e-commerce development in agricultural trade promotion in vietnam

Assessing the impact of internal environmental factors to the E-Commerce applications in trade promotion activities of Agritrade 2.4.1.. E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE PROM

VIETNAM NATIONAL UNIVERSITY, HANOI

MASTER OF BUSINESS ADMINISTRATION THESIS SUMMARY

Supervisor: 1 Dr Tran Doan Kim

2 Mr Ha Nguyen, MBA

Hanoi – 2012

1 The imperative of subject

2 Establish the main research subject

3 Research’s objectives

4 Research scope

5 Delimitation of the research’s contents

5.1 The basic elements of E-commerce model

5.2 Assign content to build E-commerce model for Agritrade

6 Research methods

6.1 Data collection methods

6.2 Data analysis methods

CHAPTER 1: THEORETICAL FRAMEWORK

1.1 E-commerce

1.2 The formation of E-commerce

1.3 The situation of E-commerce development in Vietnam

1.4 The operation forms and E-commerce transactions

1.5 Benefits of E-commerce for businesses

1.6 The E-commerce requirements

1.6.1 Technological Infrastructure

1.6.2 Human Infrastructure

1.6.3 Security and safety

1.6.4 Automatic Financial payment system

1.6.5 Consumer Protection

1.6.6 Economic and legal infrastructure

1.7 Definition and content of Trade promotion

1.8 Trade Promotion in E-commerce

1.9 The difference of E-commerce applications in agricultural trade promotion

2.2 Overall assessment of agricultural trade promotion activity of Agritrade 2.3 Assessing the impact of external environmental factors to E-commerce application at Agritrade

2.3.1 Impact of economic environment

2.3.2 Impact of political legal environment

2.3.3 Impact of socio-cultural environment

2.3.4 Infrastructure and Internet services for E-commerce

2.3.5 Competitors

2.3.6 Customers

2.3.7 Human resources for E-commerce

2.4 Assessing the impact of internal environmental factors to the E-Commerce applications in trade promotion activities of Agritrade

2.4.1 Impact of human resources

2.4.2 Impact of financial resources

2.4.3 Impact of technology infrastructure

2.5 Analysis the results of survey and discussions

2.5.1 The results of survey

2.5.2 Results of expert interviews

CHAPTER 3: CONCLUSIONS AND THE PROPOSAL SOLUTION OF COMMERCE DEVELOPMENT FOR AGRITRADE

E-3.1 The conclusions and findings through the research process

3.1.1 The achievements and limitations of Agritrade

3.1.2 The findings of the research process

3.2 Orientation and perspective of development of Agritrade in the future 3.2.1 Development orientation of Agritrade

3.2.2 Agritrade’s views on the E-commerce application

3.3 Proposal solutions of deploying E-commerce application in Agritrade 3.3.1 Group of Human Resource solutions

3.3.2 Solutions related to infrastructure and technology

3.3.3 Solutions related to business processes

3.3.4 Solutions related to electronic marketing promotion

3.3.5 The other solutions:

CONCLUSION

LIST OF REFERENCES

E-COMMERCE DEVELOPMENT IN AGRICULTURAL

TRADE PROMOTION IN VIETNAM

Doan Tran Nhan

MBA Candidate, 2009-2011 School of Business - Vietnam National University, Hanoi

Supervisor: Dr Tran Doan Kim

Mr Ha Nguyen, MBA INTRODUCTION

1 The thesis title

E-Commerce development in agricultural trade promotion in

Vietnam

2 Necessity of the thesis

Electronic commerce (E-commerce) is a new field and showing great role in trade promotion, products trading through the global Internet E-commerce can help businesses reduce costs and attract the large customer

Due to benefits of E-commerce, now many companies over the world apply this model in their business operation In Vietnam, purchasing through E-commerce websites only popular for some kinds of goods and services such as airline tickets, electronics, cell phones, computers, books, tours, hotels, cosmetic, etc

Trade promotion is the series of activities to promote the sale of the business in general and target market Since the traditional trade promotion activities are geographically limited, higher costs and taking long time, so the application of E-commerce seems to overcome such drawbacks

In Vietnam agriculture, the E-commerce application is concerned, facilitated and clearly oriented by the Government agencies Besides the traditional trade promotion activities such as

surveys, trade fairs and exhibitions E-commerce will create a new promotion method that is simple, convenient, fast and save cost In the present, there are some Agri-businesses applying E-commerce in marketing activities and business of their products However, only a few businesses can achieve success from these activities

Trade Promotion Center for Agriculture (Agritrade) is a department under MARD Agritrade’s functions are designing and implementing agricultural trade promotion activities Besides trade promotion programs, Agritrade also developed an important promotion activity that is agricultural products displaying The deployment of both displaying activity and organizing trade promotion events, Agritrade will perform well as connections between producers and consumers

The effective of these activities are not really high and it also faces some restrictions Therefore, it is necessary to develop new models to improve the effective of trade promotion to the Agricultural products in particular and Vietnam Agriculture in general According to the general trend of the times, E-commerce application seems to be the good solution for Agritrade

3 Research aim and objectives

Through the learning process, survey and investigation, the authors found that the required objectivity and subjectivity are imposed Agritrade in the short term (1-3 years) and long term are:

 AGRITRADE will become a focal point for trade promotion activities in Vietnam Agriculture

 Approach E-commerce development trend and apply IT into operation on promoting agricultural products and local specialties

 Develop E-commerce model to provide a link between producers, traders and consumer of agricultural products

To achieve the above goal, the study needs to utilize the following objects:

 To systematize basic concepts relating to E-commerce model and trade promotion

 Survey and research the activities of trade promotion activities of agricultural products and local specialties at Agritrade

 To propose solutions to develop E-commerce for agricultural trade promotion

4 Research scope

The scope of research in space: this is graduated subject so the

scope of the research only for micro and limited to Agritrade Specifically, the scope of the research is to study the basic concepts related to a review topic, agribusiness situation and propose solutions

to develop E-commerce model for agricultural trade promotion activities of Agritrade

The scope of research on time: The time for studying the subject

and collecting survey data from January to March 2010 at Agritrade This data combined with secondary outside data in last three years

5 Assign content to develop E-commerce model for Agritrade

In this research, to develop E-commerce model for Agritrade, I will develop research methods to conduct surveys on the actual situation of Agritrade’s activities Overall assessment of the impact factors inside and outside the organization It also combined with analysis of results compiled from surveys, interviews with staffs and customers of Agritrade and agricultural expert Since then, I will

assess the application ability and plans to develop an E-commerce model for Agritrade

Based on survey results, analysis of primary data and secondary sources, I will develop E-commerce model based on market factors, human resources, finance, and infrastructure for deploying this model Moreover, I will also improve sales process, handle orders, and deliver the product and other support services

6 Data sources and Research methods

Data used in the thesis were taken from both secondary data about Agritrade’s operation, reports and statistical data of others agencies and primary data collected from interviewing Agritrade’s staff, customers and agricultural expert

There are a number of techniques used to conduct research which including: Interviewing staff, customer and expert; economic statistic method; and methods of description and comparison

7 Structure of the thesis

Apart from the acknowledgment, abstract, list of abbreviation, list of tables, figures, charts and drawings, introduction, conclusion, references and appendix, the thesis is organized in to 3 chapters Chapter 1: Theoretical framework

Chapter 2: Background and Real situation of Agricultural trade promotion of AGRITRADE

Chapter 3: Conclusion and the proposal solution of commerce development for Agritrade

E-CHAPTER 1: THEORETICAL FRAMEWORK 1.1 E-commerce

1.1.1 The concept of E-commerce

Electric commerce (E-commerce) is a relatively new field In the development process it has many different names: “Online trade”,

“Cyber trade”, “Electronic Business”, “paperless trade or commerce” etc Recently the name “E-commerce” has become familiar and became the general convention, which appears in the international legal documents Besides, another name is still used and understood with the same content

In narrow sense, E-commerce merely restricted in sale and purchase

of goods and services through electronic facilities, especially Internet and other communication networks In broad sense, E-commerce is financial and commerce transactions by electronic means such as electronic data interchange, electronic funds transfer, sending or withdrawals by credit card and other activities

1.1.2 Characteristics of E-commerce

E-commerce and traditional commerce, including the steps:

1 Consumers and providers find each other, consumers want to find a reliable supplier, while suppliers are conducting promotional activities, marketing, consulting and customer support, create trust and entice consumers to own

2 Evaluation, negotiations and discussions;

3 Organization coordination and delivery of goods;

4 Payment;

5 Confirm the correctness of every step in the purchasing process

However, the E-commerce still contains its own characteristics compared with traditional trade It is the ability to create a “virtual store” on the Internet

1.2 The formation of E-commerce

1.2.1 The reasons of E-commerce

E-commerce was born as an inevitable development in the harsh competitive environment To survive, Businesses must apply technological advances in effective way The development of mature tools such as Internet, Email, and World Wide Web is the reason

to release a new trading method: E-commerce This method has greatly hindered with the international trade, especially when the trading volume is increasing

1.2.2 The formation of E-commerce

E-commerce is developing rapidly on the global scale based on the industrial development of information technology (IT) IT industry is gradually occupied the leading position in the national economy of many countries

1.3 The situation of E-commerce development in Vietnam

In 2010, almost 100% of businesses surveyed were implementing commerce applications in many sizes and different levels According

E-to survey results, 100% of surveyed businesses were equipped with computers and each enterprise has 25.8 computers on average There are 98% of businesses have Internet connections in many different forms, in which 89% are connected by broadband (ADSL) and leased line Businesses have also focused on exploiting Email, the basic applications of E-commerce

Based on the report, in recent years, with the strong development of Internet and E-commerce, online sales has gradually developed and become more familiar with officers, students and housewives in large

urban areas Nowadays, the most popular online sales form is trading goods and services through E-commerce website

However, the statistics show that Vietnam businesses do not proper recognized the role of the website as a channel of communication and permanent interaction with customers Thus, they do not invest appropriately the time and resources to build, maintain and exploit efficiently their website

1.4 The operation forms and E-commerce transactions

1.4.1 The forms of E-commerce activities

e Digital banking and digital securities trading

Electronic payment system of banks is a great system, which includes many sub-systems

f Electronic Data Interchange

Electronic Data Interchange (EDI) is the transfer of information from this computer to other computers, among other companies or

organizations have agreed to trade automatically with each other without human intervention

g Digital Delivery of Content

Content data is the goods that people need its content not themselves carrying content such as news, books newspapers, music, movies, radio programs, television and software programs

h Retail of tangible goods

Take advantage of multimedia of Web and Java, the sellers build online the “virtual store” to make the sale

1.4.2 Transaction forms of E-commerce

The E-commerce transaction takes place between three main groups involved: business, government and customers These transactions took place by using active forms of E-commerce and are conducted

at many different levels: B2C, B2B, B2G, G2C, G2G, G2B, C2C, and C2G

1.5 Benefits of E-commerce for businesses

1.5.1 E-commerce reduces costs

E-commerce affects to most major types of business costs in the production process and conducting commercial transactions, including: cost of sales, expenses related to procurement of the enterprise, and expenses related to logistics

1.5.2 Impact on enterprise architecture

IT and communications to allow businesses can trade and cooperate

or compete with each other at high speed, lower cost and with amenities never before With E-commerce, began to appear business groups linked together by the type of network link, creating division and rules combined production and completely new business, more efficient than any real type of unstructured enterprise networking

1.6 The E-commerce requirements

1.6.1 Technological Infrastructure

We just only really have and truly carry out rich content and effective E-commerce when we have a stable infrastructure of information technology (including the two divisions: electronic computing and electronic media)

This infrastructure includes standards of the enterprise and whole country, linking these standards with the international standards, engineering and devices

Technological infrastructure not only means that the existence but also implies more economic use

1.6.2 Human Infrastructure

Application of E-commerce is inevitable raises two requirements: (1) people are familiar and capable of mastering online activities; (2) they have strong IT professionals who regular catch new IT to serve digital economy and E-commerce as well as be able to design software to meet the operational needs of a digital economy, avoid relying solely on the others

1.6.3 Security and safety

Commercial transactions by electronic is setting up very high demands on security and safety, especially when it operates on the Internet/Web

1.6.4 Automatic Financial payment system

E-commerce can only be done when there actually exists a development financial payment system It allows automatic payments Without this system, the E-commerce application is only exchange the information and transaction still ends with direct payment or the traditional means of payment

1.6.5 Consumer Protection

In E-commerce, information of goods are digital information, buyers does not have condition to taste or trial before purchasing goods It not mention to the possibility of mistake the database, be deceived by the information and the illegal organization presence on the network Therefore, E-commerce needs an intermediate quality (quality guarantor) that operate efficiently and less expensive

1.6.6 Economic and legal infrastructure

First, each government must decide whether the information society and Internet are a threat or an opportunity Each country will issues the policies, laws and specific regulations that will be reflected in the corresponding adjustment of the entire system of civil law

1.7 Definition and content of Trade promotion

1.7.1 Definition:

Base on the Commercial Law 2005 of Vietnam, Trade Promotion means activities of promoting and seeking opportunities for the purchase or sale of goods and provision of services, including sale promotion, commercial advertisement, display and exhibition of goods and services, and trade fairs and exhibitions

1.7.2 The purposes of trade promotion

The purposes of trade promotion are supporting businesses to sell out their products when they face to the competition of others providers

on the market The main purposes of using trade promotion: Promote the products consumption, Create competitive advantage for businesses, and Communicate information about business and products to consumers

1.7.3 Types of Trade Promotions

Trade promotion includes some typical models: Promotion, Commercial advertising, Displaying and introducing goods and services, and Fairs and exhibitions