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 Trinh Thi Huong Giang Student ID GBH190180

Class GBH0908 Assessor name Do Thu Trang

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

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Table of Contents
I.Introduce ........................................................................................................................................... 3
II. Type and purposes: .................................................................................................................... 5
2.1. Type..................................................................................................................................................... 5
2.2. Purposes ............................................................................................................................................ 7

III. SIZE AND SCOPE ....................................................................................................................... 9

3.1. SIZE ..................................................................................................................................................... 9
3.2. SCOPE .............................................................................................................................................. 13

IV. Organizational structure and functions ................................................................................ 15

4.1. Organizational structure ................................................................................................................. 16
4.2. Function ............................................................................................................................................ 18

V. Conclusion ................................................................................................................................. 19
VI. References .................................................................................................................................... 20

I.Introduce
Nowadays, it is not easy to choose a worthy company or corporation for us to invest in. It will
take us quite a long time to analyze all the data of that company such as financial statements,
core values, goals, ... at this time, Wells Fargo bank is looking for a company about gold, silver
and gemstones for investment. Through investment analysts of Well Fargo, they have chosen
Vietnam Airlines - the largest airline in Vietnam. In the following evaluation report , the company
will have an overview of all aspects of VNA and make a decision on whether to invest.
Company’s name: Vietnam Airlines JSC

Abbreviation Name: Vietnam Airlines

Representative Name: Chairman of the board : Mr. Dang Ngoc Hoa

Address: 200 Nguyen Son street, Bo De ward, Long Bien district, Hanoi city, Vietnam.

Tel no: (+84-24) 38272289.

Fax no: (+84-24) 38722375

Type of ownership: Joint stock company

E-mail address: Telesales@vietnamairlines.com

Website: www.vietnamairlines.com

Contact person: (Board of General Directors)

Name Position
Mrs. Nguyen Thi Thien Kim Director of supervisory board
Mr.Duong Tri Thanh General Director
Mr.Trinh Ngoc Thanh Executive Vice Presidents
II. Type and purposes:

2.1. Type
Vietnam Airlines's type is a joint stock company. Vietnam Airlines is a profit organization.
According to the financial statements for 2019, as of December 31, 2019, business
results continued to break the record with the revenue of VND 100,316 billion, increasing
1.4% year-on-year; the consolidated pre-tax pro t by VND 3,388.9 billion, exceeding 2.3%
versus last year. In which, the parent company achieved VND 74,693.89 billion in
revenue and VND 2,899.34 billion in pre-tax pro t, an increase of 20% year-on-year and
exceeding 8.3% versus AGM plan.

On the other hand, Vietnam Airlines is also a public company. On January 3, 2017, on the
Unlisted Public Company Market) (UPCoM), Vietnam Airlines stock was listed the first time. On
April 23, 2019, the date of cancellation of transaction registration on UPCoM. On May 7, 2019,
the first trading day on HOSE. Vietnam Airlines's stock code on the trading floor is HVN.
 (HVN: Tổng Công ty Hàng không Việt Nam - CTCP - Vietnam Airlines |
VietstockFinance, 2020)

According to statistics of shares in the company, we can affirm that Vietnam Airlines is a state
owned enterprise company. A state- owned company is a company where the state accounts
for more than 51% of shares. As of September 30,2016 , the state accounted for 86.16%-of the
company's shares holding the most shares.

In 2019, the Board of Directors instructed the installment of profit in cash to Vietnam Airlines’
shareholders in understanding with the determination of the 2019 Yearly Common Assembly
and in compliance with law. The payout was completed in June 2019 with a payment ratio rise
to to 10% of the par value, proportionate to the whole payout sum of VND 1,418 billion.
2.2. Purposes
During 20 years of operation, Vietnam Airlines always sets goals, visions, and scheme to
bring customers the most contentment and assert Vietnam's position in the world.

Vission: Vietnam Airlines always tries to maintain the No. 1 position as the leading unit of
Vietnam's flight crew. Vietnam Airlines became the leading airline in Asia chosen by
customers and became the leading carrier of Vietnam.
Mission: Vietnam Airlines always wants to bring different, high-quality airlines to meet
customers' expectations. Furthermore, the company also strives to create a civilized and
proficient working environment with different opportunities for employees to advance their
careers. Vietnam Airlines operates attractive commercial activities, ensuring shareholder
benefits that can be sustained.
Core Value: Vietnam airlines believe that safe is the best need and the premise of each
activity. It has always been customer-centric. Workers are the most valuable resource. All
compensation arrangements are built fairly and commendably to preserve the cohesion
and solidarity of the organization. Inventiveness is the commerce proverb, they always
enhance different trade perspectives with breakthrough attitude and endeavor to attain
enormous success. Responsible airline bunch. They understand that corporate social
reponsibility may be a business hone to ensure all choices made and activities taken are
in line with.
Objectives:
Economic objectives:

For Sustainable growth: the target of 2020 – 2022 period are Vietnam Airlines have
made digital transformation is to focus on customer-oriented commercial activities,
services build and develop Digital Property. Vietnam Airlines develop E-Marketing
activities,E-sales and Distribution.Morever, launching Web customer service.
The target of 2022 – 2030 period are digital transformation to take place in there maining
areas, develop big data and digital infrastructure, integrate and connect digital
transformation for each area using disruptive technologies, synchronize and roll out digital
transformation in all areas.
For Diversification: Cooperation with Vietnam National Administration of Tourism: On 24
December 2019, the Vietnam National Administration of Tourism and the flag carrier
Vietnam Airlines signed a memorandum of strategic cooperation.
For product development: Vietnam Airlines will Installation of Sharklet for ten A321s
aircraft for fuel efficiency, emission reduction, and operation cost saving. Established the
new-generation fleet utilization projects has investment in ground service equipment in
the 2016 - 2018 period, ULD project in the 2019 - 2020 period. In addition, Vietnam
Airlines pilot and flight crew training projects include investment in training equipment for
A321 Integrated Procedures Trainer and Airbus A350 Mockup model. The renovation of
the office building of the professional aviation training school is also the target of Vietnam
Airlines.
For social objectives: Vietnam airlines đã co-ordinated with the British Embassy to
implement CSR strategy in Medical- Community Healthcare training for the 2019 – 2021
period through a 5-party partnership including Vietnam Airlines, Facing The World, 108
Hospital, Viet Duc Hospital and Hong Ngoc Hospital. The humanitarian goal of the
partnership is highly appreciated with surgeries perforemd for 8,100. On June 9, 2019,
Vietnam Airlines joined the coalition against plastic waste, declaring a commitment and
action to combat plastic waste and fighters.
III. SIZE AND SCOPE
3.1. SIZE
As of December 31, 2019, Vietnam Airlines's total assets were 82,390,256,747,144 VND .
The total liabilities are 57,847,310,038,109 VND. Owner's equity is 18,607,555,998,420
VND.
According to the annual report for 2019, the right column describes the beginning of the year
and the left column describes the year-end parameters. It can be seen that the company barely
expanded in size due to the unchanged equity capital, the liabilities decreased from 63 trillion to
only 57 trillion. However, total assets also decreased from 82 trillion to 76 trillion. The growth of
the aviation market in 2019 slowed down, while overcrowding and increased competition made
the ticket price level decrease, affecting business efficiency.

By 31 December 2019, a total workforce of the Group numbered 21,255 employees with
Vietnam Airlines employing 6,409 people. Vietnam Airlines workforce showed an continued
trend of rejuvenation and higher level of professional expertise. In particular, importance was
attached to developing the talent pool of pilots, ight crew, aircraft engineers and technicians in
both quantity and quality, gradually reducing the proportion of foreign employees while still
meeting requirements of the air transportation business.
The achievement of the above-mentioned outcomes can be ascribed to the effective utilization of
the workforce, the restructuring of organization, the stability and flexibility in managing the team,
and the intensive training and development of the key resources (i.e. pilots, aircraft engineers
and technicians). Accordingly, despite a higher volume of flights and passengers, Vietnam
Airlines has managed to meet business requirements, ensure flight safety and maintain RPK-
based productivity rise over the years.
In comparison, both capital and workers are compelling strategy to demonstrate the estimate of
the trade, however, the number of workers is way better indicator for the estimate of the trade
due to the accessibility of data and effortlessly measured standard compare with capital aspects.

3.2. SCOPE
By the end of 2019, Vietnam Airlines had an international network of 61 routes to 33 destinations
in 18 countries and territories. Besides, Vietnam Airlines, which has a geographically extensive
commercial footprint that covers many parts of Europe, Asia, Australia, and North America with
31 branches and representative offices in 20 countries and territories, is poised to cater to the
demands of customers around the globe.

The main market of Vietnam Airlines is the domestic market. The size of the domestic aviation
market is 37.3 million passengers in 2019, 13.5% higher than the period of 2017 - 2018, with a
growth rate of 7% to 10%. The main driver of this growth is the entry of new players. For
domestic networks, Vietnam Airlines introduced multiple initiatives to strengthen the most
important route between Hanoi and HCMC mixing Vietnam Airlines and Jetstar Pacific products.

In addition, the international market also plays a huge role in the growth of Vietnam Airlines.In
2019, the total market size was 34.7 million passengers, a year-over-year increase of 15%. The
growth rate of the low-cost segment was 24% while the traditional full-service segment recorded
a 10% increment. The strong growth of the low-cost segment intensified competition in the
international market, particularly in Northeast Asia and Southeast Asia. In addition to ramping up
operations in the key market of Northeast Asia with new routes and higher loading capacity for
the China market, Vietnam Airlines agily orchestrated our operation plans among the Germany,
Japan, South Korea and Australia routes to ensure the business efficiency.

The total size of the air charter market in 2019 was 5.3 million passengers, a year-on-year rise
of 22%. The growth was chiefly ascribed to Northeast Asia, where China accounted for 95%,
South Korea 3%, and the other contributors were responsible for the rest. The Chinese air
charter market grew by 25% thanks to the sharp increase in loading capacity from 19 airlines, 6
of which are low-cost carriers (LCC). The LCC market share increased by 4 percentage points
over the same period, equivalent to 70%. LCCs’ low-pricing strategy caused a drop in charter
rates.

According to the chart, we can easily see that Vietnam is the most important market of Vietnam
Airlines. This is understandable. Because Vietnam Airlines is a Vietnamese airline, it was
established based on the needs of Vietnamese people and the company's goal is to enhance
Vietnamese values.
Target customers:

For example, the programs of Vietnam airlines, I choose the Lotusmiles program - a service
product of Vietnam Airlines. All individuals 2 years of age or older, citizenship, nationality
restrictions, regular mailing addresses and not contrary to the law of the host country, can
become members of Lotusmiles. Vietnam Airlines's Lotusmiles frequent flyer program is built
and developed on the basis of Vietnam Airlines's main product, passenger and baggage
transportation services to contribute to strengthening and developing long-term customer
relationships. sustainability between passengers and Vietnam Airlines. Customers who want to
participate in the program need to have good economic conditions, often travel for business,
travel, .... travel by plane. Moreover, the airfares of Vietnam Airlines are also higher than other
airlines. However, Vietnam Airlines has many incentives for members.

IV. Organizational structure and functions

4.1. Organizational structure
Vietnam Airlines Functional structure chart. The General Meeting of Shareholders is the
highest authority of the Company, has the right to decide matters within its duties and powers in
accordance with the Law and the Company Charter. The Supervisory Board evaluates annual
financial statements, examines each specific issue related to financial activities when it deems it
necessary or according to the decision of the General Meeting of Shareholders or at the request
of major shareholders. The General Director only operates subsidiaries and associates. The
general director and the board of directors are overseen by the Audit Committee, Investment
and Strategy Comittee, Human Resources and Remuneration Committee. The departments
operate independently according to functions.

Vietnam Airlines has and multinational structure, too. The Company's headquarters are located
at 200 Nguyen Son street, Bo De ward, Long Bien district, Hanoi city, Vietnam. With a range of
activities beyond Asia, Europe,...Vietnam Airlines also established many representative offices
to easily operate business, as well as control qualities,...easily such as Germany, Cambodia,
United Kingdom, India, France,...

4.2. Function
For every company, the marketing department is one of the most important. VNA's marketing
department has the following basic tasks: market forecast research, establish relationships with
customers, and create marketing strategies for the company's services. Firstly, the Marketing
strategy of Vietnam Airlines has a vision when positioning itself as a high-end airline, with quality
and service taken care of, this is the advantage that VNA has to compete in the context of The
aviation industry is a very competitive industry in Vietnam, in particular, Vietnam Airlines, with
women wearing Ao Dai and men wearing a yellow-green vest in elegant colors, creates a
friendliness goods, even when looking at foreigners, they are very true to the image of Vietnam.
In addition, Vietnam's distribution strategy is highly effective when focusing on the application of
technologies in its ticketing process to provide the best experience to its customers. In addition,
the airline also links with famous travel websites with millions of users such as Traveloka or
Booking ... to give customers easy access to their flights, as well as buy tickets in the easiest
way. VNA's box office is covered nationwide, making the airline's coverage at a very high level,
customers can easily buy Vietnam Airlines tickets anywhere from Online to Offline in the easiest
and most convenient way. The marketing strategy of Vietnam Airlines is really good in terms of
media and PR, VNA sponsors national events, literature socialization, education, sport and
community help. With national events, VNA sponsors most major national events such as APEC
Summit, Women's Summit,.. In addition, VNA also strengthens coordination in promoting VNA
tourism in coordination with the Vietnam National Administration of Tourism to develop TV show
programs. "The hidden beauty", "SVietnam" aims to introduce the distinctive and outstanding
features of Vietnamese culture, society, country and people.

The marketing department has continuously had critical and fundamental connections with the
finance department and human resources. The marketing department has an great plan that can
develop a arrangement of activities that perform well against brand targets, but in the event that
the fund division doesn't favor the budget, the plan falls into the past and fail. Therefore, when
there is a reasonable plan, the marketing department will work directly with the finance
department, discussing the budget to be able to implement. After that, the human resources
department will consider how many employees it will need and will plan to hire if necessary. The
human resources department will rely on the marketing department's plan to come up with the
appropriate criteria.

For corporate organizational functions, functional structure chart will help the company achieve
high efficiency and make headlines. But it also has some advantages and disadvantages. On
the advantages, the functional structure diagram will help the CEO communicate with all
activities, reduce or simplify the control mechanism, clearly define the responsibilities, the
experts at the senior management level and intermediate level. On the disadvantages,
functional structure chart will senior managers overburdened with routine matters, senior
managers neglect strategic issues, difficult to cope with diversity, coordination between functions
difficult, failure to adapt. With the functional structure, the departments in the company can
operate most effectively to achieve the goal.For example, on the digital transformation goal, the
HR department will hire the appropriate technical staff. , the marketing department will propagate
and advertise for many people. The departments will work independently to achieve the
company's goals.

V. Conclusion
Vietnam Airlines is the largest airline in Vietnam, making an important contribution to the
development of Vietnam's civil aviation industry as well as making a great contribution to the
economic, social development, industrialization and modernization of Vietnam nation. To sum
up, according to everything in the report, Vietnam Airlines is a company that fits our criteria very
well, this is a company that should be invested. Because from an investor's perspective, it is
completely possible to believe in a sustainable development of VNA and investing in this
company will be a profitable business opportunity such as profit and revenue or the opportunity
to learn more about business.

VI. References
VNA, 2019. Annual Report. [Online]
Available at: https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-
Relations/Bao-Cao-Thuong-Nien/2019-bctn-english.pdf

[Accessed 27 9 2020].

VNA, 2020. Finacial Report. [Online]

Available at: https://www.vietnamairlines.com/~/media/FilesDownload/AboutUs/Investor-
Relations/Bao-Cao-Tai-Chinh/2019/2019-consolidated.PDF

[Accessed 22 September 2020].

VietstockFinance. 2020. HVN: Tổng Công Ty Hàng Không Việt Nam - CTCP - Vietnam Airlines |
Vietstockfinance. [online]
Available at: https://finance.vietstock.vn/HVN-tong-cong-ty-hang-khong-viet-nam-ctcp.htm
[Accessed 27 September 2020].