BUSINESS PLAN FOR HCAC PHARMACEUTICAL BRANDING AND SERVICE COMPANY

BUSINESS PLAN FOR HCAC PHARMACEUTICAL BRANDING AND SERVICE COMPANY Aware of the markets need to make marketing activities in the pharmaceutical industry more professional and more innovative, HCAC was born based on 12 years of founder experience through pharmaceutical organizations at home and abroad, as well as a combination of bringing creative elements within the framework, desire to give pharmaceutical companies an image of the company the product in the perfect way, professional manner with the most optimal cost and time. 15% of marketing costs go to the pharmaceutical industry, and at least 30% of this marketing cost will be spent on completing and homogenizing the image of products and companies when it comes to medical personnel. As a result, the 270 million markets are a piece of cake in the pharmaceutical industry that any company has not properly and professionally exploited. This is the market that HCAC wants to exploit.

BUSINESS PLAN FOR PHARMACEUTICAL BRANDING AND SERVICE COMPANY

HCAC-A Research Project Presented in Partial Fulfillment of the Requirement

for the Degree Master of Business Administration

Submitted by: [Le Thi Thuy Hang]

UBIS

[May], [2022]

EXECUTIVE SUMMARY

Pharmaceuticals is an essential industry with a high growth rate in Vietnam Despite thevolatility of all microeconomic and macroeconomic factors, pharmaceuticals have alwayshad a sustained and noticeable development over time With a scale of more than US$6billion by 2021 and double-digit growth rates even in times of crisis caused by the recentwar and pandemic, the pharmaceutical industry in Vietnam has demonstrated why foreigninvestors have chosen this as a potential and promising land for a wise investment

On the other hand, due to that macro factor and the rapid development, Vietnam'spharmaceutical industry also contains the body points that need to be improved topromote promising development in the next decade

With a market capacity of $6 billion by 2021, an average of about 20% of the cost isinvested in marketing activities to bring the drug to patients The peculiarities ofmarketing in the pharmaceutical industry are reflected in the fact that the object of theindustry is medical personnel Unlike other professions that require a high level ofcreativity, marketing in the pharmaceutical industry requires a combination of 3 elementsthat can be summarized in the word K.I.P: Professional knowledge in the pharmaceuticalindustry (K: Knowledge); Imagination (I: Images); and practicality (P: Practicality).Because of this combination, the marketer in the pharmaceutical industry must often besomeone with an educational background in the medical-pharmaceutical industry andmust have experience in the medical-pharmaceutical industry

This requirement makes it difficult for an independent company to provide services to thepharmaceutical industry The lack of professional understanding of the legal corridor ofthe pharmaceutical industry is a seemingly insurmountable obstacle for marketingcompanies when approaching pharmaceutical companies Meanwhile, pharmaceuticalcompanies must use their internal resources to train marketers in an often unprofessionaland time-consuming way

Aware of the market's need to make marketing activities in the pharmaceutical industrymore professional and more innovative, HCAC was born based on 12 years of founderexperience through pharmaceutical organizations at home and abroad, as well as a

combination of bringing "creative elements within the framework", desire to givepharmaceutical companies an image of the company / the product in the perfect way,professional manner with the most optimal cost and time.

15% of marketing costs go to the pharmaceutical industry, and at least 30% of thismarketing cost will be spent on completing and homogenizing the image of products andcompanies when it comes to medical personnel As a result, the $270 million markets are

a piece of cake in the pharmaceutical industry that any company has not properly andprofessionally exploited This is the market that HCAC wants to exploit

In order to be able to systematize the necessary main ideas and improve thestrategic thinking for HCAC, I would first like to express my sincerest thanks to Dr.Quang Vinh Pham and Dr Dien Trung Son He has spent much time listening,commenting, and sharing all the sincerest advice to help me complete this article

I also thank my colleagues in the past, at major pharmaceutical companies local andinternational, for helping me on my career path so that I gained excitingexperiences in this particular industry

I would like to thank my colleagues and colleagues at HCAC, who have been with

me from the early days of the company's founding to the present The four yearswent, and we keep moving forward our HCAC

I would also like to thank UBIS University and my UBIS MBA intake 42classmates in Vietnam for enabling me to learn from academic to practicalknowledge to include in this article

Thank you to my parents and the little angel, 7-year-old daughter Suri, for making

my life impossible to be more perfect and exciting

Sincerely,

Le Thi Thuy Hang

1 Introduction

1.1 Reasons for choosing a startup idea

Pharmaceuticals is an essential industry with a high growth rate in Vietnam Despite thevolatility of all microeconomic and macroeconomic factors, pharmaceuticals have alwayshad a sustained and noticeable development over time With a scale of more than US$6billion by 2021 and double-digit growth rates even in times of crisis caused by the recentwar and pandemic, the pharmaceutical industry in Vietnam has demonstrated why foreigninvestors have chosen this as a potential and promising land for a wise investmen Unlikeother professions that require a high level of creativity, marketing in the pharmaceuticalindustry requires a combination of 3 elements that can be summarized in the word K.I.P:Professional knowledge in the pharmaceutical industry (K: Knowledge); Imagination (I:Images); and practicality (P: Practicality) Because of this combination, the marketer inthe pharmaceutical industry must often be someone with an educational background inthe medical-pharmaceutical industry and must have experience in the medical-pharmaceutical industry

This requirement makes it difficult for an independent company to provide services to thepharmaceutical industry The lack of professional understanding of the legal corridor ofthe pharmaceutical industry is a seemingly insurmountable obstacle for marketingcompanies when approaching pharmaceutical companies Meanwhile, pharmaceuticalcompanies must use their internal resources to train marketers in an often unprofessionaland time-consuming way

Aware of the market's need to make marketing activities in the pharmaceutical industrymore professional and more innovative, HCAC was born based on 12 years of founderexperience through pharmaceutical organizations at home and abroad, as well as acombination of bringing "creative elements within the framework", desire to givepharmaceutical companies an image of the company / the product in the perfect way,professional manner with the most optimal cost and time

1.2 About HCAC

- Name of company: HCAC Limited Company

- Abbreviation: HCAC Ltd Co.

- Address: Flooth 15th, R1508 Vincom Center, 72 Le Thanh Ton, Ben Nghe

Ward, Distrist 1, Ho Chi Minh city, VietNam

- Goal in next 3 years: 2023-2025

 Gain 10% marketing expenses from local pharmaceutical (27 million USD) 420-440-500k

 To be successful in connection at least 100 pharmaceutical products

to clients’ HCAC company.

1.2 Main Business Fields

1.2.1 Branding Services in pharmaceutical industry

Currently, the problem of environmental pollution is increasingly severe; food hygiene ispoor, population density is living in big cities, so diseases are increasing Therefore,paying attention to health is getting more and more attention, and users have moreopportunities to choose the best healthcare products/services, so in recent years marketinghas been increasingly popular among consumers Pharmaceutical companies pay moreattention, the competition density between domestic and foreign pharmaceuticalcompanies is increasing, and companies promote marketing strategies on products andbrands to attract the attention and trust of pharmaceutical companies Doctors,Pharmacists, and patients with the company's products Pharmaceutical companies have

never exploited brands intensely, only focused on creating products and promotingproduct features, but the life cycle of pharmaceutical products is concise (about 10-17years

The differentiating factors of Pharmaceutical products:

Medicines are special goods

Doctors, Pharmacists decide most of the purchase

Under the strict management of the Health Sector (Pharmacy Law), advertising contentmust comply with the state's regulations on drug advertising

There are many subjects with different characteristics, qualifications, and requirements.Marketing in Pharmacy is a combination of essential marketing and specializedknowledge of Pharmacy Professional Pharmaceutical Marketers apply tools in Marketing

to come up with appropriate marketing strategies and plans Moreover, of course, therewill be separate regulations to maintain and develop in each industry

Therefore, taking care of customers in the Pharmaceutical industry even more, requirespersonnel who have a thorough understanding of the medical-health field and at the sametime have the high professional expertise to listen and advise customers on their problemstheir health issues

In the Pharmaceutical industry, Marketing activities promote drugs and drug products tosatisfy customer needs for health purposes Therefore, the pharmaceutical marketingprinciple is that the drug is sold to the right audience, type, price, and place Marketing inthe pharmaceutical industry costs much more than the investment costs for R&Ddepartments (research and launch of new products), so professional pharmaceuticalmarketers need to use different campaigns targeting medical staff & patients

HCAC, with its founder having more than ten years of experience in the pharmaceuticalindustry, provides marketing solutions to build brands for pharmaceutical companies,including content:

Build and optimize the pharmaceutical industry-standard website

The importance of a standard SEO website is undeniable for all industries However, itmust be invested more carefully in the pharmaceutical industry because this is an area

that directly affects health and is subject to high competition HCAC will help businessesoptimize websites with SEO standards in terms of content and standards in interface,colors, and features of the pharmaceutical industry.

Brand development in the digital environment

HCAC plans to build a pharmaceutical communication strategy to promote the presence

of pharmaceutical brands in the digital environment The company has the advantage ofhaving a good relationship with many newspapers, television stations, media productionunits, and product distribution systems with the GPP pharmacy chain

Ads Facebook, Google, Zalo, Tiktok

The image and personality of the brand are developed by HCAC, from the FanpageTikTok channel to the Zalo Official Account We execute advertising campaigns,optimize funding, and provide daily reporting data week for customers HCAC has ateam of experts with at least five years of pharmaceutical marketing experience,specializing in advertising for the pharmaceutical and dietary supplement industry

Digital marketing, omnichannel marketing

In addition to building a brand on many popular social networking platforms that attract alarge amount of traffic every day, HCAC also supports a range of services and contentmarketing on mass media such as PR press, wrote talk show scripts and cooperated withlocal TV stations such as VTV, HTV, and THVL to promote products Collaborate withexperts, KOLs, and KOCs to win customers' trust

1.2.2 Support for HealthCare Association/ Organization in events

Organizing events helps companies promote their image to the public and, at the sametime, create an invisible bond with customers and partners Each event has its color,contributes to polishing the brand name and product, and is a part of the business's entiremarketing and promotion strategy This is an important point to create opportunities tomeet and exchange, promote two-way information and strengthen relationships

The symposium/ Scientific conference which would be organized by healthcareAssociation included many activities and special tasks such as: to invite professionals forgiving presentaion, disussion with professionals for final presentation based on pharma

regulation, medical knowledge, and the target audience… These tasks can finish only ifthe organiser is an expert in pharma/ medical field We also get permission of SOH/ DAV

to organise the event It takes time and would be difficult for a normal event company toget these licenses

1.3 Keys to success

The company aims to provide specialized marketing services for businesses in thepharmaceutical field with a team of experts related to the pharmaceutical industry to helpbusinesses optimize marketing costs At the same time, it improves the Marketing brandand increases the pharmaceutical brand's recognition with customers The companyprovides customers with professional service experiences, understands customer needs,and becomes a bridge between pharmaceutical enterprises and customers The companystrives to help customers diversify the target market with many different types ofcustomers, from doctors and medical staff to patients

1.4 Timeline to start

The company is expected to be established on June 30, 2022

2 Business environment Analysis

2.1 Overview of the pharmaceutical industry in Vietnam

+ According to IQVIA, the value of Vietnam's pharmaceuticals market was VND103,912 billion (+2% YoY), achieving a compound annual growth rate (CAGR) of 6% in

2018 and 2020

+ The growth rate of the pharmaceutical industry in 2020 slowed down due to thetightening of infection control measures in hospitals and the decrease in income ofworkers as business activities are affected because of the pandemic

+ The pharmaceutical production and business system are expanded with about 250manufacturing plants, 200 import-export facilities, 4,300 wholesale agents, and more than62,000 retail agents

+ETC channel (The drug channel for treatment in a hospital) is the main growth driver ofthe industry in 2020, with an increase of 5% in 2020 to about VND 76 trillion, achieving

a CAGR of 9% in the period 2018-2020

+ Although the OTC(Over-the-counter) channel had an unusual growth before socialisolation, focusing on pain relief, antipyretic products, antiseptics, hand sanitizers, andimmune enhancement drugs However, the decline in aggregate demand reduced thevalue of OTC channels in 2020 by 9% to VND 28 trillion

In 2020, the size of the ETC auction channel was estimated to reach $5.5 billion, whilethe OTC retail channel only reached $1.8 billion

At the end of 2019, the Ministry of Health issued Circular 15/2019/TT-BYT regulatingbidding for drugs to accelerate the transition from foreign to domestic drugs throughchanges that benefit manufacturing establishments export EU-GMP standards Manypharmaceutical enterprises have had to perform the reverse problem of accelerating thetransition from the ETC to the OTC market to avoid policy changes in the health sector,including regulations on the selection of winning drugs in pharmaceutical products.Hospitals (ETCs) prioritize low-priced drugs

Realizing the potential of the non-prescription drug market, recently in Vietnam, therehas been a strong development of drugstore chains with big players in the pharmaceutical

retail industry such as Pharmacity, An Khang, Long Chau FPT

Building a chain of pharmacies that have GPP (Good Practice Pharmacy) standards will

be the future trend When people's living standards increase, they will look to reliablepharmacy addresses to listen to pharmacists for drug advice

Vietnam is classified in the group of Pharmerging Markets by IQVIA Institute - a group

of 17 countries with the highest growth in the pharmaceutical industry in the world In thegroup of Pharmerging Markets, divided into three subgroups, Vietnam is ranked in thethird group of 12 countries - with a growth rate of 14%, and Vietnam is only behindArgentina and Pakistan

The growth potential of the pharmaceutical industry is being appreciated by severalfactors such as:

• The population is entering the "aging" phase Vietnam's golden population is currently

at its peak and is entering a period of rapid population aging Since 2011, Vietnam hasentered the aging phase when the number of people over 60 years old accounts for 9.9%

By 2018, this number had increased to 111.95% According to the General Department ofPopulation, Vietnam will become a country with an aging population by 2038, with theproportion of people aged 60 and over reaching over 20% Even by 2049, the proportion

of older adults will account for about 25% of the population

• Vietnam's average drug spending is currently only about 75 USD (2019), much lowerthan the world average With a large population and an economy with excellent growthpotential, the Vietnamese pharmaceutical market is considered to have much room fordevelopment in the future

Vietnam's current population is about 97.3 million people, its per capita income is 2,750USD (2020 data), is one of the countries in the region with the fastest economic growth.The proportion of the population is aging, income is increasing, and awareness isincreasingly focused on health issues Because expenditures on health needs also increasebecause of that In 2005, per capita, drug spending was $9.85 In 2010 it was $22.25, and

in 2019 it was $75 The average growth rate in the period 2010-2019 is 14.8% Maintain

an average growth rate of at least 14% by 2028, reaching 85 USD in 2020 and 248 USD

in 2028.

As assessed by Vietnam Report, the global outbreak of Covid-19 has shown the primacy

of healthcare and the healthcare industry in unprecedented ways On the one hand, ithighlights the critical role the pharmaceutical and innovative drugs industry plays inensuring global safety and security On the other hand, it also exposes gaps in the globaleconomy, including healthcare services

The ability to control the epidemic is still the leading factor affecting pharmaceuticalbusiness results next year According to Vietnam Report, the current epidemic is stillcomplicated, with new strains appearing, but with the Government pushing to completevaccine coverage by early 2022, adding a new economic stimulus package, The strategicshift from Zero Covid to "living together safely with the epidemic" according toResolution 128/NQ-CP will help the economy in general and the pharmaceutical industry

in particular recover and create growth momentum in 2022 In addition, The growthdriver for the pharmaceutical market also comes from the young population structure ofVietnam, which is rapidly aging, people are increasingly interested in health care, andevents about environmental pollution, natural disasters and epidemics, leading to anincrease in spending on health BMI Research forecasts that the size of Vietnam'spharmaceutical market will reach USD 7.7 billion in 2021 and USD 16.1 billion in 2026,with a compound growth rate of 11% in VND and will continue to be in the group of 20countries with the most robust and most stable growth in the world In addition, the new-generation Free Trade Agreements (FTAs) that Vietnam has signed and the recent wave

of mergers and acquisitions (M&A), according to experts, will also be the driving forcebehind the growth growth of the pharmaceutical industry in the coming time whencreating conditions for pharmaceutical enterprises to expand export markets, developdistribution networks, access more capital, technology, and high-quality human resourcestowards product lines with higher standards such as EU-GMP, Japan-GMP, and improvecorporate governance skills

However, in order to create new and more sustainable values for the next average period,enterprises need to invest in researching new drugs and expanding drug production lines

to meet international standards; increasing the application of technology and automation

in production and business; strengthening financial and supply chain risk managementmeasures; training and developing high-quality human resources; implement strategiesfor sustainable development and environmental protection; promote the export of drugsand medical equipment and develop and expand the OTC channel (direct sales throughpharmacies)

2.1 External environment factors

2.1.1 The macro factors

Political factors

Vietnam is a one-party state ruled by the Communist Party of Vietnam The CommunistParty of Vietnam provides strategic direction and decides on all major policy issues thatthe government will then implement The country is led by the so-called "four pillars":the General Secretary, the President, the Prime Minister, and the President of the NationalAssembly General Secretary Nguyen Phu Trong currently holds two positions: Head ofthe Communist Party of Vietnam, the most powerful position in Vietnam and he has justbeen re-elected for another 5-year term (from February 2021) The policy was made byPolitburo based on consensus and currently prioritizes stability, maintaining the politicalstatus quo, domestic economic development, and international integration Regionalsecurity, especially about the East Sea Party leaders are elected every five years at theNational Party Congress The National Party Congress sets out the general direction ofthe Government's economic and social policies for Vietnam in the next 5 years The mostrecent congress was held in February 2021 Then at the end of 2021, 500 delegates will

be selected to form the National Assembly, Vietnam's legislative body, and the body thatconfirms the appointment of ministries Head of Government (Gov, 2020)

Vietnam is one of Southeast Asia's more politically stable countries Vietnam is ruled bythe Communist Party of Vietnam Its main goal is economic growth, in addition tomaintaining the one-party state system, territorial integrity, and social order Vietnamaims to achieve middle-income status by 2025, upper-middle-income status by 2030, anddeveloped, high-income status by 2045 Vietnam recognizes that much work remains to

be done The only way to achieve this goal is through economic and long-termgrowth Laws need to be improved, as does information technology, telecommunications,and transport infrastructure Climate change, natural disasters, and cybersecurity are themain threats (Gov, 2020).

The advertising of drugs on radio, television, electronic newspapers, and websites isprescribed in Articles 22 to 23, Circular No 13/2009/TT-BYT dated September 1, 2009,

of the Ministry of Health, guiding drug information and advertising activities (Circular13) Accordingly, drugs that fully meet the following conditions may be advertised onradio and television: Must be drugs with main active ingredients on the list of activeingredients registered for advertising on radio and television; the drug's ingredients do notcontain active ingredients on the list of narcotic drugs, list of psychotropic drugs, list ofprecursors, list of radioactive drugs according to current regulations

Drug advertisement contents must satisfy all information specified at Points a, b, c, e, i,and k, Clause 2, Article 21 of Circular 13; Particularly, Clauses a, b, c, e, and k Clause 2,Article 21 must be read aloud and clearly Suppose a drug ingredient has three or moreactive ingredients, depending on the duration of the broadcast The main active ingredientcan be read, or the generic names of vitamins, minerals, and medicinal herbs can be read

In case of advertising on local radio and television stations, the advertising unit mustnotify the local Department of Health in writing, enclosed with the receipt of the drugadvertisement registration dossier from the Drug Administration of Vietnam and theadvertisement's content advertisements or scripts with the approval stamp of the DrugAdministration of Vietnam

Drug advertising on electronic newspapers, enterprise websites, and service providers isspecified in Article 23, Circular 13: Drug trading units may only advertise drugs that theytrade business on their legitimate website It is not allowed to advertise drugs that they donot trade A drug trading unit or an authorized unit may only advertise drugs on thewebsite of an advertising service provider when the advertising service provider has aninternet information service provision (ICP) license from the Ministry of Information andCommunications Information - Communication and Certificate of business registration

of advertising services by the law The advertisement of drugs on electronic newspapers,websites of enterprises, and websites of advertising service providers must be done in aseparate column This category must clearly state: "Page dedicated to drug advertising,"This text must be bold with a larger font size than usual and appear continuously at thetop of the page.

Advertising on electronic newspapers, enterprise websites, and advertising serviceproviders must satisfy the following conditions: Drug advertising on the website mustsatisfy the provisions of Clause 2, Article 21 of Circular 13 Drug advertisement in thisform must be separate, not overlapping or interspersing many drugs simultaneously toavoid misunderstanding Drug advertisements on website in the form of video clips mustsatisfy the provisions of Article 22 of Circular 13

Economic

The development of Vietnam over the past 30 years is remarkable Economic andpolitical reforms since 1986 have spurred economic development, rapidly transformingVietnam from one of the poorest countries in the world to a low-middle-income country.From 2002 to 2018, GDP per capita increased 2.7 times, reaching over 2,700 USD in

2019, with more than 45 million people escaping poverty The poverty rate droppedsharply from more than 70% to less than 6% ($3.2/day at purchasing power parity) Themajority of the remaining poor in Vietnam are ethnic minorities, accounting for 86%.Due to extensive economic integration, Vietnam's economy was heavily affected by theCOVID-19 pandemic but also showed considerable resilience GDP growth is estimated

at 2.9% in 2020 Vietnam is one of the few countries in the world with positive economicgrowth, but the pandemic has left long-term impacts on households - income of about45% of surveyed households decreased in January 2021 compared to January 2020 IfVietnam successfully controls the spread of the virus, export-oriented manufacturingindustries perform well, and domestic demand recovers strongly, the economy isexpected to grow by 6.6 percent in 2021

Due to extensive economic integration, Vietnam's economy was heavily affected by theCOVID-19 pandemic but also showed considerable resilience GDP growth is 2.9% in

2020 Vietnam is one of the few countries in the world with positive economic growth,but the pandemic has left long-term impacts on households - income of about 45% ofsurveyed households decreased in January 2021 compared to January 2020 If Vietnamsuccessfully controls the spread of the virus, export-oriented manufacturing industriesperform well, and domestic demand recovers strongly, the economy is expected to grow

by 6.6 percent in 2021

Social factor

The 2019 population and housing census was conducted at 0:00 on April 1, 2019,according to Decision No 772/QD-TTG dated June 26, 2018, of the Prime Minister This

is the fifth population and housing census in Vietnam since the country's reunification in

1975 The 2019 population and housing census collect basic information on populationand housing throughout the territory of the Socialist Republic of Vietnam to serve theplanning of socio-economic development policies of the country and monitor theSustainable Development Goals

According to the announcement of the General Statistics Office of Vietnam (2019) somekey indicators of the results of the 2019 Population and Housing Census: (1) The totalpopulation of Vietnam is 96,208,984 people, of which, male population is 47,881,061people, accounting for 49.8% and female population is 48,327,923 people, accounting for50.2% Vietnam is the third most populous country in Southeast Asia and the 15th in theworld After 10 years, the population of Vietnam increased by 10.4 million people Theaverage annual population growth rate in the period 2009 - 2019 is 1.14%/year, slightlydown compared to the period 1999 - 2009 (1.18%/year) (2) The total number ofhouseholds across the country is 26,870,079 households, an increase of 4.4 millionhouseholds compared to the same period in 2009 On average, each household has 3.6people/household, 0.2 lower person/household compared to 2009 From 2009 to 2019,the average growth rate of the number of households was 1.8%/year, 1.2 percentagepoints lower than in the period 1999 - 2009 and is the same period the period with thelowest rate of population growth in the past 40 years (3) Vietnam's population density is

290 people/km2, an increase of 31 people/km2 compared to 2009 Vietnam is the third

most densely populated country in Southeast Asia, after the Philippines (363 people/km2)and Singapore (8,292 people/km2)

Vietnam is witnessing rapid changes in population and social structure Vietnam'spopulation has reached 96.5 million in 2019 (from about 60 million in 1986) and isexpected to increase to 120 million by 2050 According to the results of the 2019Vietnam Census, 55.5% of the population was under the age of 35, with an average lifeexpectancy of nearly 76 years old, higher than other countries with similar incomes in theregion But the population is aging rapidly A growing middle class – currently accountsfor 13% of the population and is expected to grow to 26% by 2026 Besides, Vietnam isone of the countries with the fastest population aging rate, forecast by 2050, the agegroup over 65 will increase 2.5 times (Word Bank, 2020)

The health sector has also made great progress as living standards have improved.Between 1993 and 2017, the infant mortality rate decreased from 32.6 to 16.7 (per 1,000live births) Life expectancy at birth increased from 70.5 to 76.3 years old between 1990and 2016 The population health care coverage index was 73 - higher than the regionaland world averages - with 87 % of the population with health insurance (Word Bank,2020)

Waste management and pollution treatment are becoming more difficult due tourbanization, economic growth, and rapid population growth In less than 15 years,Vietnam's waste volume will have doubled There's also the issue of plastic waste in theoceans The Mekong River is estimated to be responsible for 90 percent of global oceanplastic waste Vietnam is also one of the ten countries in the world most affected by airpollutionWater pollution is having serious consequences on the productivity of importantindustries and people's health (Word Bank, 2020)

The government is working to reduce the environmental impact of growth and to adapt toclimate change effectively Many strategies and plans are being implemented to promotegreen growth and the sustainable use of natural resources

Technological factors

Flourishing start-up culture, international investments, low costs, government initiatives,

and an educated workforce have been driving an IT revolution in Vietnam for a longtime The country has a number of tech parks such as Da Nang Hi-Tech Park and SaigonHi-Tech Park that accommodate offices and factories for more than 700 companies,including 220 foreign companies that specialise in IT and software engineering, hardwaremanufacturing, and infrastructure development.

Vietnam is now the eighth largest provider of IT services in the world Five IT industriesthat are currently trending are fintech, artificial intelligence, E-commerce, softwareoutsourcing, and education technology (Samuel, 2019) However, as many companies areshifting manufacturing operations to Vietnam, a fierce battle for skilled labour is wellunderway, exacerbating an existing shortage of skilled labou

However, when compared to other goods and service markets in Vietnam, the Scienceand Technology market is currently the slowest growing The following characteristicsshow how Vietnam's Science and Technology market is still in its early stages ofdevelopment (Nguyen Chi Hai, 2020)

Firstly, the science and technology market supply is dependent on skills, and humanresources are still limited

The number of high and medium-level technicians in Vietnam still accounts for a smallproportion of the total number of employees, the level of improvement is not much overthe years The proportion of advanced technical expertise accounted for about 7.2% ofemployees in 2017

Currently, there are 1,629 public scientific research organizations nationwide with141,000 people;1,961 non-public scientific research institutions employing more than23,000 employees

Despite having a large and healthy workforce, Vietnamese worker lack the necessaryskills and innovation capacity This is one of the disadvantages of Vietnamese workersattempting to integrate into global labor markets According to a 2019 WEF assessment,Vietnamese people's digital skills are rated at 3.8 points on a scale of 7 (ranked 97), butcritical skills in teaching are only at 3 points on the scale score 7 (ranked 106 out of 141economies)

The number of enterprises participating in research in the field of science and technologycurrently accounts for nearly 9%, this proportion tends to increase, however, theproportion of enterprises working directly related to scientific research and developingonly about 351 enterprises, the number is too small compared to the scale of over 560thousand enterprises operating with business results in Vietnam today (General StatisticsOffice, 2019).

Secondly, the cost of creative innovation activities through R&D will determine thegrowth of the science and technology market

The total state budget expenditure on science and technology from 2011 to 2015 was69,592 billion VND, equivalent to 2% of total budget expenditure Developmentinvestment expenditures account for only 44% of total expenditures, while non-businessexpenditures account for 56% Spending on science and technology in the state budget isguaranteed to be 2% of total state spending from 2016 to 2018 In which the structure ofdevelopment investment / non-business expenditure on science and technology is still at a40/60 ratio

The innovation picture of Vietnam is quite blurred compared to other countries in theregion when the number of patents and the number of patents applied forcommercialization in Vietnam are quite far from other countries The reason can beexplained, the level of spending on R&D activities in Vietnam depends on the role of thestate, almost lacking the hands of the private sector in the science and technology market.Meanwhile, compared to 3.3 percent of Japan's GDP, 2.2 percent of Singapore's GDP,and 2.1 percent of China's GDP, Vietnam's relative R&D expenditure in 2018 was only0.4 percent of GDP In Korea, R&D spending accounts for 4.2 percent of GDP, thenumber of patents applied to brands outnumbers Japan's with 4378 inventions per millionpeople, and per capita income has reached 29,891 USD (in 2018)

Therefore, for Vietnam, mobilizing the participation of the private sector in spending onR&D activities is very necessary for the context of 4.0

Thirdly, the demand for products in the science and technology market is still quiteprimitive

The market of Science and Technology 4.0 still depends on market demand, however, inVietnam, market demand is still developing quite primitively due to the incompletemarket mechanism, the level of international integration of most businesses is not high.Not really facing fierce competition, so the demand for science and technology products

is still low

Fourthly, the industry structure of Vietnamese enterprises is slow to transition to 4.0.With the strong and small growth of Vietnamese businesses and the current industrystructure, Vietnamese enterprises will hardly have the opportunity to participate inindustries brought by 4.0

The challenge for Vietnam will be falling into the trap of cheap labor and developingimmediate advantages to develop occupations in traditional fields compared to high-risk4.0 industries Moreover, the barrier of technological know-how for the followingcountries prevents them from jostling to develop industries with new technologies in thecondition that these countries cannot research and develop technology for themselves.Fifthly, the intermediary institutions in the science and technology market operate in alack of methodical and small scale, unable to connect market supply and demand Forexample, at present, science and technology pavilions and exhibitions take place poorly

in terms of organization, attracting few businesses, schools, and research institutes toparticipate

Along with the explosive development of science and technology, followed by the advent

of modern media such as Facebook, zalo, and youtube, which has had a substantialimpact on marketing activities The world is entering the era of digital marketing Thisdirectly affects HCAC's business activities

2.1.2 The micro factors

Threat of competitive rivalry

According to the latest statistics, if only considering the pharmaceutical industry, thedomestic pharmaceutical market is on an optimistic growth trajectory Vietnam is one of

21 countries classified by IMS Health in the group with the highest growth in thepharmaceutical industry This group is considered the driving force for the world