MISTRY OF FINANCE
UNIVERSITY OF FINANCE —- MARKETING
TRƯỜNG ĐẠI HỌC TÀI CHÍNH - MARKETING FINAL EXAM Course: INTERNATIONAL BUSINESS MANAGEMENT \V vinrAsr Lecturer: Ph.D Tran The Nam Course ID: 2411910018901 Class: IP_22DMAO1
Group 6 Tran Gia Hân 2221001930 Vũ Thị Thảo Nhi 2221001940 Nguyễn Ngọc Bảo Trân 2221001947 April, 2024
Trang 2TABLE OF CONTENTS
Table of confen(s ccnn T22 Hnnnn n1 kkn ng KT 1kg 1k kg 1k1 kg 2151 khe 2 Table of tables - Q21 1111121111111 11251 111115111111 n 912511 E ng 11kg 251 E11 k5 ke nen 4 IE10I-0 8ï) 4 Question 1: Based on classical or modern trade theories, students are required to indicate whether to support or oppose Vietnamese government’s support for local car industry 5 1 NO (va nải:ađađŨDŨŨŨỤŨ 7 PIN (uy oi ivncpPaadđadđađaadađaiadađaaiiaăaăảaaậ4ẼẢ 7 2.1 Brefoverview of Vinfast Company c1 211122212111 1118211811 rườ 7 2.2 Brnlefovervlew of South KOF€a - c2 1 n1 11211211111 111 11111111111 811111 11x ray 8 SN 0000 na o4 9 3.1 Political EnvITOnIN€HI G12 3222351 1153151 15111511511 1512 1115311118811 811 182 x£6 9 3.2 Economic ETVITOTIN€II - 2 5 0 2011231211153 151 11111511111 11 1111111111111 1111k 10 3.2.1 Economice Growth and Income Growth - ¿c2 c3 2132113111 rres 10 3.2.2 Partnerships oÊstrategic coopecration VIetnam — Korea II
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Trang 4TABLE OF TABLES
Trang 5TABLE OF FIGURES
Trang 6Question 1: Based on classical or modern trade theories, students are required to indicate whether to support or oppose Vietnamese government’s support for local car industry
Based on modern trade theories, we can provide several arguments to support the Vietnamese government's support for the local car industry:
Comparative Advantage: According to the theory of comparative advantage, countries should specialize in producing goods or services in which they have a comparative advantage By supporting the local car industry, the Vietnamese government can capitalize on the country's available resources, skilled labor, and potential for technological advancements in the automotive sector, thus fostering a competitive advantage in car manufacturing
Economic Diversification: Supporting the local car industry can contribute to economic diversification, which is beneficial for long-term economic development By expanding into the automotive sector, Vietnam can reduce its reliance on traditional industries and create a more balanced and resilient economy This diversification can enhance economic stability and create new employment opportunities
Technology Transfer and Knowledge Spillovers: The government's support for the local car industry can facilitate technology transfer and knowledge spillovers Collaborations with foreign automakers or investments in research and development can help transfer advanced technologies, engineering expertise, and managerial know-how to the local industry This can boost technological capabilities, promote innovation, and create a favorable environment for the development of a knowledge- based economy
Export Promotion: Developing a competitive domestic car industry can support export promotion efforts By producing cars domestically, Vietnam can tap into international markets and generate export revenues This can help improve the trade balance, increase foreign exchange earnings, and enhance the country's overall export competitiveness
Trang 7create employment opportunities and foster skill development, contributing to human capital formation and poverty reduction
Trang 8Question 2: VINFAST is VIETNAMESE successful company The company wants to expand its business in ASIAN countries Students are required to analyze the potential of an
ASIANCOUNTRY with PESTLE model and then, build the international business strategy
in three years (2025-2027) that VINFAST should apply to conquer successfully 1
2
EXECUTIVE SUMMARY
Vinfast, a well-known electric vehicle (EV) manufacturer in Vietnam, is making a calculated move into the Korean market with the goal of becoming well-known, capturing a sizeable portion of the market, and adjusting to local tastes in three years (2025-2027) Vinfast takes a licensing strategy after seemg how fiercely competitive the Korean EV industry is To take use of local resources and experience, Vinfast partners with a respectable Korean firm With this partnership, Vinfast can expand its market share and rapidly build its brand In order to make sure that its products appeal to the target market and are accepted by consumers, Vinfast will also collaborate closely with the partner to modify its cars to suit Korean customer tastes and legal requirements
INTRODUCTION
2.1 Brief overview of Vinfast Company
Vingroup is one of the biggest private economic groups in Asia, and VinFast is a member company of Vingroup The top car manufacturer in Vietnam is VinFast VinFast Manufacturing and Trading Company Limited (VinFast LLC), a division of Vingroup under the direction of Mr Pham Nhat Vuong, is the owner of this brand
VINFAST
Trang 9
Vingroup, the biggest private firm in Vietnam, is supporting VinFast, a start-up in the automotive industry Thus, we are free to design automobiles in a bold and creative way Producing top-notch cars with Vietnamese features was our initial goal
_— 4
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Picture 2: Vinfast company
Vinfast is a combination of the following words: pioneer, style, safety, inventiveness, and Viet Nam VinFast stands for the ambition to establish a respectable, well-known Vietnamese brand that will facilitate people's ability to purchase automobiles and motorbikes that are suitable for the market, their requirements, and their means of sustenance The manufacture of electric cars and electric motorbikes by Vingroup is also meant to support the growth of Vietnam's industrial sector, heavy industry, and related sectors
2.2 Brief overview of South Korea
Trang 10that are competitive in the global market Korea boasts a well-developed charging infrastructure, with over 170,000 public charging stations nationwide, alleviating range anxiety and fostering greater confidence in EV adoption Major global and domestic automakers are vying for a share of the Korean EV market, leading to a diverse range of models and competitive pricmg, driving innovation and affordability The Korean EV market is expected to continue its growth trajectory, with projections indicating a potential 50% market share by 2030 This growth will be fueled by continued government support, rising consumer demand, technological advancements, and a robust charging infrastructure Leading EV manufacturers in Korea include Hyundai, Kia, Genesis, and Tesla, offering a diverse range of models to cater to the evolving needs of Korean consumers Overall, Korea's EV market presents a dynamic and promising landscape, poised for continued growth and innovation
3 PESTLE ANALYSIS 3.1 Political Environment
The political philosophy of South Korea is best described as a capitalist democracy Significant economic progress has been facilitated by this system, which is defined by a multi-party system, a mixed-market economy with a majority of private capitalism, the separation of powers, and the ability of individuals to participate in politics
South Korea is now going through a period of relative political stability The liberal Democratic Party (DP) received 47.83% of the vote in the 2022 presidential election, while the conservative People Power Party (PPP) received 48.56% This close margin demonstrates the stark political division that exists throughout the nation Still, the administration has moved to quell worker unrest and other challenges
Trang 11Union.These collaborations have brought in a substantial amount of foreign direct investment (FDI), which is expected to exceed $20.8 billion by the end of 2020 in South Korea
From Comprehensive Partners in 2001 to Strategic Partners in 2009 to Comprehensive Strategic Partners in 2022, the political relationship between South Korea and Vietnam has developed gradually The two countries have pledged to enhance their economic cooperation by implementing the Vietnam-Korea Free Trade Agreement (VKFTA) and electronic origin data interchange systems effectively They hope to achieve a bilateral trade turnover of USD 100 billion and USD 150 billion by 2030, respectively
Picture 3: Vietnam and South Korea Comprehensive Partner 3.2 Economic Environment
3.2.1 Economic Growth and Income Growth
Trang 12Regarding employment, the economy is estimated to generate approximately 230,000 new jobs in 2024 This growth is primarily driven by the normalization of in-person service jobs, which experienced a significant surge in the previous year Furthermore, the employment rate is expected to continue its upward trajectory
8.00 % 6.00 % 4.00 % 6.4 41 43 2.4 5 79 i I : : ữ 7 0.9 0.9 LỊ Ean 393
Jan 2021 Jul 2021 Jan 2022 Jul 2022 Jan 2023 Jul 2023 Jan 2024
Figure 1: South Korea GDP Annual Growth Rate (in %)
The annual consumer price increase is expected to significantly decelerate to around 2.6% compared to last year's 3.6%, primarily due to stable international commodity prices; however, it is forecasted to sustain around 3% throughout the first half of the year Korea is also in the group of high-income developed countries in the world with an average GDP per capita in 2023 reaching about 34.65 USD/person With this income level, Korean consumers have a relatively high ability to pay for cars and EVs, which is an opportunity for VinFast To add, the global automotive industry is expected to register a CAGR of 4.5 percent and grow in terms of 205 million additional units by 2028 For the automotive industry, the trends with respect to industry growth are favorable
3.2.2 Partnerships of strategic cooperation Vietnam — Korea
Korea continues to maintain its position as Korea is Vietnam’s third largest trading partner; Vietnam is Korea’s largest trading partner in ASEAN
Trang 13which exports to Vietnam will decrease by 12.3% compared to 2022 to 53.49 billion USD
3.3 Social Environment
The social fabric of South Korea is a complex tapestry made up of individuality and collectivism, modernization and tradition, and a rapidly aging population But major shifts brought about by Western influences have resulted in a culture that is increasingly individualistic and consumer-focused, especially among younger generations
The Aging Population: Due to its increasingly aging population, South Korea has a demographic dilemma By 2030, there will be 25.7% of the population 65 and older, compared to the median age of 44.4 in 2023
Korea's Statistics
* under |5 years old ¢ from |5 - 64 years olf ¢ over 64 years old
Figure 2: South Korea aging population
Perceptions of Electric cars: Electric cars (EVs) are typically seen favorably by South Koreans According to a Korea Automobile Manufacturers Association poll conducted in 2023, 72% of participants said they would be interested in buying an electric vehicle (EV), with cheaper running costs and environmental concerns serving as primary drivers
For some customers, though, there are still obstacles to overcome, mcluding worries about battery life, charging infrastructure, and cost
Trang 14charging in 2023 This allays range anxiety, which is a big worry for prospective EV purchasers
EV Infrastructure:
South Korea Leads the Charge
Number of public charging stations per
1,000 plug-in electric passenger cars in 2022" 563 South Korea 4e; Netherlands © FY 235 China @ EM +25 France q) [E—1 85 United Kingdom $fÈ fA 53 L] C} United States | | 43 mm 4 Germany @ | | 41 Norway đề Q 31 * Selected major EV markets, incl battery electric vehicles and plug-in hybrids Source: IEA Sstatista % Figure 3: Korea’s public charging station
Trang 16Advantage Disadvantage Codified laws: Civil law is founded on an} e@ Rigidity: Civil laws dependence on extensive body of codified laws that provide codified laws can occasionally make it legal concepts definition and consistency difficult to adapt to new or unusual The laws are usually arranged in a circumstances The rigid application of the methodical way which facilitates their law might make it more difficult to adjust accessibility and comprehension to new social challenges
Certainty: Because civil laws are clearly | ® Complexity of codes: Civil law codes can defined and interpreted by the legislature,
there is a high level of legal certainty
associated with them When making legal
choices, this consistency may give people
and companies stability and trust Clarity: The codified system of civil law offers precise rules for dealing with
contracts, property rights, and family law
issues People can better grasp their rights
be quite detailed and intricate, making it difficult for those who aren't lawyers to comprehend and appropriately apply the
law Because of this intricacy, seeking
advice from legal experts may become necessary
Inflexibility: It might be difficult to quickly
handle newly developing legal challenges
or social developments due to the long and and responsibilities in different legal bureaucratic process of revising civil law circumstances because of this clarity tules Civil law regimes prioritize Consistency: Civil law systems aim to apply legislative law making above judicial
and interpret the law consistently Legal
decisions in comparable instances can be made more consistently by adhering to codified laws and court precedent
interpretation, which may restrict judges’
ability to shape legal doctrine and adapt to social demands
3.4.2 Legal Precedent
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There is considerable debate surrounding the concept of precedent, yet in practice, the judgments of the Supreme Court wield significant influence as precedents, carrying binding authority In Korean legal practice, precedent is synonymous with judgments issued by the Supreme Court Even if a lower court's judgment is published in the "Official Gazette of Judgments of the Courts of First Instance and Appeal,” it does not attain the status of precedent unless it onginates from the Supreme Court However, a notable constraint exists: certain judgments rendered by lower courts, which may have garnered widespread agreement and lacked appeals or protests, cannot serve as precedents simply because they were not issued by a higher court