Subject: International Business Management

Individual Assignment

INDIVIDUAL ASSIGNMENT
Subject: INTERNATIONAL BUSINESS MANAGEMENT
EMBA IEI04
Students name

: Phan Thi Ngoc

ID

: VN1001651

Date of completion : 08/11/2014

Topic"Select a country and a product or service you feel as an investor will be a wise financial
investment and has long tern potential and benefits."

CONTENT
I.
II.

Introduction
Country Selection- Why? With Supporting documentation

III.

Product/ Service Selection- Why? With Supporting documentation

IV.

Strengths/ weaknesses of country with documentation

V.
VI.
VII.
VIII.
IX.
X.
XI.

Strengths/ weaknesses of product/ service with documentation

Expected or estimate of competition
Entry mode?
Ease to do business- World Bank ranking?
Country corruption status- TI ranking? Potential impact on investment?
Summary
Bibliography

Individual Assignment

I.

Subject: International Business Management

Introduction
With the advantage of the tropical fruit is abundance and fresh, Vietnamese fruit has exported to
many countries markets. Over the years gardeners tend to choose good fruit, establish growing
garden, increase productivity and focus on improving the quality meets export standards. Many
countries allow the import of fruits from Vietnam.
As reported by the Ministry of Agriculture and Rural Development, in August of 2014, there are
40 kinds of fresh fruit exports to 40 countries and regions such as China (the Mainland and
Hong Kong ); ASEAN countries (Thailand, Malaysia, Indonesia, Laos, Myanmar, the EU
countries (UK, France, Belgium, Netherlands, Spain, Italy) countries in the Middle East (UAE,
Qatar, Lebanon, Arabie Seoudite ...), Eastern Europe (Russia, Ukraine ...) and Canada reached
1.3 million tons, of which more than 697 000 tones of dragon fruit, nearly 300,000 tons of
watermelon , more 100,000 tons of longan , more than 70,000 tons of litchi, 600,000 tons of
rambutan, etc
Meanwhile, European countries have demand more increase for organic products, especially
fresh fruits and vegetables. As reported by the Swedish Chambers of Commerce on June 2010,
Denmark is one of the top countries in the world when it comes to organic food consumption
and consumption of organic food products per capita is highest in Europe.
Base on Danish Import Promotion Office, the traditional supply current as the EU cannot meet a
growing demand for more sophisticated products such as tropical fruits, fresh fruit. New market
opened, investors Vietnam should do to seize this opportunity?

Individual Assignment

II.

Subject: International Business Management

Denmark is a selected country for export to

Criteria are used to make this selection is:

Within top 20 countries is ranked in Global competitiveness index
Political Systems & Political strategies is individualism; freedom in economic and social
with less government control.
Legal Environment is healthy
Economic system is privately owned - opened
1. Denmark is ranked 15th out of 148 countries as report by the World Economic Forum in
2013-2014. Have very good environment for investment.

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Subject: International Business Management

2. Political Systems & Political strategies is convenient for internal business:

-

Denmark is country circled by the Baltic and North Sea. The country consists of a large
peninsula and many islands. Germany, Norway, and Sweden are neighboring countries of
Denmark. Denmark has an importance position controlling the Danish Straits that
connect to the Baltic and North Seas.

The government system is a convention monarchy and multi-party political system. The
Queen is chief of state and the Prime Minister is the head of government.

Denmark is a member of the European Union since 1973. But, Denmark has chosen to
not take part in the European Union's Maastricht Treaty, including the European
Economic and Monetary Union (EMU), European defense cooperation, and issues related
to certain justice and internal affairs. However, in fact, krone is inextricably linked to
euro via the exchange rate of mechanism II Europe (European Exchange Rate
Mechanism II), part of the European Monetary System (European Monetary System).
Exchange rate between the euro and krone is always approximately 1 euro = 7.45 NOK.

Denmark is a founding member of NATO and the OECD.

3. Legal Environment is healthy :

-

Scandinavia law system, it is a mixture between common law and civil law. But it is
considered is civil law because almost all issues of Danish legislation and regulations
meet to EU standards.

Base on 2014 Index of Economic Freedom, Denmark remains regulatory environment the
most efficient in the world. It takes only four procedures to start business, and
government has reduced the minimum capital requirements.

Hiring and dismissal regulations are flexible and efficient for the labor market.

Monetary system is stability.

Property rights and Intellectual property rights are strongly protected

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Subject: International Business Management

Denmark has levels of corruption is low. The Transparency Internationals Corruption

Perceptions Index is highest marks.

The financial sector is diversified and competitive. The banking sector is stable now.
Bank has been reduced dependence on state.

Base on report of Global EDGE, although there is the common approach bearing the
advantages of written contracts, there is no requirement of written contracts in Denmark.
A freedom of contract is the governing principle, business partner a wide opportunity for
to enter into whatever form of contract.

4. Economic system: Denmarks economic is strongly and dynamism. Global trade and
investment become the most openness, competitive and flexible in the world economy.
-

High income. The living standard is high. Distribution of income is equitability.

Foreign trade plays a key role in the Danish economy;

All most of private companies are small and medium size.

In spite of the deficits in 2009, Denmark's fiscal position remains among the strongest
in the EU with public debt at about 46% of GDP in 2013.

Base on Global Edge, Gross Domestic Product (GDP) is continuing increase in last 5
years.

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Subject: International Business Management

Inflation is very low, 0.8% in 2013 (ranked 1st out of 148 countries as reported by the
World Economic Forum in 2013-2014)

Denmark is among of the countries with the highest capitalist values

Import goods & Services is continue increase in the last 5 years

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Subject: International Business Management

Denmark has a modern market economy, the prices of goods and services are determined
in a free price system.

English is a dominant second language.

Denmark is on the list of best country in the world. Though Copenhagen, capital of Denmark
had been occupied by the Nazis during World War II, the war has not yet happened. The reason
is the Danes likes to focus on economic issues rather than a military conflict. Danish people are
the friendliness, openness and enthusiasm. Denmark leads the world leader in index about
culture, health, social security, export pharmaceuticals, food and aid activities, and also
voluntary donations to WHO and humanitarian aid. So, Denmark is a small area but it is highly
influential in the world. Social welfare systems are developed, a good infrastructure, the
government pays special attention to the field of health and education
Recently, Denmark became one of the potential export markets of Vietnam in Europe. Export
turnover of Vietnam to Denmark has been increasing steadily.

Individual Assignment

III.

Subject: International Business Management

Export tropical fruit to Denmark is a good selection.

Criteria are used to make this selection is Vietnam has absolute and nature advantages for
tropical fruit, so export it to country has opposite natural advantages with Vietnam is favor trade.

1. Advantages come from Vietnam

-

Advantages of climate and soil in tropical countries, provinces in Vietnam have formed the
area quite concentrated fruit serving for industrial processing and consumption. Especially,
the Mekong Delta with an area of the largest fruit-growing reaches about 36.5% of its total
area. The total amount of fruit in Mekong Delta provinces average at around 26 to 27 million
trees / year in recent years. A Large number of fruits were trade throughout the country,
including to some of its neighbors.

Base on information of the Center for Trade Information 2006, the area of fruit trees
throughout the country in recent years has increased rapidly, reaching 766.9 thousand
hectares in 2005 (compared to 1999 increased by a thousands of hectares, the average growth
rate of 8.5% / year), for the volume of 6.5 million tons (of which the largest banana
production to 1.4 million tons, citrus: 800 thousand tons, longan: 590 thousand tons).
Mekong Delta region is largest fruit tree area (262.1 thousand ha), production reached 2.93
million tons (accounting for 35.1% and 46.1% of the area of production).

Vietnam has many fruits that few countries have. Recently, more fruits are exported such as
longan , litchi, and continue to offer every kind of specialty, such as breast milk, dragon fruit,
rambutan and mango penetrate into difficult markets such as the US, Japan, Australia, New

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Subject: International Business Management

Zealand, Taiwan ... . Fruit export turnover in recent years ranged between 150 and 180 USD
million / year.
-

According to the Agriculture Organization - salaries (FAO), the demand for vegetables in the
world market is increased by 3.6% annually, while the ability to grow production is only 2.6
%. To world markets, fruit and vegetables are always in poor availability status; it is easy to
consume and prices always rises. There are more and more developed industrial countries
demand for imported vegetable growing again. The life has been improved, the demand for
fresh fruit and vegetables growing.

It can be affirmed that the world market for fruit and vegetables is very promising. Fruit is an
opportunity for Vietnam to conquer the world market.
2. Advantages come from Denmark
Besides that, base on Market Report-Organic food June 2010, although Denmark is a relatively
small country; the organic food market is quite interesting. In general, Danes are highly
interested in environmentally friendly products; the market for organic products is the highest in
Europe.

Base on Organic.dk website, Dairy products are the most important organic products on the
Danish market. It covers around 40 percent of the total turnover. The consumers are
interested in organic vegetable and fruit is increasing. For satisfy the market for organic
vegetable and fruits, a high import is needed.

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Subject: International Business Management

The turnover of organic foods in Denmark has increased with 77 percent in the period of
2004 - 2009. Just in 2009 the turnover increased with 35 percent compared with the year
before.

The sales of organic fruit and vegetables reached more than 140 million Euro in 2009 - or
around 20 percent of the total turnover of organic products.

And base on Market Report-Organic food Dec. 2009, the volume of Fruit imported from
Vietnam is very small just around 0.006&% of total fruit quantity of Denmark in 2008.
Fresh Fruits
Mangos
Grapefruit
Lemon
Citrus fruit
Passion fruit
Bananas
Pineapples
Total of fruit is imported from Vietnam
Total Fruit was imported by Denmark
Fruit is imported from Vietnam vs Fruit was
imported by Denmark (%)

2005
2

Quantity in tones
2006
2007
1
3
1
1

10

12

353,941
0.003%

372,530
0.002%

2008
1
5
1
17

14
1
5
25
382,371
0.007%

24
416,019
0.006%

Since many of fruits on market are imported to Denmark, this is good opportunities for
exporters from developing countries such as Vietnam.

Individual Assignment

IV.

Subject: International Business Management

Strengths/Weaknesses of Denmark
-

Strengths:
Inflation is lowest in the world Ranked 1st /148 in Global Competitiveness Index
Tariff barriers to trade are few - Ranked 4th /148 in Global Competitiveness Index
Trade freedom provides an advantage environment for competition. Nature of
competitive advantage ranked 5th /148 in Global Competitiveness Index

Weaknesses:
The overall tax remains burdensome and complex. Effect of taxation on incentives to
invest ranked 112th /148 in Global Competitiveness Index. Effect of taxation on
incentives to work ranked 128th /148 in Global Competitiveness Index

V.

Strengths/Weaknesses of Vietnam fruit

-

Strengths:
Due to the ecological diversity, fruit in our country is very diverse, there are over 30
different types of fruit trees, belonging to 3 groups are: tropical fruit (banana,
pineapple, mango ...), Asia tropical (orange, mandarin, lychee, longan ...) and
temperate (plum, pear ...). One of the largest groups of fruit trees and the fastest
growing is longan, litchi and rambutan. The area of this crop accounted for 26% of the
total area of fruit trees. Followed by bananas, accounting for about 19%.
There is some types of fruit have a competitive advantage, Ministry of Agriculture
and Rural Development identified 11 kinds of fruits have competitive advantages,
including: dragon, Breast Milk, Mangosteen, Citrus (grapefruit, orange) , mango,
durian, pineapple, litchi, coconut and papaya.
Base on information posted on Ministry of Agriculture and Rural Development, in the
first 4 months of 2011, exports of dragon fruit to the US reached 600 tones, equivalent
to 70% of total exports in 2010. US also allowed importing rambutan. Dragon fruit
exports to Japan in the first 4 months of this year reached 200 tons and 40 tons of
Korea. Late last April a delegation of experts from New Zealand to Vietnam to

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Subject: International Business Management

examine the preparation of fresh mango exports to this market. Expected until early
2012, Vietnam's mangoes can be exported to New Zealand after treatment standards.
Thus, we can say Vietnam fruit exports are expanding rather large. They are a good
reference to be allowed to import to Denmark.
-

Weaknesses: Base on information was posted in Saigondautu.com.vn

Vietnam fruit characteristics which are tropical, so the shelf life is very short, without
the use of biological preservatives, or preserved by the quality standards that allow
time just to keep fresh fruit from 4-5 days, and the use of technology, the maximum
time are almost two weeks. This is one of the reasons that affect to the quality of fruit
exported to foreign as well as domestic consumption.
Of course, to be able to export fruit in this difficult market, the challenge now is to
change farming practices of farmers in our country (non-standard). Meanwhile, the
exporters also face many challenges in terms of quality and price to compete with
similar fruits of other countries.
The value of exports to the US market, Europe is 1.5 times compared to the Chinese
market, but it is very high risk. There have been many lessons as fruit exported to
some European countries is returned due to not meet standards.
The price of fruits is rather high, not enough to compete with other countries,
especially compared to Thailand and China. So far Vietnam fruit (except dragon) has
yet to make the brand on the world market.
Transport cost is high. Aviation Charges of fruits from HCMC to US is about US $ 3 /
kg. While in Thailand, the government has programs to support charges for exporters
should now pay only about 0,5USD / kg.
The system's policies in Vietnam in general and agriculture in particular is inadequate,
the promulgation of policies lack consistency and have not strategy. Many policies
really have not specified, the effective level of promotion is very limited due to
insufficient financial resources and management skills, cumbersome procedures,
difficult to apply.

Individual Assignment

VI.

Subject: International Business Management

Competition.
Also base on this Market Report-Organic food Dec. 2009 report, it is can see competition is
huge. The leading exporter for tropical fruit is China, Thailand, Pakistan, India, Indonesia and
Latin America.

VII.

Entry mode: Exporting

Base on 6, the Center for Trade Information report, there are some risks
of exporting:
-

There are not enough yields to export, so revenue cannot cover company expense.

It is not easy to change habits and farming practices in order to change the quality of fruit
according to the requirements of foreign consumers.

Price escalation cause by high transport cost, tariff wall, importers cost

It is difficult to develop a marketing plan

It is difficult to select the effective distributors

Individual Assignment

Subject: International Business Management

Macro level, the activities of the State management agencies in building and market
development, trade promotion, develop bilateral relations and multilateral, to facilitate the
export of vegetables is very limited institutions, lack of initiative.

VIII.

Easy to do business- World Bank ranking

In World Bank Report-2014 - Easy to do Business, Denmark stands at 4 in the ranking of 189
economies on the ease of doing business.

Almost indicators except cost indicators show that Denmark is easier country to do business in
compared with OECD countries (Organization for Economic Cooperation and Development).
Especially in related to starting a business, trading across borders (import/ export), Denmark
shows more advantage. On other hand, protecting minority investors is not so good.
IX.

Corruption in Denmark
Denmark ranks in 1st out of 177 countries on the Transparency International Corruption
Perception Index
The lowest level of corruption makes Denmark an attractive country for business activities.
Business environment in Denmark is very healthy and strong because it is supported by basic
principle of International Code of Ethics. It provides values rules & guidelines to guide behavior
in the world of business. It is fair at all.

X.

Summary
Fruit exports to the Danish are an opportunity and a challenge, too. If the export is success in
Denmark, it will open up opportunities for export to other countries in the Nordic region. Under

Individual Assignment

Subject: International Business Management

high pressure of high demands of this difficult market, the industry of fruit will be developed.
Profit at first may be not high due to the limited production, but in the long term, this is a right
way. It will be pushed the economy of Vietnam forward.
XI.

Bibliography:
1. Report of the Ministry of Agriculture and Rural Development :
http://xttm.mard.gov.vn/Site/vi-vn/73/81/204/86262/Default.aspx
2. Report of the Swedish Chambers of Commerce on June 2010:
http://www.virke.no/omvirke/aboutvirke/Internationaltrade/Documents/MarketReportOrganicFood.pdf
3. Report of Danish Import Promotion Office:
http://cendoc.esan.edu.pe/paginas/infoalerta/Agroexportacion/textocompleto/fruit.pdf
4. Report of the World Economic Forum in 2013-2014:
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf
5. Wikipedia website: http://en.wikipedia.org/wiki/Denmark_and_the_European_Union
6. Scandinavia law system of Stockholm Institute for Scandinavian Law 1957-2010:
http://www.scandinavianlaw.se/pdf/50-1.pdf
7. Report of 2014 Index of Economic Freedom:
http://www.heritage.org/index/country/denmark#rule-of-law
8. Report of Global EDGE: http://globaledge.msu.edu/content/trade-law/denmark.pdf
9. Report of the Center for Trade Information 2006: http://www.google.com.vn/url?
url=http://mrivn.com/images/2007/01/Thuc%2520trang%2520va%2520phuong
%2520huong%2520phat%2520trien%2520san%2520xuat%2520cac%2520loai%2520cay
%2520an
%2520trai31122.doc&rct=j&frm=1&q=&esrc=s&sa=U&ei=RTtcVIzZHYHuPPHXgYg
B&ved=0CCwQFjAE&usg=AFQjCNENG21Usp2YMT4iJljBtMeTCmQI2g
10. Market Report-Organic food June 2010:
http://www.virke.no/omvirke/aboutvirke/Internationaltrade/Documents/MarketReportOrganicFood.pdf
11. Organic.dk website: http://organic.dk/market/import/index.htm
12. Market Report-Organic food Dec. 2009,:
http://www.virke.no/omvirke/aboutvirke/Internationaltrade/Documents/MarketReportOrganicFood.pdf
13. Report of Ministry of Agriculture and Rural Development:
http://www.mard.gov.vn/en/Pages/news.aspx?CategoryId=10

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Subject: International Business Management

14. Base on information was posted in Saigondautu.com.vn:

http://www.saigondautu.com.vn/Pages/20110623/Thach-thuc-thi-truong-kho.aspx
15. World Bank Report-2014 - Easy to do Business :
http://www.doingbusiness.org/data/exploreeconomies/denmark/#protecting-minorityinvestors
16. Transparency International Corruption Perception Index:
http://www.transparency.org/cpi2013/results#myAnchor1