Swot Analysis on Vietnamese Economy

Topics: Inflation, Investment, World Trade Organization Pages: 6 (2169 words) Published: November 11, 2010
In recent years, globalization has become one of the most popular term involving in many business articles and speeches. Globalization has brought both advantages and disadvantages to the world in many aspects, from economy to culture. Along with the trend is the expansion of multinational company. Nowadays, it is common to see a company with operations in many countries. In order to penetrate to a new country, every entrepreneur should have a SWOT analysis about the country to know about its strengths, weaknesses, opportunities and threats. The analysis will help the entrepreneur to find a proper strategy for the company to operate in the new country. This SWOT report will analyze the strengths, weaknesses, opportunities and threats of Vietnamese economy. With the GDP increases steadily 7% per year, Vietnam is a noticeable country which offers investors from every countries lots of strengths and advantages that they could find attractive and useful for their business process. When comes to the strength, location can be the first strong point that has greatly affected the Vietnamese economy. Generally, Vietnam locates in the south east Asia, in the middle of the Pacific Asia area. It is bordered by Laos to the north west, Cambodia to the south west, People’s Republic of China to the north and the east sea to the east. Due to its location, Vietnam can be considered as the common trading place of the whole area, in which many companies take as its transition. For instance, many Japanese and Korean companies take Vietnam as a stop point in their process delivering products to the more southern countries. It is all due to the central location of Vietnam. Therefore, a huge amount of money has been invested in Vietnam with the purpose of not only improving the conditions but also attracting more investors. Vietnam has become an open market and become more popular in the past decades. Many important business events of the whole area have been held in Vietnam recently. Furthermore, having approximately 3260 km of the border which meets the sea, Vietnam has the advantage of transportation and delivery. Heavy products such as cars, minerals, etc. can be much cheaper transported through the sea route than by planes. The low cost of delivery can lead to the decrease in the price of both imported and exported products. This is maybe one of the most attractive trait of Vietnam, which offers to investors the possibility to make profit from a small amount of capital invested. Natural resource is another strength of Vietnam. Located in the most eastern part, faced the Truong Son mountain to the west and the east sea to the east, Vietnam has the access to plenty kinds of resource, such as minerals, soil, wood, petroleum and gas complex, a diversity of animals, etc. With the tradition of thousand years of agriculture, Vietnam ranks second among the most exported rice countries in the world. This is due to not only the proper policies of Vietnamese government, but also because of the appropriate climates and terrain, which mostly includes deltas and low mountain. Besides, Vietnam also gains lots of money from exporting petroleum, sea species, coal, etc. Moreover, having the access to several kinds of resources means Vietnam can provide raw materials and producing ingredients itself. It can lead to the lower producing cost, due to the self-supply of raw materials. On the other hand, the profit from selling materials takes an important role in the economy. For instance, Vietnam not only can produce energy enough for the whole country but also enough to sell to other countries, such as Laos. . Thirdly, Vietnam ranks 13rd among the most populous countries in the world, which means it has a huge amount of working force. With 88 million people (2010) in a small area of 331,212 km², the labor cost is extremely cheap and with the population density as high as in Vietnam, it is easy for companies to find employees. In 2009, the monthly minimum wage...
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