Case 3 Vietnan

Topics: Investment, Foreign direct investment, Macroeconomics Pages: 2 (442 words) Published: December 12, 2014
Case 3: Vietnam:
Questions:
1) Does Vietnam represent an attractive investment opportunity? A: Yes, does it. Vietnam is the 12th most populous nation in the world. Its economy rapidly grows and substantial inbound foreign direct investment. Then, there is an ongoing series of liberalizing economic reforms. Plentiful, well educated and low-cost labor force.

2) Is it too late for U.S. companies to enter Vietnam?
A: NO, it won’t too late. There are several reasons: 1. Government encourages foreign investment with changing regulations for reducing tariffs. 2. With Vietnam’s economic rapid growth, the Market is still developing and there are many opportunities for new investors under good government policies. 3. There are plentiful, well-educated and low-cost workforces. 4. Vietnamese has a high US brand awareness. Thus, there are so many benefits from high-level growth of economy, regulations, and low-cost workforce for U.S companies to enter into the market. 3) What recommendations would you make to each of the three U.S. MNCs regarding whether to enter Vietnam (if not Vietnam, then where to enter) and timing? A: For the chemical industry, I do not recommend U.S Company to entry, because there are high cost if using representative officers, and conflict between product position and quality. Thus, I will recommend them to entry Newly industrialized countries with processing contract way. For the sport industry, I recommend U.S Company to entry immediately, because they have strong product design and marketing abilities. They are able to innovate products and segment emerging markets. In addition, there is very high demand in the market. Major competitors produce in Vietnam with the processing contract way. For the children industry, I recommend U.S Company to play wait and see, because there are many counterfeits and undeveloped retailers. Thus, the best way is to make a processing contract with the local distributors. Then find a right time to joint...
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