Vietnam Market Entry
1) Does Vietnam represent an attractive investment opportunity?
I think this question has a risk/reward element like with any investment opportunity but the variable is also the type of business one would like to invest into. The strengths that make Vietnam great are that it is the twelfth most populous nation with rapid economic growth and substantial FDI (foreign direct investment) as well as ongoing liberalizing economic reforms in the previous 10 years (joining and working with trade groups). Vietnam is growing and emerging and with a plentiful, well-educated, and low cost workforce. However, there are plenty of things that would worry me like the corruption, bureaucracy, and lack of infrastructure. In addition, the Communist party has intentions of keeping firm control and retaining powers such as the right to buy into foreign companies or to decide the level of profits on which to collect taxes. In terms of infrastructure, the airport hasn’t been rehabilitated post war and the roads are terrible without development. In terms of labor and costs, managerial talent was scarce and foreign investors faced high rents, telecommunication costa and cumbersome service contracts. Based on this analysis, Vietnam is an investment opportunity but I would be wary with the risk involved as options for market entrance in terms of stakes and contracts and government approval and regulations may be cumbersome.
2) Is it too late for U.S. companies to enter Vietnam?
It is a little late but not too late for U.S companies to enter Vietnam as shown by PepsiCo which entered the market early. We must also understand that we were the tenth largest source of foreign investment compared to many of the Asian powers investing so it is understandably obvious that we are a little late. However, like Pepsi, there are a number of U.S based multinational corporations (MNCs) already operating in Vietnam and if firms do their research and due diligence, investment would
I think this question has a risk/reward element like with any investment opportunity but the variable is also the type of business one would like to invest into. The strengths that make Vietnam great are that it is the twelfth most populous nation with rapid economic growth and substantial FDI (foreign direct investment) as well as ongoing liberalizing economic reforms in the previous 10 years (joining and working with trade groups). Vietnam is growing and emerging and with a plentiful, well-educated, and low cost workforce. However, there are plenty of things that would worry me like the corruption, bureaucracy, and lack of infrastructure. In addition, the Communist party has intentions of keeping firm control and retaining powers such as the right to buy into foreign companies or to decide the level of profits on which to collect taxes. In terms of infrastructure, the airport hasn’t been rehabilitated post war and the roads are terrible without development. In terms of labor and costs, managerial talent was scarce and foreign investors faced high rents, telecommunication costa and cumbersome service contracts. Based on this analysis, Vietnam is an investment opportunity but I would be wary with the risk involved as options for market entrance in terms of stakes and contracts and government approval and regulations may be cumbersome.
2) Is it too late for U.S. companies to enter Vietnam?
It is a little late but not too late for U.S companies to enter Vietnam as shown by PepsiCo which entered the market early. We must also understand that we were the tenth largest source of foreign investment compared to many of the Asian powers investing so it is understandably obvious that we are a little late. However, like Pepsi, there are a number of U.S based multinational corporations (MNCs) already operating in Vietnam and if firms do their research and due diligence, investment would