Assessment 3

SCHOOL OF BUSINESS
ASSIGNMENT COVER SHEET
STUDENT DETAILS

Student name: Trinh Anh Nhã Trúc Student ID number: 20449298

UNIT AND TUTORIAL DETAILS

Unit name: International Marketing Unit number: IMk-T221WSB-2

Tutorial group: Tutorial day and time:
Lecturer or Tutor name: Nguyễn Văn Thăng Long

ASSIGNMENT DETAILS

Title: Report about the assessment of market entry method(s) for the company assigned to the project
Length: 773 words Due date: 25/07/2021 Date submitted: 25/07/2021
Home campus (where you are enrolled): Ho Chi Minh City

DECLARATION

I hold a copy of this assignment if the original is lost or damaged.

I hereby certify that no part of this assignment or product has been copied from any other student’s work or from
any other source except where due acknowledgement is made in the assignment.
I hereby certify that no part of this assignment or product has been submitted by me in another (previous or
current) assessment, except where appropriately referenced, and with prior permission from the Lecturer /
Tutor / Unit Coordinator for this unit.
No part of the assignment/product has been written/produced for me by any other person except where
collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
I am aware that this work will be reproduced and submitted to plagiarism detection software programs for the
purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism
checking).

Student’s signature: Trúc

Assessment 3

After analyzing and becoming aware of Thailand's environmental variables, the Franco-
Vietnamese healthcare service must pick an entrance route for their firm to establish. In order
to gain access to possible entrance methods, FV healthcare must thoroughly consider
industry standards and determine the best entry strategy for the future.

Currently, there are numerous chances for enterprises to enter the healthcare industry in
Thailand owing to the booming demand during COVID 19. There are multiple entrance
strategies to explore for FV healthcare to develop its services. According to the Organization
for Economic Cooperation and Development report for 2021, the COVID-19 pandemic has
resulted in a significant drop in investment demand. The government decided to provide
incentives for investment in medical sectors and overall healthcare services to respond to the
pandemic issue. In particular, the Thailand Board of Investment reacted quickly to the
situation by implementing tax incentives to encourage investment in the medical industry. As
a result, foreign direct investment becomes an essential tool for FV healthcare. When using
FDI as a market entry approach, businesses will gain vital skills and expertise from the host
country; also, FDI will produce a positive contribution by giving capital and technological
resources, resulting in a rise in the rate of economic growth (Hill&Hult,2017).

Another method that FV healthcare can put into consideration is the Turnkey project. A
turnkey project is often employed in complicated, expensive production technologies or
services, such as the medical sector since it allows firms to take over quickly and simply by
obtaining the "key" from a local firm, which is responsible for setting up an operational plant
(Hill&Hult,2017). A turnkey project is less hazardous; this technique is best suited for firms
who wish to minimize economic risks or enter politically problematic nations.

In addition to FDI and Turnkey contracts, FV may consider franchising as a means of entering
Thailand's medical business. Healthcare franchising can advance services (Nijmeijer et al.,
2014). Companies may promote patient pleasure by providing qualified services (wide variety
of services, cleanliness, equipment variation) and suitable healthcare quality (caring way, high
dependability, and execute expertizing) through franchising (Agha et al. 2007a; Agha et al.
2007b). Furthermore, franchising may assist businesses in swiftly establishing a global
presence (Hill &Hult,2017).
Assessment 3

According to a Pricewaterhouse Coopers(PwC) report, the number of foreign investments in

the medical sector is approximately 62.66 million USD, ranking fourth out of twenty sectors
that attract investor interest. Furthermore, due to the increasing aging population and
urbanization, the healthcare industry creates incentives for foreigners to invest. According to
PwC's research, foreigners account for 30 percent of revenue in the medical business, and
the growth rate is rising. Another element that may influence FV healthcare service entrance
is the number of healthcare facilities in Thailand, with public primary care facilities accounting
for 64 percent, general clinics for 28 percent, and hospitals for 8 percent; additionally,
Thailand has a physician and surgeon shortage. It is also worth noting that China established
several clinics in Thailand to provide traditional medicine and acupuncture services
(Donnapee, March 2021).

When all factors are considered, FDI emerges as the most viable market entrance approach
for FV healthcare. Turnkey projects and franchising have some drawbacks; for example,
applying Turnkey projects may leak FV business advantages such as knowledge and
technology to competitors. It is not suitable for long-term market presence; for Franchising,
Thailand currently lacks specific legislation governing franchise agreements. As a result, there
is no legal definition of franchising or a franchise, which might cause ambiguity (Adcock, June
2016). According to Zbigniew Zimny's report on FDI in health services, most Greenfield
projects have occurred in developing countries. Thailand FDI link to medical tourism; in 2017,
foreign patients made 3.3 million visits to Thai medical services, with 2.4 million for medical
tourism and 900,000 for expatriates. In addition, the number of patients from Japan, China,
and Myanmar is also on the rise (Tantisaeree, 2019).

As stated in the Foreign Business Act, healthcare services are not included in Lists One, Two,
or Three, which list firms that the Thai government prohibits or does not intend to compete
with foreign countries. Based on that, FV can fully control their company by acquiring a
Foreign Business License or taking advantage of the Thailand Board of Investment's
promotion.

To summarize, deciding on an entrance strategy for a new foreign location is one of the most
critical decisions firms must make. FDI is the most acceptable entrance route for FV
Assessment 3
healthcare when all other options are considered. Not only does FDI allow FV services to join
the medical business quickly, but it also ensures service quality and lays the foundation for
future competition.

Appendices

         Advantages and Disadvantages of Entry Modes International Business 11th Edition

Number of Healthcare Facilities and Share of Private Hospital pie chart in Thailand in 2014
Assessment 3

References

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Assessment 3
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Assessment 3
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