG PIPE engages to
products comply with international standards in order to satisfy customer’s requirements in both
quality and quantity.
• Continous invest in state-of-the-art technologies and equipments to supply the widest range of
products and standards to be applied.
• Dealing business by professional trading activities and prestige of VG PIPE’s brand name, VGS are
looking forward to expand their market share in main export markets, including North America,
Europe, and Oceania…
• Tightly manage manufacture processes according to Quality Management System ISO 9001:2008.
To create a stable development and environment friendly, VG PIPE is looking forward to apply
Environment Quality Management System ISO 14000.
 2. Organizational structure

The Organizational Map of VGS is described in a systematic manner in which divisions are systematically
and logically arranged for each employee and position in the company with a consistent hierarchy of
obligations. This arrangement enables the company to work in the most efficient manner and facilitates
departmental cooperation, making VGS powerful.
VGS has a functional system. This arrangement is focused on the division of an entity into smaller units
with unique assignments or functions. The graph consists of the total divided into relatively separate
sections that carry out those operations.

Main advantages:

• Chief executive in communication with all activities

• Reduces/ simplifies processes of control
• A clear description of duties
• Specialists at the stages of senior and middle management

Disadvantages:

• Senior executives were overburdened with routine matters

• Strategic challenges are ignored by senior managers

• Hard to cope with diversity
• Challenging teamwork between functions
• Failure to adapt

This comes down to the fact that the functional-structure which is determined contributes to allow VGS
to acquire the long-term objectives is also the strength of the firm.

3. Human resource
VGS is well aware of the importance of the current broad-scale factory program being run by a highly
trained engineer team. Therefore, the organization annually provides professional employees with
quality job opportunities. To ensure continued development and turnover of employees, the Company
also offers training and counseling.

VGS has signed consultancy agreements with leading US, New Zealand and Europe experts. In addition,
the company has collaborated on a regular basis and formed a network of ties with leading steel
specialists worldwide to train, share expertise and transfer technology, bringing Vietnamese steel
manufacturing to the level of developed countries.

The need for healthy working practices and decent education is a valid workplace expectation. But VGA
is dedicated to:

• Finally, EPP is included in employees' personal safety equipment and preventive measures to
preserve wellbeing in the workplace during their job cycle.
• Organize annual orders and drilling plans for occupational safety.
• Establish fire-prevention programs at headquarters and all work facilities and ensure that

100% of staff are trained in fire prevention and suppression once a year.

• In addition to life benefit protection under the Vietnam Law regulations, the implementation

of preventive care services to offer adequate health and disability benefits to workers.

We ensure that all of our employees get what they deserve by remembering and honoring the sacrifices
made by employees to contribute to the growth and success of VGS. We have compensation
transparency and equity schemes at VGS to ensure that the employees' wages are in appreciation of
their contributions and sacrifices. In addition, VGS offers its employees a share of the company's profits,
depending on the overall success of the company, to encourage their contributions.
 4. Brand equity

In the beginning of 2020, the total brand assets of VGS will be 1,705 million VND. Despite experiencing a
turbulent 2020 due to the impact of the pandemic, by the end of 2020, the total brand assets of VGS
reached 1,758 million VND. Since then, VGS has been and is having a stable foothold in the Vietnamese
steel market.
 5. Financial strength

Such estimates show:

• VGS is a corporation with a stable financial position, high profitability, and fair potential growth
prospects.
• Established in the sales and revenue of the company, which is enough to meet the requirements
of investors
• A good financial condition will need to be given in order to earn credit. On client loans, there is
very little risk of default.

Despite being influenced by COVID-19, VGS still stands firmly in the market and its financial statements
show the sustainable development that investors are looking for.
 6. Physical assets

• The total assets of VGS have continued to rise over the past few years thanks to the expansion of
the production rate and the increase in short-term deposits. In terms of financial distribution,
current assets amount to VND 486,918 million.
• The overall assets of the company rose by 3,1 percent by the end of 2020, primary due to the
growth in long-term assets. Tangible fixed assets grew by 8,8% percent from VND 160,005 million to
174,155 VND billion.
• That is the primary reason why the firm's fixed assets have greatly increased in recent years with
regard to long-term investments with the purchase and expansion of the manufacture line.

7. Market resources
VGS currently has 3 subsidiary companies operating with business money and more than 10 branches.

To ensure the stable development, VGS strictly controls the management and production activities with
the Quality Management System ISO 9001: 2015 and the 5S Program according to Japan.

In order to create a variety of products in different sizes, with the orientation of short-term, proactive,
straight forward to advanced technology, up to now, VGS has owned all 38 modern production lines.
advanced technology from Europe and Japan with a very high rate of automation, including:
 • 02 production lines of hot-dip galvanized steel pipes
• 03 small production lines of black welded steel pipes
• 20 lines of production of galvanized steel pipes
• 01 large black pipe production line
• 02 cold rolled sheet production lines
• 03 lines of galvanized steel production
• 02 hot-rolled construction steel production lines
• 05 lines for cutting corrugated iron, slab phase cut, pressed sheet, cut iron

It can therefore be assumed that the market resources of VGS are solid.

8. Technology base

VGS claims to be a pioneer enterprise in the production and supply of hot rolled construction steel
products; Black welded steel pipe; Hot dipped galvanized steel pipe; Galvanized Corrugated Pipe; cold
rolled corrugated iron and galvanized steel sheet. Commitment to bring to the market international
standard products to maximize the quality and output according to the market demand.

To realize this goal, VGS constantly invests in advanced technology, modern techniques, production
facilities to diversify products associated with the standard quality of products requiring technical
specifications high.

Depending on technical requirements, all products of VGS are manufactured according to the standards
of countries with developed material industries such as the UK and the United States; Japan; Korean and
Vietnamese standards.

Thanks to the methodical efforts in technology investment, advanced production techniques, VGS's steel
pipe, and construction steel products have been informed by contractors, project owners, and
construction units. used, appeared in a series of large construction projects in the country such as
Kengnam Building; National Assembly House; National Convention Center; Terminal T2 Noi Bai
International Airport; Da Nang Airport, Formosa Ha Tinh Steel Complex, SAMSUNG Thai Nguyen Project,
Thanh Tri Bridge, Vinh Tuy Bridge, Nhat Tan Bridge; Royal City Urban Area Project, Time City, Tan Cang
Project; overhead railway, highway Noi Bai - Lao Cai, expressway Hanoi - Hai Phong; Ha Noi Thai Nguyen;
ring road 3; overhead railway; major projects of Vincom Group and many large projects across the
country….

V. SWOT OF THE COMPANY

1. STRENGHT

Potential brand

• VGS is a potential company with a 7.2% market share in the Vietnamese steel market.
• After more than a decade in operation, VGS has become one of the largest steel producers in
Vietnam, with a capacity of 1,300,000 tons per year with 03 main product lines that are steel
pipes; Cold rolled steel sheet, Galvanized steel sheet and Construction steel sheet.
• For steel pipes and cold rolled and galvanized steel pipes: VGS is one of the 5 largest steel pipe
producers in Vietnam with a capacity of 600,000 tons / year.
• For construction steel: VGS is in the Top 7 largest construction steel producers in Vietnam with a
capacity of 700,000 tons / year.
 Product quality

• With products meeting international standards to meet the maximum quality and output
demand of the market, VGS strictly controls management and production activities with the ISO
9001: 2015 Quality Management System. and the 5S Program according to Japan.
• VGS has won many national awards and achievements in production line quality and output
product quality such as: National Quality Silver Award 2015; National Quality Gold Award 2016
and Asia-Pacific International Quality Award (GPEA) 2017. In 2020, VGS is the only enterprise in
the province to receive the National Quality Gold Award.
Distrubution network

• VGS intermediaries include nationwide distribution - retail branches, logistics, and warehouse
companies of VGS (PIPE, 2019). Furthermore, when the customer comes directly to purchase,
the organization and the expert owner will legally transfer the items for the benefit and comfort
of the customer. Their actual distributors are usually their employees all over the country in
different positions to distribute those products.
Overcome competitors

In the Vietnamese steel market, there are many domestic and foreign steel manufacturers operating
such as Vietnam Steel Corporation VNSteel, Pomina Steel Company Limited, Hoa Phat Group Joint
Stock Company, etc. The companies compete with each other very fiercely, affecting the revenue,
market share and operating results of VGS. However, to overcome the competition, VGS's marketing
department has had new solutions (PIPE, 2019):

• Be proactive in finding credit institutions with low interest rates and good capacity to borrow
capital. Superintendent to quickly recover capital and reduce financial costs.
• Strengthen the building of innovative, strong and friendly branches through social activities for
the community.
• Correct, maintain, and regularly upgrade the system of machinery and equipment in order to
improve productivity and product quality.
 • Always pioneering investment in modern technology.

2. WEAKNESS
Uncontrollable source of raw materials

According to the Vietnam Steel Association (VSA), over the past time, the steel industry has faced many
challenges due to excess capacity, increasingly fierce competition pressure from domestic manufacturers
and the direct influence of steel imported from China. Along with that, the increase and decrease of
input materials had a direct impact on the efficiency of production and business of steel enterprises. In
particular, Vietnam's steel industry is currently heavily dependent on the international raw material
market, most of the input materials for the production of steel products have to be imported in very
large quantities (VSA, 2019).

VGS's raw materials are supplied from many reputable sources at home and abroad with guaranteed
quality enough to meet the company's production requirements.

This combined with the fluctuations of the market as well as the complicated developments of the
epidemic have made many steel companies, including VGS, heavily dependent on external raw materials.

More, Department of Commerce (DOC) decided to impose anti-dumping and countervailing duties on
steel sheet products imported from Vietnam, using raw materials imported from China and South Korea
and Taiwan territories (VGS, 2019). However, Vietnamese businesses have actively used Vietnamese raw
materials or materials originating from other countries to produce export orders to the US. This shows
the adaptability and flexibility in sourcing raw materials of steel enterprises in Vietnam. The quantity and
timing of purchasing raw materials are strictly and reasonably calculated to achieve the best buying
prices and buying conditions from time to time as well as minimize inventory costs and interest expenses
on purchasing raw materials.
Others

Besides the above weakness, VGS still has some other weaknesses such as:
• Poor infrastructure cannot compete with foreign companies.
 • The administrative procedures are still complicated.
• The weak qualifications of workers still depend on production lines and foreign experts.

3. OPPORTUNITIES
• Technology is more and more modern, machines are increasingly improved in industrial
production, and are developing new products with higher quality but lower cost, environmentally
friendly and responsive full of international standards.

• With a high GDP growth rate, the economy has received much foreign attention. With high
economic growth, especially in the construction industry, the demand for quantity and quality of
steel products increases.
• The investment environment in Vietnam is increasingly open and favorable, easily attracting
investors to invest in the development of the steel industry.
• There are more and more FDI projects investing in the steel industry, through which there will be
more opportunities to learn, improve and approach the scientific and technical level of foreign
partners. In fact, FDI inflows are increasing, this is also a lever to promote the consumption of
steel products in the coming time.
• The "Vietnamese citizens using Vietnamese products" advertisements also helped the industry
market local brands, including VGS.

4. THREATS
• Domestic enterprises are still young, so it is difficult to be proactive in operations production and
business activities lead to the risk of crisis.
• The economy still faces many difficulties due to the restructuring of businesses.
• The competitive environment is increasingly fierce in the context of globalization and non-tariff.
• Enterprises in the region and in the world have strengths in capital and modern technology ready
to compete in price and quality, market dominance will make it difficult for small and medium
enterprises.
 VI. EXTERNAL IMPACT ON COMPANY’S DECISION
According to VGS's Sustainable Development Report 2019, the organization had carried out one strategic
strategy for them: "Maintaining the important role in the Vietnam steel sector and seeking to enter the
top 5 of the largest steel firms in terms of sales".

And to realize that goal, the VGS executive board decided to officially join and became the 14th
member of the Vietnam Steel Association on July 23, 2008. Joining the Vietnam Steel Association is not
just an opportunity for products. The company's more widely known, it also helps the business avoid
some of the strict regulations of the steel industry in general. On the other hand, the reputation of VG
PIPE is also increased, making steel export to foreign markets more convenient.

Vietnam Steel Association is a non-governmental organization, manufacturing, processing and trading

steel products, raw materials and a number of economic and service organizations related to the steel
industry in Vietnam. volunteer to join. The Steel Association was established with the aim of promoting
cooperation among its members in the construction of a sustainable steel industry.

Since its establishment up to now, the Vietnam Steel Association has always stood side by side with the
country's steel enterprises to build and develop Vietnam's industry, contributing to the growth of the
national economy. Initially, the Vietnam Steel Association consisted of only 13 companies producing
construction steel. Up to now, the Association has 103 members, divided into 4 steel majors.

In conclusion, VGS's participation in the steel association marks a milestone in the company's
development. This is an opportunity for VGS as the company has access to new markets and new
technologies through the association. However, this is also a challenge for VGS when it must always try
its best to maintain its market share as well as its foothold in the association, when worldwide
fluctuations such as pandemic or trade war are affecting. small to developing countries like Vietnam in
general and VGS in particular.

VII. CONCLUSION
While the Vietnamese steel industry has enormously tough competition from other domestic and foreign
steel products, what VGS has accomplished is truly noble. With national distribution and other quality
products, VGS is now on track to become a leading supplier of steel products, and has been promoted
and sold on international shelves. SWOT, PESTEL, and 5 strategic features sequence analysis, as well as
financial evaluations, human resources, technical foundation, and so on, have demonstrated the power
and growth prospects of VGS in the future. In short, this is an organization that meets the most stringent
demands of investors.
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