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Company's Business Results During the Period (2018-2019)

4. The company's business results in the period (2018-2019)

Table 2: Business results 2018-2019 Truong Hung Thinh General Trading Service Company Limited

Unit: billion VND


STT

Target

2018

2019

2019/2018

(+/-)

%

1

Current assets

34,810

34,895

85

0.24

2

Long-term assets

12,814

14,080

1,266

9.8

3

Total assets

47,624

48,975

1,351

2.8

4

Liabilities

38,145

39,802

1,657

4.3

5

Equity

9,479

9,172

-307

-3.2

6

Total capital

47,624

48,975

1,351

2.8

7

Revenue

78,021

71,168

-6,853

-8.7

8

Profit after

tax

1,870

1,661

-209

-11.2

9

Labor

(People)

30

42

12

12

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Companys Business Results During the Period (2018-2019)


(Source: 2018/2019 business results document of Truong Hung Thinh General Trading and Service Company Limited)

Through the above data, we can see that the revenue of Truong Hung Thinh General Trading Service Company Limited has decreased. The company's revenue in 2018 was 78,021 billion VND, but in 2019, the revenue decreased by 6,853 billion VND, equivalent to 8.7% compared to last year.


II. Overview of the company's product consumption situation in recent times

Table 3: Company sales data table

Unit: billion VND



2018

2019

BT Type

M 3

Total amount

M 3

Total amount

Mac 200

8300

6,308

7600

5,766

Mac 250

10000

8,000

9700

7,760

Mac 300

8700

7,482

8500

7,310

Mac 350

16800

15,456

11000

10,120

15000

14,550

13800

13,386

Mac 450

12300

14,760

13000

15,600

Mac 500

8100

10,287

7800

9,906

Total

79200

76,843

71400

71,022

Mac 400


Source: Company accounting department


III. Current status of product consumption market expansion activities of Truong Hung Thinh General Trading and Service Company Limited

1. Policies and measures that the company has applied to expand the product consumption market in the past (2018-2019)

1.1) Product policy

-Determine the size of the product set

The main task of the company is to produce and trade commercial concrete to serve the market demand in Hai Phong. Construction of civil and industrial works. Leveling and foundation treatment of small and medium-sized irrigation, industrial, and civil traffic works...

In recent years, the Company has been participating in the construction of a number of projects in Hai Phong, including civil and industrial construction projects. With a team of skilled workers and employees, having many years of experience in the construction and installation of large projects, the capacity of construction equipment and machinery is equipped with modern, fully equipped to meet all construction and installation needs. The unit has initially created a reputation in the market and has participated in the construction of a number of projects in Hai Phong City.

Taking the motto of putting product quality first. The company has gained a lot of trust inside and outside the province. The company's production and business activities are constantly expanding.

1.2) Promotion and advertising policy

1. Advertising


Nowadays there are many forms of advertising to reach customers, including advertising through newspapers.

Newspaper advertising is a popular method that is easy to reach the majority of customers. Companies can advertise in newspapers to introduce the company and concrete products, focusing on the advantages, uses and competitive prices.

Advertising with flyers and posters in crowded places


2. Stimulate consumption


discount


Business discount is understood as the discount rate that the seller gives to customers who buy in large quantities. This discount is often accompanied by conditions such as: cash payment, purchase in a certain quantity to get a discount or early payment...


This form can be applied to customers who buy the company's products. The discount can be applied from 2% - 4% depending on the order price of a certain product and is applicable to customers who buy the product for the first time.

1.3) Price policy

Table 4: Price list of ready-mixed concrete - commercial concrete


Strength of the concrete

label

Standard

Slump (mm)

Unit of measure

Unit price (VND/m 3 )

200#

Stone 1×2

120±20

m3​

760,000

250#

Stone 1×2

120±20

m3​

800,000

300#

Stone 1×2

120±20

m3​

860,000

Stone 1×2

120±20

m3​

920,000

400#

Stone 1×2

120±20

m3​

970,000

450#

Stone 1×2

120±20

m3​

1,200,000

500#

Stone 1×2

120±20

m3​

1,270,000

350#

(Source: material planning department)


The pricing policy for each product of a manufacturing and business unit is the regulation of the selling price or the selling prices for each specific target. The pricing policy is one of the part policies of the Marketing strategy and it plays an important role in linking other parts. At the same time, it has the role of influencing, promoting or inhibiting the effects of the Marketing policies of the enterprise.

A business produces a product. If the business sets a reasonable price policy or the selling price is appropriate to the value of the product, the product will be accepted by consumers. If the business sets an unreasonable price policy or the selling price is too high or too low compared to the value of the product, consumers will not buy it.

This means that pricing policy can positively or negatively impact the implementation of the overall strategic goals as well as the marketing strategy goals of the business.

Moreover, price plays an important role in the production and business activities of enterprises. It is an important factor in the process of deciding whether to continue producing and supplying products to the market or not? Is it necessary to replace new products? In construction, it determines how much the enterprise will bid to both dominate the market and have a basis for accumulation for the enterprise. Price is a decisive factor in the volume of products that the enterprise sells (reasonable prices sell a lot and vice versa), so it affects profits.

For buyers, price influences their purchasing decisions. For them, price reflects the overall product characteristics that they directly perceive.

Nowadays, price competition is shifting to product quality competition, delivery time... but price competition is still fierce. In the field of basic construction, bidding price competition is fierce, it shows the competition, economic benefits and monopoly position of enterprises in the market.

Table 5 Price policy of fresh concrete and commercial concrete of Truong Hung Thinh General Trading and Service Company Limited compared to competitors

Unit: VND


STT

Concrete strength (Grade)

Unit

Thanh Concrete Joint Stock Company

Hung

Truong Hung Thinh General Trading Service Company Limited

Bach Dang 5 Joint Stock Company

1

200#

m3

740,000 VND

760,000 VND

780,000 VND

2

250#

m3

780,000 VND

800,000 VND

820,000 VND

3

300#

m3

840,000 VND

860,000 VND

880,000 VND

4

350#

m3

900,000 VND

920,000 VND

940,000 VND

5

400#

m3

950,000 VND

970,000 VND

990,000 VND

6

450#

m3

1,180,000 VND

1,200,000 VND

1,220,000 VND

7

500#

Ton

1,250,000 VND

1,270,000 VND

1,290,000 VND

(Source: Sales Department of Truong Hung General Trading and Service Company Limited

Thinh)


For construction enterprises such as Truong Hung Thinh General Trading and Service Company Limited, the pricing policy has some differences compared to other industries: the pricing and price structure are calculated separately for each project, project item, and each area, and must compete with many other enterprises through bidding. To win the bid, the enterprise must have a reasonable pricing policy: lowest cost, ensuring quality, aesthetics, and shortest construction time...


If the business's product is new, special... then the business can initially set a high price, then gradually reduce the price to promote consumption.

If a business's products are produced in large quantities, sold on a mass scale, and have many competing products, the business can set prices according to established market prices...

Therefore, according to this point of view, businesses also need to differentiate prices according to market areas, time and customer groups to attract more customers... And this second point of view is the "market-oriented" pricing policy.

1.4) Distribution policy

Direct channel: The company sells goods directly to consumers without going through any intermediaries. This is a business channel. For the company's construction markets: the company organizes direct sales to the company's units and construction sites, not through first-level agents. For the project market, the company applies marketing measures to investors, project management boards of the Ministry of Construction, Ministry of Transport... to officially put steel products into use in large projects. According to the results of practical research, the company's current distribution network has not fully met the needs of consumers. Therefore, the company must focus on building a better and wider distribution channel system.

2. Achievements 2.1) Market share


Currently, the company has a reputation and a moderate market share compared to its competitors, with a very wide distribution network in the northern market. Therefore, the company has a flexible business strategy, thoughtful sales services and always follows the market for its products. Along with the company's incentives, sales volume has increased rapidly. Sales revenue by sales methods has increased steadily over the years.

Along with consuming products through different methods, the company also launched many types of products for customers to choose from. Thanks to that, the company's market share has improved significantly. Specifically, the company's market share is 7%.

2.2) Product output consumed


m

Consumption output 2018-2019

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

2018

2019

m200 m250 m300 m350 m400 m450 m500

Table 6: Product consumption output 2018-2019



2018

2019

BT Type

M 3

Total amount

M 3

Total amount

Mac 200

8300

6,308

7600

5,766

Mac 250

10000

8,000

9700

7,760

Mac 300

8700

7,482

8500

7,310

Mac 350

16800

15,456

11000

10,120

Mac 400

15000

14,550

13800

13,386

Mac 450

12300

14,760

13000

15,600

Mac 500

8100

10,287

7800

9,906

Unit: billion VND

Source: Company accounting department


To expand the market for its products, Truong Hung Thinh General Trading and Service Company Limited has sold products. At the same time, the company has also diversified its business items to expand and exploit the maximum consumption market.

1.3) Revenue and profit


Table 7: Sales revenue and profit table

Unit: Billion VND


STT

Target

2018

2019

(+/-)

(%)

1


Revenue


78,021


71,168


-6,853


-8.7


2


Profit after tax


1,870


1,661


-209


-11.2


Source: Company accounting department

Revenue in 2019 decreased by 6,853 billion (equivalent to 8.7%) compared to 2018, leading to a decrease in after-tax profit.

3. Evaluate the company's strengths and weaknesses in expanding the product consumption market.

3.1) Advantages

- 2018 is the first year of the company's establishment in a new but fiercely competitive market context, with the high determination of all staff.

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