FOREIGN TRADE UNIVERSITY

HO CHI MINH CAMPUS

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GRADUATION INTERNSHIP REPORT

Major: External Economics

SALE ACTIVITIES OF STRAW HAT

IN INTERNATIONAL MARKET
AT HOANG LONG HANDICRAFT CO LTD

Student’s Name: Tran Thanh Phu

Student’s Number: 1401015442
Class: CLC2
Course: K53
Supervisor: PHAM HUNG CUONG (Ph. D)

Ho Chi Minh City, April 18th, 2018

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 TABLE OF CONTENT
ACKNOWLEGDEMENT ........................................................................................ 1
Chapter 1. INTRODUCTION ABOUT HOANG LONG HANDICRAFT
COMPANY LIMITED. ............................................................................................ 3
1.1. Establishment and development ....................................................................3
1.1.1. General information about Hoang Long Handicraft Co. Ltd. ......................3
1.1.2. Establishment history ........................................................................................4
1.1.3. Development of company ..................................................................................4
1.2. Function, mission, structure of company and human resource .................4
1.2.1. Function, mission and vision of the company ...............................................4
1.2.2. Structure of company .....................................................................................5
1.2.3 Human Resource situation ............................................................................7
1.3 Business results in stage 2014-2017 ...............................................................9
1.3.2 Overall income ..............................................................................................9
1.3.3 Net profit of the firms ..................................................................................10
1.3.4 Before tax profit ...........................................................................................11
1.3.5 After tax profit .............................................................................................12
1.4 Role of sale activities straw hat in international market at Hoang Long
Handicraft Co,. Ltd. ................................................................................................13
1.4.2. Consumption market .......................................................................................13
Chapter 2. SALE ACTIVITIES OF STRAW HAT IN INTERNATIONAL
MARKET AT HOANG LONG HANDICRAFT CO LTD. ................................ 17
2.1. Sale activities of straw hat in international trade .........................................17
2.1.1. Growth Revenue in stage 2014-2017 ..............................................................17
2.1.2. Revenue structure gained from Straw hat by market ......................................18
2.1.3. Revenue structure gained from Straw hat by profit ........................................20
2.1.4. Price export .....................................................................................................21
2.1.5. Export turnover ...............................................................................................21
2.1.6. Delivery terms .................................................................................................22
2.1.7. Payment terms .................................................................................................22
2.2. Evaluation of sales activities ............................................................................23
2.2.1. Achieved result ................................................................................................23
2.2.2. Disadvantages .................................................................................................23
Chapter 3. THE OUTLOOK, ORIENTED DEVELOPMENT AND
RECOMMENDATIONS FOR HOANG LONG HANDICRAFT CO., LTD. ..25
3.1. The outlook of straw hat sale activities in international market ................ 25
3.2. Hoang Long Handicraft Co. Ltd.’s orientation for future development of
straw hat and others. .............................................................................................. 25
3.3. Recommendations for Hoang Long Handicraft Co., Ltd. ........................... 26
3.3.1. Solution 1. Enhancing skill of sales team....................................................... 26
3.3.2. Solution 2. Competitive price ......................................................................... 28
3.3.3. Solution 3. Payment policies .......................................................................... 28
CONCLUSION ........................................................................................................31
REFERENCE
 TABLE OF ABBREVIATION
ABBREVIATION FULL NAME
AFTA ASEAN Free Trade
Co., Company
D/P Documents against payment
E.U European Union
GDP Gross Domestic Products
Ltd Limited
L/C Letter of credit
T/T Telegraphic Transfer
WTO World Trade Organization
VAT Value added tax
 TABLE OF FIGURES

Chart 1.1 Structure of company ............................................................................ 7

Table 1.1.Human Resource in 2017 ...................................................................... 8
Table 1.2 Human resources in 2014 - 2017 period ............................................... 9
Graph 1.1 Sale activities by total revenue in stage 2014-2017 ............................. 10
Graph 1.2 Cost and profit in total revenue in stage 2014-2017 ............................ 11
Graph 1.3 Population leader board ...................................................................... 14
Graph 1.4 Sale activities by products in 2014 – 2017 .......................................... 15
Graph 2.1 Sale activities of straw hat versus revenue .......................................... 16
Graph 2.2 Revenue structure gained from Straw hat by market ........................... 18
Graph 2.3 Revenue structure market of Vietnam in 2015 .................................... 19
 1

ACKNOWLEGDEMENT
Having been through much historic volatility, Vietnam has been
accomplishing several certain and memorable achievement ranging from Politic,
Diplomacy to Economy and Society. On May 11th 2007, Vietnam officially became
150th member of the biggest international commercial organization – World Trade
Organization (WTO). Up to now, every inch of economic activities and transaction
has been improving significantly, accompanied by external factors. Especially,
foreign trade activities have played integral role in Vietnam’s economy. When it
comes to foreign trade, outward processing, lodestar of economy, cannot be ignored.
Along with geographic advantages, long-standing economic basis, Ho Chi
Minh has been regarded as one of the most essential commercial center of exporting
and importing of Vietnam for ages. According to “Statistical Office in Ho Chi Minh
City”, there will be more than 500.000 enterprises from small and medium sizes in
Ho Chi Minh City at the year of 2020. That will contribute significantly to Vietnam’s
GDP. Moreover, nowadays, there are a lot of companies evolving commercial
transactions raging from trading, manufacturing, merchandising, and logistics. All
of these activities have created a dynamic city which attracts many foreign
investment and attention of outside buyers. Proudly speaking, becoming one of
leading manufacturers and exporters of agricultural products, HOANG LONG
HANDICRAFT CO., LTD is one of typical enterprises for its reputation about
professionalism, creativeness and enthusiasm in phase of adaption to changes in
Vietnam’s economy.
Given above-mentioned preeminent features, the writer has chosen subject
name: SALE ACTIVITIES OF STRAW HAT IN INTERNATIONAL
MARKET AT HOANG LONG HANDICRAFT CO., LTD”.
The report has three main chapters:
Chapter 1: Introduction about HOANG LONG HANDICRAFT CO., LTD.
Chapter 2: Sale activities of straw hat in international market at Hoang Long
Handicraft Co., Ltd.
Chapter 3: The outlook, oriented development and recommendations for
Hoang Long Handicraft Co., Ltd.
 2

During process of writing this report, I have been assisted by many colleagues
in Hoang Long Handicraft Co., Ltd. Specially Ms. PHAM LE PHUONG THAO,
vice director of the company, has given chances to experience, learn and get access
to practical exercises. Besides, I would like to say special thanks to Mr. PHAM
HUNG CUONG in guiding me to write the report.
Due to short-term internship at company and also lack of experience, my
report cannot avoid some unexpected mistakes. I hopefully receive good feedbacks
from the lecturers and supervisor to help me to improve myself and future jobs.

Student

TRAN THANH PHU

 3

Chapter 1. INTRODUCTION ABOUT HOANG LONG HANDICRAFT

COMPANY LIMITED.
1.1. Establishment and development
1.1.1. General information about Hoang Long Handicraft Co. Ltd.
1.1.1.1 Basis information about tax code, official name, …
According to decision of Ho Chi Minh Department of Planning and
Investment published in 20 April 2008.
- Company’s officially registered name: CÔNG TY TNHH THỦ CÔNG
MỸ NGHỆ HOÀNG LONG.
- English name: HOANG LONG HANDICRAFT CO., LTD,
- Tax code: 0308240660
- Main office: 276/17/25 Ma Lo Street, Binh Tri Dong A ward, Binh Tan
district, Ho Chi Minh city, Vietnam.
- Telephone: +84 28 6266 1527
- Fax: +84 28 6266 1527

- Logo:
- Slogan: Quality the first.
Business principles in international trade.
“Quality the first” is the company slogan. The director board also considers it
as the business’s principles in the international trade. With all of experiences in
international market, Hoang Long Handicraft Co., Ltd always treated their customers
as a priority to remain a long term relationship and efficiency. The director board
always bears in mind that there is no place for cheating or low qualified products to
stand in the international trade. The more professional the company is, the better it
will gain.
Given the customer’s insight that people do not want to waste money for low
quality products and not willing to pay much. Therefore, the company always aims
to the goal which can offer a competitive price for their buyers but remain the quality.
 4

Thanks to those business’ principles, Hoang Long Handicraft Co., ltd, has been
achieving a stable position in international trade, which is very severe to many
enterprises.
1.1.2. Establishment history
In 2008, realizing the demand for handicraft products, HOANG LONG
HANDICRAFT CO., LTD, was officially established and legally registered under
the law with the total capital less than $10.000.
During developing period, HOANG LONG HANDICRAFT CO., LTD, have
3 factories in the west of Vietnam, specifically in Tien Giang province, with output
capacity of more than 300000 products/month. That created a huge number of 200
job opportunities for local people.
Their products are mainly focused on: straw hats, palm leaf products and
wooden products. The products have been accredited to E.U standards, as the
completion is becoming fiercer and fiercer nowadays.
1.1.3. Development of company
From 2008, Hoang Long Handicraft Co., Ltd has been exporting to a wide
range of countries around the word such as: Germany, China, Russia, India, Togo…,
and have been received many good feedbacks from the clients and customers for the
handicraft products.
In June 2008, the company has received the first order of straw hat to India for
supplying 1 20ft full load containers with the total value of $12.000. That was not
only the first order of company but also as a milestone of developing. On account of
that incident, the company oriented its own direction.
After 5 years, company has received lots of orders from many countries around
the word ranging from Africa to Mid-Asia and East Asia. Therefore this can be
evidence for a demand of this kind of product.
From 2016 to now, the company has been planning to broaden the scope of
products to have other kinds of products as fresh fruit, canned fruit and so on.
1.2. Function, mission, structure of company and human resource
1.2.1. Function, mission and vision of the company
1.2.1.1 Function of the company
 5

Manufacturing and supplying good handicraft products from high-skilled

workmanship with competitive price. The company also receives orders from
customers to process their products based on the ready designs. That is one of
advantages of Hoang Long handicraft Co., Ltd as a manufacturer
Besides, Company have to perform customs declaration for exporting
activities. If company have any payment made by L/C, company have to present all
the necessary documents to be a beneficial party.
1.2.1.2 Mission of the company
The Company is trying to be a leading supplier of top quality handicraft
products. By that way, company can help the local people to earn high income to
increase life standards.
Moreover, it has an aim to be a trader in international market with mission to
provide fresh fruits at high quality but competitive price. They hope to be a supplier
and able to bring Vietnamese products to global market in order to affirm Vietnam
brands. Provide C/O as customer’s request for clearing customs.
1.2.1.3 Further vision of the company
With more than 10 years in international trade, the firm will develop as a
leading and trustworthy manufacturers and exporters of handicraft products to bring
Vietnamese high quality product to be on high position in international trade.
Becoming a trustworthy enterprise which foreign buyers including firms and
individuals can reply on.
1.2.2. Structure of company
1.2.2.1 Overview about structure of Hoang Long Handicraft Co., Ltd
Hoang Long Handicraft Co., Ltd has 7 main departments with its separate
functions. Each department has a separate director. All departments will assist each
other and share information to each to get the highest result in working. Starting with
the Head Director, Financial Department, Purchasing Department, Sale department,
Human Resource department, Export and Import Department.
As Hoang Long Handicraft Co., Ltd is a manufacturer with separate office and
factory. Hence they have to get a separate department apart from head office in Ho
 6

Chi Minh City. The factory department is located inside factory where manager can
supervisor the process in factory.
General information about each department’s functions:
Vice Directors: there are two Vice Directors in Hoang Long Handicrafts Co.,
Ltd. Their main functions are to manage the manufacturing line in the factories; give
decision to each contract gained by sale department; be the only representative of the
company, be responsible for all company’s activities under the law.
Financial Department: There are one person who takes charge in this
department. The main functions of departments are: manage the financial factors of
company, calculating the salary for the workers depending on time, productivities,…,
making payment for any costs arising from company’s activities such as: banking
charges, exporting duties, and other charges,…contact with outside companies as:
banking, custom offices…, collect fee and other liabilities.
Sale Department: This department is the most important in company besides
Director. As they have functions to find new customers for the company, conduct sale
contract, keep in touch with the old customers to maintain the relationship, conduct
strategies, planning marketing strategy for new products; cooperate tightly with
purchasers to get best price for the customers…
Export and import department: In this department, they have to perform custom
clearance, get certificate of origin for the products in order to export, contact with the
carriers and forwarder to get quotation for shipment, place delivery order, get B/L to
perform with the Buyers and Banks, supervise the delivery so as to keep the delivery
on time…
Purchasing Department: The main functions of this department are: find
suppliers to get best price from them to help sale executive in advertise the products,
contact suppliers to get material for producing, supervise of buy contract between
company and suppliers…

Chart 1.1 Structure of company

HOANG LONG HANDICRAFT CO., LTD

 7

VICE DIRECTOR

FINANCIAL SALE PURCHASING EXPORT-IMPORT

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

HUMAN RESOURCE

Source: Hoang Long Handicraft Co., Ltd, 2018

Factory manager: The main functions of this department are managing
manufacturing activities, promoting productivity, supervising workers, quality,
assure output quantity and others relevant matters.
Human resource department: The main functions are recruitment, training new
staff to help them be able to work in new environment and also caring for the life of
current staffs in company…
1.2.2.2 Comment about its structure
With a reasonable structure of the company, the firm has been operating
smoothly. Their department works effectively and mutually. Those things have
brought about a lot of benefits. However, this conversely imposes high pressure on
company’s finance. The director board is thinking about a plan that can cut down the
amount of workers but still bring the same efficiency.
This issue cannot be solved in a short time. It needs a lot of effort between
director board and the staff who working in the office also in the factory.
1.2.3 Human Resource situation
1.2.3.1 Human resource in 2017.
As can be seen from the table below, the numbers of workers and staff have
been increasing remarkably, along with improved skills of employees who work in
factory and high quality staff working in office as well, 94% and 41.6% respectively.
The reasons are, company are developing with many inquiries and orders from
 8

customers day by day, therefore to keep the pace of supplying requires the factory to
speed up their productivity by hiring more workers and train higher skill for the
workmanship as well. Thanks to the development of technology and education, better
and better demand of executives becomes.
The most striking feature is the gender gap in factory (15% male, 75% female).
Concerning typical industry, making one handicraft product is required carefulness,
meticulousness, hardworking and also devotion…that create typical characteristics
dominating women.
The reason why there is a high different in cultural level-qualification between
workers who work in factory and who work in office is that in factory, they just need
labor who can work and create tangible values like products.
In comparison with the one who work in office, they have to use not only their
manual labor but also their brainwork in order to have customers, and connect
customer with the company
Table 1.1.Human Resource in 2017
Unit: People

Number of
Cultural level - qualifications Ages
staffs

Fema Univers Interme

Male College Tertiary <30 30-45 >45
le ity diary

Quantity Q % Q % Q % Q % Q % Q % Q %
Factory 5 30 0 0 0 0 0 0 30 100 27 77 6 17 2 6

Office 2 10 8 80 2 20 0 0 0 0 8 80 2 20 0 0

Total 7 40 8 2 0 30 35 8 2

Source: Hoang Long Handicraft Co., Ltd, Human resource department, 2018

This happens the same to age. As this industry is new and required fast pace
of getting latest information about market and clients. Therefore, it is suitable only
for the age from 20 to 35.
1.2.3.2 Human resource in 2014 – 2017 periods.
 9

In recent years, human resource in company has been changing significantly.

As this industry has extreme elimination feature for its fierce competitiveness, wide-
range language distance, frequent business trip...
Table 1.2 Human resources in 2014 - 2017 periods
Unit: People
Year
2014 2015 2016 2017
Place
Factory 19 18 24 35
Office 6 7 12 12
Source: Hoang Long Handicraft Co., Ltd, Human resource department, 2018
As can be seen from the above table, in the 2 early years of period, there was
not a change in the amount of working labors. However, this figure was continuously
increasing in the next 2 years. The first reason is that Vietnam has a young population,
which is in working period about 70%. The second is due to the development
company’s policies.
1.3 Business results in stage 2014-2017
1.3.2 Overall income
The company went into function in early 2008; therefore company has also
gained some certain achievement in income. However, due to economic crisis in
2008, Hoang Long Handicraft Co., Ltd, also faced some financial difficulties, besides
on the early stage of foundation, company found no way out to find customers in
those days. As many country had turned to long-standing enterprises in order to save
their domestic market country.
Moreover, in 2014, political state between Vietnam and China’s became
stressing, because China had placed an illegal HD981 drilling platform in Hoang Sa
Archipelago. That created many barriers preventing enterprises in Vietnam exporting
their own products to China, which was deemed as biggest market of Vietnam for the
mean time.
The graph below gives a breakdown of income gap of company in stage 2014
– 2017. After political crisis in 2014, enterprise had recovered from that dark point
of economy to be able gain customers from China market.
 10

Graph 1.1 Sale activities by total revenue in stage 2014-2017

Unit: US Dollars

250,000 230,000
217,040
200,000 185,500

150,000
USD

100,000

50,000 30,000

-
2014 2015 2016 2017
Year

Revenue

Source: Hoang Long Handicraft Co., Ltd, Accounting office, 2018

Specially, in 2015, due to a member of ASEAN Free Trade Agreement
(AFTA), Vietnam was reduced the import tax by ASEAN countries. That was a
memorable mark of Vietnam economy in general and Hoang Long Handicraft Co.,
Ltd, in specific. Since then, Hoang Long Handicraft Co., Ltd has explored a new
market for their products that made an increase in revenue.
1.3.3 Net profit of the firms
Profit is the most important thing that every enterprises focuses on while doing
business. Without profit, there will be non-trade market, which will lead to the
collapse of the economy. However, to run the business, the managers also have to
face many cost and fee while exporting. We can name some as: export tax, document
fee epically Fee for Certificate of Origin, Fumigation fee… logistics cost and so on.
Therefore the question of how much profit is enough to run and maintain the business
is always a very difficult question to answer.
Graph 1.2 Cost and profit in total revenue in stage 2014-2017
Unit: US Dollars
 11

27,000
2014 3,000
30,000

129,850
2015 55,650
185,500
Year

149,500
2016 80,500
230,000

141,076
2017 75,964
217,040

- 50,000 100,000 150,000 200,000 250,000

Cost Profit Total Revenue

Source: Hoang Long Handicraft Co., Ltd, Accounting office, 2018

As can be seen from the graph above, we can see after each contract or
shipment the firm get high total revenue. However, revenue doesn’t mean high profit.
Because, as buyers, people always want their products to be ready-to-use. They just
want to pay for one company, and for one time. Hence, Vietnamese enterprise,
specifically Hoang Long Handicraft Co., Ltd, as a seller, has to share the transaction
cost with the buyer, that mean they have to apply CIF, CNF, CPT, CIP incoterms
basis. Not mentions to the government’s policies do not support small and medium
size exporting enterprises well. Many taxes such as: exporting tax, enterprise income
tax, individual tax… along with bank charges, export duties fee… are distributed to
revenue. After all, the exact amount of profit is not high as the revenue. In some
situation, the seller has to discount the price for the buyer to show their willingness
in doing business. Those make the profit near to zero or just by 5 to 10 percent of
revenue.
1.3.4 Before tax profit
Main product of Hoang Long Handicraft Co., ltd is straw hat which was made
from straw. According to degree 122/2016/NĐ-CP the company must apply for 0%
of the export tax to foreign countries in the world with the HS code 1213.0000.
 12

Thanks to some political policies, the material to produce straw hat is apply 0% tax
rate. This helps the enterprise a lot to reduce the have-to-pay for the tax.
Source: Vietnam Custom Government, 2017
However, besides export tax rates, the company also has to face the company
income tax. This tax rate is 20% based on income of the company. This income will
be calculated based on the commercial invoice that the company would release to
their customers. In some special cases, for small value invoices, the firm can export
under non-commercial method. With no need to pay for export tax rate, and this also
helps theirs customers to avoid paying for the import tax rate which somehow could
be up to 5-10% per shipment.
Furthermore, the firm also need to pay for Value added tax at 10% for using
logistics services and some other fee while register document with Official Legal
Department.
1.3.5 After tax profit
Thanks to Vietnam’s policies support for exporting activities, whenever one
firm can export its products worldwide, Vietnam government will support them by
revert the VAT (Value added tax) for the company. However, this amount is too small
for Hoang Long Company, because almost the material needed for production is
applied 0% VAT.
After all types of tax and cost, the true profit that the firm can earn is very
limit. It can be max 30%, otherwise due to some unexpected problem that happened
to the shipment, the firm can get very low profit.
Besides, there are also many risks that Hoang Long Handicraft Co., Ltd have
to face as: late delivery, nonpayment, late payment, fluctuated exchange rates…
originated from fraud company or non-prestige carriers. These are contributing
directly to company’s financial problem.
In conclusion, the total revenue of company at current state is stable and has
an upward trend but the profit is not really high, just equal to 5-10 percent of total
revenue. This mainly comes from Straw hat products; meanwhile, other products
like basket, fresh fruits, hardly bring high revenue. In next part of this report, the
writer will explain the reason why straw hat products can gain top revenue.
 13

1.4 Role of sale activities straw hat in international market at Hoang Long
Handicraft Co,. Ltd.
1.4.1. The demand of the product
With the explosion in the development of technology, the buyers nowadays
can get easily access to the manufacturers and the real seller. That means they can
reduce lots of waste money. Therefore, after searching on search engine for business
as: Google, Alibaba, Tradekey…, we can see there are trillion of request of handicraft
products in general and straw hat in specific. In details, there are 3 720 000 results
for the key words buyer straw hat/ straw hat manufacturer. The same happens to us
when searching on Alibaba and Tradekey, which are the two biggest E-commerce
markets nowadays. (Source: Google search engine, 2018)
Besides the end buyers, there are thousands of traders who are ready to buy
the products from Hoang Long Handicraft Co., Ltd and resell them in domestic
market and also in international market.
All of those things together create a big demand for handicraft products in
general and straw hat in specific.
1.4.2. Consumption market
Not surprisingly, the largest countries in the word in terms of population
are China and India, with both now having populations of well over a billion.
The United States comes in third with just under 325 million residents. The BRIC
countries (Brazil, Russia, India and China), generally regarded as the four major
emerging economies expected to dominate in the 21st century, are all in the top ten
most populous countries, indicating how important the sheer size of their populations
are to their economic expansion.
However, a number of countries considered by the International Monetary
Fund to be developing countries (that is, having not achieved a high degree of
industrialization relative to their populations, and where the population typically has
a medium to low standard of living) also have sizeable populations,
including Nigeria (over 190 million), Bangladesh (almost 165 million)
and Mexico (around 129 million), demonstrating that the issues affecting developing
nations span multiple continents.
 14

The directors of Hoang Long Handicraft Co., Ltd consider India, China, UAE,
and some countries in Europe are the biggest market that the firm aims to sell. Due
to high population of China, India…, which create a huge demand for straw hat,
China and India are the 2 biggest markets that can consumes the company’s product
most.
Graph 1.3 Population leader board
Unit: Millions

China

India

USA

Indonesia

Brazil

Pakistan Population

Nigeria

Bangladesh

Russia

Mexico

0 500 1000 1500

Source: Bloom berg, Population Reference Burea, 2017

1.4.3. Role of sale activities straw hat in general income of company

As the manufacturer of handicraft products, Hoang Long Co., Ltd has a wide
range of products as: straw hat, broom, bamboo basket, water hyacinth basket…
However not any kind of product can bring high revenue or high profit.
The majority of total revenue was dominated by straw hat, namely 55%. Next
coming to basket products is contributing a proportion of approximately 21%.
Meanwhile, handmade gifts and broom ranked third and fourth respectively. Fresh
 15

fruit showed a reversal picture to straw hat. This kind of products accounted for the
least amount of company’s income, just about 7%.
The reasons for those statistics are coming from latent defect factors. For
example, fresh fruits are always easy to be rotten if they are not safely kept in good
condition. However, when it comes to preservation of fresh fruits, many new affairs,
especially cost, arising such as cost of hiring reefer container, cost of
preservation…that distributed directly to the revenue that can be gain from fresh
fruits.
Graph 1.4 Sale activities by products in 2014 – 2017
Unit: Percentage

60%

50%

40%
Sales
30%
55%

20%

10% 21.00%
9% 8% 7%
0%

Source: Hoang Long Handicraft Co., Ltd, Accounting office, 2018

Not like fresh fruits, straw hat products are hard to be damage. They are strong
structure, and easy to be shipped by dried container which is much cheaper than other
products. Besides, company’s main market is China, and mid-east Asia, which have
a tropical climate. That leads to a huge demand for this item.
Sub-conclusion: In this chapter, the writer has already summarized about
general information of Hoang Long Handicraft Co., Ltd. The writer also shows the
whole economic picture of the firm through years and its income by products. We
 16

can see that there are many factors that can affect to sale activities of the company.
Somehow, this part also shows to the reader the overview about hindrances and
benefits that the enterprise have to face in international market.
 17

Chapter 2. SALE ACTIVITIES OF STRAW HAT IN INTERNATIONAL

MARKET AT HOANG LONG HANDICRAFT CO LTD.
2.1. Sale activities of straw hat in international trade
2.1.1. Growth Revenue in stage 2014-2017
As having been mention in previous part of this report, the total revenue of
Hoang Long handicraft in general, and of straw hat in specific, is increasing
significantly day by day. However as the rule accept no exception, sale activities of
straw hat in early stage of company is not better in 2014. Only after 2014, the sale
activities of straw hat had some new step in getting new customers along with new
market demand for the item.
Graph 2.1 Sale activities of straw hat versus revenue
Unit: US Dollars

250,000 230,000
217,040
200,000 185,500
170,000 165,000
150,000
USD

100,000 92,000

50,000 30,000
17,000
-
2014 2015 2016 2017
Year

Total Revenue Straw hat's Revenue

Source: Hoang Long Handicraft Co., Ltd, Accounting office, 2018

The graph points out clearly that the increasing in total revenue means
increasing in straw hat’s revenue. Revenue gained from straw hat contributes greatly
to company’s total revenue. For that reason, the company has showed its right
oriented direction to take. The higher demand of straw hat increases, the higher
revenue of the firm could gain. As recently reports, nowadays, the demand for straw
 18

hat is increasing day by day. Specifically, in some internet commercial website called
B2B such as alibaba.com, tradekey.com, amazon.com… the average price of a straw
hat coming from Vietnam is about $30-35/species, that means 5-6 times higher than
the price selling in domestic market.
Also mentioned in previous part, in 2015, as a member of AFTA, Vietnam has
been cut down the import tax to ASEAN country. Those countries are such an
unexplored and brand new market for Vietnam enterprise to exploit. In next part, the
writer will show how Hoang Long Handicraft Co. Ltd, penetrate to international
market. Back to the main point here, the revenue that can gain from straw hat products
is increasing significantly after 2014, which was five-fold in 2015, and ten-fold in
2016.
However, the high revenue doesn’t always come along with high profit. Tax,
duties, charges, transaction cost, risk… all contribute to the revenue and cut profit
down to, sometimes, 2-5% of total revenue. If the company wants to increase high
profit, they have to increase the price in straw hat, but that would lead them out of
international market which have many suppliers and manufacturers be ready to jump
in the market. For that reason, the company have to accept low profit in return to get
high revenue, which will, somehow, make up for the company’s activities.
2.1.2. Revenue structure gained from Straw hat by market
In general, the main market of Hoang Long Handicraft Co. Ltd, is China,
India, and ASEAN Countries which have large demand on the product. Besides, the
firm also integrates into United State of America, Russia, or France… but those
markets are contribute a small proportion in total revenue of company. China and
India are the two biggest market for handicraft products in general and for the straw
hat product in specific. As those two countries have nearly the same culture to
Vietnam’s. Moreover, those countries have the highest population in the world. That
leads to high demand on products (including handicraft products).
The statistic will be showed clearly in the graph below:
 19

Graph 2.2 Revenue structure gained from Straw hat by market

Unit: Percentage

Others, 4%
Spain, 5%

ASEAN
Countries, 16%

China, 43%

India, 32%

Source: Hoang Long Handicraft Co., Ltd, Accounting office, 2018

It’s easy to be seen from the chart, China is the largest market consuming
Hoang Long Handicraft’s products. It’s a strong evidence that demonstrate the reason
why in 2014, due to political crisis, the total revenue of the firm drops significantly.
When the political situation is not stable among countries, the domestic firms find it
extremely hard to export their products, find new customers… not mention to the
countries, sometime, apply strict rule to prevent exporters penetrate to their own
market.
In 2016, the export markets of Vietnam mainly came from Asia with a turnover
of more than $US 85.28 billion, accounting for 48.3% of total exports of Vietnam. In
particular, the main export markets of Vietnam included China with a turnover of
more than $US 21.97 billion, an increase of 28.4% compared to the same period last
year, accounting for 12.4% of total exports of Vietnam; the Japanese market with a
turnover of nearly $US 14.68 billion, an increase of 3.9%, accounting for 8.3%; and
the Korean market with a turnover of nearly $US 11.42 billion, an increase of 28%,
accounting for 6.5%.
 20

Graph 2.3 Revenue structure market of Vietnam in 2015

Unit: Million USD

40
35
30
25
20 2014
15 2015

10
5
0
USA China Japan Korea HongKong UAE

Source: Nguoi Dong Hanh News, 2016

As can be seen from the graphs, the total amount of quantity exported from
Vietnam to China dropped down heavily in the year of 2014 compared to the 2015
year at 0.84%.Therefore, we can realize how Vietnam’s economy relied on China’s.
Hence, as an inseparable part of economy, Hoang Long firm also faced the same
results. This explains the decrease in revenue and revenue structure market of Hoang
Long Handicraft Co Ltd for.
2.1.3. Revenue structure gained from Straw hat by profit
As mentioned in previous part of the report, the revenue earned by straw hat
make up to 55% total revenue of the firm. Beside after eliminating all tax and cost,
the profit that straw hat bring to the company is very high and competitive.
It is easily to figure out the sales activities comes mostly from India, China
and Spain, because of its high population, development of agriculture industry…
However, nothing is perfect. When comes to disadvantages of these two
largest market, we can clearly see that the political situation is not stable, along with
requirement for cheap price in products. About political situation, China always
wants to expand its dominant to surrounding countries, forces surrounding countries
(including Vietnam) reply on China ranging from Politics to Economy. Therefore, if
there are any fluctuations in their own market, exporters from Vietnam will surfer
 21

crisis in their sale activities. Moreover, enterprises from China and India, as a buyer,
always request for cheaper price than that of in their domestic market. That makes a
lot of difficulties for Vietnam’s firms.
2.1.4. Price export
When getting new inquiries about straw hat, the firm will calculate many
things to give the customers the best quotation such as: cost of logistics, tax, labor…
This can be calculated easily as the following formula:
Price =
Quantity * Input price+ Logistics cost + Tax+ Net profit + Others
Quantity
For examples, we have an inquiry of 10 straw hat, with the price for producing
a single hat is $32. We will have 10*32= $320. The inquiries require receiving CFR
Chittagong, Bangladesh, and the cost of shipping is $40/shipment with all in price.
Now we have 320+40=$360. Fee of fumigation, documents, tax, others… to be sum
up is $60. The net profit for each shipment is 40$. In the end we have
360+60+40=$460. Then providing to 10 pieces, we will have the latest price about
$4.6/pcs. The latest price is 1.5 times higher than the original one.
However, if there are some unexpected problem happens to the shipment. We
need to compensate for it to keep the relationship. At the end, the firm earns not much.
2.1.5. Export turnover
Due to annually report of Vietnam custom, to the end of November 2017, the
export turnover of handicraft products increase 23.5 million USD, which increase the
export turnover to 242.9 million USD contributed to 2.64% higher than that of
November 2016.
Among the international trade, due to Vietnam custom, United States of
America is the biggest consumption, which counts up for 20.1% the total of the
turnover, however when comparing to the same time at 2016, it is decrease
significantly 13.44%.
With the total revenue of $217040 in the year of 2017, Hoang Long Handicraft
Co., ltd made up to 0.9% of the total. The firm aim to increase this finger to 1.2% in
the following years.
 22

2.1.6. Delivery terms

As an integral part of international trade, the firm strictly obeys the rule of
Incoterms 2010 which was widely applied in the world now. CFR/CIF/FOB are the
three popular terms that the company apply in international trade.
With CFR or CIF terms, the company has to face many problems which can
be named as: financial problem, documents problem… Because when we apply CFR
or CIF terms, the company needs to cover all the shipping cost from Vietnam to the
buyer’s destination port. Which, sometimes, can bring back many dangers such as:
damages due to delivery time, the document do not accord with the LC on the surface
of documents… The most important thing is that, due to Incoterms 2010, the
responsibility of the seller is enhancing to when the buyer get their shipment at the
destination port. And furthermore, Vietnam has never had much voice in international
abbreviation court.
It’s been a long time and considered as a practice of many firms in Vietnam
that, we usually apply FOB terms in every contract to limit the responsibilities of the
Seller and danger we have to face.
2.1.7. Payment terms
The most important thing and priority in every negotiation is the payment
terms. As the seller, the firm always put this term in the top of every discussion.
Normally, Hoang Long Handicraft Co., ltd just accept Telegraphic Transfer with
advanced of 30% and the balance will be transferred against copied documents.
However, to some specific situation, especially while working with the Indian
Company, they hardly accept payment with high amount of money. At this time, the
company accepted a new method by dividing the payment into 3 steps to reduce the
percentage of advanced payment that they have to pay. The first payment is 10% to
maintain the price for 2 week in order for them to be able to place order. The second
payment is 20% as advanced payment. The 70% is transferred against documents.
Besides TT, the firm also accepts Irrecoverable Letter of credit (L/C) at sigh 100%
issuing be a reputable bank in international.
The firm does not accept any late delivery or payment after the cargo has been
shipped. Easily understood that the firms cannot face to any financial problem to
 23

maintain the business and to keep away from fraud in international trade, that are
somehow the disadvantages of the firm.
2.2. Evaluation of sales activities
2.2.1. Achieved result
For years, thanks to organization’s policies and manager board’s decisions,
the company has become stronger and more experienced in international trade. They
have not met any spam, scam or cheaters from other countries.
Hoang Long Handicraft Co., Ltd has been developing faster and firmer. They
have been establishing good fame in international trade. The company gains more
and more inquiries from customers through all over the world, which create many
works for the labors in their area. Indirectly, they have been increasing the standard
of living for the residents.
Besides, as an inseparable result, Hoang Long handicraft Co., Ltd along with
other handicraft exporting companies in Vietnam have gained good fame for their
quality and earned many achievements in international market. That makes Vietnam
becomes a trustworthy country that buyers, customers and importers can reply on.
Thanks to clear decision from manager board, the company has protected
themselves from cheaters and loss in trade. Requirement for a deposit or payment by
Letter of credit made them more and more secured in international trade where people
are always ready to cheat the others to gain benefits.
2.2.2. Disadvantages
However, in return, the company also faces many disadvantages during its
operation.
First to come, due to the strict policies in payment terms, the company has left
many customers whose policies are payment after receiving goods. Not any
customers are scammers but the policies of their company are not allowed them to
pay advanced or even to get the LC in contrast. Because in some countries, especially
United State of Emirates, India, Iran, Nigeria,… the fee of opening Letter of credit is
sky-high. That will make their margins down to zero, but they cannot accept payment
in advance as well. That makes the company lost lots of customers from these
countries.
 24

Secondly, the company must think about warranty and insurance term. So far,
when signing contract with European countries, the customer always required for the
insurance term in the contract which Hoang Long Handicraft Co., ltd hardly accept
this term.
Thirdly, the sales team is old and need to renew. The sales team of Hoang
Long handicraft Co., Ltd is becoming older and older. They cannot meet the
development of technology. As we know today, even in a second, the world has been
changing. If we do not catch up with the development of technology, we will be left
behind. Thanks to technology, making payment is now becoming easy and easier.
Not like in the past, where people need to go to the bank and do the remittance, now
they totally can use global services provided by many famous companies as Pay Pal,
Global pay… That makes the sales team cannot absorb due to their ages.
Sub-conclusion: In this chapter, the writer also shows the details about sales
activities of the firm compared the total revenue provided by market, countries… In
this chapter, the writer also clarify about the company terms. Showing that there are
still some advantages and disadvantages separately by their policies.
 25

Chapter 3. THE OUTLOOK, ORIENTED DEVELOPMENT AND

RECOMMENDATIONS FOR HOANG LONG HANDICRAFT CO., LTD.
3.1. The outlook of straw hat sale activities in international market
According to Professor Philip M. Parker, in “The 2016-2021 Outlook for
Women’s, Girls’ and Infants’ Straw Hat in Asia” the demand for straw hat products
is increasing significantly these days. The reason comes mostly from global warming,
war, drought, desertification…which many countries, especially in mid-east Asia,
Africa and North America are facing. (Philip M. Parker, 2016, page 3).
In recent report about CPI by General Statistics Office of Vietnam said that, from
October 2016, consumption of straw hat increased 0.5%. That is a slight signal for
the enterprise in the industry. (Source: General Statistics Office of Vietnam’s post
published in October 2016)
Besides, Vietnam’s joint in international trade organization has created many
benefits to Vietnamese enterprises. Among them the most remarkable merit is cutting
down on import tax to some E.U countries as a member of WTO, TPP… or to
ASEAN Countries as a member of AFTA.
Moreover, making handicraft products is typical industry of Vietnam, due to the
fact that Vietnam is an agricultural country, which has more than 1000 year in
agriculture. This is an advantage that hardly a foreign company can compete with
Vietnam’s enterprises about the price and quality.
However, with many advantages in and outside, Hoang Long Handicrafts Co
Ltd., doesn’t make use of them well to earn higher revenue. In the next part, the writer
will show his viewpoint about recommendations for Hoang Long Handicrafts Co.
Ltd.,
3.2. Hoang Long Handicraft Co. Ltd.’s orientation for future development of
straw hat and others.
According to the director of company, in near future, the firm will strongly
focus to explore new market in, firstly, in surrounding countries as Cambodia, Laos,
Thailand, Hong Kong, Korea…These markets are, somehow, brand new market to
straw hat products from Vietnam’s enterprises. Especially, Korea and Hong Kong
 26

market shall be the first two markets that Hoang Long Co will focus mainly. As Korea
and Hong Kong market get high demand for fashion and consumptions.
Besides, for the current markets, the director said that they will add more value
to the straw hat products such as more decoration, higher quality, more designs… for
customers’ choice. This will attract the customers in current market. Creating new
brands for straw hat is also one of strategy to develop sale activities of Hoang Long
Handicraft Co., Ltd.
Moreover, the firm also increases the quality of customer’s service. Not
stopping at after buying but they will follow the customers to get information about
their experience when use firm’s products.
Besides straw hat, the director board also suggests to develop some more
products as: fresh fruit, homemade gifts… Because of huge demand on the global
market nowadays, there are more and more buyers in the world, looking for cheap
and quality products, which comes nature.
3.3. Recommendations for Hoang Long Handicraft Co., Ltd.
As a member of Hoang Long Handicraft Co., Ltd, the writer has experienced
sale activities of straw hat in company. Seeing that company are facing many problem
occurred in operation process and below are the suggested tools that can change the
situation of the firm to more positive side.
3.3.1. Solution 1. Enhancing skill of sales team
Foundation of solution
A sometimes ignored part of sales strategies is ensuring sales reps have the
necessary skill levels to achieve those strategies. The most thought-out
and potentially successful strategy in the world will only succeed to the level that
salespeople are capable of executing it. Hence the enhancement of sales skill level
should be a vital part of sales training.
Source: For Sales Pros, Clemens Czarnecki, 2014
Solution’s content
We live in an age of technology. There are many tasks done for us that we
previously had to do ourselves—even some thought processes. Despite the futuristic
visions of self-thinking computers, however, our best engineers have yet to evolve a
 27

computer program that could totally “think on its feet” and execute a complex B2B
sale.
Some sales trainers have sought to follow a computing model and evolve
highly detailed scripted sales processes that would allow a sales rep to do a minimum
of thinking. But in recent years these have been proven unworkable. A salesperson in
B2B sales is dealing with a live human being and—even more challenging—
a group of live human beings called a company. No script, no matter how well written,
can possible take into account the endless variety of issues that can arise during a sales
cycle.
Forward-thinking companies today have realized that the only way for a sales
force to truly succeed is to be a team composed of skilled experts. This means they
are experts on the industry, their own company, and its products and last but not least,
selling itself.
These staffs are required active, dynamic and cleverness to adopt new
information coming from customers and analyze data given from the market.
However, this step is taking long time to train human resource. And staffs also find
it hard to adapt new techniques. In return, if the company succeeds in training staffs,
they will get an excellent sale executive group that can get a lot of potential
customers.
Expected results
As we always said about the first impact, it is the most important to the others
when we want to do or sell something. If the first impact is too bad, it will leave an
unprofessional in the buyers’ memories. The sales team will lose their customers.
Therefore, the first expected result after training is that the sales team must have
improved their skill to be able to get the first impact of the customer and make them
remember to the company name and products. Thanks to that, they will always think
about the company name and put it name at the first choice.
The second expected result is to make the sale team become more confident
and excellent in discussing and negotiating with the buyers. That means they will not
lose in the mind battle and can bring as much as benefits to the company as they can.
 28

3.3.2. Solution 2. Competitive price

Foundation of solution
“Right price for the right quality”. Customers do not look for the low quality
at high price and vice versa. Therefore, the question which might seem easy is not
easy at all. What is the right price? What is the competitive one? To find a correct
answer, you will need to spend a long time. No one can answer that question correctly.
It depends on the company calculation on working labor, working times, material and
so on…
Solution’s content
Firstly they need to reduce the labor force. This means they need to apply the
new technology to the production. Secondly, they need an excellent procurement
team who can buy quality material at acceptable price.
Secondly, the firm also needs to find carriers that can offer the lowest price of
transaction. As the delivery is so expensive nowadays. This will gain higher profit,
as profit is calculated by revenue subsidies cost. Finding new carriers with low price
is also difficult. Because these day, there are many carriers, forwarders…and we
cannot get to the exact carriers we want. Also because of asymmetric information of
delivery, we do not know how much it costs to transfer the goods from the exporters
to importers’ country. The only thing that the firm can do is joining into some group
of forwarder or have good relationship with the carrier as APL, Maersk… to get best
price in order to reduce the transaction cost.
Expected results
First come to price as the most impact of the offer. It can be different from two
or three suppliers but the reason why the buyer decides to buy from you but not from
the others is that we can supply the right price for the right products they are looking
for. With the good price and good quality, we will no more be afraid of lacking of
customers. There comes a time the buyers will look for us instead of the fact that now
we are sourcing for them.
3.3.3. Solution 3. Payment policies
Foundation of solution
Hoang Long firm needs to be more flexible on the payment term.
 29

It has become the new normal for customers to pay later, and the pressure this
places on middle market sellers and suppliers is obvious. Now that big customers are
much less hesitant to demand an extension on payment terms or make a late payment,
company will need to consider acquiescing if they want to compete with other
midmarket businesses. Although this helps their customers preserve capital, it makes
it more difficult for them to do the same.
The best way forward is to think flexibly about how to preserve capital while
retaining strong client relationships. There won't be an all-encompassing solution for
use with every customer, but their middle market company should carefully develop
a menu of options to juggle the company's needs and customers' priorities. The
existing customers and potential clients will see flexibility as a reason to continue or
start doing business with. (Chuck Leddy, 2015)
Solution’s content
Not fixed to the payment made by T/T or L/C. They can use the D/P payment
methods with those who are regularly doing business with the firm. That will create
more opportunity to have contract and gain more profit. However, in return, this
methods will include high risk. As the firm is not sure about the Buyer for just one or
two shipments. As the Seller, payment is still one of biggest problem to the Seller. If
the Buyer can’t make the payment, the Seller has to be suffered from loss.
Expected results
Business owners understand the pivotal role of good cash flow in a thriving and
growing endeavor. Without a proper flow of funds, productivity suffers and
expansion is difficult. Traditional payment methods like checks can take a relatively
long time to process, so businesses that still collect a majority of their revenue through
arguably outdated methods may unknowingly be putting themselves at a
disadvantage. Because payment methods such as credit card and debit card are
typically processed faster than checks and require less work on the customer’s part
than an in-person payment, offering such options is a simple route to accelerate
payments.
Slow payment processing isn’t the only problem plaguing cash flow within some
organizations. Rough economic times have left many consumers in a financial bind.
 30

When not offered flexible payment options, some customers may stall on payments
or miss them completely, increasing the risk of accumulating bad debt. A platform
that gives customers the freedom to choose their own payment method allows them
to manage their own finances better, which could lead to quicker payments for
business.
Sub-conclusion: In this chapter, the writer already suggested to overcome
disadvantages and be more flexible and easier to spread its scale to international trade.
As the rule accepts no exception, in this chapter, the writer can’t cover all the
hindrance that the company may face, but already suggested main featured that the
company can apply easily and also given out the expected results if the firm can
successfully apply.
 31

CONCLUSION
In the past, South Korea used to deny importing foodstuff, fruits and vegetable
from Vietnam due to worry about hygiene and low quality of the products. However,
Vietnamese farmers and producers have been striving forward and have gone a long
way since then, and now we can export agricultural produce to developed countries
and earns money from these trades. Besides, joining in international trade
organization also creates many opportunities to exporting companies in Vietnam,
hence, help them to gain high revenue from international commercial activities.
During my internship in Hoang Long Handicraft Co., Ltd, I have chance to
experience the professional working environment and practice sale process as a
manufacturer. In theory, every step, every information is seemed to be easy and
straightforward, but in reality, everything is much more difficult and complex. It also
teaches me many important things as soft skills, analysis thinking…
I would like, once again, to say special thanks to Hoang Long Handicraft Co.
Ltd, to give me a chance to experience and Mr. Le Giang Nam (M.A) in guiding me
to write this report. May Hoang Long Handicraft Co., Ltd be more successful in
business and Mr. Pham Hung Cuong, healthy and successful in life.
 32

REFERENCE
Philip M. Parker, 2016, The 2016-2021 Outlook for Women's, Girls', and Infants'
Straw Hats in Asia, Icon Group International published.
Hoang Long Handicraft Co., Ltd, Human resource data 2014, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Human resource data 2015, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Human resource data 2016, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Human resource data 2017, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Sales activities reports 2014, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Sales activities reports 2015, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Sales activities reports 2016, for internal circulation
only.
Hoang Long Handicraft Co., Ltd, Sales activities reports 2017, for internal circulation
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General statistics office of Vietnam, 10/2016, Social and economic situation in 10
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 33

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