International Business Management Program

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International Business

Assignment 3

Presented for

Pooja Lekhi, Oleg

Instructor, International Business Management Program

Greystone College of Business and Technology

Prepared by

Camila

Lorena

Jack

Jayden

 International Business Management Program

Greystone College of Business and Technology

August 6, 2019

Index

Business Report        1

1. Introduction        1

2. Briefly Vietnam description        1

3. History and Geography        2

3.1.  Hofstede’s cultural dimensions and Vietnam        2

4. Political System        3

5. Economic system of Vietnam        4

6. Government involvement in trade        5

7. Foreign Direct Investment        6

8. Regional Economic Integration        7

9. General international strategy        8

10. Selected entry mode (Our business entry mode)        10

10.1. Exporting and Importing        10

10.2. Licensing        10

10.3. Franchising        11

10.4. Joint venture        11

10.5. Greenfield        11

11. Conclusion        12

References        13

Business Report

1. Introduction

 Based on the purpose of developing a company in the sector the tourism industry in Vietnam, this statement will demonstrate briefly about the country in terms of population, location, language and so forth. In order to show the cultural issues, the Hofstede Framework will be used and succinctly described each part of the technique that may influence the decision making about doing business in Vietnam, and how to behave in certain situations. Concerning about political, economic system and the government laws involved in trade, this report will also describe briefly about the main points, which may be decisive when desire of doing business in another country. Supporting the research, it will state how much foreign countries have invested in Vietnam, which may be a good thermometer to stakeholders. In order to add more information, it will be explained about the trading blocks that Vietnam already belong and which one (s) it is going to be part of. To conclude the description, some general international strategy will be defined as well as selected entry mode, with propose to make this report complete.

2. Briefly Vietnam description 

 Socialist Republic of Vietnam is the official name with land area of 119,719 square miles (310,070 square km) but the total area is about 127,881 square miles (331,210 square km). Vietnam population is 96,160,163 according to the July 2017 sense. According to the same sense the population growth rate: 0.93%; 15.5 births/1,000 population, 5.9 deaths/1,000 population, -0.3 migrant(s)/1,000 population; infant mortality rate: 17.3 deaths/1,000 live births. The life expectancy is 73.7 years’ average.

People were born in Vietnam are called Vietnamese for the nationality, Vietnamese for the ethnicity. The official language is Vietnamese, but English has considerably increased in recently years. There are some parts of Vietnam that people speak French and Chinese.

Talking about ethnic, the big majority is Vietnamese with 85.7%. Vietnam has 54 officially recognized ethnicities. Buddhist 7.9% is the most popular religion with 7.9% being the Catholic the second most popular with 6.6%. There is more religion followed by Vietnamese people such as, Hoa Hao 1.7%, Cao Dai 0.9%, Protestant 0.9%, Muslim 0.1%, none 81.8% according 2009 sense. The capital, Hanoi, is located in the north, while the country’s largest city, composed by 1.064 million (2018 sense).

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3. History and Geography 

Vietnam occupies the eastern and southern part of the Indochinese peninsula in Southeast Asia, the territory oh Vietnam is limited to the north with China and west with Cambodia and Laos. The nation after becomes independence from the French in 1954, was divided into four countries, Laos, Cambodia, North Vietnam and South Vietnam. 

3.1.  Hofstede’s cultural dimensions and Vietnam

Concerning about cultural issues when doing business in another known country, it is always recommended analyses the cultural of a nation by the Hofstede’s framework.  

The Power Distance in Vietnam is high, which means that people are familiar to receive orders from the highest position within a company. Lower positions expect for directions by their boss in order to be enrolled determined activities. Complementing, Vietnamese people do not received well challenges, they may be interpreted it as an insult. With a low score on Individualism, Vietnam is a collectivistic society. Vietnamese people preserve close relationship, which may influence and transfer the close relationship from the friendship to the company environment. The score of Vietnam is low on Masculinity dimension and hence, it is considered as a Feminine society. Vietnam focus on working to live, they also preserve equality, solidarity and quality in their working lives. When occurs some issue they solve it by negotiations. Vietnam has a low preference for avoiding uncertainty. In that society is well-tolerated changes and are open to change or abandon rules when it does not work or are ambiguous. Schedules are also flexible. Precision and punctuality do not come naturally.

On the dimension of Long-Term Orientation, Vietnam is considered having a pragmatic culture.

In societies with a pragmatic orientation, people believe that truth depends very much on situation, context and time. They are propene to adapt and change conditions. Also, they are perseverant in achieving results A low score of 35 on the Indulgence dimension indicates that the culture of Vietnam is characterized as Restrained. Knowing it, they may tend to be cynics and pessimist. People with this orientation have the perception that their actions are Restrained by social norms and feel that indulging themselves is somewhat wrong.

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Hofstede framework – Vietnam 

4. Political System

 The Socialist Republic of Vietnam, as well as China, North Korea, Cuba and Laos is one of the socialist countries, being official communism system.  The Socialist Republic of Vietnam is a law-governed state is comprising by The Communist Party, as mentioned before. The state of the Socialist Republic of Vietnam is the central organization and the pillar of the political system. The National Assembly is the highest –level representative body of the people, which exercises three main functions: legislate, which decides on important national issues, to exercises supreme supervision over all activities of the State.

The President is the head of state, elected by the National Assembly among its deputies to represent the Socialist Republic if Vietnam in domestic and foreign affairs. Some of his power are to declare the promulgation of the Constitution, laws and ordinances, to head the all people’s armed forces and assume the Chairmanship of the National Defence and Security Council, to recommend to the National Assembly the election, removal or dismissal of the Vice President, the Prime Minister, Chief Justice of the Supreme People's Court, and Head of the People's Procures.The Government administers the implementation of the State’s affairs in the fields of politics, economics, culture, society, national defense and security and foreign relations; ensures the efficiency of the State apparatus from central to grassroots levels; assures that the Constitution and laws are respected and executed. 

5. Economic system of Vietnam

Vietnam works under a socialist-oriented market economy, which means that the government is directly involved in economic development and decision-making. Currently, it is a mix between this centrally-planned economy and a market economy, which is controlled by supply and demand. The eventual goal of the government is to achieve socialism. During the 1980’s, the Communist Party established this unique economic framework in an attempt to move away from the Soviet-type economic planning that was then in place.

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