Week 4 Homework Assignment
June 24, 2012
1. Update the political, legal, and economic situation in Vietnam; then select a product of your choosing and evaluate Vietnam’s potential both as a market and as a manufacturing site.
a. Vietnam’s economy has grown significantly, expanding at an average rate of 7.5% per annum over the past decade. In 2010, foreign investors registered capital of nearly $18.6 billion (US), in which the actual disbursed capital came to $11 billion. Vietnam offers a welcoming investment climate, including solid economic grown, political stability, a competitive workforce, a gradually more open and transparent market, abundant natural resources and good geographic positioning in the region. The Vietnamese economy keeps developing at a rapid pace. Exports continued to increase at a high growth rate of 21% in 2003 helped by the strong performance of exports to the USA, which grew by over 60% from a low base. b. After doing research, the product I chose is RTD Tea. RTD tea is known to be a fast growing, popular product in Vietnam. In 2011, RTD tea continued to display the robust growth of 33% in total volume terms, which was the highest growth within soft drinks. During the review period, consumers showed great interest in RTD tea as they perceived it as a refreshing and healthy drink to consume. The strong demand for RTD tea was also in line with the rising trend of Vietnamese trying to control their calorie intake and cut down on carbonates. Most manufacturers advertised RTD tea as being low in sugar and containing vitamins and minerals which can prevent heart disease, obesity and dental problems.
2. What, if anything, can Western countries do to help improve the political climate for doing business in Vietnam? Give examples. a. By continuing and growing their exports, this can help to improve business in Vietnam. After the Vietnam war Vietnam became communist in 1975. Even though a lot has changed...