Effectiveness of b2b model on the exportation capability of vietnamese small and medium enterprises

EFFECTIVENESS OF B2B MODEL ON THE EXPORTATION CAPABILITY OF VIETNAMESE SMALL AND MEDIUM ENTERPRISES A Dissertation Presented to the Faculty of the Graduate School Bulacan State University City of Malolos In Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY IN BUSINESS ADMINISTRATION by PHAN THANH HÙNG ID No BCC 10323 March 2012 i Acknowledgments This thesis would not be possible without the big supports of many advisors, scholars, friends, and family First and foremost, I would like to express my deepest thanks and gratitude to my advisor, Dr Le Hoang Dung, whose valuable advices, suggestions, and encouragements helped me get over all difficulties and finish the thesis It has been an honor to work with Dr Dung and I always appreciate the time we have shared together My special thanks would also be to Dr Mariano C De Jesus – President of Bulacan State University (BSU); Dr Danilo D Faustino – Executive Vice President for Academic Affairs (BSU); Dr Antomio L Del Rosario - Vice President for Student Affairs and Service (BSU); Dr.Danilo S.Hilario - Vice President for Planning, Research and Extension (BSU); Dr Evangelina G Custodio - Vice President for Administration and Finance (BSU) and Dr Alex Lee - Registrar and Director for International Programs for organizing this Ph.D program I would remember and appreciate their precious helps, comments, and advices that have inspired me to complete my thesis within the time permitted for the program Thanks are also expressed to Bulacan State University Professors and Staffs of Hongkong Office-BSU for supports and guiding during my completion of the thesis ii May I also thank Dr Tran Van Rung, President of Institute of Accounting & Business Management (IABM), Ms Nguyen Thi Thu Thuy, Ms Nguyen Mai Ly-International Cooperation Center – IABM for giving me a chance to study at BSU Their endless supports have motivated me to pursue amd complete my course This thesis could not be made without the big supports of HCMC Board of Exhibition Organizers, Mr Le Ba Ngoc, Vice President of Vietcraft, Mr Son, Ms Ha, Secretary of Vietcraft, the enterprises that participated the Survey and Interview, especially Phan Gia Hy LLC’s people, where I daily work, who have helped me to deliver and collect the questionnaires as well as other necessary information I can never forget their willingness and contribution to my study Last but never least, my special love, thanks and gratitude to my beloved family, including my parents, especially to my Dad who died and could not see me finish this dissertation, my beloved Mom, my dear wife and children “Mimi” and “Sam Sam”, my beloved brothers and sisters, my best friend and twinned sister, Thu Ha, whose love, inspiration and endless encouragements have given me greatest motivations to complete this research project Again from the bottom of my heart: “Thank you very much for everything!” iii Dedication I dedicate this work to my beloved family, especially to Mommy, Cam-Mi-Sam, and Thuong You are all my life and every step of mine is accompanied by your inspiration iv Statement of originality I hereby declare that this study is my original work and the results of my ceaseless working days under pressure to address my curiosity and desire to better understand the actual practice of B2B/e-commerce in Vietnamese Small & Medium Enterprises toward export from which making some of contribution to improve the export capacity for Small & Medium Enterprises of my country v Table of contents Acknowledgments i Dedication iiii Statement of originality iv List of abbreviations .xixiii List of tables xvi List of figures xvxvii Abstracts xixx CHAPTER I .1 THE PROBLEM AND ITS BACKGROUND INTRODUCTION STATEMENT OF THE PROBLEM SIGNIFICANCE OF THE STUDY SCOPE AND DELIMITATION OF THE STUDY NOTES IN CHAPTER I 10 CHAPTER II 13 THEORETICAL FRAMEWORK 13 RELEVANT THEORIES 13 International trade theory 13 Competitive advantage theory 16 Technology Acceptance Model (TAM) 19 Innovation diffusion Theory (IDT) 21 vi RELATED LITERATURE 23 Definitions of E-commerce 23 Categories of EC 26 Business-to-consumer (B2C) 26 Business-to- business (B2B) 27 Business processes that 27 Consumer-to-consumer (C2C) .27 Small & medium enterprises 28 Trends of using EC in business 32 RELATED STUDIES 35 SYNTHESIS 41 CONCEPTUAL FRAMEWORK 44 Organizational benefits 47 External pressure 47 Perceived ease of use 48 Organizational readiness 48 Marketing tools 49 HYPOTHESIS OF THE STUDY 51 DEFINITION OF TERMS 552 NOTES IN CHAPTER II 60 CHAPTER 64 RESEARCH METHODOLOGY 64 vii METHODS AND TECHNIQUES OF THE STUDY 64 SOURCES OF DATA 65 POPULATION AND SAMPLE OF THE STUDY 66 RESEARCH LOCALE 70 RESEARCH INSTRUMENTS 71 Focused Interview Questionnaire 772 Survey Questionnaire 73 RESEARCH DESIGN 74 COLLECTION OF DATA 77 TREATMENT OF DATA 79 NOTES IN CHAPTER 81 CHAPTER 882 RESULTS AND FINDINGS .882 ORGANIZATIONAL BENEFITS TO B2B APPLICATION 882 The importance of B2B to organizational benefits 83 The importance of B2B to the core benefits of SMEs 83 EXTERNAL PRESSURES TO B2B APPLICATION 87 External determinants to B2B application 87 Level of importance of the determinants 89 PERCEIVED EASE OF USE TO B2B APPLICATION 992 ORGANIZATIONAL READINESS TO B2B APPLICATION 100 Amount of computers owned by SMEs 100 viii Use of emails in business 103 Data security measures 104 E-commerce staff 105 Training forms of IT & e-commerce 107 Investment for IT & e-commerce 109 Readiness to invest or invest more in B2B 110 Investment of B2B in the next three years (2011-2013) 111 Compatibility of B2B to company’s resources 11112 MARKETING TOOLS TO B2B APPLICATION 113 Business website 113 SMEs own website 114 Features of Website 115 Assess frequency .118 The suitability of the website to the business and the common practice 119 Websites help to increase export volume 121 Plan to build a website .123 Reasons to build a website 124 E-marketplace 126 Member of E-marketplaces .127 Effectiveness of joining e-marketplace to export 128 Plan to join e-marketplace in short-term (1-3 years) .130 ix Export trend from B2B 13132 E-marketing 134 Email marketing 135 Search Engine Marketing (SEM) 138 Online advertisement (OA) .141 Other forms of E-marketing 144 OTHER ISSUES RELATED TO B2B APPLICATION 146 Evaluations of SMEs on effectiveness of B2B application in reality 147 Building corporate image 149 Reducing costs 149 Increasing profit and operation effectiveness 150 Increasing sale volume 151 Evaluations of SMEs on barriers in deploying B2B 15152 Low social environment & business practice in B2B application 153 Low people’s awareness on B2B 155 Unsafe internet security 156 Poor Electronic Pay System 157 Incomplete legal frame for B2B 158 Lack of qualified human resource for B2B .159 Weak delivery and transport service .160 DISCUSSIONS AND FINDINGS 16162 220 d Finance □ e Technology/HR □ f Both d & e g Other reasons (pls state them) …………… ………………………… E Marketing tools (Website/ E-marketplaces/ E-marketing) 17 Does your enterprise have a website? a.Yes □ b.No □ (pls continue to No.21) Please tell in details about your website: a Web address:…………………… ……… b Year of building………………………… c Total amount of web users……………… 18 What features does your web have? a Introduction of your enterprise □ b Introduction of products & services □ c Online shopping □ d Online Payment □ e Others (pls state)…………………………………………… (Note: You can choose more than one option) 221 19 How often you assess your website? a Daily □ b Weekly □ c Monthly □ d Yearly □ 20 Do you think your website is suitable to the business and the common practice of the industry you are doing? a Yes □ b No □ c Don’t know □ if Yes, you think your website will help you to increase export volume? d Yes □ e No □ f Not sure □ 21 Does your enterprise plan to build a website? a Yes □ b No □ If yes, when will it be? c In the next 12 months □ d In the next 24 months □ e Don’t know □ 22 Why does your enterprise build a website? a To introduce the enterprise & its products/services □ b It is an effective marketing tool □ 222 c I it as other enterprises have it □ (Note: You can choose more than one option) 23 Is your enterprise a member of any e-market places? a Yes □/pls say the name:…………………… b No □ 24 How would you evaluate the effectiveness of joining e-market places to export? Very effective ↔ Ineffective 25 Will your enterprise plan to join e-marketplace in short-term (1-3 years)? a Yes □ b No □/ The reason(s) is (are)……………………………………… 26 In case your enterprise is attending e-marketplaces, could you tell the trend of export turnover from B2B compared to the previous year? a Increased □ b Reduced □ c Unchanged □ 223 27 Which of the following e-marketing does your enterprise use to get more people to know about you? a Email marketing □ b Online Advertisement □ c Use Search Engine Marketing (SEM) □ d Others (pls state)……………………… Note: -You can choose more than one option [SEM is an internet marketing method that focuses on purchasing ads which appear on the result pages of search engines such as Google Many search engines offer ways for individuals or businesses to purchase ads, which typically appear above or to the right of the content on the search result pages (Retrieved 15 March, 2010 from http://www.businessdictionary.com/definition/internet-marketing.html)] 224 F Others 28 How would you evaluate the effectiveness of B2B application? (circle the number chosen) Very effective ↔ Ineffective a Widening the contact channel with customers…5 b Building corporate image………………………5 c Increasing sale volume………………………… d Reducing costs ……………………………… e Increasing turnover and profit………………… 29 How would you evaluate the barriers in deploying B2B/e-commerce in Vietnam now? (circle the number chosen) Good ↔ Bad a People’s awareness on B2B/e-commerce ………5 b Qualified human resource for B2B/e-commerce c Legal frame for B2B/e-commerce ………………5 d Electronic Pay System ………………….……… e Delivery and transport service………………… 225 f Internet security is not safe……………………… g Social environment/business practice using B2B 30 What would you recommend to the Government create a more favorable environment for B2B/e-commerce application for SMEs? …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… Thank you very much for your kind co-operation!!!!! 226 APPENDIX K AN OVERVIEW ON HOCHIMINH CITY & HANOI Hochiminh City (formerly named as Saigon), a center of the South of Vietnam with the population of about seven millions two hundred thousand people (2009) which covers an area of two thousand ninety-five (2,095) square kilometers, is the largest city of Vietnam Ho Chi Minh City is the economic center of Vietnam and accounts for a large proportion of the economy of Vietnam Although the city takes up just 0.6 percent of the country's land area, it contains 7.5 percent of the population of Vietnam, 20.2 percent of its GDP, 27.9 percent of industrial output and 34.9 percent of the FDI projects in the country in 2009 In 2009, GDP per capita reached two thousand eight hundred (2,800) USD, compared to the country’s average level of $ one thousand forty-two (1042) USD in 2009 The city has been home to three export processing zones and twelve industrial parks, Ho Chi Minh City is the leading receiver of foreign direct investment in Vietnam There are currently about three hundred and twnety thousand (320,000) enterprises located here The economy of Ho Chi Minh City consists of industries ranging from mining, seafood processing, agriculture, and construction, to tourism, finance, industry and trade The state-owned sector makes up 33.3 percent of the economy, the private sector 4.6 percent, 227 and the remainder in foreign investment (Retrived 15 April, 2010 from http://en.wikipedia.org/wiki/Ho_Chi_Minh_City) Hanoi, located in the center of the North of Vietnam with the population of nearly six million five hundred thousand (6,500,000) people (2009) which covers an area of three thousand three hundred and twenty-five (3,325) square kilometers, is the capital and second-largest city of Vietnam Industrial production in the city has experienced a rapid boom since the 1990s, with average annual growth of 17.5 percent from 1991-2010 In addition to eight existing industrial parks, Hanoi is building five new largescale industrial parks and sixteen (16) small- and medium-sized industrial clusters with more than forty-eight thousand (48,000) businesses Trade is another strong sector of the city In 2009, Hanoi had three thousand (3,000) businesses engaged in foreign trade, and has established the relationship with one hundred and seventy-two (172) countries and territories The city's export value grew by an average of 9.1 percent during 2001–2010 The economic structure also underwent important shifts, with tourism, finance, and banking now playing an increasingly important role Together with economic growth, Hanoi's appearance has also changed significantly, especially in recent years Infrastructure is constantly being upgraded, with 228 new roads and an improved public transportation system (Retrieved 14 April, 2010 from http://en.wikipedia.org/wiki/Hanoi) 229 APPENDIX L: CURRICULUM VITAE OF THE WRITER Name: PHAN THANH HÙNG, 1976 Male, Vietnamese, married Add : 418/15 Le Duc Tho Str, W.16, Govap Dist, HCMC, Vietnam Email: grande@phangiahydecocraft.com/ phangiahy@viettel.vn Mobile : 84-(0)98.900.9733 RESUME Skills & Capabilities -Active, good communication and good balance under high pressure -Fluent in speaking, reading and writing English, Italian; fair in German and French -Good skill in PC: MS Word, Excel, Power Point -Have a good knowledge of business and communicative skills -More than fourteen years experiences in teaching English, interpreting and translating V-E & E-V, ten years in teaching laws & economics; twelve years as chief representative and seven years as director and general director -Have competence for management -Have extensive relationship and skills that are useful for business and public relation Experience Education: 08/2008 to now: PIONEER Trainer of “Assistants to CEOs” Program 230 I am in charge of Enterprise Law, Labor Law, Intellectual Property Law, and Competition Law 02/ 2008 to now: COLUMBIA SOUTHERN UNIVERSITY: Lecturer of M.B.A program I am in charge of Business Law and International Business 09/12/2002 to now: UNIVERSITY OF SOCIAL SCIENCES AND HUMANITIES Lecturer of Faculty of English Linguistics and Literature I am in charge of the following subjects: -Public Speaking (speech): Techniques of speaking and presentation of talk show/topic in which two of the main are: +The art of speaking in front of audience +Presentation skill -Business: ESP-based and content-based It consists of the following subjects: +Forms of Business +Human resource management +Marketing and consumer behaviors +Financial management +Products and pricing decisions +Securities market +International business +Governmental relations and business law My favorite subjects are Speech, International Business, Human Resource Management, Products and Pricing Decision and Business Law -Academic writing: How to write an essay or thesis academically that satisfies the requirements of thesis writing It includes methodology of thesis and essay writing and presentation 231 * I have worked with programs of “Honored Class for The Gifted” of University of Social Sciences and Humanities (“Honor Class for the Gifted” of the Faculty of English linguistics and literature in these subjects) 04/15/2002 to 2006: SCHOOL OF TOURISM Lecturer of languages department -I am in charge of Italian class in which the main contents are Italian language, civilization and culture 09/15/2003 to 12/01/2004: FACULTY OF ECONOMICS Lecturer of Business English I am in charge of Business English: ESP-based and content-based It consists of the following subjects: +Human resource management +Marketing and consumer behaviors +Financial management +Products and pricing decisions *In the meantime, I also some training courses for Apollo, in which two main courses are Products and Pricing Decisions and Presentation Skills 09/15/2000 to 09/15/2002: HCMC UNIVERSITY OF LAWS Lecturer of Basic Sciences department & International Law Department -I am in charge of the following subjects: +American Constitution +Business Law: Commercial Law, Enterprise Law, Economics Law I am very interested in teaching all subjects related to Business Law and I have done more than twenty courses in Business Law during this time 09/15/1998 to 09/15/2000: HCMC UNIVERSITY OF NATURAL SCIENCES Lecturer of English department 232 I am in charge of General English Other universities and courses: -Apollo: Lecturer of courses of presentation skills and teamwork -Hanoi Foreign Language University: Lecturer of English Linguistics From 2004 to 2008: Tutor and supervisor of the following B.A graduation these: -Business Solutions with E-commerce at Minh Long Corp -Application of E-commerce for Search of New Customers at Phan Gia Hy LLC -Solutions for Strengthening Import-Export Activities at Phan Gia Hy LLC -Reality of Business Operations and Development Tendency in 20072009 at Viet Intellectuals LLC -Teaching Practice and Lesson Plan in four skills in English learning Business: 08/2011 to now: INSTITUTE OF MANAGEMENT AND BUSINESS DEVELOPMENT Vice President, in charge in Marketing 2.06/2004 to now: PHAN GIA HY CO LTD G Director -Manage finance, legal issues and human resources -Be in charge in recruitment of staffs for the company (recruit about 180 staffs at different positions) 02/2006 to 2008: THE DANISH EMBASSY Interpreter of English-Vietnamese and Vietnamese-English Interpret in conference, international fair and business visits of foreign companies in Vietnam (both N.S interpretation and simultaneous interpretation) 233 12/1996 to 06/2004: PAKHUIS OOST REPRESENTATIVE OFFICE Chief Representative -Be responsible for general business of the office, such as negotiating and signing contracts, doing quality control of goods, doing payment and recruiting etc… 05/1996 to 12/1996: DUTCH CHAMBER OF COMMERCE Interpreter of English-Vietnamese and Vietnamese-English Interpret in conference, international fair and business visits of Dutch companies in Vietnam Part-time job: Exclusive Translator for ANZ bank, Vietnam branch (from 8/2008-now; Manager of EFP Program for Smart-Train Training & Service School (from 12/2009-now) Director of External Relations for The Pioneer Assistant to CEO School (from 01/2010) Education & Training 1998: UNIVERSITY OF SOCIAL SCIENCES AND HUMANITIES, major in English Linguistics and Literature: B.A in English Linguistics and Literature 2000: HCMC UNIVERSITY OF LAWS, major in Commercial Law: B.A in Commercial Law -Graduation Thesis: “POLICY OF PROFIT DISTRIBUTION AT BINH THANH PUBLIC WORKS CORPORATION” 2000: UNIVERSITY OF SOCIAL SCIENCES AND HUMANITIES, major in Italian: Advanced Certificate in Italian 2003: C.F.V.G (French-Vietnamese Management Training Center), major in business administration: M.B.A in Human Resource Management Graduation Thesis: “Attraction of FDI into Joint-Venture under Law on FDI in Vietnam: Reality & Direction of Improvement” 2009-2012: North Central University/International American University: DBA in International Business 2010-2012: Bulacan State Univeristy: Ph.D in Business Administration Graduation Thesis: Enhancing The Export Capacity for Vietnamese SMEs 234 Hobbies Reference Date Signature through The Application of B2B Model.Dua tion thesis: “EIGN Football: I know nearly everything about football I can also play it quite skillfully and it once a week Reading: I read newspaper everyday, especially Thanhnien Newspaper, Sports and Culture Newspaper and vnexpress Traveling: I have traveled to most places in Vietnam, to Euro and Asia independently and eagerly Available if required Feb 01, 2012