Review Questions Chapter 1, the Global Perspective, January 2019

Discussion class K55BBE

Name: Doan Thi Minh Hoa
Student code: 1610 710 060

Lecture Overview:
Part I. How can we get the “big picture” of IB? – a model
Part II. What is Globalization? Global Markets, Products and Production

PART I.
Question 1. According to the IB model introduced in the lecture, how is a national company different from
an international company?

A national company is a business whose target market resides only in a certain country or region. The
central benefits of a national company is a clear focus and a defined market.

An international company takes part in international business, which is any commercial transaction that
crosses the borders of two or more nations. This kind of company has no foreign direct investments (FDI)
and make their product or service only in their home country. In other words, they're exporters and
importers. They have no staff, warehouses, or sales offices in foreign countries.

Question 2. You work for a Vietnamese garment company that has decided to begin exporting men’s
sports clothes to the United States. Can you predict which aspects of the Foreign Business Environment
(Cultural, Political/Legal, Economic forces) in the United States might be the most challenging for your
business to succeed in the US market?

In my opinion, the challenges related to Economic forces would be most significant. Recent years have
witnessed great improvements in the Vietnam – US relationship with many new bilateral agreements, so I
do not think Cultural or Political/Legal barriers would be too formidable.

However, for Vietnamese apparel products, the main challenge is to counter economic problems, such as
the lack of technical design and management capabilities, finance related problems and inadequate market
information. The U.S. apparel retail industry in recent times been subject to the severe competitive
pressures with the participation of numerous key market players such as Nike, Under Amour or VF Corp.
(which owns brands including JanSport, The North Face and Dickies) and the penetration of many foreign
giants like Adidas or Puma. In comparison to these companies, sports products from Vietnam seems to lack
attractive design, and we do not have as many state-of-the-art technologies in our products as these brands.
Therefore, it would be difficult for a Vietnamese garment company to penetrate into the market which tend
to have high requirements regarding product quality like the US.

PART II.
Question 3. Come up with a list of at least 3 products from Vietnam that have the most potential to become
global products. What is it about these products that give them such potential?
Vietnamese products with potential to become global:
1. Agricultural products and food:
Vietnam has a large number of high-quality agricultural products and food, which have become favourite
among foreign consumers. However, Vietnam’s exports have failed to match its potential due to limits in
trade promotions in international markets and building brand names. With integrated marketing and proper
attention from the government, I believe we can build a strong image for this type of product in
international markets.

2. Electrical machinery and electronic equipment:

In recent years, Vietnam has been a relatively attractive destination for producers of consumable electronics
since there are abundant and high-skilled workers, low costs, an actively developing economy, and a
domestic and regional market of potential with a low level of protection. The increasing presence of many
foreign corporations in this field in Vietnam brings about opportunities and serves as a catalyst for
Vietnamese enterprises to become domestic suppliers, contractual manufacturers or joint venture.

3. Software and IT services:

Vietnam’s software industry is growing strongly, and the government is also trying to improve the IT talent
pool as it promotes IT education, provides tax benefits to software companies, finances software parks, and
is investing to improve digital infrastructure. Vietnam’s IT services offer cost advantages compared to
Japan, Korea or India – big names in the IT service industry. In addition, our proximity to Japan and Korea
attracts clients from there who prefer “nearshoring” to distant places like India or South America, where
time differences and cultural gaps can make communication difficult.