kl huynh thi thanh thao 70900379

VIETNAM GENERAL CONFIDERATION OF LABOUR TON DUC THANG UNIVERSITY DEPARTMENT OF BUSINESS ADMINISTRATION CURRENT STATE AND RECOMMENDATIONS TO IMPROVE EXPORTING ACTIVITIES OF BUILDING STONE AT F-C LIVING STONE VIETNAM CO., LTD Thesis submitted as a requirement for the degree Bachelor of Business Administration Supervisor: MA HA NGOC MINH Student: HUYNH THI THANH THAO Student ID: 70900379 Intake: 13 HO CHI MINH CITY, 2013 ACKNOWLEDGEMENT -0 In my honor, I express the gratitude to Ton Duc Thang University’s teachers who have given me the most basis professional knowledge of International Business Administration with whole hearted instruction I especially give my appreciation to my instructor – Mr Ha Ngoc Minh, MA who has instructed and helped me to complete this internship report with his enthusiasm I want to express my gratitude to the Board of Director at F-C Living Stone Vietnam Co., Ltd as well as the staffs at all Departments especially to the staffs at Department of Export – Import who helped me when I studied at the company I give my appreciation to Mr Do Kim Luon who gave me helpful advice to complete this graduation thesis Because of limitation of the major knowledge as well as experience, I could not avoid mistaking so the contents of my graduation thesis also have a lot of shortcomings Thus, I hope to receive sympathy and strictly suggestions from Mr Ha Ngoc Minh, MA, as well as other teachers, Board Of Director of F-C Living Stone Vietnam Co., Ltd and the staffs at all Departments to improve myself Finally, I would like to give my special thanks to my parents who always give me the best conditions to complete this graduation thesis Ho Chi Minh City, 9th July 2013 Student: Huynh Thi Thanh Thao WORK IS DONE AT TON DUC THANG UNIVERSITY I assure this is my own research and with the scientific guidance of MA Ha Ngoc Minh The contents of the study, the results of this topic are truthful and are not published in any form before The data in the tables for analysis, assessment, evaluation is collected from various sources and stated clearly in the references In addition, the thesis also uses some comments, evaluations as well as the data of other authors, other agencies which are cited and annotated the sources If having any fraud, I completely bear responsibility for the content of my thesis Ton Duc Thang University does not involve in fringement of copyright Ho Chi Minh City, 10th July 2013 Huynh Thi Thanh Thao COMPANY’S COMMENTS Student: Huynh Thi Thanh Thao Student ID: 70900379 Class: 09070101 Intake: 13 SUPERVISOR’S COMMENTS Student: Huynh Thi Thanh Thao Student ID: 70900379 Class: 09070101 Intake: 13 EXAMINER’S COMMENTS Student: Huynh Thi Thanh Thao Student ID: 70900379 Class: 09070101 Intake: 13 TABLE OF CONTENTS INTRODUCTION .1 Reason for choosing the topic .1 Objective and significance of the study Scope of the thesis Methodology Data source .2 Thesis structure CHAPTER 1: LITERATURE REVIEW .4 1.1 Entry strategies in foreign markets 1.1.1 Exporting .4 1.1.1.1 Indirect export 1.1.1.2 Direct export 1.1.2 Foreign Direct Investment 1.2 The Marketing Mix .7 1.3 The Gravity Model in international trade .8 1.4 The contents of exporting products 1.4.1 Investigate, research export market 1.4.1.1 Selecting the export market 10 1.4.1.2 Selecting commodities to export 10 1.4.1.3 Selecting business partner in market research 10 1.4.2 Setting up plans and export projects 11 1.4.2.1 Setting up plans to export goods 11 1.4.2.2 Building up export projects 11 1.4.3 Transaction, negotiation about export contract 11 1.4.4 Performing export contracts 13 1.5 Building stone market and factors affect building stone export activities 15 1.5.1 Building stone exporting market .15 1.5.2 Types of building stone exported .16 1.5.3 Factors affect building stone export activities 17 1.5.3.1 Factors outside the enterprise environment 17 1.5.3.2 Factors inside the enterprise environment 20 CHAPTER 2: ANALYZE CURRENT STATE OF EXPORTING ACTIVITIES AT F-C LIVING STONE VIETNAM CO., LTD 22 2.1 Overview about F-C Living Stone Co., Ltd 22 2.1.1 General information about F-C Living Stone Co., Ltd 22 2.1.1.1 About the corporation 22 2.1.1.2 About F-C Living Stone Vietnam Co., Ltd 23 2.1.2 Company’s field of operation 23 2.1.3 Management system of the company 24 2.1.4 Function of each department .24 2.1.5 Characteristics of resources of the company 26 2.1.5.1 Capital of the company 26 2.1.5.2 Human resources of the company 26 2.1.5.3 The market of the company 27 2.1.5.4 Financial situation of the company 28 2.1.6 Some key results of the company from 2010 to 2012 .28 2.2 Current state about export activities at F-C Living Stone Vietnam Co., Ltd …………………………………………………………………………….33 2.2.1 Products of the company 33 2.2.2 Price of the product 35 2.2.3 Current state about export markets of the company 35 2.2.4 Promotion 43 2.2.5 Organize to perform export building stone of the company 43 2.2.5.1 Resources for exporting .43 2.2.5.2 Exporting delivery 44 2.2.5.3 Method of Payment 45 2.3 Analyze SWOT matrix of F-C Living Stone Vietnam Co., Ltd .45 2.3.1 Strengths 45 2.3.2 Weaknesses 47 2.3.3 Opportunities 48 2.3.4 Threats 49 CHAPTER 3: SOME RECOMMENDATIONS TO IMPROVE EXPORT ACTIVITIES OF BUILDING STONE AT F-C LIVING STONE VIETNAM CO., LTD………………………………………………………………………… 51 3.1 Forecast the development trend of building stone market and exporting orientation of the company .51 3.1.1 Forecast the development trend of building stone market in the world ……………………………………………………………………… 51 3.1.2 The orientation of exporting building stone of the company 51 3.1.2.1 The goal of exporting building stone of the company .51 3.1.2.2 The orientation of exporting building stone of F-C Living Stone Vietnam Co., Ltd .52 3.2 Some recommendations to promote export activity of the company 53 3.2.1 About the product of the company 53 3.2.1.1 Improve the quality of products 53 3.2.1.2 Selecting strategic commodity 53 3.2.2 About the exporting market 54 3.2.3 About the price of the product 55 3.2.4 Sales promotion strategy 55 3.2.5 Setting up marketing system, strengthening the researching and improving the collecting and processing information system 56 3.2.5.1 Researching the market .56 3.2.5.2 Perfect information collecting and processing system 57 3.2.6 Improve exporting process .58 3.2.7 Enhance e-commerce application 59 3.2.8 Improve efficiency of using business capital 59 3.2.9 Improve organizational management system and human resources ……………………………………………………………………… 60 3.2.9.1 Improve organizational management system 60 3.2.9.2 Solutions to develop human resources in the company 62 3.3 Some recommendations to the State 62 CONCLUSION 65 LIST OF ABBREVIATIONS ASEAN Association Southeast Asian Nations EAT Earnings after tax EU European Union L/C Letter of Credit T/T Telegraphic Transfer UK United Kingdom WTO World Trade Organization 55  The company needs to know who competitors are to respond promptly  Promote and expand the exporting into these markets 3.2.3 About the price of the product After choosing the strategic product and market, the company continues to implement price strategy To control the price of the product, the company should apply CIF price instead of FOB The ocean freight for a container 20 feet to Malaysia is around USD 150.00 The cost to export in CIF term is not much higher than FOB With the young, talented, experienced staffs, the company should take this advantage to promote the strengths of the company The company should change traditional business approach from indirect exporting to direct exporting The company can use independent local distributors who will buy the products to resell them in the local market Independent local distributors can be established in strategic market of the company that is in Malaysia Using this approach, the company can control the price in foreign market, raising awareness of the customers about company’s brand name But it requires the company must have information and understand clearly about the market To this, the company must take much effort in researching the market 3.2.4 Sales promotion strategy The company also needs to launch a campaign to find new customers through participation in international trade fairs, introduce the products and design the company’s website This is the best approach to search, study market’s demand to have effective business steps To approach more to target market, the company should attend some trade affairs about construction material like Greenbuild Asia, the International exhibition and conference on sustainable building, design and construction organized at Kuala Lumpur, Malaysia or any international trade affairs organized in this country 56 3.2.5 Setting up marketing system, strengthening the researching and improving the collecting and processing information system 3.2.5.1 Researching the market Market is the key issue If we not have the market, we cannot export the products, the enterprises not have profit to survive Thus, to survive and have profits, the businesses must pay special attention to issues of consumption, market research deeply, always thinking about how building stone products enter into the world market To answer this question, it is necessary to work effectively on the market research It also means that company has to research and built a marketing strategy to be able to find the output for export products Market research allows us to capture customers’ demand in the market: the price, market capacity to be able to choose customers, business methods that have most effective for the company The company always has goals, specific plans and flexible implementation plans in order to get effective in business The scope of activities of the company is large, in multiple markets, with customers in all over the world However, big customers is rare, researching and developing the market to achieve good results needs to invest more time and money Therefore, the company needs to implement measures follows:  Investment in market research in both human and material resources Regularly send employees of the company to the market, meet customers to establish business relationships and gather information  Maintain traditional customers that the company already has, especially big customers Conduct to research and commit to customers that have regularly trade relations, to ensure mutual benefit and co-development  Strengthening and expanding relations with the diplomatic offices, organization working for foreign relations located in Vietnam and other countries to seeking new customers 57 The company needs to study movements of the competitors in abroad such as China, Hong Kong, Indonesia, India and the competitors inside the country These rivals have their own advantages in providing the same products with the advantages of materials, labor cost, models, technology thence defining suitable direction for the company when the economy is integrated and has much fluctuations Researching the market, then setting up the objectives and measures for each market will be a solid foundation to help company get detailed business plans, practical and effectiveness 3.2.5.2 Perfect information collecting and processing system Currently, the company is collecting information primarily through economic centers, databases, external agencies, news, magazines in domestic and abroad, through the internet, through trade fairs and international exhibitions General evaluation, this is a universal, secondary source of information In addition, the company also collects information through the familiar customers of the company, gathers information through the practical assignment of the staff in the importing country Therefore, company can conduct a number of solutions following to get the advantages of information:  Establish a relationship with the embassy of Vietnam in the countries that the company interests in as well as with the embassy of those countries in Vietnam From these relationships, the company can exploit the information relating to market tastes, policies, priorities This is very important and will bring efficiency to sales operations of the company Using the company’s budget to buy the information from the information provider The information provided by market research company often ensures the accuracy and timely Thence, the company can quickly capture market demand and have opportunities to enhance the export turnover  In addition, the company has to build an information system providing about company’s information so that customers can find, contact in the most convenient way Specifically, the company can build website introduce the 58 company, the products and customers can purchase online through websites, fax system, telephone When the company has built a good system to collect information, the next step is to handle that information in the most effective way Firstly, managers needs to analyze the reliability of information Next, it must have a feedback system Another important thing is that the information needs to be ensured confidentially, not let the competitors know in order to take action and reduce the company’s business efficiency 3.2.6 Improve exporting process  Improving export business must start from researching the international market To the international market: the company must capture the tastes of consumers about products the company is manufacturing, the policy about exporting, changes in demand for goods, and competitors, the potential group of customers To the domestic market: capture the changes in supply and demand, prices of goods in the domestic market, policies, national laws and international laws  The market research: Currently, the company is not only focusing on developing relationships with traditional customers but also continue to look for new customers The careful market research gives enterprises accurate information about the market and enterprises can choose and work with new partners  Completing transactions, negotiation and signing exporting contracts: base on the information obtained through market research and information through business partners, combined with the ability and needs of the company, the company needs to make specific goals for negotiation to achieve the objective With the transaction negotiation and signing of the contract work, the company should have professional staffs who have responsibility and transactional capabilities and grasping information ability 59  Process of performing export contract: First, the company must train exporting staff group with the ability to meet the needs of the export process in the company During performance of the contract, the company needs to have an agreement with the importer about time of opening L/C, schedules, delivery time to avoid storage cost due to late delivery or L/C does not match with the current contract, causing unnecessary waste 3.2.7 Enhance e-commerce application E-commerce is an inevitable development trend of the current economic conditions, thanks to e-commerce, businesses have much information about the market and partners, businesses are easy to create, strengthen relationships, shorten the production process E-commerce has special significance for developing countries like Vietnam, especially for small and medium enterprises operating in the field of international trade, it is a useful tool to help businesses connect with the outside The company can apply some following measures:  Equip technology infrastructure: the company can conduct effectively only when they have a technology infrastructure full of capable, modern  Set up the company’s website, apply of e-commerce for all stages of the business process, from advertising, offering, introducing product, ordering and online payment, delivery to the consumer, answering questions about products 3.2.8 Improve efficiency of using business capital To improve capital efficiency, the company must take measures to speed up the working capital cycle With that goal, the company first needs to pay more attention in researching market demand, expects market volatility to meet the market’s need timely so that the company can quickly recover capital to make another deal Furthermore, the identification of the needs of the market will contribute to reduce inventory Thus, the company can solve the stagnant of capital better, reduce cost of preservation That helps to reduce production costs significantly due to lower 60 maintenance costs and improve the competitiveness of the goods For fixed assets not used or damaged should be liquidated to add to the amount of fixed capital Company needs to determine exactly amount of working capital needed to operate exporting business to mobilize the appropriate capital If determining wrong the capital requirement will lead to a shortage of working capital, and make business process affected The surplus mobilization of capital will lead to wastage of capital, slow down the business cash flow, reducing business efficiency In addition, the company also need to set a good relationship with the bank to mobilize capital, conduct payment transactions easily Expanding export business can bring more profit, improve export business efficiency 3.2.9 Improve organizational management system and human resources 3.2.9.1 Improve organizational management system To be successful in business, operation of enterprises should be done on the reasonable and efficient structure system Organizational system of the company was established when entering the business However, the organizational structure is not a constant factor The stagnation and poor adaptation of the organization is one of the important issues that can lead to failure Thus, during operation, the organizational system needs to adapt well with the movement of the economy Innovating in business strategy, adapting to the specific circumstances of company require organizational management carried out regularly during the formation, survival and development process of enterprises The main content of organizational management including:  Design and build organizational structures  Selecting, recruiting and training  Conducting the organizational operation of the company  Control the organizational operation of the company  Adjust the organizational operation of the company when necessary 61 The organizational model is set up basing on operation field: organizational model according to functions, organizational model according to products, organization model according to geographical area, organizational model according to customers Currently, F-C Living Stone Vietnam Co., Ltd is applying organizational model according to functions, enterprise selects functions to build organizations The organizational system of the company includes departments that are responsible for different functions The advantages of the system are higher efficiency, maximize the advantages of specialization, simplification, more focus on professional standards and employees behavior However, there are disadvantages:  Easy to appear contradiction between the functional units when setting targets and business strategies  Result will not be effective without coordination between departments  It is difficult to identify and dissect responsible for each department to the business performance of the company F-C Living Stone Vietnam Co., Ltd has selected and applied organizational system according to business functions and the company needs to take measures to promote the strengths and control the disadvantages Company may limit the weaknesses by following these measures:  The Board of Directors plays an important role in outlining, unifying the ideas between departments about the plans, targets and proposing final decision The Board of Directors need to lucid in order to avoid conflicting, overlapping in plans and action of the departments  Must create alignment, coordination between the heads of departments in the company in the implementation plan through unified action plan proposed by the Board of Directors  Reducing organizational structure towards compact and efficient to reduce costs, increase profits and reduce overlapping in activities and increase the work efficiency of employees 62  When evaluating the results, as well as the responsibilities, need to be fair, share achievements for the department at the rate of contribution 3.2.9.2 Solutions to develop human resources in the company In all activities, the human is always the deciding factor, especially in business Business performance depends on the capacity of staff, the ability to prove staffs’ potential of leaders To develop the human factor in the company, the company can apply some following measures:  Searching and attracting talents: through advertising, introducing in the media about business performance, prospects of the company… The company will attract talented people wishing to become a member of the company  Implement training plans is a strategic task in business operations of the company Training and educating for staffs to complete the objectives: improving operational, physical, enhance community integration, spirit, attitude and responsibility towards corporations and social  About policies for employees: the company should have a working system and treatment suitable for each specific condition such as working time , rest time, working conditions, income, bonuses, penalties, and incentives, health insurance, promotion 3.3 Some recommendations to the State  Capital Policy Encourage the construction industry by medium-term loans with low interest rates to invest in depth and add to working capital to develop producing and processing of building stone Increasing and diversifying fund for scientific and technological activities, opening the business capital that the enterprises can access, carrying out the medium and long term credit with preferential interest rates Diversify funding for science and technology, machinery, invest in basic research, invest in researching the application and deploy the technology  Monetary Policy 63 Most product exported are valued in foreign currencies, mainly in USD Thus, the exchange rate may affect price and purchasing power of the market The monetary policy of the state can stabilize the exchange rate, creating better conditions for businesses and consumers A policy of exchange rate stability of the State will promote the ability of exporting so that the export market of the company will be strengthened and expanded This is an extremely important condition contributing to the stability and development of the company  Assisting to search market and search market information The government should create conditions for enterprises having big market by signing bilateral trade agreement between the governments with incentives for both parties This helps Vietnam businesses looking for and penetrating easily into the foreign market Creating an environment with healthy and fair competition is the condition for companies to consolidate and expand the market, continues to expand business activities in the future The state should establish counseling centers about information and database related to foreign markets, therefore, businesses have the opportunity to contact and find business opportunities Encouraging domestic and foreign enterprises to develop the products with high quality, exchange rate policy in combination with extend the power of companies in the export sector to be able to export directly  Perfect the economic law and perfect exporting management mechanism Develop economic laws to correct social relations in business Issue full, detailed, specific law documents and guideline to carry out, reduce issue under the law documents, gradually reduce provisions with general principles Erase competitive limitation regulations, unfair competition, not suitable for market mechanisms, with antitrust international commitment Especially laws on mining, processing and international trade laws Improving management mechanism of export operations to simplify administrative procedures and reduce the time to export procedures, save costs In 64 fact, our customs procedures are complex and prolix, takes a lot of time Currently, although the government has applied for electronic customs declarations, the customs declaration procedures have been checked by customs officers after checked by computer Thus, this appears negative, causing delays for exporters The government should also take measures to create favorable conditions for businesses by simplifying customs procedures, improve the system of electronic customs declarations, reform administrative procedures  Create conditions for enterprises with 100% foreign capital The foreign enterprises should be treated like domestic economy part The State should have more preferential and incentive policies for these enterprises to encourage them operate more effectively Because when the enterprises operate effectively, they will not only bring benefit for them but also submit to the State through income taxes Moreover, the enterprises will help to solve job problems for Vietnam’s labor Therefore, to attract more and more foreign enterprises operating effectively in Vietnam, the State needs to have incentive measures as well as promote business operations for these enterprises more and more 65 CONCLUSION After more than 20 years of opening and reforming, our country is constantly rising, confirming the position in the international market In particular, the exporting of building stone also helps to contribute the strength of Vietnam’s economy F-C Living Stone Vietnam Co., Ltd is a company operating efficiently in this field In the market economy, the company faces with fierce competition from other competitors, but F-C Living Stone Vietnam Co., Ltd has been trying to increase the efficiency of export business in the company, and has achieved encouraging results The company’s product has been accepted in more than 15 countries in the world, the company’s operation has gradually expanded From a small scale, the company can stand firmly and operate efficiently, gradually works more professional On the other hand, the company’s product quality is higher and higher To have such a success, the staffs along with the company’s Board of Directors has not stopped trying The growth of the company shows that the role of small and medium enterprises in the export business In addition, the company also exists some common drawbacks that are the export turnover is still low, goods quality does not meet certain international standards, limitation of marketing activities These show that the company needs to find right direction to improve business efficiency With the topic “Current state and recommendations to improve exporting activities of building stone at F-C Living Stone Vietnam Co., Ltd.”, I understand the actual operation of export process and applied the knowledge that I got at the school into the practice, and I bravely suggest some solutions to promote export of building stone of the company In fact, any business that operate in any field desires to improve their business performance, and there are many different methods to improve business performance It is important for every business to find the appropriate solutions to their business and apply in practice The thesis is done on the basis of the knowledge I learned at school, study the practical export business operation in F-C Living Stone Vietnam Co., Ltd, the support 66 of all the staffs in the company and especially the dedicated guidance of MA Ha Ngoc Minh I sincerely thank you If I have condition and the company provide more material, I will research deeper about competitors in the industry REFERENCES  Vietnamese Hoang Thuy Chinh (2009), Current state and solutions to enhance exporting natural stone of Nhat Huy Co., Ltd., Graduation thesis, National Economics University, Vietnam  English Paul R Krugman and Maurice Obstfeld (2006), International Economics: Theory and Policy, 7th Edition, Pearson Addition Wesley, pp 12-13  Websites Schewe, Charles D., and Alexander Hiam, The Portable MBA in Marketing, July 2013, http://www.quickmba.com/marketing/mix/ Shpstone, Vietnam ashlar paving stone market, July 2013, http://daisan.com.vn/tintuc/739/17/Thi-truong-da-op-lat-Viet-Nam-Co-hoi-dautu-va-tiem-nang-phat-trien.html Terpstra, V and Sarathy, R., Entry strategies in foreign markets, July 2013, http://www.palgrave.com/business/lambin/students/pdfs/Note%2013.pdf APPENDIXES Company’s products Investment certificate Sales contract Bill of Lading Commercial Invoice Customs declaration Packing List Ninh Thuan White Phan Rang Pink Khanh Hoa Purple Phu Yen White ... best conditions to complete this graduation thesis Ho Chi Minh City, 9th July 2013 Student: Huynh Thi Thanh Thao WORK IS DONE AT TON DUC THANG UNIVERSITY I assure this is my own research and... involve in fringement of copyright Ho Chi Minh City, 10th July 2013 Huynh Thi Thanh Thao COMPANY’S COMMENTS Student: Huynh Thi Thanh Thao Student ID: 70900379 Class: 09070101 Intake: 13 ... distance from this 38 market to Vietnam is rather far so it is difficult to develop in this market Thus, this market is not really attractive, the company should maintain market share in this market