Vietnam Market Entry Decision IBM - Case Study Presenters: Balaji Chettiyar (Roll No 1410) Chinmay Patil (Roll No 1443) Deepak Kulkarni (Roll No 1428) Devendra Pataskar (Roll No 1445) Ganesh Patil (Roll No 1444) Nikhil Tathe (Roll No 1455) Ritesh Khadke (Roll No 1427) Shivraj Pawar (Roll No 1447) Vinayak Jaybhaye (Roll No 1423) Vishal Vadkar (Roll No 1459)
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Vietnam Market Entry DecisionIBM - Case Study
Presenters:Balaji Chettiyar (Roll No 1410)
Chinmay Patil (Roll No 1443)
Deepak Kulkarni (Roll No 1428)
Devendra Pataskar (Roll No 1445)
Ganesh Patil (Roll No 1444)
Nikhil Tathe (Roll No 1455)
Ritesh Khadke (Roll No 1427)
Shivraj Pawar (Roll No 1447)
Vinayak Jaybhaye (Roll No 1423)
Vishal Vadkar (Roll No 1459)
Vietnam- PESTEL ModelPolitical
Communist Party(CPV) - Centralized control
over media, military, state
Special unnerving powers with government
Improved relationship with neighboring
countries
Trade embargo lifted by US government in
1994
Amended Constitution 1992 - Recognized the
role of private sector in the economy
Bureaucracy
Economical
Member of Association of SE Asian
nation (ASEAN)
Full diplomatic ties with China in 1991
Doi Moi economic reforms
SOE contributes 40% share in GDP
Significant contribution by private organisations
Expected high investment in coming years by
Japan
Joined Asia-Pacific Economic
Cooperation (APEC)
Average annual growth rate of 7.5% in FY1991-
96
Social
Economically efficient labor force
90% literacy rate
Attraction towards western brands
Young population (50% population < 21 years)
Hard working entrepreneurs
Socialist oriented market economy
High corruption
Technological
Major industrial growth in Oil &Gas, Power,
Real Estate, Hotels & telecommunication
Lack of communication channels (telephone,
television etc)
Lack of distribution network
Lack in capacity and equipment for increasing
imports
Vietnam - PESTEL ModelEnvironmental
Shallow water harbors
Lack of infrastructure and transportation
Developing tourist industry due to rich natural
and cultural heritage
Long coastal area and opportunity of marine
transport
Equidistantly located from emerging markets
viz. Malaysia, Indonesia, China, Thailand,
Singapore & Hong Kong
Legal
Allowed max 70% FDI
100% ownership approved only for large &
complex organisation as rare case
Benefits of re-exports
Foreign companies operating through local
dealer can establish office only for promotion
of international trade or technical support.
Trading / marketing / investment is prohibited
for such offices
Build-operate-transfer ventures allowed
Business Cooperation contract – Freedom to
design own contract
Chemical Corp- Overview World Leader in Chemical adhesives & sealants.
Superior replacement technology,
Diverse & fragmented customer base.
Highly trained sales force expert in value based selling.
Technological leadership (30% revenue from newly introduced products – Innovation).
Highly profitable business-61% Gross margin
International distribution - Strength. (56 Distributors in totality).
Strong & well dispersed global manufacturing presence – USA, Peurto Rico, Ireland, Costa
Rica, Japan, India, Brazil, China.
Existence in almost all neighbouring countries of Vietnam which are contributing handsome
revenues.
30% import duty in Vietnam for chemical products. Which will result into product pricing 3 to 4
times higher than present competition.
Incase of export to Vietnam through dealer network , no Direct marketing / Sales promotion is