Case study

Binh Tien company and the reasons for entering the potential foreign market,
United States.

1. Introduction:

Finding and expanding the market is an important growth strategy to increase revenue or
market share especially global expansion. Many companies that have expanded beyond
borders have found that there are a lot of benefits. A company only operating in domestic
market will very likely be affected if there is a local economic crisis. Global expansion
provides greater opportunities to business. It provides customers to the company, profit,
market share and position in the international market. In addition, there are many risks
and difficulties ahead so a company should only enter the foreign market when it has
enough economic potential and power in the domestic market. Vietnamese enterprises are
becoming more mature and have more potential to expand their market. One of them is
Biti, a successful company in footwear production in Viet Nam. With the slogan "Biti's -
Vietnamese nudes", Biti brand of Binh Tien Consumer Products Company has been using
the word for years. The company is growing strongly and exporting to many countries
around the world. With fashionable design and good quality, we do believe that Bitis is
capable of reaching even more difficult market like the USA. It is a great opportunity to
bring the Vietnamese brand to the world.

2.Company background.

2.1. Established history.

Founded in 1982, Biti's is the precursor to the two production groups Binh Tien and Van
Thanh, when it has only 20 workers specialized in the production of simple slippers. In
1986, the two mergers merged into Binh Tien Rubber Cooperative, which specializes in
producing high quality footwear, consumed domestically and exported to Eastern Europe
and Western Europe.

In the late 1980s, the political situation in Eastern Europe fluctuated, Biti's export market
was severely reduced and Biti's products also suffered from fierce competition from
Thailand, China in the market. domestic school. After learning about EVA technology in
Taiwan to make materials for slippery foam products, Biti's decided to buy the production
line brought back to Vietnam. Since then, Biti's has chosen to enter the domestic market
with the registration and protection of the brand. In order to ensure that consumers do not
have to worry about paying, buying, or buying, Biti's applies the "one price" policy and
has created good effects.

In recent years, Biti has continued to build stores across the country, specializing in shoes
from adults to young and only under the Biti's brand. With the 40 interactions of the field,
the channel distribution will be expected to be used in Biti's consolidation of school
presence in the country. In addition, Biti's mass-produced products continue to be used as
ERP, SAP software to manage production planning, marketing, and branding, Gosto. Biti
is also looking to renew itself with dealers and more recent specialists for deploying
online sales.

Goods year, shoes Biti's for more than 20 million style to many types of style, sample
code. Biti's fashion shoes, Biti's elegant men's shoes for Biti's or Biti's sports shoes are
always selected by many Vietnamese people, whether they are going to school, going out
or going for a picnic.

In early 2016, Biti made a strong and impressive leap when allowing Hunter's versatile
hunting boots. Biti's weight is only 225g and is one of the lightest shoes in Vietnam for
the time being. The best of Biti Hunter but still make sure the standard of a and have a
plan. It can be said, the sports shoes of Biti's Hunter has really created fever in youth
from 2016 to now.

By 7,000 skilled workers with a nationwide distribution network, Biti always maintains a
growth rate in the domestic market of around 20% per annum. Cambo Trading distributes
Biti products all over Cambodia, Biti also exports to 40 countries such as Italy, France,
United Kingdom, USA, Russia, Japan, South America. Mexico ... Besides, Biti's is well
known nation such as Decathlon, Clarks, Speedo, Skechers, Lotto ... believe in choosing
partner with big order value.

2.2. Potential market

In terms of footwear, handbags, from the beginning of the year to June 2017, America s
the largest export market for footwear and handbags in Vietnam, valued at over US $
1.99 billion. Vietnam's footwear exports to americamarket increased by 13.9% and
accounted for 35.2% of Vietnam's total footwear exports.

Therefore, America is a best & portential market for Tan Binh Company, special with
sneaker.

2.3. Nowadays development.

The number of employees increased to 9,000. There are 3 Trade Centers, 1 Business
Center, 2 branches and more than 4,000 agents nationwide. Biti's products are sold to
more than 40 countries and regions in the world, including the most famous and
fastidious markets.

In China, Biti's has set up 4 Resident Representative Offices in Guangzhou, Kunming,

Nanning and Hekou. The "Biti's" trademark was registered in the People's Republic of
China in 1999, which is entitled to commercial protection and has 25 sales capitals and
more than 300 franchises.

Currently Biti's is a leading company in Vietnam in the footwear business. With its
strength, Biti's has moved to a new field of real estate investing, building trade centers
and condominiums in the North, Central and South, in order to meet business needs. and
housing of customers according to the trend of economic development of Vietnam is
integrating into the world market.

Biti's has become a group of companies consisting of 2 divisions:

BINH TIEN CONSUMER GOODS CO., LTD (BITI'S), and DONG BATI'S BINH
TIEN COMPANY (DONA BATI'S).

Biti's Company has 6 Branches from North to South including 2 Trade Centers, 2
Business Centers:

Biti's Commercial Center Lao Cai

Biti's Northern Business Center

Biti's Central Highlands Business Center

Biti's Da Nang Business Center View less

2.4. Achievements and awards.

ISO9001: 2008 quality management system standards of BVQI and QUACERT

Strong brand name of Vietnam of Economic Times

Top 500 largest enterprises in Vietnam

The top retail distributor in Vietnam

Gold Cup certificate of prestige brand quality leather footwear

Over the past 15 years, it has won the title of Vietnamese High Quality Goods

Accredited Business Certificate

Typical businesses in 2010 (Holy Giong Cup)

Cup one of the 50 best-known brands in Vietnam selected by the Chamber of Commerce
and Industry of Vietnam

Moreover, four consecutive times (2008, 2010, 2012, 2014) Biti's is recognized as
Vietnam Value brand by Trade Promotion Agency Ministry of Industry and Trade.

The second-class Labor Medal for outstanding achievements in the work, contributing to
the construction of socialism, protection of the country's country was presented by
President Truong Tan Sang.

Excellent Manager of Innovation.

Badge of Ho Chi Minh City. Chairman of Ho Chi Minh City People's Committee Le
Hoang Quan.

Commendation Medal "For the sake of Academic Excellence" by the Vietnam Academic
Encouragement Association.

Excellent businessman Asia Pacific.

Source: https://bitis.com.vn/pages/cau-chuyen-biti-s

http://tuoitre.mobi/tu-khoa/bitis-binh-tan-405785.html.

3. Reason for finding new foreign market.

Finding and expanding the market is an important growth strategy to increase revenue or
market share especially global expansion. Bitis Company is one of the leading shoes
manufacturers in Viet Nam. The company has extensive experience in exporting to
overseas markets. At now, Bitis has been presented in more than 40 countries all over the
world such as: Singapore, Newzealand, Australia, Canada, Japan, China, etc. The
company's products meet many criteria of the customers for example: Beautiful design,
fit and comfortable for the user, also the price is very affordable. Compared with the
famous Sneaker’s brand such as Nike, Adidas, Stan smith, Converse, the design of Bitis
Hunter is well appreciated by the majority of customers whether the price is much lower.
Besides Bitis is constantly upgrading their products to become more complete, more
catching up to the trend of youth.
Through advertising campaigns in the media, Bitis is more and more popular in the
domestic market. The reputation of the company is credible to consumers and is
spreading to overseas markets. Bitis Hunter is one of Vietnam's sports shoes lightest
design beautiful, youthful color and high quality. Especially after MV "Lạc Trôi" of Son
Tung MTP , the viewers has been attracted by the sneaker that Son Tung wore.
Finding a new foreign market will not only help the enterprise earn profits but also put “
made in Viet Nam shoes” to a new level.

Source: https://www.entrepreneur.com/article/274815.
4. PESTLE

Politics

US federal government, the American lifestyle is also from various aggregation lifestyle
from different cultures. In the US, it is believed that the free market is the way to enhance
the value of their politics. The government plays an important role. US businesses use the
government to protect them in the competition. Now the Democrats and Republicans are
dominating American politics. These political pressure groups are special interest groups.
Business organizations will support low taxes on companies and limit the right to strike
while unions will support minimum wage laws and protect collective bargaining. Other
interest groups - such as religious organizations and racial groups - are more concerned
about promulgating policies that may affect their beliefs or organization.
USA now is a partner to many international trade agreements such as: the General
Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO). Under
the 2001 United States-Viet Nam bilateral trade agreement (BTA) an through its
accession to the WTO, Viet Nam eliminated many non-tariffs and quotas barrier that is
an advantage of Viet Nam as well as Binh Tien company when seclecting USA as
potential country market.

Economic
USA is known as the largest economy in the world and well-develops economics system
with a GDP of over $ 18,569 trillion (2016). According survey-based data for december
2017 and january 2018 showed soaring order books, while initial jobless claims
continued to decrease. In 2016 consumption in USA is 2,7% while domestic demand is
1,7% ( United States economy data 2016). This is a good sign for country exports to the
United States of America.
Social
In the US there is a diversity of religions as well as ethnic diversity leading to the
formation of various culture. Religious conflicts often occur and severe racial
segregation. It is also an advantage of the US, the development of diverse economies and
types of business. Therefore, when penetrating into the US market, it is necessary to
thoroughly find out American culture in order to have a specific business strategy without
causing any negative reaction to consumers. For example, most Protestants should be in
the advertising or slogan of the product should avoid the symbol or image offense to their
beliefs.

Footwear products are consumed in the U.S. market is very diverse and abundant. The
United States of American population accounts for 4,34% of the world population that
ranks the third most populous country and territories. According to the American
footwear industry association, the United States consumes about 1.461 billion pairs of
shoes each year, of which about 85% are imported. With the huge buying power of
America is the ideal market for all countries in the world. In recent years, the US has
mainly imported footwear from EU countries such as Germany, France and England.
Since the United States lifted the embargo on Viet Nam, Vietnamese footwear enterprises
started to enter the market.
Technology
The American is the leader in the research and technological innovation, science and
technology helps to shorten the time of production. More research ideas bring results and
time from new ideas to success to shortened quickly. Also USA is known as home of one
third of world’s scientist and engineers, accounts for one third of global research and
development expenditures. Technological innovation are the basic of the US economy,
this country has been leading in terms of adapting and applying technology. This creates
opportunities for businesses to approach advanced technologies to increase product
quality and reduce costs.
Legal
USA is a highly regulated society, including many regulations about: product liability,
incorporation, anti-money laundering and bribery laws,etc. As such people or company
want to do business in the US need to be aware of many regulations, stadard and
guidelines that may affect the sale of their products or services. Federal, state and local
regulation require a thorough knowledge of tax, commercial and labor laws.
Environmental
USA has an extremely diverse geography, climate, and wildlife. This diversity coupled
with other factors has been a driving force to draw millions of foreign companies to the
country.Besides, USA faces some of the toughest weather conditions in the world. The
country has sustained 218 weather and climate disasters since 1980. In 2017, there have
been 15 weather and climate disasters with losses exceeding $1 billion each across the
United States (NCEI, 2017) so domestic and foreign enterprises should consider in order
to estimate the potential challenges and opportunities in the business context. These
factors have the power to influence the company’s operations as well as the demand for
its products. On the other hand, by taking the environmental factors into consideration,
enterprises are one step closer to the process of US’s innovation, as well as the world
civilization By restructuring operations and getting involved in Green Business,
companies are actually starting to answer some of the environmental problems of USA.
This ensures lesser pollution and lesser degradation of natural resources.

Source: https://www.slideshare.net/runrabbit21/political-legal-technological-
environment-of-usa.

https://www.thebalance.com/advantages-disadvantages-of-indirect-exporting-1953328\

https://kinhdoanh.vnexpress.net/tin-tuc/doanh-nghiep/ly-do-biti-s-thanh-cong-tai-thi-
truong-nuoc-ngoai-3569631.html

http://www.brandsvietnam.com/10676-Bitis-Thuong-hieu-giay-dep-cua-nguoi-Viet

https://bitis.com.vn/pages/cau-chuyen-biti-s

5. Method of entry.
BinhTien Consumer Products Company should try manufacture their products “ at home”
and indirect export when entering a potential market – The United States. The common
weaknesses of Vietnamese leather and footwear industry is the scarcity of raw materials
and the restriction of design teams. BinhTien Consumer Products Company have
promptly built & invested infrastructures for manufacturing good quality products at
many places in Viet Nam recently years ago. This action can create a favourable,
available conditions to bring products to oversea customers. For this reason, the company
should go on manufacture “at home” when intending to entrance into new foreign
markets. The next step in this process is that BinhTien Consumer Products Company
should decide to export indirectly via an intermediaries. Bitis's products have been
exported to new markets through intermediaries such as retailers, distributors or
businesses. In the past, Biti's products were completely depended on sole distributors. For
example, for the Indochinese market, Combo Trading Co Ltd is the official distributor of
Bitis’s products in Cambodia and has a foothold in this market with over 1000 retail
outlets.
For the Chinese market, Bitis’s has sought to cooperate with Chinese merchants because
each distributors will know how to choose the right market segment for themselves.
Applying this method to the US market will help Bitis’s find a nice position in this
market, besides, enterprise will focus on investment on areas where has great products’s
consumption aim to high profits. When dealing with Chinese merchants, Bitis’s always
shows justice, consistency and a legitimate view. With the US market, Bitis’s should
build a close relationship with retailers (special interests or privileges), maybe they will
compensate. For instances, intermediaries not only provides a route to entering an
oversea market but also fields technical shipment, logistics or provides necessary product
support. Agents development policy is one of the elements of Bitis's diversified business
policy. The advantages for Bitis’s in adopting indirect exporting is that it an almost risk
and complexities-free way to begin.

US is one of the largest footwear producers in the world, this country hold fairs every
years, as it is good oppotunities to find appropriate distributors and promote trade mark.
Bitis’s might also use the services of an exoporting trading company (ETC), as Combo
Trading Co Ltd in Cambodia market. ETCs tend to function on a more demand-driven
basis, by which the demand of the market compels them to buy specific commodities.
They usually have loyal customers for whom they source products on a regular basis. In
addition, BinhTien Consumer Products Company’ s decision is influenced by many
factors: the size of the firm, the nature of the product being sold,..Bitis’s has medium
businesses, not global. In US market, it is also new & attractive. Bitis’s will introduce to
the US market the new product line called “Bitis’s Hunter” . Its product being sold
promises to come off well because of good quality, resonable price, as cheaper than Nike,
Addidas – top trend & prevalent brands. In summary, with many previous experiences in
exporting, the right nature of the product being sold and general conditions in selected
overseas market, Bitis’s can be confident in its abilities and choose right method of
entering the US market or even other oversea market.
Source : http://www.learnmarketing.net/international%20marketing%20entry.htm
http://www.tradestart.ca/market-entry-strategies

http://www.tradeready.ca/2017/topics/market-entry-strategies/direct-indirect-exporting-
best-fit-business/

6. Conclusion
For an organizations or companies thinking of entry into overseas market often changing
and depending on the targeted country or market focuses on several ways to enter a
foreign market. Organizations need to be conscious of how potential new market may
best by still considering the risk and the different political, environmetal, social,
technological, economic and legal factors associated with the specific entry strategy. The
fact that enterprises can determine which export strategy suits for their needs. Their
choice will depend on their goals, their available resources, the type of business they run,
the degree of adaptation of their product required, marketing and transportation costs,...
We do recommend analyze the international market entry strategy of Bitis’s aim to help
researchers to understand the operations of Bitis’s and the decisions helps Bitis’s do deal
with difficulties in order to become the leading footwear brand of Viet Nam in
international market. International business strategy in addition to the flexibility of
international market penetration has contributed to the success of Bitis’s in international
market. With the aim to analyze the international market entry strategy of Bitis’s in the
process of penetrating in the US market, the research has focus on studying the basic
reasons for the international market penetration and for the investing and improving the
business operation in the target foreign markets. For the case study of Bitis’s , the
international market penetration is great opportunities but it also provides a number of
difficulties and risks in the process of doing business in international market. In order to
exist and develop in the foreign market, Bitis’s has always tried best to understand the
market, customer’s demands, interests, habits.