MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

DEPARTMENT OF INTERNATIONAL BUSINESS - MARKETING

FINAL EXAMINATION
Subject: International Business

Name of student: Trung-Quan Lam

Student ID: 31201020824
Class ID:22C1BUS50305204
Name of instructor: Dr Quang-An Ha
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INDEX

Index _________________________________________________________________1

Answer _______________________________________________________________2

Question number 1 ______________________________________________________2

Question number 2 ______________________________________________________4

References ____________________________________________________________7

Thank you _____________________________________________________________8

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ANSWER
Question number 1:

One of the biggest shift in the past 30 years of global economy is globalization. The
world became more interconnected as a positive result of two significant events: Soviet
Union’s collapse in 1989s and Cold War ending in 1991s. The major reason is the
communist bloc countries began to integrate into the global market economy, after a long
period of being intentionally isolated by the capitalist West. Trade and investment grew
as barriers to cultural exchange and migration were gradually taken off.

The highlights of this period were undeniably communication and transportation

technology. Technological communication advances, such as mobile phones and the
internet, have directly contributed to global economic growth by connecting people all
around the world. The World Wide Web connects billions of people and devices.
Humans are fortunate enough to have a chance to be exposed to numerous opportunities
for the exchange of goods, services, cultural products, knowledge, and ideas. Moreover,
delivery technology was revolutionarily improved through airlines, ships, and trains.
Delivery time between nations was dramatically cut down. Therefore, economic trade
was encouraged to happen faster and efficiently which increased products’ availability to
global citizens. Adapting to positive changes in the world, some medium-sized, and
small-sized multinationals started to appear worldwide. Although the U.S remains the
world’s dominant economic power, the emergence of these non-U.S multinationals has
declined the share of the U.S in world output and world exports.

This shift doesn’t show the problems in the U.S economy, but rather reflects the major
industrialization of many developing countries at the time, such as China, Japan, India,
and South Korea. This shift also illustrates the world's direct investment picture. Only
rich industrial countries generated foreign direct investment. Meanwhile, Vietnam was a
potential field with enormous resources that had never been discovered and utilized.
Therefore, Vietnam would be a great land for many rich industrial countries to invest in.

The advent of deactivating the embargo against Vietnam by the United States in 1995s
made a huge breakthrough in Vietnam's economy. 11.17.1995, The United States
officially declared the conciliation as normalized the trading relationship between the two
nations. Impressively, foreign investment reached 29.5 billion USD in 2000, which was
five-to-seven-time fold compared to that was in 1990. Specifically, exports contributed
14.3 billion USD, imports contributed 15.2 billion USD. Since then, the economic growth
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rate of Vietnam increased gradually. Vietnam has stepped into the industrialization and
modernization stage of its economy.

For instance, one of the oldest companies from Vietnam, Vinamilk has bloomed
beautifully since the reconciliatory move of the United States. Before, the company had
been struggling with inadequate resources to produce, with outdated and inconvenient
facilities. They stated: “We don’t have much information about global prices, while
ingredients were completely imported. We have no trading, and the capital flows were
passive. How to reduce the ingredient cost, as the eventual cost is a challenge.” To cope
with this problem, engineers had to create designs by embossing Ong Tho's image on
metal cans recycled from scraps. That was how the Vietnamese company had managed to
survive amidst a politically and economically chaotic market. But the world economy has
changed, the United States also understood that banning and warring impetuses do no
good to both sides as they opened the trading gateway in 1995s. Therefore, Vietnamese
companies could operate the business more efficiently and optimize every opportunity
from foreign partners. Vinamilk officially imported high-tech chains of manufacturing to
produce their products and started to export to foreign countries, especially to Mid-
Eastern countries. They launched a powdered-milk line of products for baby which calls
“Dielac”. The product was the best-seller and people there started to use “Dielac” to label
baby milk in general. The company has thrived in a more abundant and diverse economy
then.

As the Soviet Union collapsed and the cold war ended, many countries democratized
their policy and transformed themselves into market economies. Since, from both
political and technological (communication & transportation) aspects, the world economy
has transformed positively. Therefore, it has undeniably had a positive impact on
international business based in Vietnam.
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Question 2:

Link of the article from social media:

https://www.mashed.com/710307/the-real-reason-mcdonalds-flopped-in-vietnam/

Article name “The reason Mcdonald’s Flopped in Vietnam”

Mcdonald is one of the biggest fast food brands in the world. It has total more than 35000
stores worldwive. But in Vietnam, the number of store Mcdonald operates are quiet
humble. It’s only 17 stores in Vietnam. How could such a big brand fail in this little
country, Vietnam? I will analyze the reasons and suggest recommendation base on the 4P
Marketing Model (Price, Product, Place, Promotion).

When it comes to the failure of an international brand in a foreign market, the reasons
will narrow down to two barriers which that company fail to adjust: socio-cultural or
political-legal barriers. In this case, Mcdonald fails to cross the socio-cultural barriers. An
international business has to adapt and adjust itself in a foreign market if they want to
survive. Customers only pay for products that are close to their cultures, tastes, or
preferences. Therefore, one of the most important keys is understanding that nation’s
culture which Mcdonald was unsuccessful to response.

1. Product:
Vietnamese cuisine is famously known for its diversity and delicious taste.
Vietnam is an agricultural country so consuming vegetables and fruits are
Vietnamese people’s habit and preference in every meal. So Vietnamese dishes are
basically healthy and light.

In contrast, Mcdonald’s menu are full of dried chichken, oily chips, sweet iced
blended and heavy burgers. Meanwhile, Vietnam has banh mi, which is similar to
hamburger but its taste is much more lighter, and it has more vegetables to
consume. So why would Vietnamese people choose Mcdonald? The brand needs
to give customers reasons to stay.
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I will recommend some solutions for this problems:

a. Add more vegetables to the menu: since consuming vegetables is a habit of
Vietnamese people, the brand needs to response to this habit. Junk food is
unhealthy, so we can balance this out by adding more healthy ingredients to the
dishes.
b. Lauch unique, mixed-flavor dishes: Pho hamburger, a dish that Mcdonald
launched few years ago, did command a lot of attention from customer. But
this kind of mixed-flavour dishes will never win over the original dish (Pho).
So we can sell this products, but by seasons, or only in some special ocassions
and still get the actual profit from it.

2. Price:
One of the weakness of Mcdonald is the price. The price of Mcdonald is too high
for a fast food brand which is 20%-30% higher compares to KFC, Lotteria,
Jollibee… Especially compare to Vietnamese street food, the price is four-time
fold higher. So the root of this problem is the brand image. Are they selling their
brand image? Does the brand image really hold a value in this case? In contrast,
other fast food brands in Vietnam still survive, and thrive through the market with
a lower price segmentation.

I will recommend solutions for this problems:

a. Search for other sources to get ingredients: Vietnam is an agricultural country
so it will have enormous sources to buy meats, tomatoes, potatoes, and flour,…
which will be cheaper to purchase.
b. Defining problems that leads to high price: is the brand wasting their
resources? Does the brand use their resources effectively? It might be hiring
too much employees in a store, using electricity and gas uneffectively that
leads to wasting,…
 Find ways to lower the price, because this price segment is not appropriate
to Vietnamese customer.

3. Place:

In America and other developed countries, customer often drive through the
windows to make orders, pay, and receive meals. But in Vietnam, the number of
people that use automobile are quiet humble. So the brand won’t make much profit
from this type of customer in Vietnam. In addition, many stores of Mcdonald
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locate in commercial buildings and recreation areas. While, in that building or that
area, it has much more delicious foods to eat. If the customers come to Mcdonald
on weekend to hang out with friend, so what Mcdonald need to adjust to impress
customer as it’s merely a fast food store?

I will recommend my solutions for this problems:

Change the store’s decoration: For instance, there is a very successful

international brand in Vietnamese market “Pizza 4P”. The brand actually
serves pizza, which is junk food. But they recreate the recipe to remake it a
very healthy dish. They use more vegetables on the pizza. Additionally, the
decoration of each branch is amazing. Pizza 4P uses open space with the
modern architecture (elegant glasses with brown-shade wood wall, open
nature-like space with full of greens and trees, the baking oven is right of sight
so customers can observe the chief,…) The price segment of pizza 4P is high
but it derseves the service. Mcdonald can apply this method to attract more
customers in Vietnam.

4. Promotion:

The brand has been offered a lot of coupons and promotions. But it seems to go
unnoticeable.

I will recommend solutions for this problems:

a. Use social media to execute marketing plan: The trendiest platform in Vietnam
are Tiktok, Facebook, Instagram and Youtube. The brand can attract a massive
amount of customers through social media. Therefore, Mcdonald can maximize
their profit.

b. Send coupon codes through SMSs, emails,…

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REFERENCES
1. https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2020/10/tinh-hinh-kinh-
te-xa-hoi-10-nam-1991-2000/
2. https://studymoose.com/the-shifts-in-the-world-economy-over-the-past-30-
years-essay
3. https://www.vinamilk.com.vn/vi/tin-tuc-su-kien/1238/hanh-trinh-40-nam-
cua-sua-dac-ong-tho

4.
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THANK YOU!

THANK YOU FOR READING.

I declare that this is my original work and that it has not been submitted by someone else
or for any other subject.