Abstract

Subject area
Decision-making seems simple, but, in reality, it is not an easy task to decide the cause for its
profound result or consequence, leading to inevitable failures. Therefore, a leader must
recognize whether there is something incorrect so as to avoid bad results. A good leader is a
person who carefully reviews and analyzes aspects of a problem, knows the strengths and
weaknesses of his organization and evaluates what the advantages or risks are. It cannot be
denied that the appropriate options will reap many benefits to the business. For such
important things, this paper will discuss the dilemma of Viettire, a tire distributor company
in Vietnam. Accordingly, its CEO was worried about what strategic option he should adopt to
approach the Myanmar market while ensuring a strategic fit to its company’s resources and
capabilities and also to the overall market demands of the tire industry environment in both
countries. However, with different ideas, the expansion strategies in this new market
become controversial. The General Director and Founder of Viettire were wondering how
Viettire could expand its existing business into Myanmar. To expand the company to new
emerging market in Myanmar, Hoang Nguyen – CEO of Viettire – had conducted a strategic
analysis of external environment factors to define the opportunities and threats when doing
business in Myanmar by using Porter’s five forces model, S.W.O.T and competitive
advantages analysis. The results indicated that Myanmar’s business environment is highly
risky for foreign investors because of uncertain political, economic, social reforms in the
process. Among three options, namely, exporting, licensing and wholly owned, however,
Option 2 is illustrated as the best strategy for its dilemma.
Case overview
As for a market mechanism, what produces, how and for whom, is not the business’s
demand but the consumer’s demand. The business sells only what the market needs, not
what it has. In the period of increasingly competitive conditions, stabilizing and expanding
markets are a prerequisite for survival. If stability is seen as a “defensive” way, expansion is a
“defensive attack” like trying to hold on the “pie” that the market gives to itself. This
strategic action is to strengthen regular, close relationships with existing customers and
establish new customers. As a result, the potential market is transformed into a target
market. Hence, decision-making of which market, which method is the issue that a leader
has to think the choice to avoid risks. Mr Hung, Viettire’s co-owner, suggests that Myanmar
should be taken into account as a company’s new entry, thus exploring this potential market
to increase the company’s growth and profitability. In the progress, Viettire’s marketing
team had been doing a thorough tire market investigation in Myanmar. It was concluded
that this emerging country, especially Yangon City, was the most suitable for those who were
willing to embark on an overseas investment expansion. They believe this was a good
opportunity to gain market share compared with other entrants and competitive rivals; if
Viettire hesitated to invest, others definitely had jumped in with a first-mover advantage.
However, the CEO, Mr Hoang, was worried about what strategic option he should adopt to
approach this new market while ensuring a strategic fit to its company’s resources and
capabilities and also to the overall market demands of the tire industry environment in both
countries.
Expected learning outcomes
Understand the basic decisions that firms contemplating foreign expansion must make:
which markets to enter, when to enter those markets and at what scale. Recognize the
current strategic decisions an organization is facing: positioning, portfolio and market
expansion approach. Learn how to develop an effective strategic plan. Be familiar with
different strategies for competing globally and their pros and cons. Evaluate various strategic
options and decisions in accordance with a company’s resources and capabilities.