Writing an internal analysis report (about 2500 words) of the firm that your team chosen and analyzed

NATIONAL ECONOMICS UNIVERSITY BUSINESS SCHOOL ─────── * ─────── TOPIC SUBJECT Strategic Management CLASS GROUP EBBA 10 4 1 MEMBERS Contents Internal Organization Analysis 2 A RESOURCES 2 0 Writing an[.]

NATIONAL ECONOMICS UNIVERSITY

BUSINESS SCHOOL

TOPIC:

CLASS

GROUP

: :

EBBA 10.4 1

MEMBERS

Contents

Internal Organization Analysis 2

A RESOURCES 2

Writing an internal analysis report (about 2500 words) of the firm that your team chosen and analyzed.

1 Vũ Lâm Phương

2 Tr n Th Huy nầ ị ề

3. Ngô Th Hị ường

6 Ngô Th Ki u Loanị ề

7 Nguy n Th Thùy Linhễ ị

Ha Noi, 5/2020

1 Tangible resources 2

1.1 Financial resources 2

1.2 Organizational resources 3

1.3 Physical resources 3

1.4 Technological resources 3

2 Intangible Resource 3

2.1 Human resources 3

2.2 Innovation resources 4

2.3 Reputation resources 4

3 CAPABILITIES 5

3.1 Distribution 5

3.2 Human resources 5

3.3 Research and Development : Innovation and technology resources 6

3.4 Management: Ability to envision the future of products 6

4 CORE COMPETENCIES 7

4.1 Valuable 7

4.2 Rare 8

4.3 Costly to imitate 8

4.4 Non Substitutable 8

4.5 Organized 8

B VALUE CHAIN ANALYSIS 10

Primary activities 10

1.Inbound logistic 10

2.Operations 10

3.Outbound logistic 11

4.Marketing and Sales 12

5.Service 13

II Support activity 13

1 Firm infrastructure 13

2 Human resource management 13

3 Technology 14

4 Procurement 14

REFERENCES 16

Internal organization Analysis

A RESOURCES

1 Tangible resources

1.1 Financial resources

From 2019, after changing the new logo includes golden Houblon flowers in a star shape, as a symbol of the brewer’s essence, Habeco’s business picture in 2019 has generally improved significantly, gradually increasing market share in new markets, but still maintaining market share in traditional areas At the end of 2019, Habeco’s financial statements show that the Corporation still has VND 2,877 billion in cash and bank deposits, which is the largest item in the asset structure at a rate of 36,7% Reduced dept helping interest expenses in 2019 decrease

by nearly one-third compared to 2018, to VND 30.9 billion In contrast, financial revenue, mainly from deposit interest, is up to VND 171,9 billion, which is 5.56 times higher than business expenses.(Source:VIETNAM INVESTMENT REVIEW)

(SOURCE: FINANCIAL REPORT OF HABECO) However, entering 2020, Habeco and other beer companies face many difficulties due to the double impact from Decree 100 and Covid-19 Many restaurants and tourist resorts had to suspend operations, and the demand for beer products fell sharply In the first 4 months of the year, the targets of output, revenue, and budget payment are only 44-50% Profit before tax decreased by 93% over the same period, when it was only nearly 16 billion dong Many Habeco production units had to stop operations, cut labor and wages

However, sales volume increased again in the past 2 months, helping this business profit 100 billion The target of 2020 also decreases compared to 2019 Accordingly, the consumption of main products is about 225 million liters, the sales revenue is nearly 4,224 billion dong, 45% lower than the implementation in 2019 Ants also dropped to 248 billion Dividend is expected to split 6%

1.2 Organizational resources

1.3 Physical resources

Habeco owns a dense distribution network which wide spread almost every important areas of the region (Hanoi - Me Linh Brewery; Hanoi - Hung Yen Brewery; Hanoi - Hong Ha Brewery (in Viet Tri - Phu Tho); Hanoi - Nghe An Brewery; Hanoi - Hai Phong Beer Factory; Hanoi - Thai Binh Beer Factory; Hanoi - Quang Tri Beer Factory; Hanoi - Vung Tau Beer Factory

1.4 Technological resources

Hanoi Beer products are produced on lines and technologies of the Federal Republic of Germany with a completely automatic bottling line, ensuring food quality, safety and hygiene The Habeco beer production equipment system today has always been modernized, mostly automated at all stages: raw material processing, cooking, drinking water, quick cooling, fermentation, filtration beer, beer extraction, pasteurization, labelling, palletizing

The board of Habeco has paid more effort to ensure equal quality of their products at different production facilities All production lines and equipment of Habeco’s breweries meet the same standards Materials for beer production at all breweries are of equal quality and strictly controlled by Habeco before reaching its subsidiaries In the past, when outdated technology was applied, beer production depended mostly on material sources, water resources, and fermentation techniques But now, when modern technology allows the corporation to deal with water problems to achieve the desired quality, Habeco has concentrated on improving the traditional brewing technique that requires long fermentation Mistaken products must be processed based

on ISO requirements “Currently, the quality of 100 percent of Habeco’s products is strictly controlled by the corporation and its subsidiaries based on ISO 9001-2000 and ISO 22001-2005 requirements”

2 Intangible Resource

2.1 Human resources

Habeco’s resources have 5000 employees (2019) including people with bachelor’s, master’s degrees; people reached diploma level; vocational training; unskilled- workers ; and experienced engineers Besides, the average working-age of employees is 38,5 years old

(SOURCE: LABOR ORGANIZATIONAL OFFICE OF HABECO)

A skilled and experienced workforce helps the company produce high-quality products, reducing waste, saving production costs Moreover, with talented and qualified business staff, it allows Habeco to ensure high productivity and consume well in the market In recent years, the income

of workers is always improving, which shows employee loyalty and retention level for the organization is high

2.2 Innovation resources

Throughout the years, Habeco invests continuously on making up-to- date changes in technology and the managing system to meet the requirements of the market In 2019, Habeco shook hands with FPT IS to launch the ERP business management system including main modules: financial accounting, management accounting, purchasing management, warehouse management, consolidated financial statement, More specifically, ERP will help to connect multidimensional data such as financial data, business data, technical data, which will connect all activities of the business, creating foundation for digital transitions When come to operation, this system will help Habeco standardize and automate the management process , production line and business activities, accurately control data from all stages of the system, reduce costs, increase labor productivity… Habeco also has continued making investments to upgrade modern technology in the production line, having adequate facilities and creating a green environment in accordance with international standards in the production area

2.3 Reputation resources

Brand name and brand image are the things that Habeco takes time to build Throughout the year, beginning as the first local beer brand in the Vietnam market, Habeco has been able to make an impression of a brand that carries traditional value and quality beer line with affordable prices

Vietnam Report Joint Stock Company has just announced the top 10 prestigious companies in the food and beverage industry in 2019 Accordingly, Hanoi Beer-Alcohol-Beverage Joint Stock Corporation (HABECO) is the leading domestic beer company in the list with the strong points: large capacity, affordable, commercial communication system,….With nearly 130 years of history with more than half a century of recovery and development, Habeco is now leading a domestic beer company in the Vietnamese beverage industry with the famous product lines such

as Truc bach beer, Hanoi Bold and Light Beer, Hanoi Beer Premium, Canned beer, These products have received consumers’ trust in both quality and style which meet the taste not only

of domestic but also foreign beer connoisseurs, affirming the position of a national brand

3 CAPABILITIES

3.1 Distribution

Habeco is the second largest distributor in the beer industry in Vietnam with 345 primary distribution agents HABECO's distribution system is mainly through various levels of agents, through major distributors, supermarkets, retail stores, and restaurants, consumers The HABECO’s distribution agents are mainly concentrated in the Northern provinces and North Central which creates opportunities for the company to dominate the highest market share in the region The three provinces with the largest number of primary agents are Ha Noi (78 agents), Nghe An (24 agents) and Ho Chi Minh City (22 agents) Distribution agents are usually concentrated in cities and regions which have HABECO’s factory, with a wide network of factories Northern provinces allow the company to reduce transportation costs, which can push production costs This form of distribution has brought HABECO's brand name to consumers in different regions, becoming familiar to the people

3.2 Human resources

Habeco has great Human resources capability In order for the system to be operated professionally according to the parent company - subsidiary management model, the corporation reorganizes the units and divisions, compact, effective management, and specialized departments and branches accordingly Focusing on efficient and synchronous management of quality, management of input materials, integrating the ISO system of factories and companies with the Corporation's ISO system In addition to the remuneration regime with attractive salary, the Company always creates a united and competitive working environment for employees to promote their creativity, dynamism and effectively contribute to operational results business of the Corporation Labor structure of the Company is appropriate and responsive to the needs of production and business

Habeco always focuses on investing in the learning of employees to approach science, technology and new knowledge The Corporation regularly organizes training to improve professional qualifications, skills and foreign languages in many forms: inviting domestic and foreign officials and specialists to teach at the Corporation; sent to study at home and abroad; internal training

Last but not least, Habeco treatment toward employees is also shown in quantity With a reasonable income distribution policy, employees who do jobs with higher complexity, higher expertise required, larger scale and higher working efficiency will be ranked higher wages In recent years, the average income of the employees of the Corporation is relatively high The company always takes great consideration in motivating its employees Labor motivation activities for employees in the Corporation include material methods such as wages, bonuses,

emulation, or mental stimulation activities for all employees of the company improve work

motivation, dedication and capacity contribution to the company voluntarily and happily With a salary that is quite relative to society, on average 4 times the basic salary in society, in addition

to bonuses for completing plans, saving or having a business initiative basic and fair living standards for all employees

3.3 Research and Development : Innovation and technology resources

In terms of Research and Development function, Habeco’s capability is shown in its ability in making use of innovation and technology resources The company invests considerable time and effort in developing their technology and being up-to-date in the changing market

One of the outstanding technologies applied by Habeco is to operate the project “Investment project of experimental beer production system” at the Institute of Technology, in Me Linh, Hanoi

That operating project will provide facilities for research, technical development, analysis and testing in the beer, wine, and beverage fields; research and development of new products; researching, testing and applying new techniques, processes and advances before launching the production scale in order to improve product quality and diversify products of Habeco All equipment for product research and development is equipped with modern, synchronous, designed according to international standards, the level of automation ensures the tested products have similar quality standards equivalent to products of the same type produced on an industrial scale Specifically, this institute helps Habeco reduce time for experimenting new products, and also cut down the cost for experiments With the advanced technology, they only need to conduct about 500 liters per time, compared with 22,000 liters in industrial scale Approximately 10 million dollars was the budget spent for the investment on this institute

Typically, they had the investment in bottled water extraction line; completed and put into operation the canning line of 60,000 cans / hour at Hanoi - Me Linh Brewery; New construction

of the Beer - Wine - Beverage Technical Institute; Pilot Plant system for research and

development of new products; launching new products and innovating product packaging design

to meet the needs of consumers … A pilot plant is a pre-commercial production system that

employs new production technology and/or produces small volumes of new technology-based products, mainly for the purpose of learning about the new technology

3.4 Management: Ability to envision the future of products

Globalization has created a whole new consuming trend and made great changes in consumer purchasing habits and this does not exclude beer The consumer trend of customers strongly changed from the mid-end to high-end market Being in the Vietnam market long enough, Habeco was quick to catch on to the slightest change of the market and has taken effective action to satisfy the customer’s needs The innovation that Habeco makes include:

 Prepared a rebranding strategy and a business strategy for both the medium and long term, ready to compete with competitors in the near future

 Paying special attention to new trends, thereby giving recommendations to improve the current brand image

 Concentrating on the construction and development of the distribution system through the investment in all resources

 Building the most comprehensive sales policies and support agents to bring benefits to both parties

 Promoting the training of market staff with a high sense of responsibility, enthusiasm for work to be in charge in the market

 Taking into account the innovation of the industrial revolution 4.0: Habeco has joined

hands with FPT to implement the ERP project to gradually integrate the business in the

context of the digital revolution, contributing to enhancing the strength and position in

the market Enterprise resource planning (ERP) is a process used by companies to

manage and integrate the important parts of their businesses

4 CORE COMPETENCIES

4.1 Valuable

 Brand image: Habeco affirms its position as the cultural beer producer of Vietnam and as the trusted beer brand for every Vietnamese Habeco’s products target mostly the mid-end segment to meet the taste of almost everyone, which always are among the best-selling products in the market, representing the beverage culture of the capital One of the biggest reasons customers choose Habeco beer is because the brand has high reliability

 Distribution network can be considered a valuable resource of Habeco This helps it reach out to more and more customers Also it ensures greater revenues for habeco and measures that promotion activities translate into sales as the products are easily available

 Technology is also a valuable resource of the company, not only does it help the company raise the company productivity and quality, the implementation of up-to-date technology helps reduce a considerable cost:

o Self-contained, automatic bottle washing machine ensures a perfect bottle clean in all aspects: chemistry - physics - microbiology, energy saving, water saving

o Bottled beer filling machines with the principle of vacuum have improved the quality of beer and reduced waste

o Automatic pasteurizer makes operation simple, easy to control and absolutely controls quality information

o Fully automatic cooking system, which recovers energy and recovers condensate very effectively All processes are controlled and data saved by the most advanced software available today

o The outdoor fermentation tank system is automatically controlled by a computer system that has ensured the uniform product quality, reduced hard labor, increased labor productivity

o Laboratory system is equipped with modern equipment: chromatographic analyzer, automatic beer analyzer, spectrophotometer to help ensure product quality in all stages

 Employees are valuable sources of Habeco, the majority of the workforce is highly trained and chosen through high education criteria which result in high performance in work output

 The innovation resource of Habeco can be considered valuable because it helps Habeco keep up with customer needs and therefore enhance the brand beer lines value

To conclude, Habeco has valuable capabilities of distribution, Human resources, management and R&D that help the firm neutralize threat and exploit opportunities

4.2 Rare

It is a fact that Heineken’ product is higher-end customer segment so the price of the product is higher than other beer products of the same type, but is still taken in by consumers and increasingly expanding the market with continuously increasing revenue Foreign beer brands such as Budweiser or Sapporo with higher prices come with higher quality but consumption is quite slow HABECO also with long-standing beer brands in Vietnam still retains the price of over 10,000 VND per bottle, which is suitable for the working class, offices, students, so it still maintains its position in the market Not any can keep it tradition in price while raising its product segment

4.3 Costly to imitate

Due to its limitation as a low-end segmentation and depend considerably on importing, all of Habeco resources are made use of at maximum to reduce any unnecessary cost So there are no resources that are costly to imitate This is both an advantage and a disadvantage

4.4 Non Substitutable

Referring to Hanoi culture, beside the elegance and magnificence of people with a thousand year history of civilization, cuisine plays an important role in daily life, and it is impossible not to refer to Habeco specially Hanoi beer- a symbol of image “Bold culture

of the capital” Habeco also always preserves the beautiful cultural values of Hanoi along with nurturing the beer brand of Vietnamese people to elevate their status

4.5 Organized

 Human resources are well-organized In order for the apparatus to be operated professionally according to the parent company - subsidiary management model, the corporation implements the reorganizing of units and divisions; effective management, and specialized departments and branches accordingly For HABECO, employees are the source and the driving force of the business process, so the human factor is heavily invested by HABECO In addition to the preferential remuneration with attractive salary, the Corporation always creates a united and competitive working environment for employees to promote their creativity, dynamism and effectively contribute to the results

of their operations business activities of the Corporation

 Moreover, Habeco always has long-term production and ordering plans from 3 to 5 years

to reduce input costs and also to be proactive in long-term supply of raw materials This also can avoid sudden risks, for example, because of Coronavirus some borders have to close

Distribution Capability

Human resources Capability

Research and Development Capability

Management Capability

Costly to imitate Yes

Non

Substitutable

Competitive

Consequences

Competitive partly

Temporary competitive advantage

Temporary competitive advantage

Temporary competitive advantage

Performance

Implication Average Return Average returns to above-average

returns

Average returns

to above-average returns

Average returns

to above-average returns

Core competencies:

From the analysis above, it can be seen that Distribution and R&D provide a sustained competitive advantage The patents are a source of unused competitive advantage There exists a temporary competitive advantage for employees

Strength

As a large corporation with a long tradition, the brand of Hanoi Beer is a brand loved and trusted by a large number of consumers, so the consumption of products is very convenient, production is not enough market demand Currently, HABECO's market share is 10%, ranking third in Vietnam's beer market In the North market Hanoi beer products dominate most of the beer consumption market

 Firstly, the distribution channel system of Habeco is wide, especially in the North HABECO has a wide consumption market in 36 provinces and cities with

a large customer network of more than 1000 agents and more than 5000 restaurants and hotels It is also a long-standing brand associated with Hanoi culture Customers have a long-term attachment to HABECO, so they are very enthusiastic and loyal

 Secondly, HABECO has built an internal management mechanism, thoroughly applied and implemented ISO management on product quality, environment and food safety, so product quality is always guaranteed

 Thirdly, selling expenses / revenue ratio is at a relatively high level The budget for advertising, promotion, sales promotion is large, advertising and promotion expenses account for 5.8% of the total cost, excluding advertising and promotion expenses

 Habeco now also has a variety of product lines from low-end beers to high-end beers which are suitable for everyone’s taste

Weakness:

The current production capacity is not enough to meet the market demand, but when Vinh Phuc brewery goes into operation, it partly meets this demand