3.

1 Internal Evaluation Based on Resources

Evaluating Biti’s internal environment helps the company identify its strengths and
weaknesses. From there, Biti’s can develop reasonable business strategies. At the same
time, it understands management and the function of departments within the company.

− Leveraging long-term experience in the footwear industry in the Vietnamese

market, Biti’s has made excellent use of its long-standing brand image. Biti’s is a
footwear business that has been present in Vietnam for a much longer time
compared to other companies (nearly 40 years), and in terms of brand image,
Biti’s has deeply ingrained itself into the memory of Vietnamese people, thereby
always winning the trust of the people for product quality, capturing a large
market share of loyal domestic customers.

− Although it is a long-established business in Vietnam, Biti’s is always creative and

knows how to adapt to the times by continuously researching and launching many
product lines, including six main product lines, notably Biti's Hunter and Biti's
Hunter X. Thượng Đình Shoe Company is also a long-standing business in
Vietnam but has not diversified its products, failing to adapt to current trends,
leading to customer neglect when many famous international footwear brands
entered the Vietnamese market, such as Nike with Air Force and Jordan lines, and
Adidas with Stan Smith and Ultra Boost.

− In addition to leveraging its long-standing brand, Biti’s is also a domestic

enterprise with a distinctive, bold, yet decisive strategic vision and long-standing
experience in the Vietnamese footwear industry of the group's management.

− The first example of a distinctive strategic choice is Biti’s leading strategy of

opening distribution agents, stores, and large shopping centers in the Central
Highlands and Northwest regions—areas that receive little investment despite
having great potential in terms of land resources and abundant unskilled labor,
including an international shopping center at the Lao Cai border gate. From there,
Biti’s market expansion strategy and penetration of new domestic markets were
quickly and effectively implemented without incurring significant costs.

− Taking advantage of its dominant position in the domestic market, after

introducing products to the border provinces, Biti’s became the pioneering
Vietnamese enterprise in promoting Vietnamese footwear to neighboring countries
and investing in many chains of agents in China.
3.1.1 Financial Capability (K-Capital)
− Charter capital: 21,070,000,000 VND.

− Biti’s has abundant financial resources and does not need to borrow funds for
business operations.

− In addition to the goal of sustainable development in the footwear manufacturing

industry, Biti’s also implements a strategy of diversifying into other business areas
to increase revenue for the company and develop into a multi-sector group. These
areas include investment promotion activities in construction, trade, and real estate
business. An international border gate shopping center with a budget of 10 million
USD has been established in Lào Cai (4-star Sapaly Lào Cai Hotel). Further
investment has been made in Lady Hill Sapa Resort with nearly 30 hectares and
4.2 hectares for the Kim Thành commercial area. Biti’s has not only effectively
utilized its business capital but also fulfilled its tax obligations to the state.

− Growth rate: Initially, there were two small cooperatives, Bình Tiên and Vạn
Thành, with only 20 workers. After more than 40 years of striving, the number of
employees has increased to 9,000. This includes two shopping centers, two
business centers, and over 4,000 agents nationwide. Biti’s products are sold in
over 40 countries and regions worldwide, including demanding markets like the
EU. Regarding business performance, Biti’s showed improvement in 2022, with
significant recovery in net revenue and post-tax profits. Specifically, in 2021, the
company’s net revenue decreased by over 26% compared to the same period in
2020 before ending 2022 with growth reaching nearly 2 trillion VND. Along with
that, Biti’s net profit also decreased significantly in 2021 and then regained rapid
growth to over 96 billion VND in 2022.
Strengths:

− Stable revenue: Biti’s has achieved stable revenue in recent years, with an average
annual revenue exceeding 1,000 billion VND. This indicates Biti’s ability to
generate profit and maintain stable business operations.

− Low debt: Biti’s has a low debt ratio compared to total assets, demonstrating the
company’s financial autonomy and reduced reliance on loans, thereby decreasing
repayment pressure. Biti’s debt ratio to total assets is below 30%, lower than the
industry average for footwear.
 − Stable net profit: Biti’s has achieved stable net profit in recent years, indicating the
company’s effective cost management and enhanced business efficiency. Biti’s
average net profit is approximately 10-15% of revenue, higher than the industry
average.

− Good profitability: Biti’s has good profitability, with return on equity (ROE) and
return on assets (ROA) higher than the industry average. This indicates Biti’s
ability to use capital efficiently to generate profit.
Weaknesses:

− Slow revenue growth: Biti’s revenue growth has been slow in recent years due to
intense competition from international brands. Biti’s revenue growth rate is below
5% per year, lower than the footwear industry’s growth rate. Lack of investment
resources: Biti’s needs to invest more in research and development, marketing,
brand building, and export market exploration but lacks financial resources. Biti’s
must seek new investment sources to meet development needs.

− Technological adaptation: Biti’s needs to invest more in technology to improve

production efficiency, management, and marketing. However, Biti’s has limited
financial resources to invest in technology.

− Cost management: Biti’s needs to manage costs more effectively to increase profit.
Biti’s faces some issues in controlling costs, such as labor and raw material costs.
3.1.2 Structure of Organization
Biti’s has a distribution system stretching from South to North with 07 branch centers,
156 marketing stores, and over 1,500 retail distribution intermediaries, providing
stable employment for over 9,000 workers at Biti’s Corporation and Dona Biti’s
Company, with an annual production of over 300 million products of various types,
including high-end sports shoes, fashion women's shoes, leather dress shoes, canvas
shoes, EVA foam slippers, and indoor slippers. The organizational structure of Biti’s
may include the following departments:

− Board of Directors: The highest representative of the company, responsible for

overall management and development direction.

− Sales Department: Responsible for business operations, product promotion,

customer acquisition, and sales promotion.
 − Production Department: Manages the production process, quality control, and
production resources.

− Research and Development Department: Conducts research, product development,

and improvement of technology and production processes.

− Accounting Department: Manages the company’s finance, accounting, and capital

resources.

− Human Resources Department: Recruits, trains, and manages company personnel.

− Marketing Department: Analyzes the market, builds marketing strategies, and

advertises products.
3.1.3 Facilities
Facilities are an important factor affecting the production efficiency, competitiveness,
and sustainable development of Biti’s. Below is a detailed analysis of Biti’s facilities,
along with specific data:
Strengths:

− Modern production system: Biti’s owns a modern production system, equipped

with advanced machinery and equipment, which increases labor productivity,
reduces production costs, and ensures product quality.

− Number of factories: Biti’s currently has three main factories in Vietnam, located
in industrial zones with good infrastructure, favorable for production and logistics.

− Capacity: The total production capacity of Biti’s exceeds 10 million pairs of shoes
per year, meeting the domestic market demand and part of the export market.

− Spacious warehouse system: Biti’s owns a spacious warehouse system, ensuring

efficient storage and distribution of products, minimizing logistics costs.

− Warehouse area: Biti’s has over 10,000 m2 of warehouse area, sufficient to meet
the storage needs of products, raw materials, and support logistics activities.

− Strict quality management system: Biti’s applies a strict quality management

system, ensuring products meet high-quality standards, attracting customers.
 − Certification: Biti’s has obtained international quality certifications such as ISO
9001, ensuring products meet high-quality standards, attracting customers.
Weaknesses:

− Inconsistent facilities: Biti’s factory, warehouse, and equipment system are not
consistent, with some old machinery hindering the improvement of production
efficiency and competitiveness.

− Lack of investment in technology: Biti’s is limited in investing in technology,

specifically the application of information technology in production management,
warehouse management, and supply chain management.

− Technological adaptation: Biti’s needs to enhance its technological adaptation,

training employees in technology skills to apply technology in production,
management, and marketing.

− Production environment: Biti’s production environment has not been

systematically invested in, lacking attention to environmental factors, affecting
worker health and the surrounding environment.
3.1.4 Labour
The workforce is highly specialized in professional skills suitable for their job
positions.
*Policies:

● Biti’s ensures employment for all company employees and ensures the payment of
social allowances in accordance with the Labor Code. Additionally, the company
applies several allowance policies for employees, such as marriage allowances,
funeral allowances, occupational accident allowances, military service allowances,
fuel allowances, business travel expenses, and monthly mobile phone costs.

● Biti’s currently has a workforce of nearly 9,000 people. Biti’s always values
human resources as a valuable asset of the enterprise. To maximize the
effectiveness of this valuable asset, Biti’s has developed a strategy for training,
educating, and improving professional skills and has boldly invested in
establishing the Biti’s Training Institute. The institute’s lecturers are individuals
passionate about sharing and transferring experience, with many years of working
at the company.
 ● To stabilize the current workforce, Biti’s has implemented practical reward
policies and comprehensive benefits to encourage employees' working spirit and
long-term commitment. Since 2018, there have been 21 Happy Biti’s training
courses connecting happiness for each employee with over 300 happiness
ambassadors.

● Today, Biti’s employees are highly skilled professionals working with an

industrial work style in a dynamic and creative environment. At Biti’s, you will
receive training and guidance to integrate into the company quickly, creating
opportunities to challenge yourself and effectively develop your abilities.
*Human Resources:

− The workforce consists of young, dynamic, enthusiastic employees with strong

expertise.

− The employees are professionally trained at universities and colleges.

Strengths:

− Highly specialized personnel with good benefits: A strong technical team,

attractive welfare policies, and training investment.

− Dynamic environment: Encourages employees’ creativity, personal development

alongside societal development.
Weaknesses:

− Limited international management: Needs to enhance multicultural experience and

global market exposure.

− Slow adaptation: Needs to be more flexible in responding to market changes.

3.1.5 Competent Staff

The company has introduced many training policies and considers training as a
practical and legitimate right of all Biti's members. The first course was opened to
enhance knowledge, practical experience, and management capacity for managers and
potential staff across the country. The "Management and Human Resource
Management Capacity Building" course was taught by Mr. Vu Khai Thanh. He shared
experiences and skills accumulated over more than 20 years of market experience.
There were also 11 lecturers who were successful entrepreneurs and managers. Before
the course, students self-assessed their abilities accurately and honestly to monitor
their progress. After three months, their actual work results were evaluated. This
evaluation helps improve the training program for future courses, contributing to
employee skill enhancement.
3.1.6 Research and Development (R&D)

− Over the years, Biti's footwear brand has gained the trust and choice of many
consumers. To achieve this, Biti’s has made significant efforts in building its
brand, improving product quality, goods, and services, continuously seeking,
innovating, and upgrading technology, alongside creating attractive designs and
styles for products. Biti's is also a leading company in intellectual property
protection.

− According to the company's leadership, Biti's does not choose a low-price strategy
but prioritizes quality and leverages technology and human resources to enhance
product value. Biti's invests in the R&D department to challenge its agility.

− Additionally, Biti's is currently a strategic partner of over 40 renowned European

brands. Throughout years of cooperation and production, the company
continuously upgrades its production lines to meet the stringent standards of the
US and European markets. Furthermore, updating new production techniques to
ensure production progress is one of the challenges Biti's must overcome.

− Biti's specializes in producing and trading fashion footwear. The product lifecycle
is short, and the list of competitors is long, so Biti's has always protected itself by
ensuring intellectual property rights for its brand and product designs, protecting
consumers' legitimate rights.

− Mr. Ho Thanh Cong, Head of Design at Dona Biti’s, emphasized that the brand is
associated with product quality and customer trust. Industrial design is the
intellectual creation and effort of the design team and honest workers. Therefore,
to adapt to the highly competitive market, Biti's must protect its brand to secure
more domestic and export orders, increase brand value, and create stable
employment and better welfare policies for workers.
Strengths:
 − Focus on quality and innovation: Biti's invests in R&D to improve product quality,
innovate technology, and create attractive designs and styles. Prioritizing quality
over low-price competition shows Biti's long-term strategic orientation.

− Intellectual property protection: Biti's proactively protects intellectual property

rights for its brand and product designs, respecting creativity and consumer rights.
This builds customer trust and prevents unfair competition.

− International cooperation and technology upgrades: Biti's is a strategic partner of

over 40 renowned European brands, demonstrating production capacity and
meeting international standards. The company continuously upgrades production
lines and updates new techniques to ensure progress and product quality.
Weaknesses:

− Short product lifecycle and intense competition: The fashion footwear market has
a short product lifecycle and intense competition, requiring Biti's to continuously
innovate and create. This puts significant pressure on the R&D department to
quickly grasp trends and introduce new products.

− Production progress pressure: Updating new production techniques to ensure

production progress is one of the challenges Biti's must overcome.
3.1.7 Product Quality
Strengths:

− High product quality: Biti's products have high quality, durability, and a long
aging period.
− Typically, a Biti's product has a usage period of 3 to 5 years, suitable for the
"durable and long-lasting" mentality of most Vietnamese people. Biti's reputation
is not only recognized in the domestic market but also acknowledged by reputable
foreign organizations such as BVQI. Additionally, Biti's product range is very
diverse, catering to all ages and classes. Biti's is one of the few domestic footwear
companies investing in R&D to create diverse designs and styles, contributing to
the company's competitiveness.
Weaknesses:

− Price: Biti's products are relatively expensive due to their high-quality materials,
which competitors exploit by producing moderately priced products. For 100,000
 VND, a customer can buy one pair of Biti's sandals and use it for two years, while
the same amount can buy two pairs of other sandals for two years. Although the
quality of a Chinese sandal lasts only one summer, it gives customers a sense of
constant renewal.

− Product creativity: Biti's products lack creativity and breakthrough designs. Biti's
is not quick in capturing market demands. Most products are still simple, with
colors not diverse and youthful, not meeting the needs of young people.

− Raw materials: Another weakness of Biti's and other large domestic companies is
their dependence on raw materials, with localization rates only reaching 20-30%
per product. Therefore, companies cannot flexibly change designs, making
products expensive and not diverse.
3.1.8 Technology
a. Production Technology:

− Biti's has invested in automated production lines for certain product lines,
especially sports shoes. This increases productivity and reduces errors in the
production process.

− The application of CAD/CAM technology (computer-aided design and

manufacturing) helps Biti's create product designs quickly and accurately.

− Biti's has applied new technologies to products, such as:

o Lite Flex 2.0 sole technology: Increases elasticity and reduces weight for
shoe soles.
o LiteTraction technology: Increases grip and anti-slip properties for shoe
soles.
o LiteFoam technology: Provides comfort and cushioning for products.

− Biti's is seeking a more effective digital platform to replace the outdated PLM
solution, choosing the Centric Footwear PLM solution.

− Currently, Biti’s uses robots in cutting and gluing shoe soles and applies 3D
printing technology to create product models.
b. Information Technology:
− Biti's has implemented an ERP system (enterprise resource planning) to manage
business activities such as production, logistics, sales, and finance.

− The use of a CRM system (customer relationship management) helps Biti's track
and manage customer information, formulating appropriate marketing strategies.

− Biti's has built online sales channels on e-commerce platforms and the company's
website.

− Biti's uses data analysis tools to monitor business performance and customer
behavior.

− Biti's Smart – A smart technology platform combining Biti's sports shoes, smart
devices, and a smartphone app to track and provide recommendations for
children's physical activities.

− Biti's incorporates digital platforms into training and human resource

development. For example, using warehouse management software to track
inventory and marketing automation tools to send marketing emails to customers.