An example of franchise is KFC KFC is fast food restaurant chain that is famous worldwide KFC

Franchisor is who allow franchisee to use brand name of services or products to do business.. Finally, if KFC success in Vietnam market, the value of its brand will increasingly rise and

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES-INFORMATION TECHNOLOGY

Subject : Understanding Business Lecturer : Bien Thi Bac Ha

Student names : Nguyen Thai Thanh 20DH121650

Luong Thi Ngoc Huong 20DH120937

Hoang Thi Thu Uyen 20DH121592

Nguyen Ha Vy 20DH121612 Nguyen Thanh Quy 20DH121702

I INDEX

INDEX

CONTENTS

1 What is franchise ? 3

2 What is IPO ? 4

3 What is the first mover ? 5

4 What is GDP&GNP ? 6

5 What is a multinational company and a transnational compayny ? 7

6 Vietnam join the WTO 8

7 What is M&A ? 9

REFERENCES 10

II CONTENTS

1 WHAT IS FRANCHISE ?

Franchise is the permission for individuals or organizations to use brand name of services or products of franchisor for business purposes The franchisee must pay

an expense or share the percentage of turnover or profits to franchisor in a certain time periods and area There are 2 definitions related to franchise: franchisor and franchisee Franchisor is who allow franchisee to use brand name of services or products to do business Franchisor have 3 advantages and 3 disadvantages The first advantage: initial investment in new market is not high Secondly, enhance brand value from business expansion Finally, through franchisee, it is possible to learn about new market easily The first disadvantage is just one mistake of one unit will seriously affect the brand’s reputation Secondly, it is easily to dispute with franchisee about the problems of turnover and profit Then, the litigation will occur and affect the reputation of the franchisor Finally, if the franchisee thrives, the franchisee can lose control and be replaced by the franchisee in the world market Franchisee is who pays rental brand to do business the franchisor’s brand name Franchisee also has 3 advantages and 3 disadvantages The first advantage: needn’t build reputation for brand Secondly, the franchisee is supported by the franchisor including professional training, inheriting the business methods that have been successful before Finally, minimizing the risk of business failure The first disadvantage: always compete continuously with competitors of the same system Secondly, business operations must follow a certain framework, thus preventing creativity in business Finally, investment expenses for the business under the franchisor's brand name is quite high An example of franchise is KFC KFC is fast food restaurant chain that is famous worldwide KFC

entered the Vietnamese market in 1997 under a franchise from the "Yum! Brands" group of Thailand The franchise fees of KFC are about 45.000 USD Monthly fees are about 4% of monthly turnover KFC has advantages and disadvantages when entering the Vietnamese market There are 3 advantages Firstly, KFC entered the Vietnamese market very early so it has owned most of market share Secondly, KFC does not have to invest too much money in a new market like Vietnam, so KFC will not lose too many if its business fails Finally, if KFC success in Vietnam market, the value of its brand will increasingly rise and assert its position in the global market KFC has 2 disadvantages Firstly, when the franchisee makes a mistake, the KFC's reputation will be affected KFC could be boycotted and forced out of the Vietnamese market Finally, if the development of franchisees is out of KFC’s control, KFC will have a new competitor in the market For the franchisee, there also are some advantages and disadvantages Franchisee has 3

advantages Firstly, franchisee will do business with the brand KFC- a very

famous brand in the world market Secondly, franchisee will use KFC's business methods that have been successfully used by KFC in many other markets The franchisee is also supported by KFC if there is any problem Finally, the process

of building a new brand is many risks, but not with franchise Franchisee also has

3 disadvantages Firstly, franchisee always competes continuously with

competitors in the same system Secondly, investment costs for the business under the KFC brand name are quite high Therefore, franchisee will suffer heavy losses if the business fails Finally, franchisee is controlled by the franchisor and is prevented from creativity in the busines

2 WHAT IS IPO ?

IPO (Initial Public Offering) refers to the operation of a company that mobilizes capital widely from the public for the first time (an initial public offering of securities

to investors) through an initial public offering and put on the stock exchange After the IPO, the company will officially become a public company, also known as a public joint stock company or a public joint stock company

What conditions do businesses need to meet to issue an IPO?

First, have a charter capital contributed at the time of registration of 10 billion VND or more Second, business operations must be profitable in the most recent year before IPO Third, propose a plan for the issue and use of capital raised from the offering and approved by the Board

of Directors Next, enterprises with foreign investment must register to convert into joint stock companies And enterprises operating in the field of infrastructure must have at least one construction investment project under the socio-economic development project of the ministry or branch Finally, companies with 100% state capital must convert their form into joint stock companies

What are the risks that businesses face during IPO?

First, CEOs,CFOs and members of the board of directors must understand the regulations and laws and be responsible for the reports and information disclosed public and accountable to the law Second, the company will incur a lot of expenses because most administrative expenses and accounting procedures of listed companies double or quadruple During the IPO process, the information technology system, consulting services and investment banking are necessary elements and will incur more costs Third, businesses must be under pressure to maintain growth to meet investors' expectations The company must be transparent with all information and documents relating to company operations to shareholders and the press Finally, when shares are sold to the public, the company gradually loses control of the company's operations Each decision must

be approved by the shareholder Part of the company may be sold to rival companies and there is nothing you can do about it

Example: The historic IPO of Facebook

Like other companies, Facebook launched an IPO to have the financial resources

to run the business, expand the scale and buy other companies May 18, 2012 Facebook opened the first IPO worth $ 16 billion Opening at a share price of $ 42, Facebook's share price quickly dropped to the suggested price of $ 38 by the end

of the session In the first ten days, stocks continued to fall, making Mark Zuckerberg removed from the list of the 40 richest people in the world Facebook's share price fell 24.1% According to Bloomberg, this is the biggest stock decline in

US IPO history since the last decade

3 WHAT IS THE FIRST MOVER ?

The First mover is those enterprises are at the forefront of a product or service in the market and gain a competitive advantage by establishing product awareness and brand loyalty For product awareness is the customer's perception of a brand

in the market and product awareness depends on whether a brand's communication method is powerful enough or not? Identify products that factor in

identification and cue effect Brand loyalty is the active use of a brand's product and can be shown by users buying and selling to accept a competitor is taking the market When creating many loyal customers, it proves the quality of the brand's good products or services in the market In parallel, first mover is always done later

by competitors Usually, the first mover has already had a solid portion of the market with the customer fixed enough for the market To be render field, follower strategy must constantly strive and innovate to improve As the first developer, a certain advantage is a fixed position in the market Easily achieve exclusive rights with suppliers, thrive relationships with retail distributors In addition, the brand's margins are most conspicuous The level of product awareness also comes from here, when the presence is higher, creating attraction and somewhere to leave a mark for customers Next is the economic advantage, before entering their own school, the leader has a longer study time and allows the establishment of a means of supporting production or product distribution more efficiently than before when there is a competitor Finally, there is the advantage of switching costs, repeated use of the first product creates a habit and switching to a different product that can affect the price as the cost is incurred, time to adapt However, a sizable pressure for the first mover incomprehensible would very easily lose parts Lateral business units easily copy and refine to create better products to market Especially if the business is at the forefront if it continues to vigorously produce and forgets about valuable products, it is easy for the following businesses to create products that meet the needs of users A realworld example of Coca Cola -the first mover and Pepsi - -the follower strategy Coca Cola has been known as one of the “big men” at the forefront of the beverage market with a history of more than 130 years and a known connection for the ability to recognize and bring joy, sharing and happiness Coca Cola was memory with logo red with test “COCA COLA” in script form and exclusive to product shape, allowing high degree of determination to create trust among users Coca Cola's marketing strategies are always linked to stories The picture of a white bearded Santa Claus in a red suit is

so far the central image for the Christmas holiday at Coca Cola's creative event Regarding the Orient, on the occasion of the first festival of the year, the image of the flock flying back represents the harmony of the family, a warm and happy atmosphere A competitive invitation of Coca Cola is "always understand what users want" and

through that always change positively Thanks to that, Coca Cola is not simply a drink, but also known through its inspiration and sharing That is how Coca Cola reaches its users Pepsi - Follower Strategy, the biggest rival of Coca Cola in history until today with equal shares (Coca Cola has 64% higher market share) Pepsi has a completely new and unattractive marketing strategy called Storytelling However, Pepsi's branding effect is rather pale because Coca Cola is quite successful in its local product Pepsi has a unique competitive advantage of Pepsi which is to utilize the power of influencers with the first influencer marketing channel, a 5 million VND contract with actor Michael Jackson and with this violence Change the Pepsi and Pepsi section to a new page

4 WHAT IS GDP&GNP?

GDP (Gross Domestic Product) is defined as the market value of all goods and services produced within the last territory in a given period (usually 1 year) The higher the GDP, the stronger the country's economy and vice versa For example,

we do not need to know where the citizens or companies are in Vietnam as long as they work in Vietnam, they are counted in Vietnam's GDP GDP is made up of four elements of GDP = C + I + G + NX Where C: household spending (is the range of personal expenditures such as procurement of necessary materials and eating) The raging COVID epidemic makes people afraid to take to the streets and life becomes difficult, people are less consumed leading to C in constituent GDP is reduced Two, I-Total Investment is the expenditure on purchasing those goods and services that are used in the future of the business However, from where in

2020, the COVID epidemic takes place, making business difficult, production stagnates, unsold products cause investment to also be reduced NX: Import and export In the context of the global economy, trade between countries is frequent and necessary but currently the wave of global outbreaks especially residents from abroad to Vietnam causes the government to close and restrict trade from abroad leading to import and export is also reduced G: Government targets In order to revive the economy and contribute to GDP growth, the government has made efforts to promote non-governmental spending is the segments build by road, schools, high-speed projects, infrastructure to serve the people

* Nominal GDP and actual GDP

Nominal GDP (or GDP at current prices) is the value of the total domestic product

at contemporary prices when goods and services are produced The actual GDP (GDP at comparable prices) is the total domestic product calculated according to the final output of goods and services of the year of the study and the price in the original year According to the financial-monetary calculation, GDP is in fact a potential GDP minus the CPI inflation index for the same period of time used to calculate that GDP index

GNP (Gross National Product) totals the value of the final services and products that all citizens of a country make both at home and abroad The final product for calculating GNP is not an intermediate product but a directly consumed product GNP is an important economic target for evaluating the development of an economy There are many ways to calculate GNP but the most common is by social spending GNP = C + I + G + (X - M) + NR Among them: C-Personal Consumption Costs; I-Total Personal Investment; G-Cost of state; X-Export turnover of goods and services; M-Import turnover of goods and services; NR-net income of foreign assets For example, a Vietnamese person who exports labor in Japan, the income that he / she makes in Japan will be counted towards the GDP

of Japan but not in the GNP because he / she does not have Japanese nationality

If the money he/she makes to move to Vietnam will be counted in the GNP of Vietnam GDP and GNP are the same because both are standard concepts, common use worldwide, used in the field of macroeconomics, which are indicators

of a country's economic development, are calculated based on defined formulas and are the final figures of a country per year GDP and GNP have differences GDP is the entire value generated by the economic sectors operating within the territory of a country consisting of domestic and foreign economic sectors operating in that country Meanwhile, GNP is the entire value produced by nationals of that country including citizens working abroad Moreover, GDP differs from the GNP in that it eliminates the conversion of income between countries, it is attributed to the territory in which the product is produced rather than the income received there GDP is about geographical factors and GNP is about ownership Shows that GNP means broad, reflecting closer to reality than GDP For example:

A Vietnamese company with a branch in Russia, a branch with operating results in

2019 is as follows: Revenue of USD 2 billion, profit of USD 350 million, profit transfer to Vietnam 180 million USD At that time,

Russia's GDP was 350 million, Vietnam's GDP was 0 VNĐ; and Russia's GNP 170 million, GNP of Vietnam 180 million In the past 10 years, Vietnam's GDP growth rate has had significant fluctuations GDP growth in 2019 is 7.02%, exceeding the National Assembly's target of 6.6-6.8% Although the growth rate in 2019 was lower than 2018 but higher than 2011-2017 (Lao Dong Newspaper-December 28, 2019)

COMPANY?

Multinational company are companies consisting of parent companies and subsidiaries located in different countries in which the parent company is located in the head office and the subsidiary is distributed abroad from 4-5 foreign companies Every multinational company that is self-sufficient and has full authority to decide in each region unlike a transnational company is a form of activity that must be shared They classify the company into 3 main groups: horizontal company, vertical company and multi-dimensional company Each group

of companies will have different ways of operating to benefit the parent company Multinational companies that have certain characteristics of capital, brand advertising strategies, advanced technology and good products to be able to grow the economy for the company, the above factors are essential When multinational companies come to Vietnam also bring a lot of benefits and disadvantages to us They help increase employment opportunities for workers, bring new techniques here to produce for Vietnamese people to exchange and learn more to expand understanding, also help develop the country's economy in the industrialization of modernization For example, Unilever entered Vietnam in 1995 Unilever has many brands in Vietnam such as OMO , Clear, Sunlight and there are 5 factories nationwide Unilever has grasped the Vietnamese market very potentially so decided to develop here, also help Vietnam have more taxes from trade activities, help increase more job opportunities In addition to multinational companies that help develop the world economy, there are transnational companies that also contribute to the development of the world What is transnational company? Transnational company are companies made up of at least 2 countries or more, having an organizational form consisting of a parent company and a system of subsidiaries under the control of the parent company in terms of finance as well as about the right to decide From that, it can be seen that under the parent company, there are also subsidiaries, affiliates and branches under the

parent company The origin of forming a company is to acquire bankrupt businesses to expand scale and contribute capital to business of many countries Basic characteristics of a transnational company such as globalization, standardization and diversification To capture the consumption market in foreign countries, they must always diversify products to adapt to consumers In countries around the world, the demand is increasing, ensuring product standards is very necessary to gain the trust of customers for the company's products to reach the global market And want to be like that need to push into Marketing to widely advertise the company's strategy to the globe Transnational companies play an important role in the world economy, contributing to abundant human resources, helping the world learn more about science and technology to develop production needs, create more goals striving for developing countries Example: Apple Group

is a transnational company with great influence on the world economy in the technology field They are headquartered in the US and subsidiaries in countries around the world Apple Group is constantly developing, offering a variety of products to attract customers and the quality of the product is always the top priority And Apple Group has a branch in Ireland Apple Group has an important influence on the economy and politics around the world in general as well as the

US in particular Finally, both multinational companies and transnational companies contribute to the political economic development of the country in particular and the world in general

6 VIETNAM JOIN THE WTO

1-1995 Vietnam applied to join the WTO to motivate exports because it had to improve the conditions of international market participation, wanted to be able to attract investment capital from the country in addition to expanding sales of agricultural products and textiles, access to WTO dispute settlement mechanism After many negotiations, on January 11, 2007, Vietnam officially joined the WTO WTO membership also brings many advantages and disadvantages to the country What are advantages of Vietnam joining WTO?

Vietnam's accession to the WTO is not a goal but a means to reform the economy, and the WTO has the following opportunities First, immediately enjoy the achievements of GATT and WTO after nearly 60 years of existence (import duties and non-tariff barriers ) Secondly, to provide the motivation for economic reform in building a full legal

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