Business analysis report vf34

Introduction The report is about the marketing strategy, environment and current issues in Vinfast – a Vietnamese car manufacturer, especially focusing on its latest electric car Vinfast

BUSINESS ANALYSIS REPORT

Lecturer: Dr Hauser Mirjam

Student: Phan Nguyen Thuy Duong

Student ID: 31211021968

Class: PMk – DH47ISB - 1

TABLE OF CONTENTS

INTRODUCTION AND BACKGROUND 2

Introduction 2

Background 2

Challenges 2

SITUATION ANALYSIS 4

SWOT Analysis 4

Competitor analysis, Macro-environment and Micro-environment 5

Competitor analysis 5

Macro environment 6

Micro environment 8

SUMMARY, SUGGESTIONS, LIMITATIONS 10

Summary 10

Suggestions 10

Limitations 10

REFERENCES 12

APPENDIX 14

INTRODUCTION AND BACKGROUND

1 Introduction

The report is about the marketing strategy, environment and current issues in Vinfast – a Vietnamese car manufacturer, especially focusing on its latest electric car Vinfast VFe34 Firstly, there is brief information about the brand and the electric car as well as potential challenges Then, the report will analyze the Macro and Micro environment, SWOT analysis of the product Finally, suggestions will be given to solve the problems

2 Background

Vinfast Manufacturing and Trading Company Limited is an LLC private start-up manufacturer in automotive field It was established in June, 2017 as a subsidiary

of the parent organization Vingroup – the largest conglomerate in Vietnam Its headquarter locates in Hai Phong City, Vietnam

Vinfast VFe34 is the first Vietnamese smart electric car, which was officially launched on October 15, 2021 at price of around 690 million VND The car is integrated with many smart features

3 Challenges

- Competitive pressure: The current Vietnamese automobile market is led by

Thaco, Toyota and other reputable brands They have a large quantity of loyalty and customers

- Brand barriers: As a young and new brand in Vietnam, customers will hesitate to

choose it instead of other imported cars with affirmation in the market

- Limitations on automotive auxiliary industry in Vietnam: The domestic

supporting industry has not developed Only few components produced in Vietnam, lack of investment and engineers have resulted in less plentiful types

SITUATION ANALYSIS

1 SWOT analysis

a) Strength

- First Vietnamese electric car: It appeals to patriotic customers with label “Made

in Vietnam” car

- Longest warranty: VFe34 offers 10 years - the longest term in comparison with

all cars available in Vietnam

- Protect the environment: Those who have high awareness of the surroundings

will consider to buy VFe34

- Apply artificial intelligence: This system will provide drivers with smart

assistance and security functions to maximize convenience in every journey

- Low maintenance cost: The cost is lower than petrol gas and makes it a good

choice for people with median income (Appendix a)

b) Weakness

- Not yet a popular car brand: Vinfast is considered as a young brand and still

struggling with gaining brand awareness

- Short travel distance: VFe34 can only travel a short distance of 285km per

charge It’s just suitable for those travelling within the city

- More charging time: It requires longer time to charge than petrol cars.

- Incomplete infrastructure: Vinfast needs to spend a massive amount of time and

money investing on charging stations The planned number of charging stations is much fewer than of traditional ones

c) Opportunity

- Potential market in Vietnam: There is an increase in need to own a car, which

gradually matches with that of ASEAN More people are seriously concern about the environment so they want an ecofriendly car (Appendix b)

- Positive perception: Vinfast has received support from many national customers,

especially from the government to prioritize domestic products

- Many strategic partnerships: Vinfast has set up tight relationships with

international firms to create the most valuable and distinctive product before launching in the market

d) Threat

- Competitive disadvantage: In comparison with the other brands, Vinfast has

little experience in automobile industry In 2020, Thaco and Toyota are 2 top car brands in market share of Vietnam (Appendix c)

- Decline in demand: During Covid-19 pandemic, the demand to own a private car

has dropped significantly because of lock down or working from home

- Limitations on automotive industry: The localization in the industry is low and

Vinfast has relied on international production of components

2 Competitor analysis, Micro-environment and Macro-environment

a) Competitor analysis

In the SUV segment, Vinfast VFe34 will compete with many other electric cars in Vietnam: Kia Seltos, Hyundai Kona, MG ZS

 Kia Seltos: The best-selling car with a modern and youthful appearance at a

reasonable price ranging from 699 to 719 million VND

has everything expected in a modern car with a favorable price from 636

to 750 million VND

attracted a lot of customers with the cheapest price from 519 to 619 million VND

b) Macro environment

Political

In general, Vietnam has undergone stable politics so the car industry is not negatively influenced by political activities The government has passed lockdown the policy in which import tax on some materials will be reduced to 0%; therefore, essential components of Vinfast cars can easily and economically be delivered to the factory In addition, there are tax incentives to encourage manufacture and consumption of electric cars

 Economic

Smart car Vietnam gross domestic product in 2020 was about 271.2 billion USD and increased by 2.9%, which is recognized as leading performance in GDP growth of major Asian economies Inflation rate is maintained low at 3.22% in

2020 to raise consumption and demand, encourage production and investment (Appendix d)

 Social

The population of Vietnam in 2020 was 97.34 million people, becoming the 15th populous country in the world The total number of households in Vietnam is above 26 million households with 3.6 members in each on average With high population density, Vietnam has witnessed a substantial rise in demand for car ownership (Appendix e)

 Technological

Vietnam has experienced a rapid development stage of technology in various fields, including automobiles In the current economic globalization with industry 4.0, many cars are well-equipped with advanced technology It is predicted that in the next few years, there will be a new generation of smart cars with superior autonomous drive assistance technology

 Environmental

The climate condition in Vietnam is tropical monsoon, hot, humid and rainy It has differentiated the automobile industry from other countries Besides, environment pollution is at an alarming rate Many vehicles release a huge amount of toxic gas into the air As a result, many car brands tend to innovate green transportation

 Legal

According to Minister of Industry, automobile plants must have a study report proved following current national regulations and have a capacity of 10,000 vehicles annually It is required to have registration documents for technical safety and environmental protection in manufacture and assembly Moreover, Vinfast cars have to undergo rigorous examination and assessment from world

organizations such as ASEAN NCAP, EURO NCAP, WTLP… before being launched in the market

c) Micro environment

The company

Human resource of Vinfast are those who are experienced and professional executives It has a stable financial condition with support from the parent company Vingroup (Appendix f)

 Suppliers

Vinfast has established close relationships with many global corporations to be able to manufacture the products in time to meet the demand

 Schuler AG – stamping line

 Eisenmann – technology, assembly lines

 Durr AG – supply of paint lines

 LG Chem - a member of LG Group - manufacturing and supplying international standard batteries

 BMW - a famous German engine manufacturer - VinFast bought the intellectual property rights from it

 An Phat - a leading plastic corporation in Southeast Asia - specializing in the export of thin film packaging

Marketing mediaries

Vinfast currently has a wide network of 242 distributors and 83 dealers in all provinces, cities in Vietnam They are located at convenient places for customers

to easily access and experience the products The company also works with well-known influencers such as David Beckham, Miss Tieu Vy and other Vietnamese stars

 Customers

Vinfast has potential customers who are using Vingroup services such as real estate, tourism, medical examination or education They take pride in national brands and are dynamic technophiles wanting to experience Vietnamese electric car However, some customers tend to wait until the quality of the product is verified by the previous users before making a passesdecision

 Competitors

Vinfast VFe34 is facing numerous potential international competitors in the market Generally, Kia, Hyundai, Toyota are all strong competitors of VFe34 In addition, there is an increase in advanced application in many new cars to compete with Vinfast electric car

 Publics

Vinfast’s environment includes 2 types of publics: Internal publics and General

public About Internal publics, the employees satisfy with the company policies of

suitable working hours, desirable working conditions and other attractive

benefits Regarding General public, Vinfast has built a positive brand image as a

pioneer in Vietnamese automobile industry carrying the mission “to create a better life for people”

SUMMARY, SUGGESTIONS, LIMITATIONS

Vinfast and VFe34 have become more and more popular in Vietnam Despite having advantages as a domestic product with a smart system and environmental friendliness, VFe34 is encountering both internal and external challenges Some actions will be necessary to solve these issues

- Focus on quality to create unique products: The customers are concerned about

the quality when evaluating alternatives so core value in every product will help them realize that it is the best choice The brand can add more features and services to make it more convenient as well as maintaining the low price to become highly competitive in the market

- Take advantage of human and financial resources: Vinfast should encourage

workers to support the car industry with new and useful inventions, ideas and methods to reduce dependence on international components for production

- Create a brand impression: Recently, both Vinfast and VFe34 have attracted a lot

of attention from customers To make use of this period, Vinfast should find effective ways to promote products to quickly take a remarkable position in the market

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3 Limitations

The report still carries a limitation is not having sufficient information The reason

is Vinfast VFe34 has been just launched for 1 month and none of the customers have a chance to experience the car Therefore, it will lack information and news about the real experience of this product However, in the future, this limitation can be overcome when the cars are reached customers and detailed reviews will

be given

1 6 nhược đi m CUA xe đi n can để ệ ược khắắc ph c đ thuyếắt ph c nhiếều ụ ể ụ

người mua xe hon - (2021, April 22) Otosaigon - diếễn đàn, c ng đồềng ồ tồ ộ sồắ 1 Vi t Nam https://www.otosaigon.com/threads/6-nhuoc-diem-cua-xe-ệ

dien-can-duoc-khac-phuc-de-thuyet-phuc-nhieu-nguoi-mua-xe-hon.9009279/

2 Climate in Vietnam: Everything you need to know - LIOS (2021, May 13) Live and Invest Overseas https://www.liveandinvestoverseas.com/country-hub/vietnam/climate-in-vietnam/

3 Danviet.vn (2021, October 19) Đâu la lo t đồắi th CUA VinFast VF e34, ạ ủ Lieu xe đi n Co gi hon đ c nh tranh? danviet.vn https://danviet.vn/dau-ệ ể ạ la-loat-doi-thu-cua-vinfast-vf-e34-lieu-xe-dien-co-gi-hon-de-canh-tranh-20211018152403805.htm

4 Danviet.vn (2021, October 19) Đâu la lo t đồắi th CUA VinFast VF e34, ạ ủ Lieu xe đi n Co gi hon đ c nh tranh? danviet.vn https://danviet.vn/dau-ệ ể ạ la-loat-doi-thu-cua-vinfast-vf-e34-lieu-xe-dien-co-gi-hon-de-canh-tranh-20211018152403805.htm

5 Hoàng, T (2020, December 25) Nh ng chính sách TAC đ ng đếắn th ữ ộ ị

Truong o to Viet Nam Nam 2020 Báo Thanh Niến

https://thanhnien.vn/nhung-chinh-sach-tac-dong-den-thi-truong-o-to-viet-nam-nam-2020-post1272792.html

PAGE 12

6 Nguyếễn, H C (2018, October 4) Chuyến gia Viet Nam: Xe VinFast se gap

ph i Su c nh tranh rat Lon Báo Thanh Niến https://thanhnien.vn/chuyen-ả ạ

gia-viet-nam-xe-vinfast-se-gap-phai-su-canh-tranh-rat-lon-post1267937.html

7 Review moi Truong làm vi c CUA Vingroup - NOI đây Co Phu hop v i ban? ệ ớ (2021, June 22) JobsGO Blog https://jobsgo.vn/blog/moi-truong-lam-viec-cua-vingroup/

8 Thach th c VA Co hoi CUA xe Vinfast Tai Viet Nam (2021, March 12) ứ MUAXEGIATOT

https://muaxegiatot.vn/thach-thuc-va-co-hoi-cua-xe-vinfast-tai-viet-nam.html

9 Thach th c VA Co hoi CUA xe Vinfast Tai Viet Nam (2021, March 12) ứ muaxegiatot.vn https://muaxegiatot.vn/thach-thuc-va-co-hoi-cua-xe-vinfast-tai-viet-nam.html#mucluc-thach-thuc-nao-dang-hien-huu

10.Thong CAO Bao CHI Ket qua Tong điếều tra Dan so VA nhà o Nam 2019 (n.d.) General Statistics Office of Vietnam https://www.gso.gov.vn/su- kien/2019/12/thong-cao-bao-chi-ket-qua-tong-dieu-tra-dan-so-va-nha-o-nam-2019/

11.Th c Trang moi Truong hi n Nay – Nguyen Nhan VA gi i pháp (2019, ự ệ ả August 24) Thồng câều cồắng ngh t Th nh Phát ẹ ị

https://thongcongnghethuthamcau.com/thuc-trang-moi-truong-hien-nay/#14_O_nhiem_moi_truong_khong_khi

12.Vietnam, B (n.d.) 7 đồắi TAC CUA Vinfast th c Su la nh ng AI? Brands ự ữ Vietnam https://www.brandsvietnam.com/13652-7-doi-tac-cua-Vinfast-thuc-su-la-nhung-ai

13.VinFast site (n.d.) VinFast - Mãnh li t tinh thâền Vi t ệ ệ

https://vinfastauto.com/vn_vi

14.Đâu la nh ng đồắi th CUA VinFast VF e34 Tai Viet Nam? (2021, 3) ữ ủ

oto.com.vn https://oto.com.vn/xe-moi/doi-thu-cua-vinfast-vf-e34-tai-viet-nam-articleid-upjbwc5

APPENDIX

a) Strength - Low maintenance cost

b) Opportunity – Potential market in Vietnam

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Vietnamese need to own a car from 2013 – 2017 c) Threat - Competitive disadvantage

Market share of leading automobile manufacturers in Vietnam in 2020

d) Macro environment – Economic

GDP of Vietnam in 2020

Vietnam’s GDP growth in 2020

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