Phân tích môi TRƯỜNG KINH DOANH QUỐC tế và hệ THỐNG tài CHÍNH VN v

Business Report: Operating in an international business environment gives organizations many open opportunities Market development beyond the border, access to cheaper raw materials and production process and achieve lower levels of financial expenditure are some logical reasons which urge businesses to get involved in international business activities However, the managers also face many difficulties, problems and new risk factors which require them to be very careful in management They must understand the customers’ tastes, institutional and legal framework, cultural characteristics, macroeconomic trends and financial systems Political requirements and risks are also the key factors to consider Therefore, approaching the multi-national market and international financial infrastructure provides the opportunity to choose a new competitive strategy, but also make businesses have to face with the increasing complexity and diversity Task: Put yourself in the place of the staff of the organizations such as the "Chamber of Commerce" of Vietnam Your group wants to increase Foreign Direct Investment in Vietnam, and the organization requires your group to find out the good, the bad and the risk of many aspects from the perspective of a Multi-national corporation deciding to invest in Vietnam Your team must know the "good side" to "sell off" the positive aspects of Vietnam Financial Market, as well as the pricing structure and the friendliness towards potential foreign businesses Your group must also know the "bad side and the threats" to be ready to discuss and debate about business activities in Vietnam Your group must prepare a business report summarizing the research results and suggestions ANSWER: INTRODUCTION McDonald - A godfather in the "fast food" restaurant chain business, which has occupied a lot of market shares and has the presence in almost all demanding markets, but so far has not been able to lay its foot on the Vietnamese market - a potential but very challenging market So what are the reasons? Investment policy, franchise partners, competitors or nonstandard food are the main causes which made this big boss afraid when approaching Vietnam The following business report will clarify the issues and help Mr McDonald have a clearer decision with Vietnam market share I/ INTERNATIONAL BUSINESS ENVIRONMENT AND VIETNAM FINANCIAL SYSTEM: Recent socio-economic situation in Vietnam: According to the Government's report about the socio-economic situation in 2012 at the fourth session of the National Assembly XIII, October 22nd, 2012, in the context of world economic fluctuations becoming more complex and difficult, with sharp decline in trade, global growth lower than expected this year, it created the negative impact on our economy which has deeply integrated and opened The socio-economic results of the first 10 months of 2012 are as follows: a General information: * In terms of Investment: - Implemented capital from the State budget of the first ten months of 2012 reached 164.9 trillion dongs, equivalent to 79.4% of the year plan and increased 8.3% compared to the same period in 2011, including: + Foreign direct investment from the beginning of the year to 20/10/2012 reached 10.5 billion USDs, including: The registered capital of 881 newly licensed projects reached 6.7 billion USDs, supplementing registered capital of 359 projects licensed from previous years reached 3.8 billion USDs Implemented foreign direct investment of ten months of 2012 was estimated at billion USDs, down 1.1 percent from the same period in 2011 + Foreign direct investment of the first ten months of this year mainly focused on the processing industry with 6.9 billion USDs, accounting for 66.2% of the total registered capital; the real estate industry reached 1,8 billion USDs, accounting for 17.6%; remaining sectors reached 1.8 billion USDs, accounting for 16.2% - In ten months, the country has 47 provinces and sub-cities have newly licensed foreign direct investment projects, in which Binh Duong has the largest amount of registered capital, followed by Hai Phong, Hanoi, Dong Nai… * Consumer Price Index: - The consumer price index (CPI) of 10/2012 increased by 0.85% from the previous month The index of this month rose mainly due to the influence of the pharmaceutical and medical services and education industries, in which the pharmaceutical and medical service group increased 5.94% (medical service increased 7.78%); education group increased by 1.88% (education services increased 2.10%) The high level increase of medical service prices in October contributed to the increase of the whole country price index with the increase of 0.31% - The consumer Price Index (CPI) of 10/2012 increased by 6.02% compared with 12/2011 and increased 7% compared to the same period last year The average Consumer Price Index of ten months of 2012 increased 9.66% compared to the same period in 2011 - The U.S dollar price index of 10/2012 increased by 0.06% over the previous month; decreased by 0.88% compared with 12/2011 and down 0.18 percent from the same period in 2011 b Positive sides: * Inflation rose lower than expected: - In the first eight months, the consumer price index (CPI) increased only 2.83% However, the CPI in September unexpectedly rose 2.2%, made the CPI in months reach 5.13% Thus, the overall inflation in the economy has not bounced back Generally speaking, most commodities’ prices in September still increased but at a very low level With credit of the year increased only at a very low level, there’s a high change that the inflation in the coming months will only increase slightly even though it’s in the peak season of the yearly inflation cycle This is contrary to the fears of many that inflation will rise sharply - Inflation can be seen as a bright spot since it increased in a much lower level than many people feared it would be However, it is not an entirely positive thing because from a different angle, it indicates a decline of the entire economy (Graph 1: Vietnam inflation graph from 2000 to 2012 - Source: GSO) * The stable exchange rate will keep being stable in the upcoming months: - 2012 was the first year in the last four recent years with a relatively stable exchange rate The current rates are much lower than that in the beginning of the year and fluctuated around 20,800 - 20,100 VND / USD This is considered a positive point for the economy - In 2013, the exchange rate may continue to be stable since there’s no big gap between the supply and demand for foreign currency However, the exchange rate will increase slightly if the Government provides strong stimulus for the economy (Graph 2: USD/VND exchange rate graph from 2008 to 2012 – Source: GSO) * Both import and export increased: - Both export and import increased quite significantly in the context of the economic downturn However, the increase in export and import is mainly due to FDI This is completely understandable because the FDI companies are in the manufacturing chain of multinational companies Both domestic import and export decreased, which reflects the difficulty of the economy (Grapth 3: Vietnam Import – Export and Trade Balance Deficit Graph from 2001 to 2012 - Source: GSO) * Interest rate has sharply decreased compared to that at the beginning of the year: - Compared with that at the beginning of the year, the interest rate has fallen sharply Currently, the lending interest rate in the market is commonly under 15%, 4-5% lower than that at the beginning of the year Borrowing interest rates also fell to below 12%, lower than the 15-20% of the earlier time - The decline in interest rate, not only due to the decrease of expected inflation, but is also due to the decrease in the capital demand of the economy In addition, the interest rate decreased is only because the Central Bank has sharply decreased the refinancing and rediscount rate In addition, other socio-economic indicators such as foreign affairs, security and defense, socio-political stability; cultural, education and training development, science and technology, environmental protection, social security and social welfare also have been improved and achieved certain successes c Negative sides: In addition to the above positive results, the government report on the socio-economic situation in 2012 at the fourth session also shows some existing issues as followed: - Unstable macro-economy, inflation remains at risk of rebound Bad debts increase and handling is slow and difficult Companies still had to deal with many difficulties, can’t access the capital, big inventory Stagnant real estate market is not likely to recover soon, which creates many potential risks - Some corporations, state corporations operate ineffectively, illegally, causing great loss of state assets The quality, efficiency and competitiveness of the economy have not improved much The economic and social forecasting capacity is still restricted and doesn’t meet the requirements - The life of a part of the population, especially in remote areas and ethnic minorities, got more difficult Due to limited resources, the expansion and improvement of the level of support of social welfare policy, poverty reduction programs, new rural construction, job creation and wage reform did not meet the requirements - Education and training is still weak; the quality of training of many universities, colleges was slow in improving; Science and technology couldn’t meet the requirements in terms of productivity, quality and economic competitiveness improvement - The management of natural and environmental resources was still inadequate; there were a lot of pending big projects The environmental pollution in industrial parks, manufacturing facilities, villages, river basins was still heavy The flooding in some major cities was slowly to be overcome - There was still some disappointment about the social order and safety; especially crime, social phenomena, traffic law violations, food safety - Administrative system reform did not meet the requirements Many administrative procedures are no longer appropriate and slow to be changed The administrative discipline inspection and supervision was still weak, reducing the effectiveness and efficiency of management and administration A part of the government officials turned into bad and failed to fulfill their responsibility, which created harassment and the negative impact on the trust of the people The international business environment of Vietnam: 2.1 FDI into Vietnam in recent time: - According to the Foreign Investment Department (the Ministry of Planning and Investment), the total foreign direct investment (FDI) registered in Vietnam since the beginning of the year has reached over 11 billion dollars That's down more than 12% over the same period, equals to half compared with the goal of attracting 22-25 billion USDs in FDI set for this year - Disbursed FDI capital since the start of the year reached more than billion USDs - The total number of newly registered FDI projects has reached 658 projects worth 10.79 billion USDs, down about 10% in terms of the number of projects but increased 41% in terms of the amount of registered capital over the same period last year - Also according to the Foreign Investment Department (the Ministry of Planning and Investment), the majority of foreign investment projects in the first 10 months of 2012 are small and medium projects There is only one project with the investment of over billion USDs in the real estate industry, 55 are medium-sized projects, and 111 are small and super small projects - Currently, the Ministry of Planning and Investment is now focusing on the quality as well as the disbursing progress to implement the investment projects, instead of focusing on the amount of registered capital This is also a positive result in the context of global and domestic economic difficulties 2.2 Shortcomings in attracting FDI: - After 25 years implementing the open door policy, attracting foreign investment with the promulgation of the Law on Foreign Investment in 1987 (one of the first laws of the renovation period) and the amended laws in 1990, 1992, 1996, 2000 and 2005, along with the bylaws, Vietnam has established an uniform, transparent and consistent legal framework with international standards and create a favorable business environment for foreign direct investment (FDI) - Despite achieving important basic results mentioned above, but according to Dr Do Nhat Hoang, the director of the Foreign Investment Department (the Ministry of Planning and Investment), there are still many problems existing in the policies of attracting FDI into Vietnam today; they are reflected through the fact that the attracting, use and management activities of foreign investment over time have revealed a number of limitations and shortcomings They are: + The ability to absorb capital is still modest, means that we haven’t taken advantage of this capital source in an efficient way while Vietnam is having a great demand for capital; the quality of the capital is not high; + The attraction of high-tech investment projects is still limited; technology transfer is still slow; there are still some foreign investment enterprises using outdated technology, which can potentially create pollution; + The use of land and mineral resources is not really effective; the horizontal and vertical linkages between foreign-invested enterprises and domestic enterprises are not high; there are still labor disputes and strikes in some places, which created bad influence on the investment climate - The above limitation and existing issues of the FDI field are caused by the internal weakness of the economy as well as the limitations in the planning and implementation of policies and laws on foreign investment The main reasons are: + The systems, laws and policies related to investment are incomplete and inconsistent + The preferential investment policy is not attractive enough + The development of infrastructure did not meet the development needs of the economy as well as not create good conditions for foreign investment inflows to be promoted efficiently + There is limitation in human resources Vietnam's human resource is abundant but there’s a low percentage of trained workers, highly qualified human resources are insufficient, which did not meet the labor needs of businesses in general, including foreign investment enterprises + The development of supporting industries is still limited + We haven’t implemented well the decentralized management of foreign investments The empowerment of the decentralization task to the local People's Committee and the IPs and EPZs’ management boards in the management of foreign investment is the right policy, it create an active position and raise the responsibility of local authorities in the management of foreign investment activities However, the decentralization process must be accompanied by clear policies, with a synchronized planning system; the ability of the empowered organizations must be improved; the information reporting and transferring from local to the central Government must be timely; the inspection and handling of violations must be done thoroughly; enhance the horizontal and vertical coordination between the general management authorities and specialized management agencies, between central authorities and local authorities + The inspection and supervision of the implementation of environmental protection regulations of the companies is still insufficient + Investment promotion activities are not effective enough Attracting foreign investors need to focus on a number of priority areas That is, to select projects which have modern technology, are environmentally friendly and can enhance the link between the areas; related to the sectors producing products with competitive advantage, products which can participate in the global production network and value chain, such as high technology, engineering, information technology and communications, pharmaceuticals, bio-industry; environmental industry and industries which use green energy and renewable energy or new materials The projects which save energy and not use a lot of cheap labor will also be given priority (Quote from the source: www.diendandoanhnhan.vn ) The impact of the global financial crisis on Vietnam: 3.1 The global financial crisis: * The government debt crisis in Europe: - The European government debt crisis is a debt crisis first bloomed in Greece in early 2010 when the cost of government debt increased continuously The crisis then spread to Portugal, Spain, followed by Italy in the Euro area France is a country with high risk of falling credit ratings; the Republic of Cyprus has been pushed to the brink to get bailout - On 09/05/2010, the European Minister of Finance has approved the rescue package worth 750 billion Euros in order to ensure financial stability in the Euro zone, and set up the European Financial Stability Committee Followed by a 85 billion Euro bailout package for Ireland in November 2010 and 78 billion Euros for Portugal in May 2011 The debt crisis has threatened the existence of the euro currency, influenced the global financial system, and made the Greek Prime Minister and the Italian Prime Minister to resign On 06.02.2012 the Government of Romania is the 6th European government collapse due to debt crisis - The statistics said that in the last quarter, Germany - the number one economy in Europe - only had modest growth of 0.2%, lower than the 0.3% in the second quarter and 0.5% in the first quarter France is also struggling to achieve growth of 0.2% Although the German and French economies continue to grow, but when considering all 17 member economies, the eurozone still has fallen into deep recession - The "modest" Growth of Germany, France, could not pull the Europe ship accelerate as the economy of the Netherlands, Spain, Italy and Austria all decelerate In the third quarter, the economy of Spain and Italy - the countries imposing the unpopular measures to "tighten their belts" - fell by 0.3 per cent and 0.2 per cent Meanwhile, the Austrian economic decline 0.1%, Netherlands fell 1.1%, the deepest decline in Eurozone * The government debt crisis in the US: - According to the U.S Deposit Insurance Corporation (FDIC), the federal debt has doubled in the past seven years to 14 trillion USDs, a direct result of the financial crisis and the fact that the government does not want to limit long-term structural deficit If there’s no decision made, the U.S federal debt could rise from 62% of GDP this year to 185% of GDP in 2035 - When more than 70% of U.S Treasury bonds held by outside private investors mature after years, the poor investor confidence in the United States will cause interest expense for the government and the private sector of U.S increased - Total U.S government bonds held by China in January fell by $ 5.4 billion, to $ 1.155 billion, down continuously for three consecutive months In December last year, China sold a net $ billion of U.S government bond - The foreign central banks hold $ 3,150 billion U.S government bonds out of $ 4440 billion in circulation abroad - The investment fund of Jim Rogers, the president of Rogers Holdings and Beeland Interests, Inc also decided not to continue lending money to the U.S government again From all these facts above, we can see that the United States is entering a major downturn which has the global influence 3.2 The impacts of the global financial crisis on Vietnam: The recession of the world economy is having a strong impact on Vietnam, including both positive and negative, expressed by some aspects as follows: * Negative sides: - The general decline of the world economy will certainly affect the economy of Vietnam, but the overall impact is likely to be slow growth and rising unemployment This definitely will affect all levels of the Vietnamese population, including working-class workers which will be affected directly - In this context, the Government should place the highest priority against inflation and heading towards macroeconomic stabilization We have to accept slower growth in a few years to have macroeconomic stability and ensure long-term growth - In terms of currency, we must continue the tightened policy But when operating, we need flexible ways to exploit favorable opportunities to achieve consistent economic growth such as positively cutting interest rates for loans to support and reduce the difficulty for businesses - The State Bank had the measures of raising the required reserve rate from 1.2% to 5% and payment bonds to commercial banks to improve liquidity and reduce costs for banks, enabling banks to cut lending rates This is for the objective of combating inflation and exploiting the ability of reasonable growth - So far, we prioritize exports (60% of GDP) and we depend on it So when the world economy is in crisis, many countries reduce imports which make Vietnam's export activities seriously affected - In the areas affected by the world economic crisis, the FDI sector is the most affected, which can be shown through: + Foreign direct investment fell sharply from the beginning of the year, but Vietnam remains a relatively favored address for investors around the world The phenomenon of narrowing and reducing the capital of the foreign investment enterprises is clear, but with the current positive signs, we can fully confirm that, in Vietnam, there’s no problem of foreign investors withdrawing capital in large-scale + The capital absorption capacity of the economy of Vietnam is not high is due to the "growth knots" such as infrastructure, transportation, electricity, water, the quality of human resources which don’t meet the requirements of economic development in general, and of the FDI sector in particular On the other hand, most of the foreign investment projects in Vietnam rely on bank loans in the host country, so when these countries have difficulties, the lending source will be limited and it will be difficult for investors to implement investment projects as promised + The impact of the financial crisis and global economic downturn is very different to different investment structures + Vietnam's policy in attracting FDI will not be linked to the policy of shifting the economic structure based on the target and direction of country industrialization and modernization Positive sides: Negative impacts are unavoidable, but this crisis has also brought positive things to Vietnam in the following ways: - Firstly, we now know what can happen to avoid on the road ahead - Secondly, this is a good opportunity to strengthen the domestic financial system that has a lot of problems - Thirdly, we need to diversify the export markets, along with better exploiting the domestic market - Fourthly, develop the internal resources as this is the deciding factor on the basis of strong encouragement towards the private sector and business development; solve the obstacles to the implementation of the capital increase investment including foreign investment - There is a notice that for a long time, Vietnam still mainly imports raw materials from outside and only does the processing step In textile field, enterprises now must import 70% of raw materials from abroad Many foreign suppliers of raw materials is also facing difficulties because many textile enterprises convert or reduce the demand This is an opportunity for Vietnamese enterprises to actively negotiate to find cheaper supplies, reduce the risk on their side - In terms of attracting FDI: Despite the decrease in the total number of projects and total committed capital investment and additional investment, there was a direction change in the lucrative, less risky fields as well as in areas which can ensure the highest chance of success for most projects under the impact of the global financial crisis; we also have to admit that, Vietnam is still a bright spot in the region and in the world in attracting FDI Vietnam financial system: 4.1 The situation: - Regarding the short-term capital market, also known as the currency market; overall this market has not yet developed and the Central State Bank hasn’t really played its role to intervene effectively in this market Executive Management in the currency market of Vietnam mostly still in the demanding style, and not based on the natural law of supply and demand of the market The different types of central bank interest rates: basic interest rates, refinancing interest rate, the discount rate, open market operations rate, the Treasury note interest rate, all clearly have impact on the market The operating tool of monetary policy, especially compulsory tool still lacks the flexibility Commercial banks and credit institutions compete with each other to raise interest rates to raise capital in just one direction, creating potential risks for the banks - Regarding the stock market: It can be concluded that, in the process of development of the Vietnamese stock market, the potential involvement of commercial banks is very large The fact that joint-stock commercial banks list their shares in the stock exchange center, the state joint-stock commercial banks issue shares for the first time in that center, as well as the fact that there will be some more stock trading companies of commercial banks going into operation will create the momentum to promote the Vietnamese stock market into further development 4.2 The reasons for the above situation: - The central bank is not really strong; the capacity in operating and applying monetary policy of the central bank is still limited The service activities of commercial banks and credit institutions have not been developed The process of restructuring commercial banks hasn’t achieved the expected results; especially bad debts tend to rise again There is a need to increase the chartered capital to ensure an adequate ratio according to international rules - The equitization process of the State Owned Enterprises in general and of the stateowned commercial banks in particular is very slow, this is also a hinder in the development of the Vietnamese stock market In addition, the fact that some Board of Directors of the joint stock banks is still hesitant in putting their banks’ stock into the stock market also slows down the above process 4.3 Solutions and suggestions for the development of our financial system in upcoming time: - The State Bank and the Ministry of Finance need to coordinate to increase the volume of state treasury bills tendered quarterly and annually It’s possible to increase the current frequency of auctions from session/week to sessions /week Make the bidding interest rate more flexible based on the changes in the market The bonds of the term should also be more diverse, such as 60 days, 90 days instead of only 360 days as current We should have a mechanism allowing joint-stock commercial banks and other small banks to win the bid for bonds in this market Especially, the Ministry of Finance should take measures to bring the insurance companies, the insurance organizations to join the bidding; this can prevent the waste of capital or the relationship of direct deposits with credit institutions as at the moment - State Bank should have measures to ensure the systematic feature of the Credit Fund, as well as have a more flexible mechanism On that basis, we can encourage the credit fund to join the inter-bank market and other forms of the currency market operated and organized by the central bank - The State Bank should upgrade the inter-bank market, and clearly define the final intervention role of the central bank in this market We should also try to move forwards to publicizing the interest rate of the interbank domestic currency market in Vietnam dominated by the interest of the State Bank of Vietnam - The financial intermediaries themselves need to quickly diversify its business operations, especially the operations in the currency market in accordance with international practices Commercial banks need to invest more for the operation of the securities businesses and attract non-term deposits, as well as payment services for customers They will be the individual investors in the stock market in the near future, as well as potential customers of the securities business operations that commercial banks need to focus in attracting II/ OVERVIEW ABOUT THE MC DONALD'S: Basic information about the McDonald's: Industry Restaurant Established 15th, May, 1940 in San Bernardino, California; The McDonald's Group, 1955 in Des Plaines, Illinois Founder Richard and Maurice McDonald for the concept of McDonald's restaurants; Ray Kroc, the founder of the McDonald's Group Head Office Oak Brook, Illinois, USA Number of offices 31,000 (global) Operating scale Global Key personnel Andrew J McKenna (Chairman) James A Skinner (Vice President) & (CEO) Product Fast food (hamburger · chicken · French fries · non-alcohol drinks · coffee · mixed ice-cream ·salad · dessert ·breakfast) Revenue 22,79 billion USDs (2007) Business Profit 3,879 billion USDs (2007) Real Profit 2,359 billion USDs (2007) Total Assets 29,391 billion USDs (2007) Stock Assets 15,279 billion USDs (2007) Employees 400.000 (2008) Slogan I'm lovin' it Website McDonalds.com (Source: Superbrand) The difficulties of Mc Donald in Vietnam market: 2.1 Competitors: * KFC: - KFC is the largest restaurant chain serving fried chicken with more than 10,000 restaurants in 92 countries KFC and its franchise system are creating jobs for more than 200,000 people worldwide - KFC serves more than 4.5 billion pieces of chicken every year and more than million customers a day worldwide - KFC belongs to YUM! Restaurants International (YRI) with other brands for individual products: + A&W All American Food: Hot-dog, burger, French fries + KFC: Traditional fried chicken + Long John Silver's: Seafood + Pizza Hut: pizza + Taco Bell: Taco, a dish of Mexico - Appear in Vietnam since 1997, KFC now has 82 stores in many cities across the country - The global revenue of KFC, according to Interbrand (millions USD): + 2008: 5,582 (down 1,76% compared to 2007) + 2007: 5,682 + 2006: 5,350 + 2005: 5,112 * BBQ Chicken: - Appear in Vietnam since the end of 2006, the fast-food brand Korean BBQ Chicken increasingly asserted its brand with plans to open or transfer the company's fast-food outlets - Specifically, in the company's development strategy of BBQ Vietnam, from now until 2013, in addition to 13 existing restaurants in Hanoi, this brand is expected to open to 10 stores in a number of potential streets in Hanoi such as: Hai Ba Trung, Ly Thuong Kiet, Hang Bong, Or make surveys and open more stores in the satellite cities around Hanoi such as: Hai Duong, Hai Phong, Quang Ninh, Ninh Binh,… - Not only that, in the period from 2015 to 2020, BBQ Vietnam Company has clearly planned the development direction in the provinces Accordingly, this fast-food brand will expand into other major cities such as Ho Chi Minh City, Can Tho, Bien Hoa, Ba Ria - Vung Tau, Hue, Da Nang, Nha Trang,… - Currently the franchise process has three restaurant models: The small restaurant with an area of 30-90m2 (with a total cost of the investment would be about $ 54,000), medium model (100 - 190m2), the total investment cost estimate is $ 83,000, while the large model (200m2 or more) cost around 108,300$ - In an interview with the Vietnam Quality Newspaper, Mr Sim Hwang Jin – the director of BBQ has shared: in BBQ development strategy, besides expanding the scale, the more important thing is to raise the position of BBQ brand on the market and expect it to become the No fast-food brand in Vietnam * Lotteria: The journey to Viet land - Lotteria is a fast-food brand coming from Japan, the company was named after its mother company - Lotte In 1972, the first Lotteria restaurant was opened in Japan In 10/1979, the first Lotteria restaurant in Korea was opened and quickly attracted many customers thanks to the introduction of Korean style fast food such as Kimchi sandwiches - Make its appearance in the market of Vietnam in 2004, after three years of operation, there are now 37 fast food restaurants with the brand Lotteria Currently, the fast-food chain Lotteria has had its presence in 12 provinces / cities across the country with 80 stores operating - Some special dishes of this fast-food chain which should be mentioned are potatoes mixed with cheese; greasy cheese sticks, fried chicken with bean sauce, beef rice, In addition, there are ice cream and soft drinks with special and unique taste However, the product considered as the biggest strength of Lotteria is still hamburger Hamburger is a typical dish of the Mongols, but after moving to Eastern Europe such as Hungary, it was renamed as Tartar Steak That conversion process went on and on until the end of the 19th century, it was called with the current name of hamburger - The hamburger most preferred by the customers at Lotteria is Shrimp Cheese Burger, Shrimp Burger, Kim Chi Burger, Lotteria Burger, etc Especially, with bulgogi burger, you will enjoy the typical Korean sauce which can be seen as a traditional sauce - Bulgogi sauce Bulgogi Burger is not only good in smell, but also greasy thanks to this traditional sauce * Street foods of Vietnam: - In Vietnam, even up till this present time, we can’t know the total number of bread selling bicycles, but there’s one thing that on can’t deny, is that bread selling bicycles are everywhere, from the streets to the alley Any tourists to Vietnam have to admit that Vietnamese food is very diverse - Walking around the streets a bit, you can always catch a lot of types of food such as sweet soup, rice vermicelli, soup bun, noodles, pancakes, eggs, fried fish ball, They are very diverse as well as cheap, which make them especially suitable for people With so many "competitors" like that, plus the consumption habits of the Vietnamese people who often eat in the street sides or small restaurants, it is clear that McDonald's will have to consider carefully 2.2 Other difficulties: - Vietnam's policy relating to the transfer of the franchise is still complex and tiring for Vietnamese partners wishing to become the franchise partner of McDonald's - The economic crisis in the world in general and Vietnam in particular is still happening, so the vast majority of families are gradually tightening spending, and reducing the number of meals eating at restaurants … - McDonald's prices are still high, which is difficult to compete with other competitors (especially traditional dishes of Vietnam) - The USD exchange rate fluctuates; the government has tightened foreign currency which makes the transnational business difficult Advantages of MC Donald's when entering Vietnam: - We should also see that, although there are too many competitors occupying Vietnamese market in recent time, but their entering is still quite new Thanks to brands like KFC, Lotterial, BBQ Vietnamese people now know about a new and modern "fast food" chain restaurant It can be said that these competitors have prepared the way for McDonald’s before its entering Vietnam - Despite more expensive prices than that of other brands, MC Donald's managed to confirm the quality of the food; this is also a good factor in the time that the people of Vietnam increasingly care about their health - The food source of "potato" in Vietnam has improved Before, this does not meet the requirements of MC Donald's that the potatoes in Vietnam are not round and big enough to create long French fries as required by the company But today, many new types of potatoes, which reach its standard size, have been planted on a large scale in Vietnam If we can take advantage of this, the cost of MC Donald's in Vietnam can be reduced somewhat - During the current economic crisis, many restaurants, shops, side restaurants can’t ensure the quality and food safety and was slowly replaced to make room for the modern and suitable fast-food chains - Young people and office workers now have a too busy life Some people not have time for housework, while the space of the noodle shop, can’t meet their expectations At that time, fast-food chains like McDonald's would be the optimal choice for a cozy dinner of their family or group of friends - According to incomplete statistics, there are over 81,000 foreigners working and living in Vietnam, mainly in the big cities (about 15,300 people in Hanoi, about 50,000 people in Ho Chi Minh City,) and the provinces which have foreign projects Among them, nearly 25,000 entering Vietnam to invest, 1,600 people work for the foreign representative offices and organizations, international organizations and nearly 54,000 live and work in the fields of economy, education, health, sports This is the leading source of potential customers with high-income and the habit of eating McDonald's (Source: Department of Housing and real estate market management – the Ministry of Construction) - The Income of Vietnamese people in some cities has been improved and enhanced considerably, the number of rich people in Vietnam is growing fast which is a good sign and a favorable condition for the development direction of McDonald's in Vietnam in the near future: + According to the strategy of socio-economic development of Hanoi until 2030, the vision until 2050 was approved by the Prime Minister at the end of February 2012 The strategy set out that by 2030, the people of the capital should have income higher than the national average; enjoy the high quality service, good living environment; working and investment environment can meet up with international standards, friendly and safe In particular, the gross domestic product (GDP) per capita reach approximately from 1,700 USDs / person of the present to around 7,100 - 7,500 USDs in 2020 and 16,000 - 17,000 USDs in 2030 + If in 2015, Ho Chi Minh City will reach the per capita income of $ 4,800, Hanoi approximately of $ 3,300, Ba Ria-Vung Tau has set its target up to $ 11,500 + The noticeable point is that the number of people with assets from $ million in Vietnam is growing strongly, with growth in 2011 was 33% compared to the same period in 2010 (According to CIEM, 2011) The official data and documents in Vietnam's stock market also show that in Vietnam, the number of USD millionaires has reached 170 by the year 2011 Particularly the 100 richest people in 2011, each has assets exceeding $ million, of which can reach the standard for the $ 100 million club membership - Vietnam is a country with political stability, good security, with no riots and terrorism Stable foreign investment policies focus on creating favorable and equal conditions for foreign companies as for Vietnamese enterprises The macroeconomic stabilization policies are gradually taking effect, the administrative reform is going on, the anti-corruption determination is confirmed strongly All these factors show that Vietnam is still a good and reliable investment environment for foreign investors in general and McDonald's in particular - Up to now, the franchise model has been adopted by many firms when considering entering Vietnam The laws are being gradually manipulated and clarified so that it’s appropriate for the state management as well as to create favorable conditions for investors The big bosses of Vietnam are also very quick, and among them, there must be someone who is daring enough to bring McDonald's into Vietnam The investment plan of MC Donald's in upcoming time, especially in Vietnam market: - Southeast Asia has become the favorite market of McDonald's and this is the race of all the large chains in the world such as Burgerking, Wendy's, Starbucks, Yum!, Subway To expand as fast as possible in the market has become a serious and important strategy of this franchise king - Here, it is likely that McDonald's will flexibly use all the three expansion plans applied in China which are joint ventures, franchising (franchise) and business license (Licensing) to accelerate expansion, of course, it still conform with its strict process of selecting partners The giant plans to open 750 new stores in the Southeast Asian market in the next two years - However, another important challenge of McDonald's while expanding into the world, especially in Asia, is to change the pricing strategy The price of Big Mac – the main product of the chain - is seen as a McDonald's index to measure a country's economy According to this index, the price of the Big Mac in China is the lowest after many reduction adjustments In each country, McDonald's focused on target customers who are high-leveled consumers during the earlier time it entered the market, and then slowly move the target to customers with average incomes when the system is large enough to reduce the cost The pricing strategy in Vietnam will certainly not different to that strategy - If McDonald's develop the franchise strategy in Vietnam, there’s one thing for sure, that this is the opportunity for very few people, who have the ability to spend around 800 thousand to $ 1.3 million to open a fast food of this brand And this is the main challenge of McDonald's to conquer the target of 100 stores here - French fries is just one of the items in the list of challenges that McDonald's and its franchise partners have to overcome The success of the KFC, Lotteria, Pizza Hut, or the announcement of Starbucks about possibly joining the market is also an impulse or a clear signal to his giant about a potential market of more than 80 million people - Although there’s no official notice about the market participation, but McDonald's has also given the very high and clear standards in the selection of its partners on the website of the United States Chamber of Commerce in Vietnam: The partner must be corporations with a lot of business experience, has a history of success, able to coordinate well with the parent company (franchisor), able to participate fully in the training of McDonald's in months, willing to spend 100% of the time to develop McDonald's, have experience in real estate and especially must have large amount of capital - McDonald's is the brand for all but its business opportunities are not for all (www.nhuongquyenvietnam.com) III/ CONCLUSION: The total revenue of the fast food industry of the country, according to the 2009 statistics of the Ministry of Industry and Commerce, reached about 500 billion dongs This number had increased by 35 - 40% compared to 2008, most of which came from foreign brands such as: KFC, Lotteria, Jolibee, The time for the appearance of first fast-food brand first in Vietnam is during the 90s, this shows that it took almost 15 years for the fast food industry to be really developed Therefore, McDonald's entering into the Vietnamese market is probably a ripe opportunity However, Vietnam is touching the threshold of recession, which is expected to take about 2-3 years to be able to recover from Thus, the upcoming 2-3 years is an opportunity for McDonald's to continue market research in general and build its pathways for market domination in Vietnam  ... the people of the capital should have income higher than the national average; enjoy the high quality service, good living environment; working and investment environment can meet up with international... business environment of Vietnam: 2.1 FDI into Vietnam in recent time: - According to the Foreign Investment Department (the Ministry of Planning and Investment), the total foreign direct investment... policies of attracting FDI into Vietnam today; they are reflected through the fact that the attracting, use and management activities of foreign investment over time have revealed a number of limitations