HOMEWORK: VIETNAM (p.

58)
1. In what way does the political environment in Vietnam pose both an opportunity and
a threat for American MNCs seeking to do business there?
- Becoming the 150th member of WTO: shows that Vietnam is willing to open its trade
door to the world -> greater certainty and predictability in the business
- Communist nation -> government closely controls the economy with regulations,
which may limit US firms’ opportunities.
- Vietnam War with US -> The older people who lived through that period could
currently hold political positions in the government and then released decisions that
weaken relations with American investment.
2. Why are U.S. multinationals so interested in going into Vietnam? How much potential
does the country offer? How might Vietnam compare to China as a place to do
business?
- Even though income level is low compared on the global scale -> willingness to learn
and grow as a population. Moreover, many other investors from Singapore, Taiwan,
Japan, South Korea, Hong Kong put over billion dollars into the country.
- Limitless potential: high quality workforce that can read, understand and learn,
technology development -> increase productivity and standard of life… Moreover,
people have a trend to use a product from the UnS
- China and Vietnam are both communist countries that undertake heavy control from
the government. China has an enormous impact on Vietnam, including export and
import. But now, Vietnam is attracting many FDI because of its advantage economic
environment, open policies for multinational companies, and support local export
companies. Vietnam is also implementing organizational reforms designed to update
its economy. At the rate it’s increasing, Vietnam appears to be within the same range
of comparability with China
3. Would there be any opportunities in Vietnam for high-tech American firms? Why or
why not?
- US high tech firms have been jumping into Vietnam in droves for many years. Intel is
in the process of building the largest chip manufacturing plant in Southeast Asia in
Ho Chi Minh City. Bill Gates has personally visited Vietnam numerous times and
there are dozens of Microsoft executives practically living out of the Caravelle Hotel
in HCMC for years. Oracle has dumped millions of dollars into developing Vietnam’s
technology education. Let’s not forget the many hundreds of smaller U.S. firms that
have already established relationships and conducting business in Vietnam.
- Vietnam has a large young and educated workforce who are willing to work hard to
earn as much as possible. Most of the population is less than 35 years old and many
of them are fast becoming technically inclined. Outsourcing to Vietnam is becoming
more popular as India and China raise their labor prices. Let’s not forget Vietnam’s
exploding economy. Vietnam’s version of the baby boomers (those born after the
Vietnam War) want cell phones, laptops, iPods and other American technology as
much as we do here. Likewise, technology manufacturers, such as Compaq, IBM,
Apple, Motorola, Samsung, LG and others, are making lots of money in product sales
to Vietnamese consumers.