FINAL EXAM ESSAY GLOBAL STRATEGIC MANAGEMENT

Therefore, companies producing bioplastics are born more and more inthe contemporary world, especially, An Phat Holdings APH is a high-tech andenvironmentally-friendly plastic company in

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FINAL EXAM ESSAY GLOBAL STRATEGIC MANAGEMENT

UEH UNIVERSITY COLLEGE OF BUSINESS SCHOOL OF INTERNATIONAL BUSINESS

AND MARKETING

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SCHOOL OF INTERNATIONAL BUSINESS

AND MARKETING

FINAL EXAM ESSAY

Course: Global Strategic Management

Lecturer : Nguyen Van Dung

Class code : 22C1BUS50313902

Student name : Dang Nhung Huyen

Student ID : 31211021086

Batch – Class : 47 – KMC02

Ho Chi Minh City, October 28 th , 2022

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Among these, plastic is an important component of both daily life and industrial production.The role of plastics in modern industries is very important Due to their superior qualities,these materials have become quite popular in a variety of industries, including automotive,electrical and electronic, manufacturing, medical, and others Besides the strong development

of production in the world, environmental concerns are always an economist's prioritybecause using plastic has many negative impacts on the environment, such as a longdisintegration process, water pollution, the eradication of helpful soil microbes, and areduction in plant life; moreover, plastic can produce harmful substances that cause cancerfor users; That means, they want to seek both financial and environmental gains Due tothat necessity, firms are now more motivated to provide “green” products that meet bothmarket demands and environmental issues; canvas bags, bamboo straws, and other productsare a few examples of those that are currently widely in use

In response to these detrimental effects, countries have been seeking out, creating, andmanufacturing “greener” raw materials in an effort to reduce harmful effects on both peopleand the environment Therefore, companies producing bioplastics are born more and more inthe contemporary world, especially, An Phat Holdings (APH) is a high-tech andenvironmentally-friendly plastic company in Vietnam and now leading in Southeast Asia

a The aims of the essay

The main aims of this essay are to know more about the global strategy of the company;research a macro environment in the target market of the industry, especially, the plastic andbioplastic industry; moreover, to learn about the competitors of Vietnamese companies inother countries And doing the final exam essay of course Global Strategy Management canhelp students to understand and remember the global strategy and entry strategy of thecompany better This essay can provide the framework for students to approach data in amore purposeful and methodical way

b Reasons to choose the company

The first reason to choose APH is this is a Vietnamese company that operates in the plasticindustry Second, the environmental issue is always a prioritized concern of countries, in

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which plastic is a necessary and indispensable material for each country And APH is acompany that focused on a production line of bioplastic products, moreover, APH hasstrength in the Southeast Asian market and aims to export to other regions like the US andEurope Finally, the plastic industry in Vietnam as well as other countries have developedstrongly so the data for the essay can be met.

c About the company

Name: An Phat Holdings Joint Stock Company

Address: Lot CN11+CN12, An Dong Industrial Park, Nam Sach District, Hai DuongProvince, Vietnam

Stock symbol: APH

B Business sectors

APH began by making thin monolayer film products, and since then, the company has beengrowing steadily With an innovative and creative mindset, APH operates in 06 key sectors:(1) – Compostable products and AnBio compounds; (2) – Packaging; (3) – Engineeringplastics & Building materials plastics; (4) – Raw materials and Chemicals for the plasticindustry; (5) – Precision engineering & molding; (6) – Industrial real estate With this plasticecosystem, APH has affirmed the brand name to bring their products to overseas marketssuch as Europe, America, Japan, Korea, Singapore, Taiwan, …

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C Business locations

APH owns a system of 16 factories producing plastic goods and materials Member unitshave headquarters, representative offices, and branches in Vietnam, Singapore, Korea,France, and the US More than 70 countries and territories make up the customer base of theGroup And APH has 16 subsidiaries on 31/12/2021

D Financial ratios

Market capitalization VND 7,248 billion (on Dec 31, 2021)Total assets VND 12,328 billion (on Dec 31, 2021)Net revenue VND 14,794 billion (in 2021)

Profit after tax VND 238 billion (in 2021)

ii Analysis of the macro environment in the target markets

a Economy and business environment

The US is the largest industrialized country in the world with a robust and competitiveeconomy (the GDP in 2021 of the US is about USD 22,99 trillion) The US is also a powerfulcountry in the exporting and import market of the US is the biggest and most varied in theworld (about USD 3,000 billion/year) The US market is not only competitive but alsodiversified, it can draw and consume a wide range of medium to high-quality products

In addition, having a population reaching 335,396,894 (October 24, 2022) people which isranked third in the globe, the US has become the market that attracts many businesses in theworld About 2,2 million of them are Vietnamese who reside in the US, which is a sizableenough group to promote the economies of the US and Vietnam With a high quality of thecustomer, the US is viewed as a prospective market that companies worldwide, like APH,wish to pursue In particular, the plastic market, which is a sector that is important to thegrowth of the US economy, has a market demand valued at USD 86,02 billion in 2021.The plastics industry in the US is among the most developed in the world, meeting bothdomestic demand and exporting to a large number of foreign countries Despite its dominance

in this sector, the US still has to import a large amount of plastic (both raw materials andfinished goods) from other countries around the world, with an estimated import turnover ofabout USD 211 billion in 2019 Vietnam is one of the partners that the US imports the mostplastic from among these countries The third-largest export market for Vietnamese plastics

in 2019 was the US, and Vietnam was one of the top five countries from which the USimported plastic The export growth rate of Vietnamese plastic products in this market has

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increased rapidly in recent years According to data from Vietnam Customs, in the first 10months of 2020, the United States surpassed Japan to become Vietnam's second-largestexport market of plastic products In the first 7 months of 2021, Vietnam’s top plastic productexport market was the US, which accounted for 36.8% of the total product export turnover,reaching USD 1,01 billion, an increase of 93.4% over the same period in 2020 And in thefirst 8 months of 2022, product export turnover reached 1,562 billion USD, which accountedfor 40.7% of Vietnam’s total export turnover When compared to the same time period in

2021, the export turnover increased by 31.9% Potential goods that could contribute to exportturnover include household plastic (export to the US market reached 71,3 million USD in2020), plastic bags (reached 50,4 million USD), tarpaulin (reached 29,2 million USD),builder’s ware of plastic (reached 23,2 million USD), plates, sheets, film (reached 22,9

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million USD) and articles for the conveyance or packing of goods (reached 19,1 millionUSD).

Although the US market has a large consumption capacity, Vietnam is still in the topcountries that are imported plastic from the US which shows the quality of goods as well asopportunities of Vietnam In particular, APH realizes the importance of the US market in itsglobal strategy, so during 10 years of conquering the US market, APH has constantly strived

to provide quality products, and certified present itself in this potential market In addition,APH has operating interests in all sectors that account for important parts of the exportturnover of plastic products to the US

Additionally, in the US, the plastic sector is crucial It is the third-largest manufacturing

industry and generated more than a million jobs in 2019 The highest number of employees inPicture 1 Export turnover of plastic products in the US 2019 - 2020 - Vietnam Customs

Picture 2 Sectors' total revenue in two years 2020 and 2021 - Annual report of APH

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the US plastics industry is in California, Ohio, Texas, and Michigan, with more than 70,000people employed in each state At the state level, California's plastic industry workforce is thelargest, with an estimated 79,700 workers in 2019 Second, in terms of the workforce is Ohiowith 74,500 workers Texas comes in third with an estimate of 71,400 Indiana and Michiganeach estimated 16 plastic workers for every 1000 non-farm workers Additionally, shipments

by the US plastics industry generate more than 400 billion USD annually In 2021, the market

for producing plastic and plastic granules was estimated to be valued at 74 billion USD,having slightly recovered from 2020 and the financial harm brought on by COVID-19 Thatall shows the importance and necessity of the plastic industry in the US

The plastic industry's rapid development coexists with the issue of plastic waste The US islikewise looking for a solution to this issue as a contemporary country leading greenconsumer trends And as a result of this pressure, the bioplastics sector was established andhas continued to expand Of the more than 367 million tons of plastic produced annually, thebioplastics market still accounts for less than one percent (according to World plasticsproduction 2020 and Plastics Europe 2021) The market for bioplastics, however, is stillexpanding in contrast to the minor reduction in the global output of conventional plastic.Bioplastics market growth is mainly driven by increasing demand and the emergence of morecomplex product applications Due to the rising demand for bio-based packaging in the foodand consumer products sectors, the US bioplastics market is among those that are anticipated

to expand significantly over the course of the projected year Bio bags and bioplastics havehigher tensile strength and are environmentally friendly so it is consequently anticipated thatPicture 3: Market size of plastics and plastic pellets manufacturing industry in the US 2012 - 2022 (Unit: USD)

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the demand for bioplastics would grow over time This is also an advantage for APH whenproducing bioplastic products is the way that APH wants to develop strongly in the USmarket.

b Attractiveness

About the market, the plastics market demand in the US was valued at USD 86,02 billion in

2021 The existence of the well-establish automotive, electronics, aerospace and defenseindustries is what accounts for the high market share Besides, population growth iscorrelated with rapid urbanization and industrialization has encouraged an increase inspending on construction to satisfy expanding infrastructure needs which has led to anincrease in demand for builders’ ware of plastics Those elements play a significant role increating a wealth of chances for plastic companies that want to operate in the US

Regarding resources, the US is one of the leading countries in modern technology where

businesses can learn about advanced production technology that promotes the growth of theplastic industry One of the US’s advanced technologies for the plastic industry isnanotechnology It is in use to reinforce existing plastics Besides, it is “additivemanufacturing” also known as 3D printing, is used by numerous industries to quickly developminor designs It enables companies to make design changes before putting the products onthe market Next is “end-to-end tracking” Throughout a product's life cycle, blockchaintechnology is perfect for ensuring the quality of the raw ingredients and finished goods Inaddition, this technology can show the correct dosage; monitor and report on the partproduction process; even deliver real-time data such as time, cost, waste, and standardscompliance Another technology that can solve the environmental problem, when plasticwaste is currently a global concern, is biopolymers also known as organic polymers While

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ordinary polymers are made of synthetic compounds, making them very strong andlightweight but at the expense of not being easily biodegradable, organic polymers do nothave that issue It is easily broken down into organic compounds that the environment is able

to absorb The US has become a target market for numerous plastic manufacturing companiesthanks to advancements in modern plastic production technology

Plastic is very important to the US economy According to the 2020 Size & Impact Reportfrom the Plastics Industry Association (PLASTICS), in 2019 the plastic industry in the USaccounted for USD 432 billion in goods and 1,003,000 in jobs Due to the industry's rapidgrowth, employment in the sector rose as well, reaching an estimated 1.5 million people andUSD 549 billion in shipments (based on the most recent data from the prior year) Theincrease in natural gas is one of the key factors contributing to the development of the plasticsindustry in the US Access to affordable, reliable natural gas is ensuring profitability andminimizes risk for the industry as a whole In many parts of the US, gas is vital to thefunctioning of many industries And according to SPI, over the coming years, the plasticsmarket will continue to grow rapidly both domestically and globally, driven mostly by greateruse in transportation, healthcare, packing, and other industries The cost in the US for theplastics sector has decreased due to the country's low cost of natural gas and oil incomparison to other locations, making it a more competitive player in the global plasticsmarket

There is no denying the growth of the plastics industry in the US, but beyond the gains to theeconomy, plastics also have a negative influence on the ecosystem and the environment inwhich people live After California and Oregon, this is the third city in the US to impose aban on environmentally hazardous goods Therefore, in 2020, the US recently made progress

in reducing plastic waste when New York city’s rule prohibiting the use of single-use plasticbags goes into force on March 1 Currently, the New York City government is also increasingthe propaganda for the new campaign, including using the keyword #BYOBagNY (usingeco-friendly bags) on social networks despite the fact that many shops have posted warningsregarding the shift in consumer shopping habits

Besides, a recent executive order on the launch of a new program was also signed byPresident Joe Biden that encouraged research and application of biotechnology This isregarded as a reliable step for bio-based products to enter the biggest and most competitivemarket in the world According to this law, the US government will enhance support for andencourage enterprises to create product lines with biological origins to create jobopportunities for US workers Infrastructure development for the bioplastics sector, along

Tiêu đề	Global Strategic Management
Tác giả	Dang Nhung Huyen
Người hướng dẫn	Nguyen Van Dung
Trường học	Ueh University College Of Business
Chuyên ngành	International Business And Marketing
Thể loại	Essay
Năm xuất bản	2022
Thành phố	Ho Chi Minh City

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