ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Ho Thi Thu Thuy Student ID GBD201501

Class GBD0907 Assessor name Phan Tran Phuong Trang

Student declaration

Student’s signature

Grading grid

P1 P2 P3 M1 M2 D1
 Summative Feedback:  Resubmission Feedback:

2.1

Grade: Assessor Signature: Date:

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 Table of content

I. INTRODUCTION. ............................................................................................................................................. 4
II. COMPANY ANALYSIS. ........................................................................................................................................... 5
1. Types and purpose of Vietnam Airline (VNA). ........................................................................................ 5
1.1. Type of VNA: ........................................................................................................................................... 5
1.2. Purpose of VNA: ..................................................................................................................................... 8
2. Size and scope of Vietnam Airlines (VNA). .................................................................................................... 12
2.1. Size of VNA: ............................................................................................................................................ 12
2.2. Scope of VNA: ......................................................................................................................................... 15
3. Functions of Vietnam Airline (VNA). ............................................................................................................. 21
3.1. VNA’s structure chart: . ......................................................................................................................... 21
3.2. Main functions: ...................................................................................................................................... 23
3.3. Structure explanation: ........................................................................................................................... 23
3.4. Advantage and disadvantage of VNA’s structures:............................................................................... 24
3.1
3.5. Working department in the structure: ...................................................... Error! Bookmark not defined.
III. Conclusion and recommendation.................................................................................................................. 24
 I. INTRODUCTION.

This report looks into all the data of a company or coporation that Well Fargo need to exploit
information (financial statements, score values and goals,etc) to invest in in 2020-2025. It also
includes some models and company scope and sizes.To choose a company worthy of trust, it is quite
time-consuming to research and decide whether to invest or not.

VNA, short for Vietnam Airlines , is the company choosen to exploit all that Well Fargo’s direct
supervisor asks for. In April 1993, the Vietnam National Airlines (Vietnam Airlines) was officially
established as a large-scale air transport business unit of the State. Founded in 27th May, 1995,
Vietnam Airlines is the flag carrier of Vietnam and the major carrier in the South East Asia, operating
94 routes to 22 domestic and 29 international destinations with an average of 400 flights per day,
connecting the world’s major cities to mesmerizing travel destinations in Vietnam, Laos, Cambodia
and Myanmar. After 20 years of development with an average annual growth rate in the double-digits,
Vietnam Airlines has established our name as a symbol of Vietnamese national pride, with a global
network and well-deserved position in the region. (Vietnam airlines) 4.1

• Name in Vietnamese: TỔNG CÔNG TY HÀNG KHÔNG VIỆT NAM - CTCP

• Name in English: Vietnam Airlines JSC.

• Address: 200 Nguyen Son, Bo De Ward, Long Bien District, Ha Noi

• Telephone number: (+84.24) 3827 2732 | Fax: (+84.24) 3872 2375

• Website: www.vietnamairlines.com

• Email: nhadautu@vietnamairlines.com
• Business registration certificate for Joint Stock Company number 0100107518, issued by Hanoi
Department of Planning and Investment, and registered for the 6th change on 26 February 2019.

• Charter capital: VND 14,182,908,470,000

• Ticker: HVN. Par value: VND 10,000/share

II. COMPANY ANALYSIS.
1. Types and purpose of Vietnam Airline (VNA).

1.1. Type of VNA:

Vietnam airlines is organized in the form of join- stock company and it is a profit
organization. According to financial statements (2019), dividend and profits paid in
current year (2019) are high and higher than prior year (2018), 416.396.403.025 VND.
A figure to be expected from shareholders.

(AUDITED CONSOLIDATED FINANCIAL STATEMENTS, 2019)

 On the other hand, Vietnam airlines is also a public company, which is a company that
offers shares to the public, including two ways: self offer or thhrough the stock
exchange market (UK regulation) (Worthington & Britton, 1994). According to Hose
investor confidence ( Ho Chi Minh stock exchange), VNA’s shares were listed on Hose
Stock Exchange on November 4, 2019, and its securities
6.1
symbol is HVN.

(HOCHIMINH STOCK EXCHANGE)

Vietnam Airline JSC (HOSE: HVN)

Industry: Transportation and Warehousing/ Air Transportation/ Scheduled Air
Transportation

Margin Trading FTSE Vietnam ETF V.N.M ETF

Open 41,600 Remain Bid 21,750 Frgn Buy 13,330 EPS 1,747

41,200 High 42,500 Remain Ask 34,470 Frgn Owned (%) 9,62 P/E -

600(+1.48%) Low 41,100 52Wk High 43,300 Dividend F P/E -

07/05/2019 10:13 Vol 468,180 52Wk Low 27,200 Dividend Yield - BVPS 13,165

Market Cap. 58,434 52Wk Avg Vol 646,591 Beta - P/B 3,13

(24HBINHPHUOC, 2019)
Mr. Nguyen Hoang Anh, Chairman of the Committee for Management of State Capital at
Enterprises (CMSC), said that VNA is the company with the largest market
capitalization listed on HOSE in early 2019. In addition, it is also one of the two
companies among 19 State-owned corporations represented by CMSC, with shares
listed on the stock exchange. (Viet Nam News, 2019)

Moreover, looking at Vietnam Airlines ownership and distribution of shares below, it is

easy to affirm that VNA is state-owned enterprise. As a state-owned company, it means
that the state shares occupied at least 51% of the company’shares (Worthington &
7.1
Britton, 1994). The number of shares of Vietnam Goverment is 1,057,638,000 of the
total number of VNA’shares, 1,227,533,778, accounting for 86.16%. (Vietnam Airlines)

(VIETNAM AIRLINES)
1.2. Purpose of VNA:

VNA continues to define its vision, mission, core values and objectives to complete
quality flights with service 5 star. Here are those growth strategies:

➢ Vision-Mission:
Firstly, uphold the No.1 positions as Vietnam’s aviation group leader.
Secondly, Vietnam Airlines to become a leading Asian airline of customer’s
choice and be the main force transportation of Vietnam as a flag carrier.
Thirdly, provide diverse and high-quality air transport up to customer’s
expectations. Next, create a civilized and professional working environment
with various opportunities for career development for employees. Finally, run
effective business operation, ensure sustainable benefits for shareholders.
(Annual report, 2019)

Some specific activities of VNA are following its set vision and mission:
Vietnam Airlines’ annual report (2019) states that the total amount of
dividends that shareholders received in 2019 was 1.418 billion VND,
equivalent to payout ratio of 10% of the share par value. Besides,
along with completing the procedures for listing HVN shares on the
Ho Chi Minh City Stock Exchange (HOSE) on 07 May 2019, it made
new developments and demonstrated a long-term strategic vision.
Moreover, VNA organized training for more than 11.000 pilots, flight
attendants, flight operators, and ground service staff on Safety-
Security training course. Moreover, VNA has held 05 English courses
in New Zealand for 91 outstanding officials and specialists; along
with that, training for 05 Master of Science (MSc) at Cranfield
University – UK & ENAC.

➢ Core values:
Firstly, safety is the top priority and the basis of every activity. Secondly,
customer-centric approach. Our development tightly links to customers’
trust. Then, employees are the most valuable asset. All remuneration
policies are built fairly and worthily to maintain the cohesion and solidarity
of the organization. Next, creativity is the business motto, we constantly
innovate various business aspects with breakthrough mindset and strive to
achieve big success. Fianlly, the responsible airline group. We understand
that corporate social responsibility is a business practice to ensure all
decisions made and actions taken are in line with social sustainability.
(Annual report, 2019).
 Some specific activities of VNA are following its set core values:
According Vietnam Airlines’ annual report (2019), November 2019, the
LotuSmiles Program, after 20 years, reached 3 million members who being
frequent flyers. This is important activity to affirm VNA’s leading position in
developing policies, products and service to offer the best benefits to
customers. Next, implementing 2 salary increases for pilots (from June 1,
2019 and September 1, 2019) and implemented regimes and policies for
employees. Finally, according to Resolution No. 27-NQ/TW of the Central
Committee, VNA completed the pilot scheme on reform of the salary
management mechanism for the period of 2019-2021.

➢ Objectives:
Based on the content of 17 sustainable development goals of the United Nations,
VNA has analyzed, synthesized and selected targets for sustainable development
orientation in 2019. This has been repeated since 2018 and has had the result is as
good as we expected. It is divided into two groups of objectives: economic
objectives (economic growth) and social objectives (environmental protection &
social development) (Annual report, 2019).

Economic Objectives: choose the G8 goals of 17 sustainable development

goals of the United Nations as the core for economic growth: decent work
and economic growth. Through that, the following objectives could be
stated that, firstly, the top 3 leading airline groups in Southeast Asia in terms
of revenue. Secondly, Vietnam Airlines is in the top 10 favorite airlines in
Asia. Top 3 airlines in Southeast Asia in terms of scale. Thirdly, implement
resilient digital transformation to become a comprehensive Digital Airline
Group. Next, advance 4-star airline services and progressively achieve 5-star
airline standards for Vietnam Airlines. Finally, it has become one of the most
favorite workplaces in Vietnam. (Annual report, 2019)

Some specific activities of VNA are following its set economic

objectives:
Firstly, a 4-star airline certificate for 4 consecutive years 2016, 2017,
2018, 2019 accredited by Skytrax. Secondly, implement Digital
Transformation strategy. Moreover, upgrade the revenue
management system; prove the flight route efficiency analysis system
(VNA Profit); build a commercial management reporting system
 (Salesforce); deploying an aerial service management system;
upgrade the mobile application system (Sales Mobile App) with many
outstanding features, deploy the application for customers to buy
tickets with miles and money (Dynamic Rewards), etc. (Annual report,
2019)
Social Objectives: including environment protection (E) and social
development (S). From that, select targets goals G7, G12 & G13 for E and
G3, G4 & G9 for S. (Annual report, 2019)

• Sustainable and clean energy.(G7)

E • Responsible consumption and production.(G12)
• Climate action.(G13)

• Good health and well-being.(G3)

S • Quality education.(G4)
• Industry, innovation and infrastructure.(G9)

(ANNUAL REPORT, 2019)

Some specific activities of VNA are following its set social objectives:

According Vietnam Airlines’ annual report (2019):

Firstly, join the coalition against plastic waste, implement the program
“Zero Waste VNA”. Secondly, eliminate and minimize the use of plastic
bags and replace them with environmentally friendly materials, helping to
reduce an average of 50 million plastic bags, save 257 liters of clean water,
9 thousand kWh of electricity and 513 thousand liters of wastewater fabric
every year. Next, actively organize propaganda activities, campaigns to
protect the environment, movements “Volunteer Saturday”, “Green
Sunday”, “Plastic waste prevention day”, “Earth Hour”. Finally, taking care
of 23 more Vietnamese heroic mothers in Quang Nam province, bringing
the total to 45 mothers; organized visits to policy families, revolutionary
veterans, and Vietnamese heroic mothers on the occasion of the Lunar New
Year, War Invalids and Martyrs’ Day with the amount of 3.75 billion VND.

(ANNUAL REPORT, 2019)

2. Size and scope of Vietnam Airlines (VNA).
2.1. Size of VNA:
To determine the size of the organization, it is usually through criteria such as the size
of the capital, the size of the physical capacity and the number of employees.
Furthermore, the size of the organization is divided into 3 levels: small, medium and
large (Worthington & Britton, 1994).

To start with, the size of the capital is the most basis. According to annual report of
Vietnam Airlines (2019), VNA’s total assets as of the end of 2019 were
76.454.866.036.529 VND. Compared to total assets at the beginning of the year, it was
a decrease of 5.935.390.710.615 VND.

(ANNUAL REPORT, 2019)

Along with that, total liabilities and owners’ equity at the end of 2019 also decreased
compared to the beginning of the year. Specifically, total abilities decreased from
63.717.833.334.911 VND to 57.847.310.038.109 VND; owners’ equity decreased
from 18.672.423.412.233 VND to 18.607.555.997.420 VND. (Annual report, 2019)

(ANNUAL REPORT, 2019)

This shows that VNA’s financial in 2019 tends to decrease. Thus, economic conditions
as well as competition from other organizations are no exception influences.
As analyzed above, the number of employees is also an aspect to determine the size
of company. The EU (1994) recommended to its members that they use “less than
250 employees as the definition of small to medium sized enterprise (SME). In
contrast, more than 250 employees are large enterprise. (The European Union’s
Small Business Act: A Different Approach, 2016)

By the same token, it can determine that the size of VNA is large enterprise. In
Vietnam Airlines’ annual report (2019) set out a total workforce of the Group
numbered 21,255 employees with Vietnam Airlines employing 6,409 people (by
31 December 2019).

(ANNUAL REPORT, 2019)

Looking at gender structure by age-group below, it is easy to see that VNA is

tending to rejuvenate employees. In particular, employees from the age of 30 to
40 account for a relatively high proportion. Following that, labor productivity in
 2019 was an increase of 5.9% compared to 2018, showing that VNA has
effectively used labor and flexibly managed the workforce. (Annual report, 2019)
2.2. Scope of VNA:

(ANNUAL REPORT, 2019)

Geographic location: Up to now, VNA still has the largest route network in Vietnam, including 25
branches present in 20 largest provinces and cities in Vietnam. Besides, VNA has a business network
in Europe, Australia, and North America, meeting the needs of customers around the world.
Moreover, it has a wide geographical network of commercial locations, ready to serve the needs of
customers nationwide (Annual report, 2019)
(ANNUAL REPORT, 2019)
(ANNUAL REPORT, 2019)
(ANNUAL REPORT, 2019)
(ANNUAL REPORT, 2019)
Geographic market: Although the total international market reached 34.7 million
pasengers, an increase of 15% over the same period, the domestic aviation market is
VNA’s main market. Specigically, 37.3 million passengers in 2019, an increase of
13.5% over the same period. This also shows a higher growth rate than the period
2017-2018 (7% to 10%). Moreover, the entry of new players is the growth engine of
VNA’s market. (Annual report, 2019)
Target customers: VNA operates on a large scale with key operational performance:
total 20.1
number of flights, passengers carried, cargo and mall carried, revenue
passenger-kilometers, and available seat-kilometers. However, cargo and mall
carried are the mainstay. Specifically, in 2019, this target reached 348 thousand tons,
the rate of 1,9% compared to 2018 and the growth from 2015 to 2019 is 67%. (Annual
report, 2019)
Through the above two sections, it is not difficult to see that the size and scope of
Vietnam Airlines is appropriate to achieve the objective of economic.

The size of VNA to achieve objectives: With such a scale, along with strong
operation and development, VNA promises to complete the set targets in the
period of 2020-2025. In particular, VNA sets a goal of maintaining its leading
position. market share (over 50% domestic market share, over 25%
international market share). In addition, maintaining the number 1 airline
company, the main transport force in Vietnam, becoming the leading airline in
Asia chosen by customers. Specifically, in the period 2015-2019, Vietnam
Airlines exceeded the targets of efficiency and capital preservation such as total
passenger volume reaching 87.2 million passengers, total consolidated revenue
reaching 355,870 billion VND; total consolidated pre-tax profit reached 12,456
billion VND (over 4.6%); The average punctuality index (OTP) reached 88.2%,
which is a high level compared to the region, and the whole Corporation has paid
30,471 billion VND to the state budget. ( Viet Hung, 2020).

The scope of VNA to achieve objectives: With three sections: geographic location,
geographic market, and target customer in the scope that help VNA complete
objectives in a great ways. Geographic market contributes to promoting profits
as well as promoting the corporation in the country. Besides, it also helps to fulfill
the last goal in the set target list, to become the leading preferred airline group
in Vietnam's labor market. Secondly, the geographic location has a wide network
of flights from domestic to international, helping to increase the company's
income and quickly fulfill the goal of reaching the top 3 airline groups in terms of
revenue in Southeast Asia. Last but not least, target customer has a strong
 influence on the development and profit of the company. Vietnam Airlines (2020)
states that KPMG- one of the world's leading auditing and consulting firms,
announces that VNA is ranked No. 1 and is the only representative of the airline
industry with the best customer experience. According to survey statistics
conducted by VNA, the airline's customer satisfaction index (NPS-Net Promoter
Score) has continuously improved. This shows the trust and love of customers. In
addition, VNA also identified two factors affecting this steady growth thanks to
attractive sales programs, meeting the diverse needs of many customers, along
with changes in services, in accordance with the actual situation. ( Vietnam
Airlines, 2020)

3. Functions of Vietnam Airline (VNA).

3.1. VNA’s structure chart:

(ANNUAL REPORT, 2019)

(ANNUAL REPORT, 2019)
 Business organizations often assign labor to employees to specialize in specific roles and
take on designated positions to accomplish organizational goals. Therefore, the
organizational structure is very important because it reflects the needs of the organization
now and takes into account the future.

3.2. Main functions:

Every department has its own function, contributing to the development of the
company. However, one of the important departments in a company is the
marketing department. For VNA, the marketing department has basic tasks such
as forecasting and reporting the market, establishing close relationships between
the company and customers, and creating development and marketing strategies.
market for the company's services. For example, with the elegance and simplicity
of the outfit, the blue Ao Dai for women and the green and yellow vest for men
create a friendly element, very true to the image of Vietnamese people and
brands. In addition, along with the development of technology, VNA also applies
a technology ticketing process, providing the best customer experience. Thus, we
can see that the marketing strategy of Vietnam airlines is really good in terms of
communication and PR. (Annual report, 2019)

We can see the connection between the marketing department and the finance
department. Specifically, when building brands as well as special strategies for
achieving goals, the marketing department always needs the support of the fund
department. Without that support, all plans of the marketing department are
considered a failure. Therefore, both departments need to discuss and cooperate
with each other to set out reasonable criteria and funds to implement a certain
plan.
3.3. Structure explanation:
With the above organizational structure of VNA, we can identify this as a functional
structure, which is one of the popular organizational structures. Overall, this
structure shows parts grouped together based on their function. In addition, the
general meeting of shareholders is the best powerful body, followed by supervisory
board, the board of directors and chief executive officer.

This structure will help the company achieve positive effects and set the stage.
Overall, we can see that the CEO can communicate and manage all the departments
and their activities, making the control mechanism simple. In addition, being able
to clearly define responsibilities, management experts at all levels will also
thoroughly perform their jobs. From there, promoting development steps to well
 implement the set goals thanks to the functional structure of the departments which
are clearly implemented in the organizational structure. Because the parts will
work independently and quickly.

3.4. Advantage and disadvantage of VNA’s structures:

➢ Advantage:
Chief executive in touch with all operations. The board of directors has a
lot of work, but its facilities effective management, good control, and
improved operational result. Therefore, the management of the
departments of the board of directors is less difficult, the work is clear,
24.1
there is no overlap. Specialists at senior and middle management levels.
Senior managers: Board of Directors, General Director, Deputy Director,
Chief Accountant. Have a wide range of management: run the
organization’s activities. Middle managers: Department heads, Branch
manager. This number of levels is quite reasonable, making it easier for
upper-level managers to control direct subordinates.
➢ Disadvantage:
Senior managers are overburdened with routine matters. The control of
the board of directors is too wide, in addition to managing the company’s
work reported by the departments, the board of directors also has to
manage more branches. Senior managers neglect strategic issues. The
fact that the board of directors has to do so much work will reduce the
effectiveness of the application of strategies, slow the progress of work.
Coordination between functions difficult. The coordination of the
functional departments in the company is not tight. The department
heads are only familiar with fobs in their fields, so their capacity in
general corporate governance is still limited. Since they are only
responsible for their functions, blame is inevitable.

III. Conclusion and recommendation.

It is undeniable that VNA is largest airline in Vietnam, the foundation ò the development of
Vietnam’s civil aviation industry as well as a strong impact on economic and social
development. Through all data analysis and reporting, Vietnam Airlines can be completely
suitable for investment to earn profit. Although the competition in the market with the
emergence of new airlines is considerable, the development is continuous and the negative
side is increasingly improving. In short, investing in Vietnam Airlines will be a great
opportunity to make profits as well as broaden your horizons about a great business
environment.
 REFERENCES.

24HBinhPhuoc (2019) . Vietnam Airlines “ Green and cool” opening day. Available at:
https://24hbinhphuoc.com.vn/vietnam-airlines-xanh-muot-ngay-chao-san-hose/ (Accessed: 12 August 2021)

Congressional Research Service (2016) The European Union’s Small Business Act: A Different Approach.
Available at: https://fas.org/sgp/crs/row/R44084.pdf (Accessed: 14 August 2021)

HoChiMinh Stock Exchange (n.d). Available at:

https://www.hsx.vn/Modules/Listed/Web/Symbols?fid=9ac914fbe9434adca2801e30593d0ae2 (Accessed: 11
August 2021)

Vietnam Airlines (n.d) History. Available at: https://www.vietnamairlines.com/fr/en/vietnam-airlines/about-

us/history (Accessed: 8 August 2021)

Vietnam Airlines Join Stock Company (2019) Audited Consolidated Financial Statements. Available at:
https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-Relations/Bao-Cao-Tai-
Chinh/2019/2019-consolidated.PDF (Accessed: 10 August 2021)

Vietnam News (2019) Vietnam Airlines listed on Hose. Available at:

http://vietnamnews.vn/economy/519557/vietnam-airlines-listed-on-hose.html
http://vietnamnews.vn/economy/519557/vietnam-airlines-listed-on-hose.html (Accessed: 10 August 2021)

Vietnam Airlines (n.d) Vietnam Airlines JSC Ownership And Distribution Of Shares. Available at:
https://www.vietnamairlines.com/vn/en/vietnam-airlines/investor-relations/investor-
news/news/2016/Shareholder-Structure (Accessed: 12 Àgust 2021)

Vietnam Airlines (2019) Annual Report 2019. Available at: :

https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-Relations/Bao-Cao-Thuong-
Nien/2019-bctn-english.pdf (Accessed: 13 August 2021)

Vietnamplus (2019) Vietnam Airlines sets the bumber 1 goal to keep at the address. Available at:
https://www.vietnamplus.vn/vietnam-airlines-dat-muc-tieu-giu-thi-phan-so-1-tai-noi-dia/660203.vnp (Accessed:
16 August 2021)

Vietnam Airlines (n.d) Vietnam Airlines is the brand with the best customer experience in Vietnam.
Available at: https://www.vietnamairlines.com/vn/vi/vietnam-airlines/press-room/press-release/2020/1111-
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 Index of comments

2.1 Achieved: P1, P2, P3

Strengths:

- Have a content structure

- Explain type and purposes of chosen company (P1 achieved)

- Explain the size and scope of chosen company (P2 achieved)

- Explain the organisational structure and functions of different departments (P3 achieved)

Weakness and improvements:

- Please format your assignment before submitting it.

- Some in-text citations are incorrect.
- For M and D requirements, you need to have references to prove it.

3.1 format

4.1 year?

6.1 ref?

7.1 are you sure?

20.1 is this about target customer?

24.1 ref?

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