compared to the absolute share of the strongest competitor.
The formula for market share is calculated as follows:
Absolute market share =
x100
Relative market share (F3) =
x100%
Formula for calculating increased market share: Increased market share = total new market share – total old market share.
Developing the essential food consumption market from the perspective of increasing market share will bring competitive advantages, thanks to which businesses have the ability to widely choose competitive weapons in terms of price, display, promotion, etc., thereby seizing opportunities to increase revenue and business profits.
Organize reasonable distribution channels
Establish and reorganize distribution channels to accelerate food consumption, increase sales by using sales staff and promote wholesale areas and retail stores in potential new markets.
1.3.2.2. Indicators for developing the market for essential food consumption in depth
Manufacturers and businesses can also ask whether with their current product brand and the existing reputation of the product, they can increase the volume of sales to the existing customer group without having to change the product. This will lead to increased sales and more profits. In other words, the business continues to sell familiar products in the current market, but seeks to increase the volume of sales. In this case, the business can apply by lowering the price of the product to attract buyers to buy more than before or advertise the product more strongly to achieve the ultimate goal of not losing any of its existing customers and training the group of customers who use many similar products at the same time to use only the product of the business. The indicators for developing the market for essential food consumption in depth include:
Profit target
Profit is a comprehensive economic indicator that shows the production and business efficiency of enterprises in general and essential food products in particular. Profit, however,
Although it is not a direct indicator reflecting the results of the expansion of the essential food market, it is an indicator closely related to this work. Therefore, through the growth rate of profits in both absolute and relative terms, we can partly understand the expansion of the essential food market of the enterprise.
Profit = total revenue – total costs
Profit plays an important role in the distribution of essential foods of enterprises. Continuously increasing profits from trading essential foods shows the financial strength of the enterprise is increasingly solid, creating conditions to expand the distribution network of goods, expand the market share for enterprises, creating momentum to improve the efficiency of the enterprise's essential food business activities.
Transforming the quality of essential foods
Quality control of essential foods is the commitment of the enterprise to prove the quality of that food. Additional services that come with the product such as home delivery, transportation, packaging, etc. This partly creates trust with customers, partly helps the company to manage employees more easily, creating its own professionalism. Essential foods are distributed in a variety of types, so each type needs to be preserved appropriately.
CHAPTER II: CURRENT STATUS OF ESSENTIAL FOOD MARKET DEVELOPMENT OF TAN DUC TRADING COMPANY LIMITED
2.1. Overview of the situation and factors affecting the development of the essential food market of Tan Duc Trading Company Limited
2.1.1. Overview of general business situation of Tan Trading Company Limited
Virtue
Overview of Tan Duc Trading Company Limited
Tan Duc Trading Company Limited was established under business license No.
6200068486 first registered on January 23, 2003 registered and managed by the Lai Chau Provincial Tax Department. Tan Duc Company operates in many different business lines, from buying and selling essential consumer foods for families to producing and distributing agricultural products such as pork, green tea, vegetables, tubers, fruits to catering services, transportation, accommodation... However, the most prominent and the source of revenue for the company is from the wholesale of essential goods and foods such as fish sauce, salt, MSG, cereals, milk, rice and other nuts. The company has legal status, has its own seal, logo and charter. Currently, the company operates with the basic functions of buying, selling and distributing consumer products for families, essential foods, blankets, pillows, carpets, mattresses, curtains, electronics, manufacturing and distributing agricultural products... As of 2020, Tan Duc Company has had over 300 regular customers. In order to improve business efficiency, the company has built and expanded the retail of alcoholic beverages and food to specialized stores. In addition, the company is also exploiting and developing a number of other services such as road transport services, short-term accommodation services and mobile catering services...
Over the years of operation, the company has continuously developed and grown in both scale and quality with a large staff of employees with solid expertise, meeting the needs of customers as well as the development needs of the company.
The company's essential food consumption market
In general, the company's main consumption market is limited to Lai Chau province. The company distributes essential food products to almost all districts in Lai Chau province. In addition, the company also distributes goods to some neighboring districts in Lao Cai and Dien Bien provinces, but the quantity is not much. Currently, Tan Duc Trading Company Limited is implementing the goal of expanding its distribution network in remote communes in Lai Chau province, this is a potential market, helping the company expand its market share as well as increase revenue.
The company's main customers
Since the company’s main activity is the supply and distribution of essential foods, goods, household electrical appliances, etc., the company’s customers are mainly small goods distribution enterprises, small traders, retailers, etc. in Lai Chau province. Some of the company’s major customers include: Hoang Nham Hotel, Huong Long Hotel, Anh Thu Enterprise, Hue Hien Supermarket, etc.
Company's competitors
Currently, in the province, there are more than 100 trading enterprises, distributing essential goods and foods with good development potential, creating significant challenges to the company's business activities. Some of the company's major competitors include Huong Long Trading Co., Ltd., Chau Tuan Trading Joint Stock Company, etc.
The company's business results in the period 2018 - 2020 Table 2.1: Business results of Tan Duc Trading Company Limited
period 2018 - 2020
Unit: VND
Business items and services
2018 | 2019 | 2020 | |
Clean agricultural products | 573,849,483 | 764,379,865 | 824,759,295 |
Consumer food | 1,837,492,057 | 1,857,659,357 | 1,934,274,927 |
Furniture | 94,830,475 | 176,890,450 | 237,482,749 |
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Indicators Measuring Financial Market Development -
![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Impact of Financial Market Development on Enterprise Capital Structure by National Institutional Quality -
The impact of financial market development on the capital structure of listed enterprises in the ASEAN Economic Community - 28 -
The impact of financial market development on the capital structure of listed enterprises in the ASEAN Economic Community - 2
Source: extracted from the business results report Comment: through table 2.1, we can see that the revenue from the distribution of essential food products of the company tends to increase slightly over the years. In particular, in the period from 2019 to 2020, when the Covid-19 pandemic broke out strongly across the country, the company still increased its revenue by nearly 100 million VND (approximately 4.15%). This shows that the company's business situation is increasingly favorable, developing and achieving good results, the company's business plans are also developed in accordance with the plan.
route.
2.1.2. Factors affecting the development of the essential food market of Tan Duc Trading Company Limited
Market development activities are extremely important for each business, but this activity is also greatly affected by subjective and objective factors in the market.
2.1.2.1. Subjective factors
Company human resources: Tan Duc Trading Company Limited has the advantage of young, dynamic employees. The management team is well-qualified, has many years of experience in the industry, has solid professional knowledge and is always ready to share experiences with employees. This is an important factor that contributes significantly to the development of the company as well as contributes to the implementation of the company's goals more effectively.
Capital and technical facilities, infrastructure of the company: When a business has a stable source of capital to support the business activities of the company, it will be a very favorable factor for increasing revenue and thereby developing the market for the business. Because, when there is capital, the company will be proactive in the source of goods to provide to customers. Avoid shortages, not fully meeting the needs of customers.
Characteristics of the company's business products: Essential foods are an extremely important product in life. The more people's lives improve, the higher and more diverse their demand for food becomes, requiring businesses to meet both quantity and quality. This is the driving force for Tan Duc Trading Company Limited to expand and develop its essential food market.
The company's reputation and position in the market: The company's reputation and position have a great impact on the formation of the company's loyal customer base. The higher the company's reputation, the larger the loyal customer base, thereby expanding the distribution network and developing the market for the company. As a business established in 2003, the company has been operating in the market for nearly 20 years. During that time, the company has built its reputation in the market. Although not a large national company, in the northern provinces, Tan Duc Trading Company Limited has affirmed its position over the years.
2.1.2.2. Objective factors
Sociocultural factors
• Population: Lai Chau is a mountainous province with a small population. Lai Chau is the 62nd most populous province out of 63 provinces and cities nationwide. After 10 years, from 2009 to present, the province's population has increased by 89,694 people; the average population growth rate in the period 2009-2019 is 2.17%/year; the sex ratio is 102.6 males/100 females. Over the past 10 years, the province's population has increased compared to the previous 10 years; the population growth rate is higher than the national average but is still under control. Specifically, the total population of the province as of April 1, 2019 is
460,196 people, of which the male population is 233,097 people, the female population is 227,099 people.
Population growth leads to increased demand for food, creating market development conditions for food distribution businesses in the province.
• Population density: Lai Chau is the province with the lowest population density in the country. In 2019, the province's population density was 51 people/km2 (an increase of 10 people/km2 compared to 2009), of which Lai Chau city is the locality with the highest population density (in 2019, it was 590 people/km2, an increase of 211 people/km2 compared to 2009). Also from 2009 to present, the proportion of urban population has increased by 4.4 percentage points. The increase in population density has led to a more diverse demand for food among people in the province, consuming more food, helping businesses distributing food products in the province increase revenue.
• Consumer income and income distribution: The income of Lai Chau province's people has increased steadily in recent years. Specifically, in 2020, the GRDP growth rate reached 11.5%/year, the average GRDP per capita was over 41.7 million VND. The income of local people affects the financial ability of consumers to satisfy their needs. When people's income is higher, spending on food will be higher not only in quantity but also in quality. Therefore, businesses have the opportunity to develop a variety of foods distributed to the market with higher quality and larger quantity.
Political and legal environment
Lai Chau province has many preferential policies and investment support in Lai Chau province for enterprises, implemented in accordance with the Investment Law. The beneficiaries of incentives include: Investors are organizations and individuals carrying out investment activities according to the regulations.regulations of Vietnamese law, having investment projects (including expansion investment projects) in the localityLai Chau province table. Preferential policies, support to reduce tax rates such as land tax,corporate income tax, export tax, various credit incentives, labor training,investment support… this helps businesses in the province to be more confidentin investment, business expansion, market development as well as multi-faceted developmenttypes of distribution items.
Economic and technological environment
Although the conditions are still very difficult, especially the complicated developments of the Covid-19 epidemic, under the strong direction of local authorities at all levels, the socio-economic development situation of Lai Chau province has achieved positive results. The average growth rate of the province in the first 6 months is higher than the national average of 10.08%. The high economic growth rate is a good sign for food distribution businesses in the province. Because when the economic growth rate is high, it means that people's income increases, the demand for food
Essential products have also increased, creating opportunities to expand and develop the consumer market for Tan Duc Trading Company Limited.
The tax system, the level of completion and enforcement of the locality as well as the whole country are completely strict and transparent, creating a healthy and fair competitive environment for all businesses focusing on trading and distributing essential food products, creating trust for businesses, helping Tan Duc Company to be more determined in its goal of expanding and developing its market.
Competitive environment
• Number of competitors: Currently, there are countless large and small businesses distributing essential foods in the market. Most of these businesses have abundant financial resources, quality human resources and distribute a variety of products. This has a significant impact on the expansion and development of the market of Tan Duc Trading Company Limited. However, in addition to the above advantages, most of Tan Duc's competitors do not enjoy preferential policies on tax rates as well as credit incentives and investment incentives that Tan Duc Company has enjoyed in the past.
Geographical and ecological environment
• Geographical location of the enterprise : the enterprise is located in group 22, Dong Phong ward, Lai Chau city, the center of the province with favorable traffic conditions, where the population is dense, which is an advantage for the enterprise. However, as a mountainous province, the transportation of essential food items is somewhat difficult due to the mountainous terrain, many steep passes, not favorable for distributing goods to communes and districts by large trucks. Using trucks with smaller tonnage, having to transport multiple times or using multiple trucks in one transport causes the company to increase costs, greatly affecting the company's gross profit.
• Weather and climate, seasonal characteristics : Lai Chau province is a mountainous province in the North, with mild and cool climate conditions, making it easier to preserve goods, especially food products of the company.
2.2. Analysis of the current situation of market development of essential food products of Tan Duc Trading Company Limited
2.2.1. Analysis of market size of Tan Duc Trading Company Limited in Lai Chau province
Business size assessment criteria
According to Article 6 of Decree No. 39/2018/ND-CP, the criteria for micro-enterprises, small enterprises, and medium-sized enterprises are determined as follows:
24
1. Micro-enterprises in the trade and service sector have an average number of employees participating in social insurance of no more than 10 people per year and a total annual revenue of no more than 10 billion VND or a total capital of no more than 3 billion VND.
2. Small enterprises in the trade and service sector with an average number of employees participating in social insurance of no more than 50 people per year and a total annual revenue of no more than VND 100 billion or a total capital of no more than VND 50 billion, but not a micro-enterprise as prescribed in Clause 1 of this Article.
Business size analysis
Revenue: Article 9 of Decree No. 39/2018/ND-CP stipulates that total capital is determined in the balance sheet shown on the Financial Statement of the previous year that the enterprise submits to the tax authority.
According to Article 10 of Decree No. 39/2018/ND-CP, total revenue of the year is the total revenue from sales of goods and provision of services of the enterprise and is determined on the Financial Statement of the previous year that the enterprise submits to the tax authority.
In case an enterprise has been operating for less than 01 year or more than 01 year but has not generated revenue, the enterprise shall base on the total capital criteria specified in Article 9 of this Decree to determine a small and medium enterprise.
In case the enterprise has been operating for less than 01 year, the total capital is determined in the enterprise's balance sheet at the end of the quarter immediately preceding the time the enterprise registers to enjoy the support content.
Based on the above determination, Tan Duc Trading Company Limited is a company that has been operating for more than 15 years, with the capital in the company's balance sheet at the end of the fourth quarter of 2020 being billion. The company's total revenue in 2020 only reached, not exceeding 10 billion VND, the number of people participating in social health insurance is almost zero.
2.2.2. Analysis of revenue of essential food items in the period 2018-
2020
2.2.2.1. Analysis of growth rate of revenue of essential food items
Tan Duc Trading Company Limited
The purpose of this analysis is to provide a general assessment of the company's revenue from essential food products. Thereby, the company provides information to forecast market demand trends as a basis for building a medium and long-term essential food business plan of Tan Duc Trading Company Limited.
25