Q. 1.

Q. 2. Introduction

Background of company

U Kar Ka Daw Sein was created since 1928 and it stands today as the famous and successful
company in Myanmar. U Kar Ka and his family was the owner of U Kar Ka Daw Sein
Company.

One of the leading businesses in Myanmar that belongs to the Myanmar Tradition Drink
group is U Kar Ka Daw Sein. The U Kar Ka Company was foundef as a modest family-run
enterprise and now employs over 300 people. Currently, U Kar Ka Daw Sein has three
branches in Yangon and two in Mandalay. Using the Retort Sterilization Process, the U Kar
Ka Daw Sein frim introduced the healthiest and most sanitary tea in Myanmar in 2016 (U Kar
Ka, 2016).

Products

 Tanakarpan Tea (Aglaia Odorata Tea)

 Nat Thit Ywat (Green Tea)
 Pin Laung Tean (Sun Dried Tea)
 Glutinous tea
 First Flush Tea
 Roasted Tea
 Zayan Chin Tea (Dry fermented Tea)
 Rose Tea
 Fried Assorted Bean Pickled Tea leaf (160g)
 Black Tea (sweet dry) 800g,400g
 Zayan Pickled Tea Leaves (Spicy Flavor)
 Zayan Pickled Tea Leaves (Original Flavor) (U Kar Ka, 2016)

Q. 3

International Economic environment of Vietnam

Vietnam has constituted itself as a constant quickly developing, and large growth goal for
international business and foreign investment.

Most of the business which are trying to invest in South East Asia are choosing Vietnam due
to its several favorable conditions such as steady form of government, Central proximity to
East Asia’s top emerging economy and being a safer or second Asia investment option rather
than countries like China Pestel analysis of Vietnam
Pestel analysis
The analysis of the external macro environment of a country includes Political, economic,
social, technological, environmental, and legal (Robert, et al., 2011)
Political analysis
Laws and regulations passed by the government can affect business operations in the host
country (Griffin & pustay, 2020)
Vietnam has close diplomatic ties with over 178 countries around the world. Vietnam is also
part of global institutions and trade groups like WTO, APEC forum, ASEAN, and UN (Shaw,
2021). Vietnam is a one-party state where the communist party of Vietnam holds the majority
of political power (Momin, 2022)
Economic Factors Affecting Vietnam
Economic factors are changes that can be made to a country's economy due to inflation rate,
exchange rate, laws and regulations, and taxes (Perera, 2017)
Vietnam is a growing economy with a GDP worth 366.15 US dollars in 2021
(tradingeconomics, 2023). Vietnam has made huge progress in the last decade (Rahman,
2023). Vietnam has become the top exporter of broadcasting equipment, telephone, and
footwear to countries such as the USA, China, Japan, and Germany (tradeimex, 2022).
Social factor
Social factors such as culture, population, and economic condition have a strong influence in
a working environment (Ho, 2016)
Vietnamese culture is deeply rooted in Confucianism, which places a strong emphasis on
respecting elders and family values. Vietnam has a population of around 97 million
(datacommons, 2021), The Majority of the Vietnamese population is Buddhist and the
official language is Vietnamese (Rahman, 2023). Vietnam has been facing the social
challenge of having a gap between the higher and lower classes (Shaw, 2021).
Technological factor
Technological factors refer to the development of new technology with the result of creating
new market opportunities, producing more capital-intensive, and reducing cost (Rob, 2011)
Vietnam is primarily an agricultural country, but that doesn’t prevent Vietnam from
processing in terms of its technology. Vietnam's main technological achievement is its
telecommunications sector as it has rapidly expanded in Southeast Asia (Saeed, 2022). In
recent years the Vietnamese government has identified IT as a major industry and economic
growth and has funded improving efficiencies and growth of IT sector. As of 2021,
Vietnam's ICT market has a value of US $ 7.7 billion. (Duong Pham, 2022).
Environmental factors
Geographical and ecological factors of a host country such as natural resources, weather,
climate conditions, and geological location of the country. (Dutta, 2010)
As Vietnam's economy grows rapidly the demand for goods and services increases as a result
the percentage of greenhouse emissions is stately growing by about 5 % annually in 20 years
(Janice Tran, 2022) Due to the high demand for services Vietnam is using a vast amount of
its natural resources which can impact Vietnam's climate.

Legal Factor

A country's legal system, which adopts laws and regulations set by the government, is also
related to a country's political system (SHARAN, 2011)

Vietnam's legal system is controlled by the country's communist party, where the state holds
a vast majority of power in courts and the government. Vietnam's legal system is based on a
combined nation of communist legal theory and France civil law (Uc, 2016)

In addition, Vietnam was placing 70 among 190 economies according to world bank, doing
business 2020 report (WorldBank group, 2019)

Vietnam’s Free Trade and tax agreements

Vietnam has been being a part of The World Organization (WTO) since 2007 created Its
rising as a dedicated and powerful trade partner for the world-wide community. The Country
has since joined into various Free Trade Agreement (FTA) and Double Tax Avoidance
(DTA) Agreements, which have corresponding functions that are ruled by certain accepted
terms of trade that countries demand on imports and exports and removing double taxation
(Alberto Vettoretti, 2022).

Inflation rate

In the first 9 months of 2023, GDP growth is estimated to reach 4.24%, CPI increased by
3.16% year-on-year, average core inflation increased by 4.49%.

(DoingBusiness, 2019)

Vietnam Exchange Rate against USD

Vietnam Exchange Rate against USD averaged 23,725.880 (USD/VND) in Jun 2023,
compared with 23,661.840 USD/VND in the previous month.

Vietnam Exchange Rate against USD data is updated monthly, available from Jan 1983 to
Jun 2023.

The data reached an all-time high of 23,725.880 in Jun 2023 and a record low of 0.976 in
May 1983 (EXECUTIVE TEAM of CEIC, 2023)

Q. 4
Pestel analysis of Vietnam
Pestel analysis
The analysis of the external macro environment of a country includes Political, economic,
social, technological, environmental, and legal (Robert, et al., 2011)
Political analysis
Laws and regulations passed by the government can affect business operations in the host
country (Griffin & pustay, 2020)
Vietnam has close diplomatic ties with over 178 countries around the world. Vietnam is also
part of global institutions and trade groups like WTO, APEC forum, ASEAN, and UN (Shaw,
2021). Vietnam is a one-party state where the communist party of Vietnam holds the majority
of political power (Momin, 2022)
Economic Factors Affecting Vietnam
Economic factors are changes that can be made to a country's economy due to inflation rate,
exchange rate, laws and regulations, and taxes (Perera, 2017)
Vietnam is a growing economy with a GDP worth 366.15 US dollars in 2021
(tradingeconomics, 2023). Vietnam has made huge progress in the last decade (Rahman,
2023). Vietnam has become the top exporter of broadcasting equipment, telephone, and
footwear to countries such as the USA, China, Japan, and Germany (tradeimex, 2022).
Social factor
Social factors such as culture, population, and economic condition have a strong influence in
a working environment (Ho, 2016)
Vietnamese culture is deeply rooted in Confucianism, which places a strong emphasis on
respecting elders and family values. Vietnam has a population of around 97 million
(datacommons, 2021), The Majority of the Vietnamese population is Buddhist and the
official language is Vietnamese (Rahman, 2023). Vietnam has been facing the social
challenge of having a gap between the higher and lower classes (Shaw, 2021).
Technological factor
Technological factors refer to the development of new technology with the result of creating
new market opportunities, producing more capital-intensive, and reducing cost (Rob, 2011)
Vietnam is primarily an agricultural country, but that doesn’t prevent Vietnam from
processing in terms of its technology. Vietnam's main technological achievement is its
telecommunications sector as it has rapidly expanded in Southeast Asia (Saeed, 2022). In
recent years the Vietnamese government has identified IT as a major industry and economic
growth and has funded improving efficiencies and growth of IT sector. As of 2021,
Vietnam's ICT market has a value of US $ 7.7 billion. (Duong Pham, 2022).
Environmental factors
Geographical and ecological factors of a host country such as natural resources, weather,
climate conditions, and geological location of the country. (Dutta, 2010)
As Vietnam's economy grows rapidly the demand for goods and services increases as a result
the percentage of greenhouse emissions is stately growing by about 5 % annually in 20 years
(Janice Tran, 2022) Due to the high demand for services Vietnam is using a vast amount of
its natural resources which can impact Vietnam's climate.
Legal Factor
A country's legal system, which adopts laws and regulations set by the government, is also
related to a country's political system (SHARAN, 2011)
Vietnam's legal system is controlled by the country's communist party, where the state holds
a vast majority of power in courts and the government. Vietnam's legal system is based on a
combined nation of communist legal theory and France civil law (Uc, 2016)

Q.5

1) Increase sales and profitability

Expandind internationally can ensure a company's long-term properity, genrate new
revenue streams, and increase return on investement. connecting out to the global
community for business is getting easier due to the Internet (TMC Acedemy, 2023).
Vietnam is a country located in Sountheast Asia bordering the Gulf of Thailand and
also has a Socialist-oriented market economy (HOA, 2021).We can improve our
products because of dense of Vietnam population.
2) Enter new market
The step of introducing a product of service to a new client segment, demography, or
nation can be referred to as entering a new market (Harvard Business Review, 2021).
To make our business more bigger and better. To expent our product to other country.
3) Offset slow in your home market
 Examining international markets might help you overcome the slow growth in your
own market. Exporting, emporting, employing the Internet, licensing, or franchising
your items are all ways for protecting your business (TMC Acedemy, 2023). By
exporting and advertising our product it will help increase revenue and profit for the
business.
4) Elarge the cusromer base
The population that purchase services or products from a company is known as its
customer base. Figure out how companies create customers that allows for steady
expansion (Ramroop, 2023). Vetinam population is more than Myanmar population,
Thus why we will spread our company in their market.
5) Travel to new counteries
Additionally, expanding your business overseas can be exciting. You will not only
make connections with people worldwide, but you will also have a reason to meet
with them face-to-face to expand your business and relationship (TMC Acedemy,
2023). Travelling to Vetinam can give us more advandure, oppotunitues and
experience. U Kar Ka company is growing and need more to sperad on other country.

Q.6

The strategic and operational approaches

Strategies for operation internationally include

Licensing

Franchising

Joint venture

Partnerships

Subsidiary

Licensing

Licensing is a process in which a company (a licensor) give permission to another company

(a licensee) to use in a specific geographic area for a specified period. In return, the licensee
must pay a specified fee to the licensor regularly. (International Business Environments and
operation, fifteenth edition, writer-John D. Daniels. lee H. Radebaugh Denial.P.Sullivan ).”
Rights or resources for a licensee may include patents, copyright, technology, managerial
skill or other factors necessary to manufacture the good “described by TMC Academy.

Advantage of licensing

The new product may only have a temporary impact on a small portion of a business’s overall
output. The business may predict that in a situation like that, sales volume will be insufficient
to support the establishment of its own global manufacturing and sales facilities. On the other
hand, the company may find a licensee who can make manufacturing and selling at a
reasonable price and with little initial investment (International Business Environments and
operation, fifteenth edition, writer-John D. Daniels. lee H. Radebaugh Denial.P.Sullivan ).”.
Licensing is not only a means of entry into foreign markets but also a supplement to
exporting or manufacturing.

Here are other benefits of licensing -

decrease difficulty on the company’s resources for instance good vehicle when capital is
scarce),

only needs a low obligation to international expansion

prevent taxes that might be charged on a product if exported (TMC Acedemy, 2023)

Disadvantage of licensing

The licensee's expenses may be higher than if it had created the novel product or method on
its own. (International Business Environments and operation, fifteenth edition, writer-John D.
Daniels. lee H. Radebaugh Denial.P.Sullivan ). Another impact is the risk of unskilled foreign
collaborators fixed and lower revenue among other international expansions (TMC Acedemy,
2023)

Franchising

Franchising is a specialized structure of licensing which means the franchisor gives a permit
to a franchisee to use both the use of intangible property (for example trademarks, patents)
and operationally support the business on an ongoing basis such as through sale promotion
and training (International Business Environments and operation, fifteenth edition, writer-
John D. Daniels. lee H. Radebaugh Denial.P.Sullivan ).”
Frequently, the franchisor provides supplies for instance, the concentrated Coca-Cola sells to
its bottler. To describe its definition in one sentence, franchising means where a business
(franchisor) allows another operator (the franchisee) to trade under their name (edecle
international GCSE (9-1) business student book, pearson, Rob jones).

Joint venture

Where two or more companies share the cost, responsibility and profits from a business is
called joint venture.Most joint venture involves two companies and the cost and profits are
shared equally.For example,two companies from same country joining together in a foreign
market like NEC and Mitsubishi (Japan in United Kingdom)

(Source-title international business environment and operations

Authors- John D. Daniels .H.Radebaugh Daniel.P.Sullivan

Fifteenth edition)

Advantage of joint venture

Joint ventures are preferred over other business models by some companies such as those that
are new to overseas operations or have decentralised domestic decision making.Because joint
venture allows companies to enjoy some of the benefits without having to lose their identity
and competition between same products companies will be automatically stopped.(Edexal
international business GCSE)

Disadvantage of joint venture

The profit from the venture is separated between the investors. This clearly reduces profit
potential.

The more companies in the joint venture,the more complex its management becomes. Source-
title international business environment and operations

Authors- John D. Daniels .H.Radebaugh Daniel.P.Sullivan

Fifteenth edition)

Disagreement may occur about the management due to its different views as it include a lot
of different companies.source-Edexal international business gcse)

partnership
A Partnership is formed when two to twenty persons jointly own a company. The business
management will be divided among the shareholders. they split the earning as well.
partnerships are common in professions including accounting, medicine, real estate and law.

-Advantage of partnerships are

Easy to set up and maintain

-Work-load may be reduced due

to separated responsibility for each partner.

-Revenue can be raised easily.

Disadvantage of partnership

Profits has to be shared among partners there may be arguments and disagreements between
partners. If a problem occurs, all partners are liable. (All are picked up by Edexale
international business GCSE (9-1)

Student's book)

Subsidiary business is when a parent company control most operations and overview task and
operation made by a child company (Morris & James, 2023)

Advantages and disadvantages of subsidiaries

Advantage

Limited liability

the parent company can protect its financial position as Subsidiaries operate as separate legal
entities(https://smallbusiness.chron.com/advantages-disadvantages-creating-subsidiary-operating-
companies-25733.html)
Resource Sharing:
Subsidiaries can share their resources and knowledge with their parent company which could help
improve parent company growth.
Access to new market
Parent companies can gain access to new market regions where they aren’t present in the market

Disadvantage

Concentration of risk

If a subsidiary company face financial or operation problem it can have an impact on the parent
company's reputation a

Lack of flexibility and management

Parent companies may find control and overseeing subsidies that are overseas due to culture and
language barrier

Running cost

In addition to the company running and staff cost, the parent company also have to pay accountant
and legal fee which could affect their revenue and profit

https://www.british-business-bank.co.uk/finance-hub/pros-and-cons-of-starting-a-subsidiary-
business/

Q.7

Conclusion and Recommendation

Within all those described strategies in question number 6, we conclude entering the Vietnam
market by joint venture will be the most beneficial strategy for a business-like U Kar Ka.
Although having lower incomes because they have to share profits with others rather than
other strategic approaches, it enables the company to share risks and leverage local
expertises. But the profits will be raised if the products would be sold at higher rates.
According to our research, most of the economic books recommend that joint venture is a
good strategy to penetrate the market as a new company in foreign market.