Value in Foreign Market Question Answer 2022

Question 1/ (4 points) Firms expanding internationally must decide on 3 key
important questions. Explain your idea with real examples.
1. Which markets to enter
There are more than 200 nation-states in the world, firms do not all hold the same profit potential
for a firm contemplating foreign expansion. The long-run economic benefits of doing business in
a country are a function of factors such as the size of the market (in terms of demographics, the
present wealth (purchasing power) of consumer in the market, and the likely future wealth of
consumers, which depends upon economic growth rates.
Creating Value in Foreign Market
Another important factor is the value an international business can create in a foreign market.
This depends on the suitability of its product offering to that market and the nature of indigeous
competition.
2. When to enter them and on what scale
When to enter
One attractive markets have been identified, it is important to consider the timing of entry. Entry
is early when an international business enters a foreign market before other foreign firms and late
when it enters after other international businesss have already established themselves.
On What Scale
Another issue that an international business needs to consider when contemplating market entry
is the scale of entry. Entering a market on a large scale involves the commitment of significant
resources. Entering a market on a large scale implies rapid entry.
3. Which entry mode to use
Exporting is a typically the easiest way to enter an international market, and therefore most firms
begin their international expansion using this model of entry. Exporting is the sale of products
and services in foreign countries that are sourced from the home country. The advantage of this
mode of entry is that firms avoid the expense of establishing operations in the new country.
Firms must, however, have a way to distribute and market their products in the new country,
which they typically do through contractual agreements with a local company or distributor.
When exporting, the firm must give thought to labeling, packaging, and pricing the offering
appropriately for the market. In terms of marketing and promotion, the firm will need to let
potential buyers know of its offerings, be it through advertising, trade shows, or a local sales
force.
How can Vietnam become the key destinations for many MNCs.
Identify the key sectors that Vietnam can attract the investment of
MNCs.

1. FAVORABLE GEOGRAPHICAL LOCATION
Possessing a long coastline, close to the world's main shipping routes, located in the heart of
Southeast Asia - both the connection center of the region and the gateway to penetrate the
economies. in the western part of the Indochinese Peninsula are the perfect natural conditions for
Vietnam's international trade.
Vietnam also has a location adjacent to neighboring China. Besides, Vietnam also possesses a
long coastline, adjacent to the East Sea, close to the world's main shipping routes, which is the
perfect condition for the trade process. The two big cities in Vietnam are Hanoi and Ho Chi
Minh City. In which, the capital Hanoi, located in the North, has very favorable business
opportunities. Ho Chi Minh City, with the largest population, located in the south, is considered
the industrial "mecca" of Vietnam.
2. STABLE POLITICS
Vietnam's political stability is one of the top factors attracting investors to Vietnam . If we look
at some countries in the region, it is easy to see that most of the countries have experienced
coups or political crises, while Vietnam's politics has always been stable. ensure consistency in
economic development policy.
3. STABLE AND DYNAMIC ECONOMY
In recent years, Vietnam has been one of the fastest growing economies in Asia. The average
economic growth rate of Vietnam in the period 1991-2010 reached about 7.5% and in the period
2011-2013, despite many difficulties, it still reached 5.6%. With a GDP of about $223 billion
and a growth rate of 6.8% in 2017, Vietnam has made its name on the list of the world's most
dynamic economies.
4. OPEN DOOR POLICY FOR FOREIGN INVESTORS
Vietnam is always open and encouraged to welcome foreign investors through actions to update
and adjust investment regulations. Vietnam is continuing to implement preferential policies to
attract foreign investors such as corporate income tax exemption and reduction, import tax
exemption for a number of goods, land rental and land use exemption and reduction, etc.
committed to continue reforming administrative procedures to create favorable conditions for
investors.

5. THE BUSINESS ENVIRONMENT IS CONSTANTLY IMPROVING
According to the Foreign Investment Agency, in recent years, Vietnam's business investment
environment has been continuously improved in the direction of openness, transparency, and in
line with international standards.
Another demonstration of Vietnam's openness to the global economy is the numerous trade
agreements that Vietnam has signed to attract the market.
Member of the ASEAN Free Trade Area (AFTA)
Vietnam - EU FTA Agreement (effective in early 2018)
Bilateral Trade Agreement (BTA) signed with the US
Member of the World Trade Organization (WTO)
All these agreements have shown that Vietnam is very eager to boost the country's economic
growth and will continue to sign other trade deals with many countries. Since then, Vietnam's
business environment has been continuously improved.
6. ENHANCE COMPETITIVENESS
The Vietnamese government is making more efforts to improve the country's competitiveness. In
2017, the World Economic Forum ranked Vietnam's competitiveness up 5 places, to 55/137; The
World Bank's ranking on Vietnam's business environment increased 14 places, to 68th out of 190
countries and territories. Vietnam's sustainable development index in 2017 increased 20 places to
68/157 countries and territories.
7. INFRASTRUCTURE IS GRADUALLY IMPROVING
Previously, limited infrastructure, especially transport infrastructure, was identified as one of the
causes creating invisible barriers in the process of attracting foreign investment into Vietnam .
However, in recent years, in order to remove these barriers, the government and localities have
been actively deploying to attract all resources to invest well in infrastructure, arterial roads.
circuits, airports, routes to border gates, borders, economic zones, industrial parks.