Chuyên đề tốt nghiệp: Real situation of importing electronic devices in viccom production and trading investment joint stock company - evaluation and recommendations to promote efficiency

NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGESENGLISH FOR BUSINESS DEPARTMENT REAL SITUATION OF IMPORTING ELECTRONIC DEVICES IN VICCOM PRODUCTION AND TRADING INVESTMENT JOINT

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NATIONAL ECONOMICS UNIVERSITY FACULTY OF FOREIGN LANGUAGES

ENGLISH FOR BUSINESS DEPARTMENT

REAL SITUATION OF IMPORTING ELECTRONIC DEVICES

IN VICCOM PRODUCTION AND TRADING INVESTMENT

JOINT STOCK COMPANY- EVALUATION AND

RECOMMENDATIONS TO PROMOTE EFFICIENCY

Hanoi, May 2020

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NATIONAL ECONOMICS UNIVERSITY

FACULTY OF FOREIGN LANGUAGES

ENGLISH FOR BUSINESS DEPARTMENT

REAL SITUATION OF IMPORTING ELECTRONIC DEVICES

IN VICCOM PRODUCTION AND TRADING INVESTMENT

JOINT STOCK COMPANY- EVALUATION AND

RECOMMENDATIONS TO PROMOTE EFFICIENCY

Supervisor: Le Thi Thu Ha, M.A.

Hanoi, May 2020

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Nguyen Thi Nhien- 11163898- Business English

In addition, I want to express my deep gratitude to all lecturers in the Faculty ofForeign Languages of the National Economics University for teaching andproviding me with basic knowledge about export and import activities throughacademic subjects as well as the soft skills needed to successfully complete theinternship which is the basis for the implementation of this research

Thirdly, I want to express my deepest gratitude and special thanks to Mr Le Van

Thinh, Director of Viccom Production and Trading investment joint-stockcompany In spite of being extraordinarily busy with his responsibilities, he stillspent his time hearing, guiding me on the right path, allowed me to carry out myresearch at their esteemed organization and extent during the internship I consider

myself an extremely lucky individual because I had an opportunity to become apart of the Viccom company I am also grateful to meet wonderful people and niceco-workers who instructed me through this internship period

Last but not least, I would like to express gratitude to my beloved family, friends,

and colleagues who have stayed with me to support promptly throughout the whole

process They have always been the firmest mental support for me.Thank you

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EXECUTIVE SUMMARYIn the era of globalization of economies, the relationship between countries in

terms of economy is closely linked especially foreign trade activities.Recognizing the fact that Vietnam is the main market attracting foreign investorsand the increasing demand for electronic devices in businesses and constructions,Viccom's managers have planned short and long term aims to develop the business

right from its inception Accordingly, it aims to provide machinery and electronic

equipment, for businesses and constructions Although it has successfully affirmedits reputation, the enterprise has encountered certain drawbacks limiting theefficiency of import activities Therefore, the research titled "Real situation of

importing electronic devices in Viccom Production and Trading investment joint

stock Company- Evaluation and Recommendations to promote efficiency" aftersome internship months in companies

The objective of the study is to assess the current situation of import activities atViccom in the period of 2017 - 2019 Based on the collected figures, the authorwill find out the achievements as well as shortcomings and practicablerecommendations to improve the efficiency of import activities in enterprises

This research includes four main parts Chapter 1 provides a background of thecompany including its establishment history, organizational structure, orientation,and import business In the subsequent part, the author provides the theoreticalbackground of import operations This will be the basis for the author to rely on toanalyze and evaluate the data collected later After gathering the primary andsecondary data, the researcher analyzes the actual business operations of thebusiness and considers the causes of those results Finally, chapter 4 providesreaders about the company's orientation soon and makes recommendations to

promote Viccom’s development.

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LIST OF ABBREVIATION

Abbreviation | Full written

ASEAN Association of Southeast Asian Nations

APEC Asia-Pacific Economic Cooperation

WTO World Trade Organization

FTA Freight Transport Association

ATIGA ASEAN Trade in Goods Agreement

AJCEP ASEAN-Japan Comprehensive Economic Partnership

AIFTA ASEAN-India Free Trade Agreement

GDP Gross Domestic Product

CFR Cost and Freight

CIF Cost, Insurance and Freight

CPT Carriage Paid To

DAF Delivered At Frontier

EXW EX Works

FCA Free Carrier

FOB Free On Board

SMEs Small and Medium Enterprise

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LISTS OF TABLES AND FIGURES

Figure Page

Figure 1 Total business capital of Viccom company between 2017 and 22019

Figure 2 Business result of Viccom company between 2014 and 2016 29

Figure 3 Import turnover of Viccom company (2017 — 2019) 30

Figure 4 Value of imported goods from 2017 to 2019 32

Figure 5.Viccom’s company imported goods structure 32

Figure 6 Viccom’s company customers network 34

Figure 7 Countries Viccom import goods from 36

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TABLE OF CONTENTSACKNOWLEDGEMENT 0.00 ccccccccesccceenceeeeneeeeeceeeeneeeseaeeceeeeeeeaeeeesaneeeaes i

EXECUTIVE SUMMARY 00000 eecceecceeneeeneeesneeeeecseecsaeeseersaeeseeesaeeeneessaes il

LIST OF ABBREVIATION 000 oie eeeececeseesececeneceeeceseeseersaeesseessaeeseesens illLISTS OF TABLES AND EIGUREES nhe, iv

INTRODUC TION ng HH HH 1

1 Background - «son 1

2 Rationale a 23 Research ODJ€CfIV€S cọ nu và 2

4 Research QU€S{IOINS G1 SE nh 25 Methodology - - c1 ng 3

6 OUTLINE e 37 Tentative schedulle «+ 1S nọ nọ ng 4CHAPTER 1: INTRODUCTION OF VICCOM COMPANY 5

1.1 Introduction of Viccom COMPANY - 5 5c c1 11k kg rưy 5

1.1.1 Establishment and development - ss s3 esssseeres 5

1.1.2 Organizational Structure <5 S119 ng ket 61.1.3 Function and current taSÏKS - 55 1n vn vn ng 81.1.4 Business ODJ€CfIV€S HH HH HH kh 81.2 Introduction of Viccom’s import DUSINESS -‹ 5c s + ss++seeresxs 9

1.2.1 Key import ØOOS - - - << E00 1119901 nh 9

1.2.2 Typical suppliers and CUSfOTN€TS 5c + SE ke ereee 9

CHAPTER 2: THEORETICAL FRAMEWORK c.eeei 11

2.1 Definition Of 1TDOII - - - c2 00101111139111 1111199 1v ng re 11

2.2 The importance of import Activities S111 1+3 ke 12

2.2.1 To the national €COROITV - <5 011119 11 kg ven ve 122.2.2 To the €T€TDTIS€ Ặ 5G 0 ng và 132.3 Types Of ITTIDOT - (5G 00010 ng re 14

2.3.1 Direct ITDOYFK Q5 11 nọ ng 142.3.2 Entrusted 1TOII - - - - - < 1119010101111 393011 1990301 ng vớ 142.3.3 Barter 1TDOY 2 G C12001 011 nen và 14

2.3.4 Temporary import for T€-€XDOY + E211 1 1E 9k reesseee 15

2.3.5 Import DTOCGSSITE LH ng và 15V082 2 he - 15

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2.5.1 External ÍaCOTS c1 HH 202.5.2 Internal factors c1 HH ng 23CHAPTER 3: FINDINGS AND ANALYSIS ẶẶẶeeeihe 26

3.1 (0i 2 26

3.1.1 v0 vo - 26

3.2 Real situation of Viccom company from 2017 to 2019 - 27

3.2.1 Company capital SÍTICfUTC€ - - c5 3 1111313 91 111118111 erre 273.2.2 Business result in the period 2017 to 2019 «+++<++sec++ 293.3 Real situation of import activities between 2017 and 2019 in Viccom

COMPANY 2Q Q Q1 HH re 30

3.3.1 [import ẨUTROVCT - SH ng re 303.3.2 Structure of imported ØOOS -.- «5s vn ng ng re 313.3.3 Network of domestic CUStOMETS G5 S21 1911 9 ky 343.3.4 Network of source market - G011 HH ng kg 363.4 Import method an 373.5 Evaluation of import performance during the period from 2017 to 2019 37

3.5.1 0.2 7 - 373.5.2 ShOTfCOIITỠS - G2 TT HH kh 39°h n9) 40CHAPTER 4: RECOMMENDATIONS TO ENHANCE IMPORT

EFFICIENCY OF VICCOM COMPANY FROM 2020 TO 2025 42

4.1 Organizational orientation from 2020 to 2025 «+ + s++++<<sss+2 42

4.1.1 General company OTI€TfafIOT - - S311 vn re rey 424.1.2 Specific orientation towards import aCfIVIfIGS c << ccs++ 434.2 Recommendations for the COmpanyy - s1 vieeeeeeeerrs 43

4.2.1 Strengthen advertising and marketing aCfiVIfI€S -«<<+<5 434.2.2 Improve the quality of human resources and increase remuneration for

CMPLOVCES 20.0 ee = 444.3 Recommendation for the ØøOV€TTIN€TI( - << 553 **+++*##vex++seeeexxs 45

4.3.1 Complete the system of laws and related poliCles - - - 454.3.2 Upgrade infrastructure and transportation sysfem -« 454.3.3 Manage market S{TIC{Ïy - - - << 1111k krưy 46CONCLUSION 01077557 - 47REEERENCES HH ng HH Hệ 48APPENDIX

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INTRODUCTION1 Background

Globalization and international economic integration and tradeliberalization are the major trends around the world Countries areincreasingly connected and interdependent with many multilateral andbilateral agreements signed As a result, regional and international links in

economy, society, science and technology are becoming more and more the

mainstreams

In line with that trend, Vietnam has carried out renovation, planned manypolicies with a view to promoting integration and achieving many successessuch as establishing diplomatic and trade relations with many nations andregions around the world, being an active member of the Association ofSoutheast Asian Nations (ASEAN), becoming an official member of the

APEC Forum, WTO, etc and signing a series of Free Trade Agreement

(FTA) with countries and regions such as ATIGA, AJCEP, AKFTA,

AIFTA, AANZFTA, and so on

Therefore, international trade and commodity trade are increasinglypromoted and developed, which become a link between countries andregions together and create many benefits for countries On that basis,logistics was born and contributed a great part to the economy Accordingto recent 2018 statistics, more than 3,000 Vietnamese enterprises dologistics, with large to small scales Logistics services now have a scale ofover 40 billion USD / year, accounting for 21% of the country's GDP Inrecent years, the average growth rate of this industry reached from 16% to

20%

However, Vietnam's logistics industry still faces many difficulties, althoughit has gained remarkable achievements, but besides that, there are still manydifficulties and shortcomings such as: infrastructure in the industry, it is stillbackward, still weak and inadequate; limitations in the application of

information technology; laws, policies and administrative procedures arestill cumbersome and complicated; human resources are not yet qualified.Import business is the activity of purchasing goods and services fromabroad on the principles of the international market in order to servedomestic demand or re-export in order to seek profits Imports show the

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3

adherence and the interdependence between the economy of each country.Businesses specializing in importing goods and services from the outsideare also making more efforts to simplify the import process, while ensuringthe quality and transparency of products to achieve maximum profits Inthis background, Viccom Production and Trading investment joint stockcompany is no exception

RationaleViccom Production and Trading investment joint stock company (Viccom)operates in the field of electronic equipment which are imported fromoverseas for industrial parks The company provides machines andequipment, consulting and supervision with a team of dedicated leaders.Since Vietnam has had a policy of opening trade with foreign businesses,the supply of goods as well as the need to use electronic devices of

businesses has increased significantly

However, the increase in demand also leads to a rapid increase ofcompetition that has more outstanding advantages in the process ofimporting goods in terms of product variety as well as delivery time andmany other aspects of the company which need overcoming In that context,I had a decision to choose the topic: “Real situation of importing

electronic devices in Viccom Production and Trading investment joint stock Company- Evaluation and Recommendations to promote

efficiency” Research objectives

The following research is expected to make the following objectives clear:

4

- To analyze the real circumstance of import activities of Viccom company

from 2017 until 2019

- To identify achievements and difficulties in the operation time

- To offer practicable suggestions to strengthen Viccom’s performance in

the next years

Research questions

Based on the expected objectives, three main questions have been built:

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- What recommendations can be applied to have a substantial improvement

in the import efficiency of the company?Methodology

This report is studied and developed based on secondary data It means thatmost of the information and data gathered and analyzed are taken from the

company’s annual reports and online website Moreover, during internship

period, working directly at the business also helps the author have a

relatively accurate view of the actual situation of the enterprise to complete

the study

Outline Chapter 1: Introduction of Viccom company

In the first chapter of the research, basic information about Viccom ingeneral and the company's electronics import business will also bementioned The purpose of this chapter is to give readers an overview of thecompany as well as the business areas and departments before going intoresearch, analysis and evaluation

Chapter 2: Theoretical framework

The next chapter will point out the critical theories regarding importbusiness Specifically, these are the definitions, characteristics, importance

and factors influencing the import business from previous researchers’

opinion about the same topic That makes the research objective andtheoretical

Chapter 3: Findings and Analysis

This chapter will analyze the situation of electronic equipment import

business Thereby, it is possible to indicate the achievements the companyhas achieved and the challenges the company is facing in the few last years

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Chapter 4: Recommendations

The final chapter of the thesis offers suggestions to facilitate the companyto promote its strengths and deal with the limitations that businesses arefacing so as to minimize the disadvantages and advance the development of

the enterprise in the future

7 Tentative schedule

Time period Activities

Feb, 17 — Feb, 23th Complete the proposal of the research

Feb, 24h- Mar, 15" Collect figures and data

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CHAPTER 1: INTRODUCTION OF VICCOM COMPANY

1.1 Introduction of Viccom company1.1.1 Establishment and developmentIn the context of strong foreign trade activities in Vietnam and the world, therehave been many newly established forwarding companies in Vietnam In addition,many associations have been formed with a dual role These are companies notonly directly importing goods from abroad but also being the center of distributionof goods for domestic enterprises and agents Early capturing the needs of this typeof business, as well as anticipating its growth in Vietnam market in the near future,

Viccom was established on January 8th, 2016 in the background

The company was-established with the tax code 0107286520 The companyspecializes in importing electronic equipment items from foreign markets andsupplying to businesses and agents wishing to use those devices Products arealways accompanied with the indispensable certificates of products quality so asto declare customs as well as meet the requirements of customers such as

Certificate of Origin, Certificate of Quality, and so on

Over four years of operation in the field of import business, Viccom Company alsoencountered a large number of drawbacks so as to gain significant achievementsin the present moment It is to become an enterprise that has a sustainable belieffrom customers about the quality of products as well as accompanying services.Moreover, the company also sets its goals for the coming years to maintaincustomers’ trust, expand its network of potential customers, and establish better

relationships with suppliers The following is some basic information aboutViccom

Trading name: Viccom Production and Trading investment joint stock Company

Head office: 12th Floor of LiLaMa Building, 124 Minh Khai Street, Hai Ba

Trung District, Hanoi

©Telephone number: +84.0243.224.7461

Fax: +84.0243.224.7460

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Email: director.viccom@ gmail.comWebsite: www.viccom.vn

1.1.2 Organizational structureAs being a joint stock company, investment and trading company, Viccomoperates as a limited extent with number of employees less than 50 people but allof them are actually closely connected with each other Specifically, eachdepartment or each individual is assigned with well- defined and precise tasks butnot separate from the work of colleagues so they can effortlessly complete the tasks

with the their coworker support and cultivate themselves more skills or knowledge

even if they are out of formal training at the university The activities of eachindividual in the company are directed and supervised by the director with a simpleand effective organizational structure

Deputy of Director

[ | |

:

Accounting-Sales Department Purchasing Technical Financial — D “Sse

Department Department Department epartment

Chart 1: Viccom’s Organizational structure

e Board of managers: they include Board of Directors, Director and Deputy

Director The Board of Directors are the most powerful individuals in the

company and operate all activities of the organization They decide onbusiness investment projects, offer annual development strategies and make

up the mind to expand or narrow the market In addition, they issue internalmanagement regulations, appoint and dismiss the positions of Director,

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Deputy Directors, managers and so on It is obvious to assert that they arethe owners, directly manage and run the company's strategic activities Thedirector is the representative of the board of directors making decisions withlower positions in the company Under the Director, the Deputy Director isthe person managing the business under the direction of the superiors, being

responsible for promoting, implementing business strategies and assistingthe director in managing the business of the enterprise

e Sales Department: The business department is the main factor that brings

direct revenue to the business In general, all businesses are interested inincreasing sales and in fact successful businesses start with good sellers.Therefore, this is the indispensable part of the organization The mission ofthe sales staff is to find customers, bid the company's goods to agents andcustomers, negotiate prices and sign contracts Another particular task is toregularly take care of our long-term customers to maintain the relationship

with them

e Purchasing Department: Purchasing officers are responsible in all stages of

importing goods from identifying products and suppliers possibly providingthe items to tracking the order until it arrives at the company's warehouse.They call for identifying the accurate model from origin, brands,appearance to parameters Undeniably, it is a substantial component

determining the company's supply

e Technical Department: The staffs, fundamentally, contribute their

responsibility to assist the purchasing department to purchase the precisegoods and make sure the quality of products before payment Moreover,they play a crucial role of installing products to customers It is also theirresponsibility to monitor the operation of the machine and provide warrantyrepairs

e Accounting- Financial Department: The staffs take full responsibility for

accounting economic transactions arising in the organization in a timely andsufficient manner to ensure satisfactory service for business activities;preside and coordinate with the relevant departments to plan the company'sannual and long-term financial plans, researching and proposing to the unitleaders business management measures to ensure good compliance with thecurrent regime and in accordance with the features and operating situationof the company in order to achieve the highest efficiency

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1.1.3

Human Resource Department: The most important function is to recruitsuitable staff for all departments when needed In addition, they have tocoordinate with the other sections in the enterprise to have intention ofhuman resources; be responsible for organizing and instructing new

employees to integrate with the work In general, human resourcesdepartment in the company is seem as a bridge between employees andemployers, therefore, this position necessitate the staffs combining with themanagers to organize a strong company structure

Function and current tasks

Viccom is a company specializing in providing genuine electronics imported fromrenowned brands all over the world

1.1.4

The main functions of the company are:To coordinate with other domestic and international organizations toorganize the transportation and delivery of goods imported from foreignmarkets for distribution to agents and workshops in any province inVietnam

To be In charge of providing installation and repair services for thecompany's products to users

The key tasks are:

To diversify products as well as suppliers to expand future businessmarkets

To simplify the import process to provide high quality products andminimize shipping time

To organize training sessions to educate employees with a view toimproving qualifications

To turn the company into a enterprise with a high position in the import ofindustrial electronics

Business objectivesDeveloping the company into one of the top company in the field of

importing machinery and electronic equipment

Applicating of new technologies to manage resources and improveperformance

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e Expanding business activities to international markets.

e Improving and fostering the quality of human resources

e Fulfilling all obligations to the state and contributing a part to Vietnam's

brands over the world

In the future, the organization will constantly research and innovate goods, applyadvanced science and technology under the rigorous testing of the company's high-quality technical staff to ensure customers using the best quality products inaccordance with the manufacturer's standards

1.2.2 Typical suppliers and customers1.2.2.1 Typical foreign suppliers

Viccom company plays a role as an authorized distributor:

e Electric motor of numerous well- known brands such as: Jiamusi (from

China), Motovario (from Italia), Siemens (from Germany), Teco(fromAustralia) and so on

e@ Speed reducer ( gearbox) of Sumitomo and Sew brand

e Sensor and measure equipment of Hydac, IFM, Sick, Turch, Emerson

maker.e Contactor and Breaker of various brand name as ABB, Schneider, LS

e Hydraulic pumps, valves and cylinders of Parker and Rexroth

e Other equipment

1.2.2.2 Typical customers

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As an import trading company, Viccom targets electronic companies and factoriesacross Vietnam, therefore, the company does not place a restriction on its potentialcustomers in a particular area Up to now, the quatity of customers of the enterpriseis up to several hundred companies and factories In particular, Formosa Ha Tinhand Dong Nai steel corporation are the most loyal and long-term customers of the

company.

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CHAPTER 2: THEORETICAL FRAMEWORK

The principal objective of this section is to provide basic theories regarding importactivities such as the definition, purpose, importance, and factors affecting thissector Besides, this part summarizes the opinions of previous researchers on issues

related to the topic and has the contribution of the author’s attitude towards the

field of research The content of this section will be presented below

2.1 Definition of import

In the current trend of internationalization, global business activities have been

strongly carried out Export and import are two crucial activities in international

trade If international trade is the exchange of goods and service provision aimed

at profitability among traders based in different countries It is said that export isan indispensable form of international business companies when penetrating theinternational market and the import also plays an equally important role becauseits exports will be the import of the other country and vice versa, it is an inseparableaspect of foreign trade There have been many different interpretations of imports.According to the Vietnam Trade Code (2005) affirms the import of goods meansthe goods being brought into the Vietnamese territory from abroad or from aspecial area located on Vietnam's territory which is considered a separate customsarea according to the provisions of law However, this view only stopped on

importing activities into the territory of Vietnam but it also pointed out the

principal characteristics of this business activity There is a different definition of

imports as set out in the code of the Republic of Indonesia: “Import is the activity

of entering goods into the customs area Imports can be interpreted as the activitiesof entering goods from a foreign country into the customs territory of a country”(Susilo, 2008) In recently published research in the Library of Economics andLiberty, Kimberly Amadeo (2020) asserted that “imports are foreign goods andservices bought by citizens, businesses, and the government of another country.They can be shipped, sent by email, or even hand-carried in personal luggage on aplane If they are produced in a foreign country and sold to domestic residents,

they are imports” Although each researcher has different interpretations of the

definition of imports of goods, all claim that imports are the exchange of goodsand services from outside the territory of a country that is not domestic goods In

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short, imports are an integral part of the state-owned by any nation It directlyaffects the economy, the situation of trading goods and services of that country

2.2 The importance of import activities2.2.1 To the national economy

Import is an important activity of international trade that has a direct influence ona country's production and life Import is an extremely essential activity ofinternational trade that has a direct effect on a country's production and life Forthe economy, import activities usually aim to:

Adding goods which cannot be produced domestically or cannot meet demand.Substituting goods that are not conducive to domestic production with imports.Import activities, if well organized and rational with domestic need andproductivity, will positively influence the balanced development of the economy.In particular, it possibly keep directly balance of three factors of production: labortools, subject of labor and labor

In the current world economy, import activities are growing and showing an

essential role for the national economy Haddad et al (1996) said that “the

theoretical relationship between imports and productivity tends to be more

complicated than that between exports and productivity Increased imports ofconsumer products encourage domestic import-substituting firms to innovate andrestructure themselves in order to compete with foreign rivals; therefore, imports

enhance productive efficiency” Some argued that the import is positively related

to GDP Schneider (2005) researched “the role of high-technology trade in determining a country’s rate of economic growth using a unique panel data set of

47 developed and developing countries over a period of 21 years (1970 to 1990)

Foreign technology has a stronger positive impact on per capita GDP growth” It

means economic growth can be led by the technology import from a foreigncountry Zaheer, al., (2014) carried out an analysis to show the influence of import

on GDP growth in Pakistan by taking 10 years of import and export data Theyassume that there has a positive and direct effect of imports on the GDP growth of

Pakistan In addition, imports contribute an important part of the economy in thesubsequent aspects:

- Create conditions to speed up the process of economic reorganizing towards the

industrialization of the country

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- Contribute to improving and raising the living standards of the people Forclients,imports provide access to diverse and modern goods For production, import notonly is the source of input for production activities but also assures technology andequipment for modernizing production, creates stable jobs for workers

- Promote export activities With production materials that import brings, it willenhance the quality of goods, makes domestic goods accessible to the world

market

In conclusion, it is undeniable that import is a significant contributor to fill the gapbetween the resources, the need of the individuals and the economic sector,especially in developing countries It is one of the crucial and indispensable partof economic growth for a country A country is impossible to produce all the goodsto meet wholly the requirements, and then it imports the goods and commodities

from the other countries

2.2.2 To the enterpriseImport activities are one of the essential stages of the business process Currentresearch of World Industrial Reporter (2012) recommended that businesses

enhance their competitive advantage by cutting unnecessary costs while extendingthe profit margin It asserted, by “importing goods or raw materials fromoffshore sources”, which “provides a host of benefits, including lower prices,higher quality goods, and the advantages associated with international tradeagreements” Moreover, import contributes to the supply of input materials for theproduction process At the same time, if the import activities are carried out well,it will lend a hand businesses cut down production costs, have a lower price,increase profits and rise competitiveness in the market for businesses In otherresearch, Joachim Wagner (2014) assumed the close connection between importand productivity He concluded that importing products let an enterprise shift itsfocus on available resources and utilize aspects that they have superior strength.However, the import activities are quite complicated because of the participation

of differently numerous economies so it requires businesses to enhance their

governance Every member in the enterprise needs to actively learn, gainexperience, upgrade professional skills to achieve maximum working efficiency.For Importing, it is not just only the department of businesses More and morecompanies specialize in importing products and services to meet the domesticrequirements of consumption It is a testament to the import importance forbusinesses

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2.3 Types of importIn the current context of the economy operating under the market mechanism,international business companies when participating in import activities oftenapply five main forms of import business According to Ms Nguyen Thi Hoa’sanalysis (2015), there are the following five categories of import

2.3.1 Direct import

Direct import is simply explained as a domestic enterprise directly signing a

commercial goods import contract with a foreign enterprise The transaction

process is agreed upon by the two parties in the business contract without being

bound by any third party The buyer researches the market on his own, finds apartner, signs a contract, pays the fee and his entire business and sales rights toother units in the country This type of importation helps businesses buy goods tosave a lot of costs Enterprises approach the market honestly and quickly, so theycan easily orient their business in the future and take initiative in goods sources.Their reputation in the international market, therefore, will also be confirmed.However, it requires businesses to have good financial potential The staffinvolved in the transaction need to be professional, experienced and understand

the market to minimize risks

unit entrusted with the import) All costs are borne by the buyer (trustee) At this

time, the trustee will be responsible for understanding the market, prices, choosingthe appropriate method of forwarding, completing the procedures, and so on

2.3.3 Barter import

It is an exchange form of goods that are assessed at the same price It means when

importing a product from a foreign country, instead of paying the monetary fee,the company will pay by exporting goods with an equivalent price Typically, thistype of import is applied by developing countries

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For example, Caterpillar imports 350,000 tons of iron ore from Venezuela At thistime, Caterpillar also exported excavators to Venezuela as payment

2.3.4 Temporary import for re-export

It means goods imported but not brought into the country of consumption Thepurpose is only imported goods sold directly to third parties for profit This activityalso includes import and export As a method of collecting foreign currencies, theexport will bring in a larger range of foreign currency than the initial capital spent.This form requires the careful signing of two specific contracts The first is apurchase contract signed with the exporter The second is the sales contract signed

with the business which will import.2.3.5 Import processing

A country will import materials, machines, and technology from abroad The

country’s enterprises will then process the goods in accordance with the

requirements requested by the outsourcing country Finally, when the goods arecompleted, they will be handed over to the lessee or transferred to a third countryat the request of the lessee

For example, a shoe manufacturing company in Taiwan recognizes that Vietnamhas abundant human resources and low processing costs, so it implements aprocessing contract with a Vietnamese enterprise Accordingly, this enterprise willimport machinery, materials and other necessary goods for shoe processing AfterVietnamese enterprises complete the required quantity, they will export thesefinished products to Malaysia, Myanmar - Taiwan's partners At the same timeexports return the machines to Taiwan when the contract ends

2.4 Import procedureBusiness activities of importing of machinery and equipment are organizedwith a variety of businesses, from researching domestic market research andseeking foreign supply market to signing contracts and selling imported goods inthe domestic market These stages and operations need to be placed in a closerelationship to achieve the highest efficiency, timely service for domestic demand

Therefore, people involved in the business of importing machinery equipmentmust grasp the contents of the procedure of importing goods

For direct machinery import, the importing enterprises need to perform the

following steps:

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Market research Transaction,

negotiation and

Performance of import

contract

Renting Buying Declaring Receiving Checkin: Testing Paying

vehicle insurance customs goods 8 operation order

Chart 2: Import procedure

2.4.1 Market researchThe issue of market research to have a complete, accurate and timely market

information system will be the basis for enterprises to make the right decisions to

meet the market's conditions At the same time, the information system is not onlya basis for businesses to choose suitable partners, but also a foundation for theprocess of transactions, negotiation, signing of contracts and future performance

of contracts operating effectively They can only react flexibly and make the right

decisions during the negotiation transaction when there is sufficient information.Therefore, in addition to mastering the domestic situation and policies and nationallaws related to foreign economic activities, foreign trade business organizationsneed to identify goods traded and master the market and customer selection

For direct import organizations, they not only research on customer needs,

competitors in the domestic market, but also need to find out and understand thesupply and prices on the international market in order to determine whether thegoods are made an allowance by the national law or not Therefore, they can beeffortless to make the selection for potential customers

2.4.2 Transaction, negotiation and signing contracts

After the stage of environmental and market research, customers and goods are

selected In the next step, purchasing staffs have to approach customers to conductpurchase and sell transactions The transaction process is the step of exchanging

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information on trade terms between involved parties These staffs need to do taskssuch as inquiry, offer, order the selected items with foreign suppliers

Negotiation is the next task Will Kenton (2020) gave his opinion about a

negotiation It is “a strategic discussion that resolves an issue in a way that both

parties find acceptable In a negotiation, each party tries to persuade the other toagree with his or her point of view” Therefore, it is assumed that negotiation inimport is the discussing, exchanging about trading conditions between import-export enterprises to reach to an agreement on signing a contract Generally, thereare the following 3 forms of negotiation used popularly:

- Negotiation via email- Negotiation by phone- Negotiation through face-to-face meetings

The good outcome of the negotiation process is the signing of a sales contract The

Cambridge Dictionary defines that contract is an agreement between the patties,the seller or the exporter takes full responsibility for delivering and transferring theownership of the goods to the purchaser also called the importer, the buyer isresponsible for paying the full amount according to contract A contract may bedeemed to have been signed only when all parties have signed it and theparticipants have full authority to sign such documents, otherwise, the contract willnot be considered as a legal document Those parties must have the legal addressstated in the contract The signing of a contract is an extremely important andindispensable part in the import process All regulations of the consignment arementioned as information of the seller, price, quantity, technical and packagingrequirements, Certificate of origin and quality or penalty when a party fails to

comply with the requirements This is the basis for both parties to comply and

execute The tighter the logic of the contract is, the higher the ability to guaranteethe quality of the goods is

The next step will be the transportation process, customs declaration, andwarehousing

2.4.3 Performance of import contractAfter signing the contract, it is essential to clearly identify the responsibilities,contents, and order of work to be done, try not to make mistakes with a view toavoiding causing damage All errors are the establishment for generating the

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criticism In order to implement the import contract, the enterprise needs toperform the subsequent order However, this sequence is the only relative, thereare inevitable steps to do first, there are tasks that can be swapped or worksimultaneously

2.4.3.1 Renting a vehicleIn the process of contract performance, who hires or which form of ship theycharter will base on the subsequent three main factors:

- Conditions of delivery of the import contract.- Volume and features of goods

- Transport conditions

In addition, it can be based on other terms of the import contract such as:Prescribing the maximum capacity of the means, the level of loading and unloadingand so on

If the conditions of delivery of the contract are the terms CFR, CIF, CPT, CIP,DAF, the exporter has to proceed with hiring the vehicles of transport If theconditions of delivery are EXW, FCA, FOB, the importer must proceed with hiring

means of transport

2.4.3.2 Buying cargo insuranceGoods transported at sea often face a large number of risks and losses Therefore,marine cargo insurance is the most popular type of insurance in foreign trade JuliaKagan (2020) affirmed that insurance is an assurance of the insurer to indemnifythe assured for damage of the subject-matter insured due to agreed risks causing,provided that the insured bought that subject a sum of money called a premium

2.4.3.3 Declaring customsGoods that cross national borders for import certainly go through customsprocedures According to Bala Ramasamy (2011), to declare customs, the exporterhad to send numerous documents to the importing company “These

documents include the Bill of Materials, Bill of Lading, the Purchase Order, the

invoice, the packing list and a certificate of non-wood packing These documents,

plus the registry book, a declaration of entrustment and an entrustment declarationfor commodity inspection, are then handed over to the customs broker/freight

forwarder” Customs procedures consist of the following three main contents:

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- Customs declaration: The commodity owner must declare the details of the goodson the customs declaration form honestly and accurately At the same time, theowners of the goods are obliged to determine by themselves the goods codes, taxrates, taxable prices of each imported goods, and calculate the allocated taxamounts of each category of tax on the customs declarations The declaration mustbe produced together with a number of other documents: import permit, invoice,

bill of lading, packing slip, etc

- Present goods: Customs are permitted to check the goods if finding necessary.Imported goods should be arranged in order and convenient for inspection Theowner of the goods bears the labor cost of opening and closing the packages

- Implementing the decisions of the customs: After examining the documents and

goods, the customs decision: allowing goods to be permitted to cross the border(clearance) or go through with some conditions attached or not be accepted for

importing The owners are required to strictly abide by the regulations of customs

2.4.3.4 Receiving goodsTo receive imported goods from abroad, the importing units need to do thesubsequent tasks:

- Sign a contract with the transport agency for receiving goods.- Confirm to the transport unit about the plan to receive goods each quarter, each

year, cargo structure, shipping plan, technical conditions when loading, unloading

and forwarding.- Provide essential documents for the transport agency (bill of lading, deliveryorders) if the people in the ship do not deliver such documents to the transportauthority

- Monitor the delivery and receipt, urge the transport agency to make a record forgoods (if necessary) and deal with all problems within their capacity in the deliveryand receipt

- Payment to the transport agency for charges for delivery, handling, storage, and

transport of imported goods

- Notify the ordering units about receiving goods.- Transfer goods to the enterprise's warehouse or directly delivering to the ordering

units

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Bala Ramasamy (2011) emphasized that “the certificate of customs clearance, thedelivery order and the packing list are given to the transportation company to get

approval for the release of the goods from the port”.

2.4.3.5 CheckingImported goods through the border gate have to be inspected Each agencyconducts inspections according to its functions and powers If abnormal signs aredetected, invite expert witnesses to make an evaluation record Transport agencieswill inspect seals and lead seals before unloading goods from means of transport

The importing units as a party in the bill of lading are also obliged to inspect the

goods and make a forecast or protest letter if there is any suspicion that the goodsare damaged, missing or not in accordance with the contract

2.4.3.6 Testing operationGoods after being scrutinized by the inspection agency at the port will be broughtback to the enterprise for commission and trial operation Personnel with technicalexpertise will consider the testing of each machine to check the parameter to meetthe quality specifications such as capacity, size or correct with the version andtechnical drawing, assembly diagram or not If it is found out that the machineryis not operating properly according to the contract, it will base on the writtenprotest letter to appeal to the exporter

2.4.3.7 Paying the orderPayment seems to play a fundamental role in international trade Because thecharacteristics of trade with foreign countries are extremely complicated, paymentin international trade needs to be prudent for the purpose of avoiding losses Thereare numerous payment methods such as letters of credit (L/C), collection ofpayment, money transfer, etc The payment type must be specified in the contract.Enterprises are required to make payment strictly according to the provisions of

the contract

2.5 Factors affecting import business

2.5.1 External factors2.5.1.1, Regulatory and Policy FrameworkPolitical and legal factors directly affect international trading activities Import-trading companies are obliged to comply with relevant government, national andinternational regulations involving this field When participating in economic

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activities in general, import businesses in particular businesses should payattention to this issue

In Mozambique, Nathan Associates (2002) in a study on mainstream tradeobserved that import procedures for small and medium enterprises (SMEs) areextremely cumbersome For example, importers needed to get hold of a certificateof origin, a certificate of quality, a sanitary certificate and an import license, whichwas needed for each transaction, before importing The authority had to inspectboth the certificate for sanitary These cumbersome procedures obstructing a largenumber of SMEs from implementing effectively external trade limited theircapability and some end up collapsing

According to Siringoringo, al, (2009) in a research on issues coped by small andmedium enterprises in importing goods, it was found out that one of the most

mentioned hindrances in term of importing concerned “the time and paperwork

required to comply with foreign and domestic market regulations” The

government did not exclusively enforce those procedures as independent unitssuch as banks, shipping agency, and insurance enterprises also had their ownprocedures A company wishing to enter the import market or intended to rise itsimport activities had to achieve the knowledge and skills to face administrativeprocedures which numerous small and medium-sized business lacked Theconsequence was that it is arduous to process the paperwork, either because of

“cumbersomeness or due to lack of time, constituted a barrier to exporting for these enterprises” The purchasing staff did not properly complete, resulting in

postponement in payments and thus creating cash flow obstacles for the importer.By this point, it is drawn that the laws and regulations of importation of eachcountry are different, and it is not easy to grasp all of them From time to time,these regulations are updated and renovated, therefore, it can bring positive effectswhich promote import or negative activities which limit this activity Thepurchasing staffs need to learn, gain experience, update knowledge constantly to

ensure the progress in importing goods.2.5.1.2 Technology

Nowadays, science and technology affect all economic and social fields and bringa large number of advantages In the import and export industry, it also brings highefficiency Thanks to the surpass development of the postal andtelecommunication system, foreign trade enterprises can communicate directly

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with customers via telex, fax, telegraph, etc to reduce travel expenses, promoteimport and export activities and support traders to capture information about themarket movements precisely and timely Besides, thanks to import and export,Vietnamese companies are exposed to the world's advanced technologyachievements Science and technology also influence fields such as goodstransport, professional industries in banks and so on These are also numerousreasons affecting import and export activities

A study works on “low and middle-income countries in Europe and Asia hadshown that manufacturing enterprises that were connected to the internet exportedmore than those not connected enterprises” (Clarke, 2005) According to Clarke(2005), a similar bond appeared to hold for the African organizations whereenterprises that made use of the internet to communicate with clients and supplierswere significantly were probable to export that other enterprises The point

estimate of the coefficient suggested that “average enterprises would export about

11 percentage points more of its output if it had an internet connection than if it

did not” This is a principal factor affecting the diversity of goods for importing

enterprises The more businesses connected to the Internet to expand their markets,the more the chance has, which importer will have access to businesses moreeffortless One thing worth noting about this factor is that the Internet is the mosteffective information channel for importers In the era of modern technology, theimporter will search for goods and suppliers mainly through this channel.Therefore, it can clearly be asserted that technology is an indispensable elementfor international trade activities in general and import business in particular

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2.5.1.3 Infrastructure

Good infrastructure is an fundamental factor to contribute to stimulating import andexport activities Infrastructure comprises roads, wharves, transportation systems,information systems, banking systems, etc which have a great effect on import andexport activities If these activities are modern, they will promote import-exportefficiency, otherwise, it will hinder the import-export process

Studies also mentioned the essential role of infrastructure on trade Wilson, Mann,

and Otsuki (2005), “when extending the gravity model to trade facilitation measures

and to a larger sample of 75 economies, posited that port efficiency and the proxiesfor infrastructure quality for the services sector, such as the use, speed, and cost of the

internet, significantly affected trade flows” Hoekman and Nicita (2008) showed that

downgraded roads and ports, weakly operating customs agencies and procedures, theflaw in law and limited access to finance and business services affected international

trade Shepherd and Wilson (2009) found out that “bilateral trade flows in Southeast

Asia were affected by transport infrastructure, mainly ports and ICT”.It can be undeniable that if the modern port system is equipped, it will cut down thetime of loading and unloading, delivery procedures as well as guarantee the safety ofgoods traded In addition, the development of the banking system, especially bankingoperations, possibly allows businesses to facilitate payment and mobilizing capital.Moreover, the bank is a factor to confirm benefits for businesses with paymentservices Finally, if the insurance system, quality control can let international flowertrade activities be implemented more safely while decreasing the range of risksprobably happening to the traders in case of risks

In short, the infrastructure factor for international trading indirectly commodity canaffect the import business of all countries in the world

2.5.2 Internal factors2.5.2.1 Business capitalIn business without capital, enterprises will not be able to do anything even when they

have business opportunities Holding abundant capital sources helps businesses carry

out their businesses more easily and have conditions to take advantage ofopportunities to make big profits Angela (2013) claimed that business capital has themost dominant influence on the performance of a company when taking part ininternational trade activities The capital market creates the ability to captureinformation quickly and accurately due to the conditions to use modern means It also

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allows businesses to implement well marketing tools on the market in terms of prices,ways of importing, and selling goods on the domestic market, creating favorableconditions for import business

2.5.2.2 Human resourceCarland & Carland (1998) accentuates that "people are a business’s greatest asset andthey can greatly impact the success or failure of a firm." Staffs will play a fundamentalrole in a small business because these businesses will be significantly affected bymissing a talented staff or hiring a useless employee Collins and Clark (2003)emphasizes that in the field of HRM research points to the fact that organizations will

only survive in an international market if they can “find and acquire scarce resources

and people are the most scarce resource” According to Chan (2010), he claimed thatpeople are a key component of the business and human resource management (HRM)

certainly plays an essential role in the success of an organization "Enterprises that do

not emphasize attracting and retaining talents may find themselves in direconsequences, as their competitors may be outplaying them in the strategic

employment of their human resources." People are always at the center of allactivities Import and export activities of particular goods are required to accentuatethe human component because it is the creative subject and directly manages thestages of import activities In the field of import, from searching for markets,customers to signing import contracts, staffs have to take responsibility.Therefore, cadres are required to have mastery of technical expertise, be good atforeign trade skills and dynamics In order to promote the role of the human element,businesses have to concentrate on training cadres and employees, fostering and

upgrading their professional skills On the other hand, the managers necessitate paying

attention to labor’s interests including both physical and mental benefits.2.5.2.3 Diversification of products

Diversification of products is a common trend that businesses always consider whenmaking business plans It has a great influence on business results Oladele (2012)seemed diversification as lever for creating competitive advantage and also decreasedamage of economic failure and creates combined effect in market Therefore, it isprominent to strike a balance between enterprise adoption of diversification strategyand the corporate philosophy to guarantee strategic fit Zheng-Feng and Lingyan(2012) showed three meanings of diversification to comprise the following: (1)to give variety or to vary; (2) to broaden business activities into different fields;and (3) to distribute investments to average the damage Sindhu, Haz and Ali (2014)

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emphasized that diversification lets units to search market options which perpetuallyleads to development Although each opinion is different from the other, all theresearchers mentioned the impact of this important factor on the business

2.5.2.4 CredibilityThe credibility that each business builds with customers and partners is not the same,and many opinions can be made about how important it is Birley and Norburn (1985)are discussing about the importance of credibility in the connection with establishingnew business It is debated that “the biggest strength of a new business, especially inthe start, is the owner (founder) himself He has the knowledge about product/marketfit, vision, strategy, etc Without the right knowledge, firm would have difficulties of

accelerating the business” MacDougall and Conrad (2009), discuss that “Without

credibility, everything you say to investors, potential partners or even your employees

can be questioned” Adding that it is extremely essential to keep company’s credibility

so as to adequately control the expectations of different actors as shareholders,

customers, partners, investors, employees, etc The credibility of the business isimpossible to achieve immediately To build trust from customers and partners it is along process However, breaking it is the opposite When a business does somethingwrong such as supplying poor quality goods, evading taxes and so on, such credibilityis difficult to rebuild Therefore, it is claimed that credibility plays an fundamentalrole in the business

In summary, every company has to pay attention to the importance of importation toboth the economy and enterprises, necessary import procedures and internal andexternal factors of organizations fully understand what an opportunity or a challengeis, then examine the current business situation of the business, develop strategic plansthat match changes in the business market Previous studies and reports are valuabledocuments providing the right lessons and theories on import business for enterprisesto learn or the following researchers to use as the foundation for building anddeveloping further relevant research but that is only a reference It is of the utmostimportance that leaders of all levels make all assessments and solutions to beappropriate to the current situation of local and international imports in general andguarantee the sustainable growth of the public Viccom Company in particular

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