ACKNOWLEDGEMENT NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT o0o NGUYEN PHUONG THANH SOLUTIONS TO IMPROVE EFFICIENCY OF IMPORT OPERATION OF THANH LOI COMP[.]
NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT - o0o - NGUYEN PHUONG THANH SOLUTIONS TO IMPROVE EFFICIENCY OF IMPORT OPERATION OF THANH LOI COMPANY LIMITED HANOI, MAY 2011 NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT - o0o - NGUYEN PHUONG THANH SOLUTIONS TO IMPROVE EFFICIENCY OF IMPORT OPERATION OF THANH LOI COMPANY LIMITED Supervisor: Pham Thi Quynh Hoa, M.A HANOI, MAY 2011 Nguyễn Phương Thanh- CQ493898- Business English 49B ACKNOWLEDGEMENT This report would not have been possible without the guidance and the help of several individuals who in one way or another contributed and extended their valuable assistance in the preparation and completion of this report First and foremost, I am heartily thankful to my supervisor, Pham Thi Quynh Hoa, for the continuous support of my research, for her patience, motivation, enthusiasm, and immense knowledge Her guidance helped me in all the time of research and writing of this report I wish to express my warm and sincere thanks to all lecturers of Business English Department for their encouragement and insightful comments I would like to show my gratitude to Mrs Tran Thi Thuy Nga - Managing Director of Thanh Loi Co Ldt and Mr Pham Dinh Khanh - Sale Manager who gave me opportunity to work in the Import-Export Division and gave me untiring help during my difficult moments My thanks also go to Thanh Loi staff for their great support Last but not the least, I owe my deepest gratefulness to my family and my friends who always encourage and inspire me All of my progress belong to them Nguyễn Phương Thanh- CQ493898- Business English 49B TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION CHAPTER 1: INTRODUCTION OF THANH LOI CO.LTD AND ITS IMPORT BUSINESS 1.1 Introduction of Thanh Loi Co.,LTD .1 1.1.1 The establishment and development .1 1.1.2 The organizational structure 1.2 Introduction of Thanh Loi’s import business .3 1.2.1 Thanh Loi is an agency of Icom Inc 1.2.2 Business area 1.2.3 Typical foreign suppliers and customers of the company .4 CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Import basic theory .6 2.1.1 Definition of import 2.1.2 Features of import 2.1.3 Roles of import 2.1.4 Types of import .7 2.1.4.1 Commission import 2.1.4.2 Temporary import for re-export .8 2.1.4.3 Direct import 2.1.5 Import procedures 2.1.6 The Incoterms (International Commercial Terms) .10 2.2 Factors affect businesses’ import efficiency 12 2.2.1 External factors .13 2.2.1.1 Political environment 13 2.2.1.2 Exchange rate 13 2.2.1.3 Tariff .13 2.2.1.4 Transportation and communication system .13 2.2.2 Internal factors .14 2.2.2.1 Human Resource .14 Nguyễn Phương Thanh- CQ493898- Business English 49B 2.2.2.2 Capital 14 2.2.2.3 Organizational structure 14 2.3 Import business efficiency and criteria of evaluation .15 2.3.1 Import business efficiency .15 2.3.2 Criteria of evaluation 15 CHAPTER 3: ANALYSIS AND FINDINGS 17 3.1 Analysis of performance outcome 17 3.1.1 General view 17 3.1.2 Revenue 18 3.1.3 Profit ratio 18 3.1.4 Return on equity (ROE) and Return on assets (ROA) 19 3.1.5 Total Turnover (TAT) 20 3.1.6 Value of Icom’s import equipment 21 3.2 Analysis of factors affect Thanh Loi’s import efficiency 21 3.2.1 Political environment 21 3.2.2 Exchange rate .22 3.2.3 Human Resource 22 3.2.4 Capital 22 3.3 Drawback .23 3.4 Causes of the drawback 24 CHAPTER 4: RECOMMENDATIONS TO IMPROVE IMPORT OPERATION EFFICIENCY OF THANH LOI CO., LTD 25 4.1 Recommendations for the company 25 4.1.1 Improving efficiency of raising and utilizing capital 25 4.1.2 Perfecting import operation 26 4.1.3 Establishing a marketing department and boosting marketing activities26 4.1.4 Training import-export executives 27 4.1.5 Practicing employee motivation 28 4.2 Solutions for the government .28 CONCLUSION REFERENCES Nguyễn Phương Thanh- CQ493898- Business English 49B LIST OF TABLE AND CHARTS Table 1: Profit ratio of Thanh Loi Co Ldt in 2007-2009 19 Table 2: Return on Equity (ROE) and Return on Assets (ROA) 20 Table 3: Total Assets Turnover .21 Table 4: Value of Icom’s imported equipments in 2007 – 2009 22 Chart 1: Thanh Loi Co., Ltd organizational structure Chart 2: Import procedures Chart 3: The value of trade in 2007 – 2009 18 Chart 4: Evolution of exchange rate between Vietnam Dong and USD 22 from 2007 to 2009 22 Nguyễn Phương Thanh- CQ493898- Business English 49B i EXECUTIVE SUMMARY Thanh Loi Company Limited is a veteran company in the field of high technology electronics, telecommunication and information technology With over 15 years experience, the company had a reputation of providing customers with high quality equipments and good services However, during global economic crisis, the company faced many difficulties such as the decrease of revenue, low rate of return from equity and return from assets That’s the reason why the author chose “Solutions to improve efficiency of import operation of Thanh Loi Company Limited” as the subject of this report The purpose of this report is to give a detail analysis of factors affect import operation efficiency and import performance outcome of the company in years from 2007 to 2009 Through the analysis, the author will draw out the achievements as well as weaknesses in import operation of the company Based on result of the analysis, the author suggests some solutions to enhance efficiency of import business of Thanh Loi Apart from the introduction and conclusion, the report is divided into four chapters Chapter one is an introduction of Thanh Loi Co Ltd which includes the establishment and development, the organization, business area and factors that affect the company’s import efficiency The second chapter is theoretical background, which mentions basic theory about import (definition, features, roles and types of import), criteria to evaluate import efficiency Chapter three deals with analysis of Thanh Loi’s import efficiency The last chapter presents some solutions to improve import efficiency of the company Nguyễn Phương Thanh- CQ493898- Business English 49B i i INTRODUCTION Introduction of the research topic and rationales In the age of global economic integration, Vietnam economy was more closely interwined with the global economy than it had ever been Among foreign trade operations, import operation is of paramount important It supplies raw materials, as well as consumables which can’t be produced by domestic manufactures Founded in 1993, Thanh Loi Company Limited focuses on developing approaches and solutions in the field of high technology electronics, telecommunications and information technology One of its activities is importing radio communication equipment, monitoring equipment and data analysis for the various purposes of national defense and security, etc After 17 years of operation, Thanh Loi Co.ltd gained many achievements but it faced so many difficulties as well That’s why the author choses “Solutions to improve efficiency of import operation of Thanh Loi Company Limited” as the subject of my report Purpose and scope of the research This report mainly aims at: Analyzing import operation efficiency of Thanh Loi Co Ltd from 2007 to 2009 Analyzing factors affect import operation of the company Suggesting some solutions to improve import efficiency of the company This report studies import operation of the company in the row of years from 2007 to 2009 Research questions How does the import business operate during period of 2007-2009? What are the causes of drawback? What are the best solutions to improve Thanh Loi’s import efficiency? Sources and methods of the research Nguyễn Phương Thanh- CQ493898- Business English 49B i i i Data for this report came from books about International Trade, Import-export business, current articles, journals online resources and documments of the company such as financial reports, quotation,etc The study is primary based on analysis of figures which reflect the company’s import efficiency Through results of the analysis, the author point out achievements and shortcomings in import operation of the company From that, some critical solotions are recommended to enhance the import operation efficiency of Thanh Loi Co Ltd