To what extent culture has impacted on international business activities of Honda Group in Vietnam or (“To what extent utilize culture has guided to the success of Honda group in Vietnam”) Today not only economists but also culturists strongly agree that culture is a driving force of socioeconomic development. The impact of culture on the economy is extremely large and complex. Besides, the trend of globalization and multilateralism helps businesses have more opportunities to approach different foreign markets. While joining a foreign market, it is salience for businesses to understand that nation formal cultural institution. Therefore, by the effective exploitation of cultural elements in production and business activities will help businesses avoid failures and achieve success in that particular market.
lOMoARcPSD|10803158 "To what extent culture has impacted on international business activities of Honda Group in Vietnam" or (“To what extent utilize culture has guided to the success of Honda group in Vietnam”) lOMoARcPSD|10803158 Table of contents INTRODUCTION Background Brief introduction of operating business in foreign country .4 The process of Honda penetrating the Vietnamese market Motorcycle factory External Element (consumers, society, etc.) International business activities of Honda in Vietnam .7 Price list for Honda motorcycle in Vietnam market Target on young people .10 Focus on contributing to society .11 Internal Element (Worker, management) 12 Attitudes about the time, working style and colleague relationship of Vietnamese workers .12 Apply Japanese working style and colleague relationship to Vietnamese workforce: 13 Potential Conflicts 14 Honda's successes in exploiting the impact of culture in Vietnam 15 Leading products and exports 16 Conclusion 17 References 18 lOMoARcPSD|10803158 INTRODUCTION Today not only economists but also culturists strongly agree that culture is a driving force of socio-economic development The impact of culture on the economy is extremely large and complex Besides, the trend of globalization and multilateralism helps businesses have more opportunities to approach different foreign markets While joining a foreign market, it is salience for businesses to understand that nation formal cultural institution Therefore, by the effective exploitation of cultural elements in production and business activities will help businesses avoid failures and achieve success in that particular market My topic " To what extent culture has impacted on international business activities of Honda Group in Vietnam"or (“To what extent utilize culture has guided to the success of Honda group in Vietnam”) will help us to better understand the impact of a culture on the business activities of the Honda foreign enterprises Specifically, the topic will delve into analyzing the impact of culture on activities such as product selection, product valuation, HR management issues and issues related to social responsibility of Honda when doing business in Vietnam lOMoARcPSD|10803158 Background Brief introduction of operating business in foreign country From individual customers and entrepreneurs to global business corporations, the core of all business activities based on human decision from large to small, insignificant choices Psychologically speaking, any choices that we made are by both of our conscious and subconscious mind, which is influenced by individual cultural developing from our past experience(ETB) When shoppers and sellers around the world intersect, they bring different values, expectations and communication platforms This difference will lead to cultural conflicts and thus create potential shocks before being able to adapt to a new culture Understanding cultural and the ability to bring out culture sympathy are tremendously vital when a company operates any particular business in that culture It becomes even more vital and largely complex when a company operates in many different cultures The process of Honda penetrating the Vietnamese market Honda officially entered the Vietnamese market in March 1996 On March 22, 1996, Honda Vietnam was officially established Honda Vietnam is a joint venture between Japanese Honda Motor Company, Thailand Asian Honda Motor Company and Vietnam Engine and Agricultural Machinery Corporation Motorcycle factory lOMoARcPSD|10803158 On August 29, 2008, in Vinh Phuc, Honda Vietnam Company held the inauguration ceremony of the second motorbike factory The second motorbike factory has an area of 300,000 m2, located right next to the existing motorbike factory available in Vinh Phuc province Total investment capital of Honda Vietnam is 290,427,084 USD, charter capital is 62,900,000 USD, Honda Vietnam's current number of employees was 4,369 people (http://www.honda.com.vn ) External elements (consumers, society, etc.) International business activities of Honda group in Vietnam Honda is a foreign enterprise operating in the Vietnamese market so obviously it must be influenced by the effects of Vietnamese cultural factors The elements of Vietnamese culture directly impact on each specific activity of Honda such as product selection, cost price and product quality, recruitment policies, and training of workers, members and public relations activities such as social responsibility, social contribution Honda has considered the first aesthetic factor when penetrating into Vietnam market Honda has launched a total of 12 models and all models are female motorcycles, which are suitable for the physique of Vietnamese people Honda models have bold and striking colors such as red, plum, green and purple charcoal The style and color of the motorcycles are also changed over time to accommodate the aesthetic changes of the Vietnamese people Honda shipped the first motorcycle in Vietnam in December 1997, which is Honda Super Dream Honda Super Dream cars are brown plum, have familiar appearance in every Vietnamese house Super Dream launches with the message of a trusted friend, following the dreams with lOMoARcPSD|10803158 Vietnamese people with a strong strength Along with the Future model launched in September 1999, Honda was very successful when it sold 500,000 units between 1997 and 2001 Since 2002, Honda has focused on producing more youthful models, vivid colors and vivid motifs Models show the dynamism and personality focusing on young people The models in turn were released by Honda: Wave α (launched in February 2002); Wave ZX and Future II (January 2004); New Wave RS and Wave α (November 2005); Wave RSV (June 2006); Wave S, Future Neo (2007) These models sold more than million units and have made Honda the number motorcycle manufacturer in Vietnam The aesthetic factor also affects the decoration and construction of authorized Honda car showroom Head Honda showroom decorated with two main colors, white and red, located in convenient traffic areas, having enough spacious campus area, cool space, sophisticated service area, room waiting when the customer warranty repair facilities, spare parts warehouse is always ready to meet the needs of customers, the staff is carefully trained by Honda Vietnam with a youthful and dynamic style, a signature etiquette of Japanese’s cultures Advertisement Honda's marketing, advertising and marketing campaigns are always friendly, close, impressive and sympathetic to Vietnamese consumers Honda's advertisements on television and outdoor billboards are intimate images of Vietnamese people such as the image of a father carrying a child with a Honda Dream car or a Honda driver wearing a helmet with a Vietnamese flag In particular, affordable products are aimed at consumers with moderate incomes in rural areas and provinces, while middle-class products are targeted at urban consumers, especially towards young people The focus of Honda's products is currently a very modern and fashionable motorcycle with the potential for strong development in the future The advantages of Honda lOMoARcPSD|10803158 Vietnam's products are in the "Honda" brand known around the world With high quality products, long life, durable, fuel-efficient, easy to maintain, suitable for the climate and traffic of Vietnam This is the difference of Honda compared to its competitors Not only stop at various types of product lines, Honda Vietnam's products are considered to be well suitable for the budget of Vietnamese people, from rural to urban people In addition, Honda Vietnam has constantly improved the design and quality of products (like Wave have many models) while maintaining the selling price Based on the income, psychology and expected attitudes of Vietnamese consumers, Honda values its products in the most reasonable way As follows: Price list for Honda motorcycle in Vietnam market At October 11, 2019, inside Ho Chi Minh City Investment Promotion Conference, Vice Chairman Tran Vinh Tuyen declared that the city economy maintained a relatively high growth, the average income per capita of HCMC’S citizen is 9,800 USD, reached 9,6% per year Stand with this, it is valid to approve Honda’s price selection bring well benefit for Vietnamese’s citizen Competitors While back in the early 2000s, Chinese motorcycles flooded the Vietnamese market with stunning cheap prices Honda motorcycles, which are selling at the top, become sluggish due to the high price of times Honda's name is still the number desire of the Vietnamese people but the problem is that price is no longer competitive In this case, if Honda reduced the price to compete with Chinese cars that would lead to losses, at the same time causing the psychology that they had been overly high in the past, the Honda brand could be boycotted lOMoARcPSD|10803158 Prior to that picture, Honda had thoroughly researched and launched a new line of motorcycles called Wave Alpha The quality is almost the same but the price is very competitive, only slightly higher than Chinese motorcycles With the name and belief in Honda quality Wave alpha was quickly received by the market Super Dream in the body of the Wave Alpha has created a swim upstream for Honda Vietnam Community factors of Vietnamese culture also strongly impact on Honda's social activities Every year, the company devotes a budget of about US $ million to the Fund for Social Activities Typical social activities programs of Honda are: "I love Vietnam" program started in September 2004, aired on VTV3 and VTV1 channels of Vietnam television, attracting 7,000 people to participate each year; including "Safe driving guide" and many other programs Vietnamese cultural values, communication, and cooperation on social activities The sense of value in Vietnamese culture is based on how its society acknowledge of any particular business activities Honda has created good feelings for Vietnamese consumers through public relations activities Honda's advertisements on billboards, on television and other mass media all emphasize the community, close family This is consistent with the traditional lifestyle and customs of Vietnamese culture Vietnamese culture highly appreciates the dedication to society and businesses that have many contributions to social activities, receive tremendously positive feelings, imprinted on the hearts of Vietnamese people Every year, Honda Vietnam Company organizes loads of social activities with a budget of billions of Vietnam dong The typical social activities of Honda are the program "I love Vietnam" broadcast on Vietnamese television - a program to guide people on road traffic lOMoARcPSD|10803158 laws and safe driving practices; Many projects support localities, policy families, economic difficulties to improve people's lives and improve the local socio-economic situation Community factors of Vietnamese culture also strongly impact on Honda's social activities Every year, the company devotes a budget of about US $ million to the Fund for Social Activities Typical social activities programs of Honda are: "I love Vietnam" program started in September 2004 The program "I love Vietnam" is one of the most popular programs on VTV3, VTV1 - Vietnam Television The program attracts about 7,000 participants each year This program has created an extremely good impression in the psychology of the Vietnamese people, including "Safe driving guide" and many other programs, helping people understand that Honda is a unit with very high social responsibility In addition, Honda pays great attention to environmental protection, creating sympathy for the Vietnamese people by building and upgrading facilities for wastewater treatment systems, CO2 treatment and indoor air generation, heal inside and outside the factory Honda implicitly taken Vietnamese people issues as an advanced to gain their trust and loyalty In addition, Honda has fulfilled the commitment of Mr Koji Onishi General Director: “We are very interested in social activities, such as guiding safe driving and propagating traffic safety to build a society healthy traffic and development of educational, cultural, sports, etc As well as charitable activities “Building and securing reputation and trust becomes even more critical in an era of consumer capitalism when businesses expand into more domains of society (e.g culture, sports, or leisure); the branding of companies and services becomes more critical for growth and the media, including the Internet becomes more significant in corporate communications.” (BECP) lOMoARcPSD|10803158 Target on young people Broadly speaking, Honda has receiving a new income group during over the past years, which are the young age citizen estimate around 18 to 24 of ages This data lead Honda to enhance their approach planning of group segmentation on markets including cost production, design, etc Currently, Vietnam is considered a country with a young population, over 60% of the population is between the ages of 17 and 35 Besides keeping the traditional culture, the trend of globalization brings Vietnam to integration of many different cultures Young Vietnamese consumers are key customers of businesses in the future And the understanding of changes in aesthetics market, new lifestyle of consumers to provide the market with suitable products has helping Honda continues to maintain the No position in the car market tight and competitive with competitors in the car market “Young Vietnamese people today are very easy to change in aesthetics, psychology, outstanding taste, personality so Honda should constantly launch new products with designs, models, fashion, sport and youth dynamic Young people are also very susceptible to influences from celebrities, so in marketing, Honda's marketing activities should have the participation of celebrities who are admired by Vietnamese youth.” According to an executive manager of Honda’s designing team in Da Nang In addition, Honda continues the social work to create good relations with the government, create good feelings for the Vietnamese people, maintaining their motto: “Honda is a member of the country who always tries its best for happiness and safety of Vietnamese people.” Focus on contributing to society In addition to the success in the field of production, business, export, Honda Vietnam is considered one of the strongest companies in contributing to the development of social, cultural lOMoARcPSD|10803158 and educational fields Immediately after the inauguration of the factory, Honda Vietnam has built a safe driving center with a system of modern training and guiding equipment and has trained more than 12,000 students Besides, there are many other effective programs, helping Honda Vietnam to receive high appreciation of agencies and the public with times awarded by the National Traffic Safety Committee in 2004 and 2005 After more than 10 years of operation, Honda Vietnam has contributed to activities related to supporting the development of education, culture, arts, sports and charity with a total of nearly million USD With a commitment to contribute more to society, Honda Vietnam officially put into operation the Honda Social Activity Fund with a budget of 10 million USD in the next years Notably, the support for education development With the Honda Award for young Vietnamese engineers and scientists with the aim of creating favorable conditions for fostering and developing future talents in the field of technology and mechanics Every year, 10 students will be awarded prizes worth 3,000 USD / person and Honda motorbike In addition, if any student wins a postgraduate scholarship in Japan, the fund will give each person 10,000 USD more for years of study abroad Of the 10 million USD of Honda Fund, there will be million USD to invest in building a modern traffic safety training center in Vietnam to continue efforts to promote traffic safety activities that Honda Vietnam Male has done so far lOMoARcPSD|10803158 Internal Element (Worker, management) Attitudes about the time, working style and colleague relationship of Vietnamese workers Understanding the elements of culture will help businesses avoid the risks that may be encountered due to differences in culture and dark exploitation, which have impacts of culture on foreign consumers In Japan’s workforce, after a plan is official given, workers are required to be strictly followed Each job must be done and completed at the predetermined time Each specific time, each person tries to focus on solving a specific task Meanwhile enterprises working in Vietnam, plans are often adjusted by the same reason: Many goals are set at the same time, which often leads to negative working behaviors, the multitasking Therefore, an officer may have to deploy many tasks and flexibility in the plan at the same time While an employee performs loads of work over a period of time, this working behavior subconsciously compel their mind to accomplish multiple tasks, this has cost a death of creative production and costing financially, cognitively and physically to Vietnamese workers In addition, any interruption from colleagues from different parts is enough to eliminate focus and significantly reduce performance Organizations working in Vietnam have many rules and many exceptions The image is often used to compare with the negative ability of multitasking by Vietnamese workers, who are riding a motorbike on a crowded road and exchanging work via mobile phones simultaneously, foreign workers have witnessed this often in Vietnam These factors affect the organization of work, planning, assigning personnel and arranging time for officials and employees Therefore, Honda have always conducting the way Japan works with lOMoARcPSD|10803158 Vietnamese employees in accordance with their capabilities, attitudes about time, and attitudes about accomplishing responsibilities and work Apply Japanese working style and colleague relationship to Vietnamese workforce: As consequences, Honda have always making efforts to change this way of doing business at its business since their first year operating in Vietnam Every year, Honda still sends many officials to Japan to train professionals and help Vietnamese officials to contact and learn about the working style in Japan, the problems of work relationship, in order to come back and apply what they have learned into Vietnam workforce Collaborative relationships in Japan and other countries are built on professional work Collaborative relationships are closely linked when professional parts are highly relevant to each other and require regular communication In Vietnamese enterprises, good co-operation requires not only close professionalism but also social activities outside of work In Vietnam, co-operative relationships are not only related to work Colleagues will share the time of shopping at supermarkets, parties after work or holidays, or join a favorite sport Personal relationships and order to subordinates have a huge impact in Vietnam working relationships An unconvincing proposal may still be adopted when the proponent is respected and loved by the majority of the participants This way of doing things is considered by the foreign partners to be very unprofessional, when decisions are made based on more sentiment than feasibility and performance Despite some of the unfortunate working behaviors of Vietnamese workforce, Honda has always shown sympathy for employee during this transformation working style Honda’s administration is a Japanese unique, management style Considering each employee is a creative subject with its lOMoARcPSD|10803158 own characteristics Therefore, in its management, Honda always shows respect for its employees It is Honda's management that has brought about profound values, not merely a master versus servant, but a worker versus worker relationship, which helps Honda to have more potential strengths and enduring internal strengths than competitors in other industries Briefly speaking, ensuring the depth of quality through rigorous recruitment both in terms of skills as well as ethics The company always pays attention to the issue of improving the skills of its employees by organizing times Training courses in Vietnam have the support of Japanese and Thai experts or dispatch staff to train in Japan and other highly qualified countries in the region Potential Conflicts “an act or process through which something becomes different” or in a simple turn, “change”, especially under working attitude behaviors, are never easy for human kind Request employees to evolve their habitual require patient or most likely impossible to some certain extent since they have hardwired an understanding of working Back in 2005, during the initial stages from Honda’s operation in Vietnam, their employees spoke up about being unpleasant of Honda’s decision on converting Vietnamese’s working style to Japanese way Minority of them were even assumed this is an act of rebellious of Honda’s managers are attempting to “brainwash” their employees for converting their habitual to a different culture for the sake of their firm The Vietnamese’s media and reporters back then started to shift their focus and penetrated on Honda, after complaining from employees went public This was one of the massive potential threats Honda could ever receive since they have invested excessive expenditures on advertising in order to maintain their reputation toward public eyes lOMoARcPSD|10803158 Despite the external dominance, Honda was still able to resolve this issue by exhibiting the importance and potential outcome of their plans could possibly bring Honda has demonstrated clearly of their point, the fact that Vietnam’s economic society wasn’t the only country that Honda targets on elaborating the Japanese work discipline behaviors, even back then Korea was also under controlled by Japanese’s behaviors during the 1960s, under the command of President Park Chung Hee During Korean’s most vulnerable periods (1960-1967) aftermath from The North Korea war, their president Park was highly faithed the Japanese’s etiquette will accelerate his country’s economic status to another level and poverty deficit Without any further explanation, the reflection of this transformation in behaviors are shown by where Korea nation are standing today As a developing country’s citizen, Vietnamese person always desire to stride toward a brighter future, and being as strong as other developed country on the continent (one of the declarative wishes from a well-known Vietnam’s former prime minister, Ho Chi Minh) in defiance of what have left over from the American-war Honda's successes in exploiting the impact of culture in Vietnam Over 10 years of operation in Vietnam, due to the branding and exploitation of cultural elements, Honda Vietnam Company has achieved great favorable outcome in many fields From the leading in the number of products sold, leading in export, training human resources to social, educational and cultural activities According to experts, Honda Vietnam is one of the big joint ventures, always leading in the motorcycle industry in Vietnam The proof for that is the rapid construction investment and continuous market of consumer-preferred products, contributing to the state budget of over US $ 330 million lOMoARcPSD|10803158 Leading products and exports Up to now, the number of customers using vehicles produced by Honda Vietnam has reached more than 2.5 million, a dream figure of many motorcycle manufacturers Not only that, Honda Vietnam has invested nearly 194 million USD for production and business activities and is investing more than 60 million USD for the construction project of Honda automobile manufacturing and assembly factory Not only concerned about the domestic market, Honda Vietnam is a pioneer in the export field (starting to export right from May 2002) Honda Vietnam's motorbikes and spare parts products are also used in markets such as Malaysia, Indonesia, Philippines, Laos, Cambodia Honda Vietnam has exported more than 163,000 motorcycles and engines and motorcycle parts, with export turnover of more than 96 million USD, contributing to enhancing the position of "Made in Vietnam" products on the international market and moreover affirming Honda's commitment to long-term business in Vietnam Motor One of Honda's other successes is highly focused on developing human resources Expanding production means creating jobs for thousands of workers Currently, Honda Vietnam's workforce has reached 3,000 people Besides, the labor system of parts suppliers, transporters and the network of Honda authorized car and service shops amounted to nearly 32,000 people Honda Vietnam's workforce is well-trained and highly skilled Notably, training courses for human resource development in the company and abroad To date, nearly 300 Honda Vietnam employees attend training courses to improve knowledge and skills in countries such as Japan, Thailand, Malaysia … Conclusion lOMoARcPSD|10803158 Through the achievements of Honda in the Vietnamese market, we can clearly see the success or failure of an enterprise in the foreign market due to the strong impact of the cultural elements of that country By grasping the aesthetics and psychology of consumers, Honda took the right steps in market approaches, marketing, promotion and marketing activities Understanding the feelings of value, communication, dialogue and cooperation of foreign cultures, Honda created good relationships with components in that society such as relations with the main cover, with locals Since then, it will help the production and business work much more convenient By analyzing through Honda’s blueprint to success, we learned that while working in a foreign country, it is certain 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