competition

Vietnam SMEs and Growth strategy

 

prelim overview

 

 

Vietnam now is at the center of a free trade zone covering a major part of world economy thank to the free trade agreements already signed and implemented ( Asean, Japan, Korea, China, India, Australia, New Zealand, Chile, Customs Union of Russia, Belarus and Kazakhstan) or being finalized ( Trans-Pacific Partnership which has a much larger scope than just tax and customs, signed in October 2015 and pending ratification, European Union, negotiation concluded and to be signed in beginning 2016).

With its lower wages but educated workforce, its relatively good infrastructure and easy business environment and the State’s volontarist industrial policy, Vietnam will benefit a significant competitive advantage, not only on cost, to attract foreign investments to become a stronger world manufacturing hub compared to its most direct competitors (China, India, Thailand, Philippines) and to increase its export power particularly within its large free trade zone.

Meantime, the local business, particularly SMEs, will face in its domestic market with tougher competition from other countries as a result of a long time priority given to export at the detriment of home market and of unsufficient funding and so investments in product quality, innovation and marketing compared to competitive products from other countries.

Overall however, being part of large free trade zone, which includes the most important consumer markets such as the US, Europe, China, Russia, India, Mexico and Asean countries, provides the historic opportunity for Vietnam’s enterprises to enter and develop and grow market share, not only on labor contribution but more importantly on value added products and services. To make this happens requires :

- A clear understanding of the business current status
- A careful thinking , planning and execution by business leaders in respect of market and product offering, business organization, profitability and funding over a period of 3 to 5 years.

At ATTP Capital, we work together with our clients in this critical process through the preparation of the preliminary Business Overview in the first stage and then the building of the Growth Strategy in the second stage.

 

 

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