485 Business and Business Environment ASSIGNMENT 2

485 Business and Business EnvironmentIntroduction In this exercise will analyze the modern examples to demonstrate the influence impact of positive and negative macro environment to business operations. Identify the internal strengths and weaknesses of particular firms and explain their interactions with external macro factors. For example, to apply the company to the above problems, Bao Viet Insurance Company will be selected for analysis. 4.1 PESTLE framework General introduction Analysis of PESTLE is a form of strategic planning to decrease market risk. Companies can achieve useful advantages in conceptualization, product creation, product releases, content marketing campaigns and other aspects by analyzing the political, fiscal, social, technical, legal and environmental aspects, which in turn help improve the effectiveness of the company. The benefits of the PESTLE analysis model include cost efficiency, a better understanding of industry, alertness to risks, and how to take advantage of them. This concept was applied by Bao Viet Insurance to create exclusive rewards and qualities for the business while marketing goods to users easily and better at the same time......

ASSIGNMENT 2 FRONT SHEET

Unit number and title Unit 1: Business and Business Environment

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Introduction 2 4.1 PESTLE framework 3

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2.1

4.2 Impacts of macroenvironment 7

4.3 Recommendations 8

5.1 SWOT analysis 9

5.2 Porter's Five Forces Model 10

6.1 Fiscal policy 11

6.2 Monetary policy 12

6.3 Trade policy 13

References 14

Introduction

In this exercise will analyze the modern examples to demonstrate the influence / impact of positive and negative macro environment to business operations Identify the internal strengths and weaknesses of particular firms and explain their interactions with external macro factors For example, to apply the company to the above problems, Bao Viet Insurance Company will be selected for analysis

4.1 PESTLE framework

General introduction

Analysis of PESTLE is a form of strategic planning to decrease market risk Companies can achieve useful advantages in conceptualization, product creation, product releases, content marketing campaigns and other aspects by analyzing the political, fiscal, social, technical, legal and environmental aspects, which in turn help improve the effectiveness of the company The benefits of the PESTLE analysis model include cost efficiency, a better understanding of industry, alertness to risks, and how to take advantage of them This concept was applied by Bao Viet Insurance to create exclusive rewards and qualities for the business while marketing goods to users easily and better at the same time

Political environment

The growth of the insurance sector is deeply influenced by the political stability and value of the national economy The level of corruption in Bao Viet insurance - especially the regulation of the insurance industry is still high Vietnam's policies have a great impact on the development of insurance companies, especially Bao Viet insurance In terms of government administration, in general, after the transition to market mechanisms The government has made important efforts to shift the concept of operating the economy from public action to indirect regulation under law Previously the government did not pay attention to the insurance industry, but since recent years the government has been more actively interested in this industry

Economic environment

Vietnam has the following economic sectors, according to the new government definition: the state economy, the collective economy, the private economy (individuals, small investors, private capital), the private economy A variant of the administration, an economy of foreign venture money(Wekipedia,2020) The economy has a high level of government interference in the demand for goods The Government also agrees that a commercial system works according to the economy Vietnam has a mixed economy, as can be seen

(WorldBank,2020)

The outbreak of COVID-19 has brought unparalleled problems that are projected to have a major effect

on the economic growth of Vietnam this year The pandemic also raises threats to the rapidly rising

economy of Vietnam Pre-pandemic estimates indicate that Vietnam's GDP growth this year will hit 6.8

percent, but it has dropped to 0.36 percent in the second quarter of 2020 The pandemic and its related

prohibitions have adversely impacted the employment of individuals Over 30 million employees were

affected at the height of the so-called 'development slowdown' in April, according to the General

Statistics Office of Vietnam Citizens employed in the industry were the hardest affected Services (72%),

led by workers employed in the industries of manufacturing and construction (67.8%) and agriculture,

forestry and fisheries (25.1%) Due to the incremental elimination of sanctions, of course, the bulk of firms, as well as leaders of small and medium-sized organizations and workers, have continued to operate The Covid 19 translation has significantly influenced market practices in the Bao Viet insurance sector in particular and the Vietnamese economy in general, lowering productivity and degrading the

economy in all respects.(forbesvietnam,2020)

Bao Viet 's 2020 insurance market is highly affected by the changes in Covid-19 For example, in the life insurance market, the growth rate of new insurance premium income and overall premium income also suffered a substantial decrease during the same period during the Covid-19 epidemic Specifically, in the first six months of the year, current mining insurance premium income fell by about half relative to the same time in 2019 (the first six months of 2019 saw a 20.4 percent rise compared to the same period in 2018) Complete fee income growth rates have declined from 25.3 percent to 19 percent (BaoViet, 2020)

In statistics, Vietnam's per capita GDP in 2019 is 2715.3 USD (World Bank, 2020) It shows that compared

to 2018, growth is more than 1.07, but this time is still very low compared to the region and the world Contribution of the private sector to GDP is very low (less than 10%), high corruption rate It is possible that in the next year, GDP will decrease slightly in the context of a still high population share, which will

be a very big problem in maintaining and stabilizing the economy if improvement policies are not in place, and re-organize the operation process to keep up with the set schedule at the beginning (forbesvietnam,2020)

(WorldBank,2020)

Social environment

Vietnam is a heavily populous nation in the world with several developmental benefits in terms of population By the end of 2018 , the population of Vietnam had reached more than 95 million people, of which the bulk were employees and children However, only around 5 million people enter Bao Viet life insurance, the proportion of the population involved in life insurance is only around 7 percent, although the average rate is 20-25 percent in nations, relative to countries in the region and across the world This

is the presumption that life insurance in Vietnam is still very viable This shows that the Vietnamese market is full of opportunities for the growth of insurance firms such as Bao Viet.(BaoViet,2020)

Technological environment

In order to allow insurance firms to computerize their service systems, and the inefficient structure of insurance companies, diversify delivery channels and modes of service, and enhance customer experience with high-tech ancillary services, Bao Viet Insurance has applied information technology Moreover, Bao Viet has observed that a new market habit for consumers was created by the accelerated growth of information technology Increasingly , consumers need to find information by electronic forms

of contact, such as the internet, phone , email, etc For general financial services, such as insuranceinvestment-payment, to be offered This is also an incentive for insurance firms such as Bao Viet

to make good use of science and technology achievements, fulfilling the rising and diversified consumer requirements in terms of competitiveness and incorporation (BaoViet, 2020)

Legal environment

In the time from 1965 to 1993, the State exercised its monopoly on insurance undertakings with only one insurance undertaking, Bao Viet, both conducting insurance undertakings and performing the insurance country's home management role At present, more attention has been paid by the State and the Government to supporting the growth of the insurance industry in Vietnam With changes to the legal framework, the Government of Vietnam is committed to a fair and reliable insurance industry climate On

9 December 2000, at the 8th session of the National Assembly, the National Assembly enacted the Law

on Insurance Sector, which provided a significant legal framework for the stable and sustainable growth

of the Vietnamese insurance industry Consistent with the regional integration

pattern According to international standards, the system of legal documentation relating to the insurance industry was reasonably comprehensive The Ministry of Finance supervises insurance enterprises in business activities, from recruitment and agency training to a system of business monitoring indicators (BaoViet, 2020)

Environmental problems

The influence of the environment has a very strong impact on the business and operation of the Bao Viet insurance enterprise As in the recent fact, Covid 19 has had a great impact on Bao Viet's business activities, reducing the revenue of the whole enterprise, the revenue growth is poor because the company had to cancel many recruitment programs recruiting and training of new employees, sales and marketing events due to social outages during epidemics Social disparity causes customers' income to decrease, resulting in delayed premium payments The pandemic has put additional pressure on new

premium growth to slow down (BaoViet, 2020)

4.2 Impacts of macroenvironment

Positive effects

Factors that positively affect Bao Viet's business activities as political factors is a strong advantage because the politics in Vietnam is very stable for long-term development, state policies have captured and invested more in the insurance industry Technology also positively affects the insurance industry because of the benefits it brings, boosting productivity and efficiency, reducing processing and operating processes, especially for the insurance industry such as Bao Viet products into technology to disseminate more widely to people by means of communication Law also plays a big role, the state has committed to building an equal and coherent insurance business environment with reforms of the legal system The legal document system on insurance business has been relatively complete according to international standards The Ministry of Finance supervises insurance enterprises in their business activities, from recruitment and training of agents to the system of business monitoring quotas

Negative effects

Factors that negatively affect the business operation of Bao Viet insurance such as economic factors such

as in the last covid 19 epidemic, the Vietnamese economy has suffered a slowdown in all sectors, including the insurance industry Business activities decreased, the number of products sold to the market was not high while the government issued a law to suspend all activities, so Bao Viet Insurance was greatly affected in the recent covid service In addition, environmental factors also greatly affect business activities of Bao Viet, when environmental problems occur seriously, human needs are more concerned about health, but the impact of the environment impacts Therefore, it also affects Bao Viet's business activities when the demand for products with a narrow financial fund is a problem that Bao Viet

is in the process of offering solutions

4.3 Recommendations

In the course of business operation and development of insurance, there are still obstacles that have been overcome, such as those of insurance related to losses that the insurance company may incur due

to the premium is not sufficient to cover covered events Bao Viet has dealt with by applying a full range

of obstacle assessment measures in the design of new insurance products, exploitation, inspection and insurance payment or indemnity; Regularly review important assumptions (death rate sheet, technical interest rate, loss parameters), review risks of insured and reasonable subject of insurance; Tracking, evaluating insurance products (in terms of profits, sales) and analyzing scenarios to timely complete products, determine insurance premiums when actual detection is different from assumptions Obstacles such as information technology when operating IT systems centrally, disrupting business operations, greatly affecting competitiveness and reputation of the Group Bao Viet handled it by implementing centralized IT management; Regularly monitor new software to use to promptly handle the problems that may arise

5.1 SWOT analysis

Strengths are positive or beneficial factors in the business that help achieve your goals Here the strong point of Bao Viet insurance is that real estate sources such as offices and headquarters of BAO Viet in the provinces have quite favorable locations The brand has a history of 25 years Network spanning provinces It is a special SOE and the state backing behind the corporation Projects using state budget

funds will use Bao Viet's insurance products Strong financial strength 18% share is for state revenue (BaoViet,2020)

Weaknesses are negative factors in the business or make it difficult to achieve your goals Here, the business results are not too impressive compared to other companies in the same industry There is no outstanding talent in human resources Mr Binh was sent down by the government The predecessor, who is very knowledgeable about the Vietnamese insurance market, is Mr Truong Moc Lam, who has been building for many years and has passed away The operating apparatus below is also not dynamic enough as the other joint stock venture companies like Mr Duc of BMI Low salary mechanism makes many employees go to foreign insurance companies Wide network and multi-sector operation if the staff

is not well managed will be a real difficulty to smoothly operate the system The financial investment

segment is still quite weak (BaoViet,2020)

Opportunities are non-company entities (business markets, culture, government, etc.) who are helpful or helpful to help accomplish the objective Here, FDI inflows allow the non-life insurance income rise because of the fast economic growth The market for non-life insurance also rises as residential income increases The insurance industry in Vietnam is seen to be rich in opportunity and will record substantial

growth over the next 20 years (BaoViet,2020)

Threats are variables that are detrimental or find the target impossible to accomplish outside of the organization (business markets, culture, government, etc.) Bao Viet insurance entering the WTO lets the insurance and banking walls vanish, and the world's major giants leap profoundly Experience and financing for domestic insurance firms can be a daunting foe (BaoViet,2020)

5.2 Porter's Five Forces Model

The first factor of the year affects the number and ability of competitors to cut a company The more number of competitors and the number of comparable products and services offered, the less the strength of the company Bao Viet insuarance current competitors come from big enterprises such as Dai-ichi, Manulife, Prudential, AIA, etc (Vinare,2019)