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Vietnam: Market Entry Decisions

Timeline: 1975 1986 1986 1995 Socialist Republic of Vietnam Established Doi moi (Economic Renovation) was officially launched Inflation averaged 775% 17 conglomerates on the models of Chaebols formed in Vietnam

Economy of Vietnam: Total GDP - $19 million FDI averaged between $14M - $15M 4th largest source of FDI Local entrepreneurs faced shortage of capital GDP per capita: $235 EU gives MFN status to Vietnam

Forms of Market Participation: MNC Vietnam Import Agency MNC SOE Joint ventures Wholly Foreign owned organizations Processing contract (MNC using Vietnamese factory for production/assembly) Business co-operation Contract Build- operate transfer ventures Representative office

Doing Business in Vietnam - Critical Factors: Less Distribution (+) Corruption (-) Poor Infrastructure(-) Low workforce Costs(+)

Chemical Corporation: Strategy adopted: Independent distributors Strength: International Distribution Strategy Suggested: Can startup in IPZs Reason: Reduced Taxation Levels

Sports Corporation: Strategy Adopted: contracted out its operations Strength: Innovative design and marketing expertise Strategy suggested: Processing contract Reason: Less production costs, more returns

Children Corporation: Strategy Adopted: OEM customers to assemblers Strength: Understanding Children, optimized manufacturing operations, good marketing strategy Suggestion: JV with SOEs to succeed in retail

Vijay Krishnan A DM14257

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