REPORT ANALYZING ENVIRONMENTAL FACTORS AFFECTING

lOMoARcPSD| 49328626
THE UNIVERSITY OF DA NANG
UNIVERSITY OF ECONOMICS REPORT
ANALYZING ENVIRONMENTAL FACTORS AFFECTING TEAM 2 1. Phan Thi Linh Chi 2. Thach Tuan Kiet 3. Nguyen Thi Giao Linh 4. Mai Thi Phuong Thao Da Nang, June 18th 5. Le Thi Tuyet 1 lOMoARcPSD| 49328626 2022 TABLE OF CONTENTS
I. INTRODUCE ABOUT THE SABECO COMPANY: ....................................................... 3
1.1 History of establishment and development: ......................................................... 4
1.2. Mission and vision of SABECO: ............................................................................. 5
1.3. Organizational structure ....................................................................................... 6
II. THE ANALYSIS OF THE EXTERNAL ENVIRONMENT .............................................. 6
1. Macroeconomic Environment ................................................................................ 6
1.1. Political and legal environment ......................................................................... 6
1.2. Economic environment ...................................................................................... 7
1.3. Socio-cultural ................................................................................................... 11
1.4. Technology ....................................................................................................... 12
1.5. Natural ............................................................................................................. 14
1.6. International Environment: ............................................................................. 16
2. Microeconomic Environment ............................................................................... 19
2.1. Customers ........................................................................................................ 19
2.2. Supplier ............................................................................................................ 20
2.3. Competitors ..................................................................................................... 21
2.4. Labor ................................................................................................................ 25
III. REFERENCES: ................................................................................................. 26
IV. CONTRIBUTION OF TEAMMATES: ................................................................... 26 2 lOMoARcPSD| 49328626 I.INTRODUCE ABOUT THE SABECO COMPANY: Name: SABECO
BEER – ALCOHOL – BEVERAGE CORPORATION Abbreviations: SABECO
Authorized capital: 6.412.811.860.000 VND
Legal representative: Chairman of the board - Koh Poh Tiong
General Manager - Neo Gim Siong Bennett
Head office: 187 Nguyen Chi Thanh, Ward 12, District 5, Ho Chi Minh City, Vietnam
Representative office: 5th floor, Vincom Center building, 72 Le Thanh Tong, Ben
Nghe ward, District 1, Ho Chi Minh City.
Fax: (+84) 28 3829 6556
Number: (+84) 28 3829 4081 - 3829 4083 – 3829 6342
Email: SABECO@SABECO.com.vn
Website: www.SABECO.com.vn
The main commercial aspect:
Producing and trading all kinds of wine, beer, beverage, and beverage packaging. Besides:
• Trading in raw materials, equipment, and technology for the beer, wine,
beverage, and food-food industries.
• Training, research, technology transfer, investment consulting, construction,
repair, and maintenance services in the beer, wine, beverage, and food-food industries.
• Real estate business, commercial services.
The scale of activities:
Up to now, SABECO has had 28 member units that are subsidiaries, affiliated
units, and affiliated companies with operating areas spread across all regions of
Vietnam. Of these, 21 units are directly involved in the production and distribution
of SABECO's products. In addition, are associated companies doing business in the 3 lOMoARcPSD| 49328626
fields of packaging production, gas, transportation, trade, real estate investment, and securities...
1.1 History of establishment and development:
Referring to beer, almost everyone will immediately think of SABECO - Saigon
Beer - Alcohol - NGK Joint Stock Company. After 146 years of establishment and
development, SABECO has made a special mark in the hearts of consumers.
In 1875: Mr. Victor Larue (French) established a small brewery in Saigon.
In 1910: This small brewery has grown into a complete factory specializing in the
production of beer, soft drinks, and ice.
In 9/1927: This complete factory was officially merged into the French company BGI system.
In 5/1977: The Minister of Food and Foodstuffs decided to assign Southern Wine
Company to take over and manage the entire factory of BGI.
On 1/6/1977: Officially renamed Saigon Beer Factory - Nguyen Chi Thanh, becoming
the historical cradle of Saigon Beer.
In 10/1985: SG Brewery installed a can filling system and Launched the first canned beer in Viet Nam.
In 1992: Launched Saigon Lager bottled beer.
In 1993: Saigon Brewery officially became Saigon Beer Company after merging 3
factories: Saigon Ice, Beer Mechanic, and Dakai Mineral Water.
In 6/1996: SaiGon bottled beer was produced with the initial goal of exporting, but due
to high domestic demand the product was sold domestically with a capacity of 350ml.
In 7/2000: The company launched Saigon Special bottled beer with a capacity of 330ml
to serve a group of customers in need.
In 2003: Saigon Beer - Alcohol - Beverage Corporation (SABECO) was established
based on Saigon Beer Company and received new members: • Binh Tay Liquor Company
• Chuong Duong Beverage Company • Phu Tho Glass Factory
• Beer - Liquor Service Trading Company - Saigon NGK 4 lOMoARcPSD| 49328626
In 2008: SABECO officially inaugurated Saigon - Cu Chi Brewery after transforming
its operating model through the equitization process.
In 2015: Over 140 years of history of establishment and development of Saigon Beer.
In 2016: Officially listed shares on Ho Chi Minh City Stock Exchange with stock code SAB.
In 2017: SABECO launched Saigon Gold canned beer with a capacity of 330ml. At the
end of 2017, Vietnam Beverage Company Limited bought more than 343.6 million
shares of SABECO's SAB (equivalent to 53.59% of capital) at the price of 320,000
VND/share. Vietnam Beverage was established to act as a domestic intermediary to help
Thai Beverage (ThaiBev) in the acquisition of SABECO. By the end of 2018,
SABECO's share price continuously decreased, but it is not possible to conclude that
this is a failed deal because it depends on many factors.
In 2018: Change management structure of SABECO. Establishing the Audit Committee
instead of the Supervisory Board. 1.2.
Mission and vision of SABECO: 1.2.1. Mission:
• Contributing to the development of Vietnam's
beverage industry at a world level.
• Promote the culinary culture of the Vietnamese people.
• Enhancing quality of life through the
provision of high-quality, safe, and nutritious beverage products.
• Bring practical benefits to customers,
shareholders, partners, employees, and society.
• Satisfy and satisfy beverage demand
according to international food safety and
hygiene standards “Food hygiene and safety
and environmental protection”.
• To fulfill all obligations to the State based on transparency in business.
• Actively participate in community activities.
• Ensure development towards international integration. 5 lOMoARcPSD| 49328626 1.2.2. Vision:
Develop SABECO to be the leading Beverage Industrial group of Viet Nam, with
a regional and international position. 1.3.
Organizational structure
SABECO's organizational structure is a vertical functional structure:
The major departments under the president are groupings of similar expertise and
resources, such as accounting, HR, production, marketing, etc... Each functional
department is related to the overall organization. The marketing department is
responsible for all sales and marketing, for example, and the accounting department
handles financial issues for the entire company.
II. THE ANALYSIS OF THE EXTERNAL ENVIRONMENT
1. Macroeconomic Environment
1.1. Political and legal environment.
The political-legal environment of a country reflects its ability to develop at home
and abroad. The lines and policies of the ruling Party have a decisive impact on the
domestic and foreign trends and the socio-economic development strategy of each 6 lOMoARcPSD| 49328626
country. Therefore, the influence of the political and legal environment has a macro
impact on the business environment of enterprises.
Vietnam is a country with high political stability. Here, businesses do not have
riots and struggles but have conditions and opportunities for economic development,
including SABECO. In another aspect of politics, corruption is an unhealthy factor in
the competition of businesses and adversely affects the economy. It has been properly
and thoroughly handled by the Vietnamese Government.
Understanding the laws, regulations, and government spending chapters as well
as forming good relationships with the government will help businesses seize
opportunities and reduce threats posed by this environment.
The government has adopted trade regulation policies according to international
common rules and laws, especially issues related to commercial transactions such as
customs procedures, and competition policy.
As an enterprise operating in the field of beer production and trading, first of all,
SABECO's activities are affected by legal documents on the Law on Food Safety and
Hygiene (Decree No. 38/2012)/ND-CP); Law on Anti-Dumping (Decree 10/2018/ND-
CP); Labor Law (Code No. 45/2019/QH14); Regulations on management of wine and
beer production and trading, Decree 105/2017/ND-CP...
Especially at the end of 2019, the Government has issued a series of regulations
on traffic safety, regulations The fine levels related to the act of driving a vehicle while
drinking alcohol, specifically, Decree 100/2019/ND-CP stipulates: When drinking
alcohol. If the concentration does not exceed 50 mg/100 ml of blood or 0.25 mg/1 liter
of breathing air, a fine of from 06 - 08 million VND and driving license will be revoked
from 10 to 12 months, a fine of between 2 and 3 million dong and have their driving
license revoked for 10-12 months.
Besides, the appearance of the COVID-19 pandemic caused both revenue and
profit to decrease compared to the same period in 2020. Specifically, in September 2020,
SAB's net revenue decreased by 29% over the same period and profit after tax decreased by 20%.
1.2. Economic environment
Economic Environment is a collection of many factors that have far-reaching
effects and in different directions on the business activities of each enterprise. Key 7 lOMoARcPSD| 49328626
economic factors include GDP growth rate (GDP), inflation status, unemployment rate,
interest rate, customer purchasing power,...
Gross Domestic Product (GDP):
GDP is an indicator used to measure the total market value of all final goods and
services produced within a national territory during a given period (usually 1 year or 1 quarter)
This is Vietnam’s GDP growth rate in recent years, and we can see clearly that
in 2020, because of the COVID-19, the GDP growth rate was only 2.91%. GDP is one
of the basic indicators to assess the economic development of a certain territory and the
figure in 2020 showed that Vietnam’s economic development had some problems because of the pandemic.
SABECO also faced many negative effects from this. In 2020, SABECO’s total
revenue was significantly decreased, about 10.000 billion dongs, ending SABECO's
revenue growth chain from 2015 to 2019. E 8 lOMoARcPSD| 49328626
However, GSO said that it was still a great success in both disease prevention and
business maintenance. The "giant" of the beer industry still exceeded 17.5% of the
revenue target and 51.7% of the profit target due to a careful business plan in the face
of unpredictable developments of the epidemic and the impact of the pandemic. • Inflation rate:
Inflation is the persistent increase in the general price level of goods and services
over time and the loss of the value of a currency. When the general price level rises, a
unit of currency buys fewer goods and services than in the past, so inflation reflects a
decrease in purchasing power per unit of currency.
In 2020, Vietnam’s inflation rate slightly increased. Although the figure in 2020
is lower than in 2018, rising inflation is a bad sign for businesses. Input costs, borrowing
costs, and production costs increased, putting pressure on profits when it is difficult to
change the price of the product in this brewing industry. Rising prices lead to more
cautious consumers in spending, affecting product consumption. However, this was still
a good inflation rate control in 2020 by the government. 9 lOMoARcPSD| 49328626
Chart depicting monthly consumption • Unemployment rate:
Unemployment is a state in which a worker wants to have a job but cannot find a job
or is not employed by the organization, company, and community. The unemployment
rate is the percentage of unemployed workers out of the total social labor force.
In 2020, Vietnam's unemployment rate is the highest figure in the previous 10
years. COVID-19 has once again been mentioned as a reason for bad economic effects.
People's living standards had to decrease in 2020 when unemployment was happening
strongly, people are forced to think about survival rather than buying beer. Consumers 10 lOMoARcPSD| 49328626
had to tighten their spending or rationally spent on necessities, resulting in reduced
consumption, a problem for SABECO. 1.3. Socio-cultural
Culture - society is one of the factors that profoundly affect the management and
business activities of all businesses in general and SABECO in particular. It includes:
population, ethical, aesthetic, lifestyle, and professional views; customs, practices, and
traditions; the concerns and priorities of society; the general level of awareness, and
education of the society... these aspects show how people live, work, enjoy as well as
produce and provide services. All of which have a profound effect on the structure of
demand in the market. This factor has a direct and very strong impact on the activities
of businesses, businesses will have to change their designs and models to match and adapt to social culture.
The problem for SABECO corporate administrators is not only realizing the
presence of the current social culture but also predicting its changing trends, thereby
proactively forming an adaptation strategy.
In Vietnam, the population of 98,915,649 people (as of June 13, 2022), is a
vibrant market and increasingly attracts the interest of many companies in all areas of life.
Moreover, consumer needs are increasing and complex. They not only care
whether the product meets their own needs or not, but also care about the quality,
ingredients, design, and price.
Table of demographic characteristics of Table of Structure of Vietnam (2020) Religion Ratio (%) Characteristics Unit Buddhism 14.91 In urban areas 38,05% Catholicism 7.35 In rural areas 61,95% Protestantism 1.09 0,997 (997 male/ Caodaism 1.16 The sex ratio 1000 female) . Hauhauism 1.47 Life expectancy Buddhism 71,5 / 79,7 ages male/female Irreligion/folk belief 73,6 Average age 33,3 ages Population density 319 /km2 Literacy rate over 77% 11 lOMoARcPSD| 49328626
Religion: Many Vietnamese people are not religious (accounting for 86%), so the
use of. beverages is less restricted. Population structure: we can see that Vietnam is a country with a young population structure. The majority age group is in the 25-59 years old region, followed by under 24 years
old and at least 60 years old and above.
Vietnam's population structure
In another aspect of sociocultural, the Vietnamese have the habit of using alcohol
on holidays, weddings, congratulatory events... This is considered a traditional culture
of the nation. Beer is not a product communication system of our country, but since its
introduction, it has been quickly accepted by Vietnamese people and has become a
popular habit, especially among men. The lifestyle of each region also greatly affects
the wine products. In rural areas, people are used to drinking traditional types of alcohol,
but when income is high, the importation of the culture into the beer manual market
increases. If in the past, our people only knew about alcohol, now, the number of people
drinking beer is increasing with the development of socio-economic development.
All things considered, our country has a large population and large population
size. Several people of working age and non-religious use the majority, creating a market
potential for soft drinks is the school title that SABECO directed to. People's living
standards are increasing, so as the target budget increases, they are willing to spend more. 1.4. Technology
The technological dimension of the general environment includes scientific and
technological advancements in a specific industry, as well as in society at large.
The technology environment is an extremely powerful environment for businesses.
Technology can create new product lines, and new techniques, create new products or 12 lOMoAR cPSD| 49328626
improve the production process of existing products, and apply effective management software to businesses.
With the context of integration and globalization, Vietnam is getting more and
more opportunities to access modern technologies worldwide. Vietnamese technology
is developing rapidly, especially in production, processing, packaging, and
preservation technologies. In the context of integration and globalization, Vietnam is
getting more and more opportunities to access modern technologies worldwide.
SABECO - the leader of the beer market in Vietnam has grasped and applied technology to the management and production in an extremely effective way. Since 2013, SABECO has wisely chosen BRAVO as a partner to provide business management
Model of the production line of SABECO company
software solutions. In the entire system of the Corporation to its member units, the
enterprise management software system - BRAVO 7 ERP-VN solution has been
applied. With the advantages of the software system in performing accounting
operations, tracking warehouses, productivity and production progress, etc., it has
contributed to increasing management efficiency in the chain of operations of the entire system of SABECO.
SABECO has boldly invested in production lines with modern technology
imported from advanced countries in the world to ensure high accuracy. An automatic
and closed production line, combined with the training of a team of technicians and
skilled workers, has brought a successful combination of modern technology with long-
term traditional fermentation, creating products with stable quality and distinctive flavor in the Vietnamese market.
With the right management and investment, the quality of Saigon beer is
increasingly improved and certified by the Quality - Food Safety - Environment
Management System by Bureau Verita CertificatiarSABECO applied new technology
to reduce costs and improve production efficiency. 13 lOMoARcPSD| 49328626
The results brought in 2018 show that SABECO's electricity consumption has
decreased by 4% for hot steam and water by 2-6% compared to 2017. SABECO's factory
system is not only invested on the modern and domestic scale but also applies an
international system to build a "Green Factory" with 3 criteria: fuel economy, efficiency
High efficiency, and especially zero-waste filtration technology.
(dây chuyển sản xuất bia tại công ty SABECO)
In conclusion, technology has helped SABECO creates many advantages in its
market. The efficiency in managing the operation chain of the entire SABECO system
has been increased thanks to BRAVO's software. The automatic and closed production
line achieves high precision because of the use of advanced technologies from abroad,
helping to improve the taste and quality of the products. Besides, it is also certified in
management, food safety, and the environment. Due to the power of technology, the
consumption of energy and raw materials is also reduced. We can see that technology
makes a very strong impact on SABECO. 1.5. Natural
The natural factors of the environment include weather, land, climate, resources,
natural resources, geographical conditions such as topography... For the beverage
manufacturing industry, the situation always changing. Protecting the climate and the
environment is one of the important issues that strategic planners need to focus on, and
it can be the key to business development. The products produced must not only meet 14 lOMoAR cPSD| 49328626
the requirements of refreshing, delicious, cheap, and environment-friendly. SABECO is
aware of this situation and has changed course over the years and has applied many new
technologies in the production process. Use environment-friendly materials. It can be
seen that natural factors have a great impact on enterprises, leading them to have flexible
adjustment policies to develop and operate their businesses.
Vietnam: Located in the extreme southeast of the Indochinese peninsula.
• Geographical coordinates: Vietnam is a country
with an S-shaped land strip, extending from
latitude 23o23' North to 8o27' North, longitude
102°8′ - 109°27′ East; is a country located on the
Indochina peninsula, Southeast Asia, along the
Pacific Ocean; The distance from North to South
is about 1,650 km, the narrowest position in the
East to West direction is 50 km, the Vietnam map
coastline is 3,260 km long, excluding the
islands. Vietnam borders the Gulf of Thailand to the south, the Gulf of Tonkin
and the East Sea to the east, China to the north, and Laos and Cambodia to the west.
• Climate: hot and humid, summer is often hot and sunny.
Thanks to Vietnam's geographical location and climate, the economy of the water
market beverage increases rapidly, thus, SABECO is easy to develop cooperation and
trade with partners at home and abroad by many different routes: road, waterway, and
road air. Conversely, the situation of natural disasters, storms, and floods, causing
difficulties for transportation from the place of production to the place of consumption,
and weather phenomena such as floods, and storms… have also significantly affected
the development of these industries. beverage companies and corporations including
SABECO. In addition, the increasingly polluted environment requires the company to
invest in modern technological processes to treat waste under permissible standards,
which will increase the company's production costs.
With SABECO, one of the important criteria that is always concerned by the
factory is the quality management system, food safety, hygiene, and environment, 15 lOMoARcPSD| 49328626
together with the Corporation to build a quality and safety management system. Food
hygiene and safety according to ISO 9001: 2008 and HACCP RvA standards.
Furthermore, the factory has also actively applied initiatives in manufacturing,
installing, and effectively operating saline water treatment systems with Anion-Cation
technology and RO technology. As the brewing industry, is exposed to fragile bottles
and noise, the Company has sought to reduce noise, and at the same time equips with
noise-canceling equipment and a shielding system to protect workers.
In order to ensure that the factory is a green spot in the city, the entire factory
campus has been equipped with trees and ornamental plants to create fresh and cool air
when entering the Factory. With its efforts in environmental protection, Saigon - Cu Chi
Brewery received the Gold Cup for Vietnam's environmental protection in 2009 from
the Ministry of Natural Resources and Environment and the Vietnam Construction
Quality Gold Cup 2010 by the Ministry of Construction.
1.6. International Environment:
Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995.
Since then, Vietnam has built diplomatic relations with 189/193 United Nations member
countries, becoming the 150th member of the United Nations. WTO (2007)... with
economic activities aimed at realizing the liberalization of trade, goods, services and
investment between countries by removing regulations on tariff and non-tariff barriers
customs, and at the same time impose tariffs between member countries.
Additionally, in early August 2020, Vietnam signed the EU-Vietnam Free Trade
Agreement (EVFTA) on trade cooperation between Vietnam and 28 European
countries. The agreement brings great opportunities for Vietnam's export market, and at
the same time attracts many EU and EU investors to commit to grant Vietnam tariff
quotas with import tax within the EU's 0% quota. Wine, spirits and beer, nearly 100%
of Vietnam's exports to the EU will be wiped out after 7 years. 16 lOMoARcPSD| 49328626
Vietnam's participation in agreements and signings has created opportunities to
attract investors from ASEAN and the EU to the Vietnamese market, helping to access
advanced technology in the production chain. on the process of importing raw materials
and exporting beer to other countries. However, this is also a big challenge for
SABECO, which must face competitive pressure on domestic products because high-
quality goods from Europe are expanded into the Vietnamese market. COVID - 19
The COVID-19, which has taken place from the end of 2019 until now, has
pushed the world economy into recession, causing serious impacts on businesses'
production and business activities and SABECO is no exception. Complicated
developments of the COVID-19 rise, lack of containers, lead to high freight rates. This
pandemic disrupted SABECO's supply chain, limiting the import and export process, as
well as difficulties in input materials.
Besides, the pandemic also negatively affects the consumption of consumers as
well as the workforce in this industry. 17 lOMoARcPSD| 49328626 TRADE WAR:
Strategic rivalry between large countries, particularly between the United States
and China, has become strong, with both countries going head-to-head in all industries,
with a focus on the profitable element of transnational commerce. The impact of the US-
China trade war has expanded internationally since the beginning of 2018.
Vietnam's import and export in the US and China 18 lOMoARcPSD| 49328626 markets
Facing the negative effects of this war, goods rotation was blocked, and global
trade came weak, which in turn led to a decline in profitable growth. And these are also
two major bear markets of SABECO, so when the trade war broke out, it partly affected the business's revenue.
UKRAINE – RUSSIA WAR:
Gasoline prices are still increasing and there is no sign of cooling down from 2021 to March,2022
The conflict between Russia and Ukraine has caused oil prices, which makes
increase in transportation costs,and also effect SABECO because mainly input materials
of company are imported from abroad.
2. Microeconomic Environment 2.1. Customers
SABECO's customers include 2 main groups: Retail customers and agents (distributors).
Both of these groups are putting pressure on businesses in terms of price, quality
of products, and accompanying services. With the demand for the final highquality food
of the users, SABECO must aim to invest in expanding the market, expanding the
distribution network, focusing on research, feedback, application of mind, and 19 lOMoARcPSD| 49328626
annotation to the products. In rural areas, most of them have low incomes and are
interested in popular beverage products.
On the other hand, Beer and soft drinks are used goods, the final customer of the
owner element of SABECO is defined as:
• Consumer market: Consists of individuals and households that buy goods and
services for personal use, usual people between the ages of 20 and 49.
• International market: Including buyers from other countries: SABECO is not
only a famous brand in the country but also known in the international market
with its presence in many countries around the world. Currently, SABECO's
products have been sold in 27 countries, 2.2. Supplier
With the aim of manufacturing high-quality kinds of beer that satisfy consumers'
needs and gain international standards to export, SABECO has carefully considered
finding global suppliers, especially suppliers of Malt, and Houblou flower, …
Specifically, to ensure the input materials with the highest quality, as well as
proactively meet the source of raw materials fully and timely for production and
business activities, SABECO has diversified the supply of raw materials, actively sought
and cooperated with competent suppliers, and Prestige at home, and abroad.
For instance, imported materials such as malt (barley seeds), houblon flowers,
and enzymes are imported from countries in the European region, Australia, and the US.
SABECO's suppliers are the world's leading suppliers of raw materials. With domestic
raw materials, SABECO advocates diversifying suppliers to meet the demand from
factories spread across the country at the most reasonable cost.
Since 2013, SABECO has wisely chosen BRAVO as a partner to provide
business management software solutions. In the entire system of the Corporation to its
member units, the enterprise management software system - BRAVO 7 ERP-VN
solution has been applied. With the advantages of the software system in performing
accounting operations, tracking warehouses, productivity and production progress, etc.,
it has contributed to increasing management efficiency in the chain of operations of the entire system of SABECO. 20