TRƯỜNG ĐẠI HỌC TÀI CHÍNH – MARKETING

KHOA QUẢN TRỊ KINH DOANH

TIỂU LUẬN MÔN HỌC: Quản Trị Kinh Doanh Quốc Tế

Lớp học phần: 2411702052903

Giảng viên giảng dạy: Cao Minh Trí

ĐỀ TÀI:

Mở Rộng Kinh Doanh Tại Philippine Của Vinfast

Sinh viên thực hiện: Nguyễn Bảo Trân MSSV: 2121003263

Dương Gia Bảo MSSV: 2121003328

TP. Hồ Chí Minh, tháng 4 năm 2024

 Executive Summary

Vietnamese auto giant Vinfast isn't stopping at domestic success. To conquer the
Philippine market, a well-defined strategy is crucial. Analyzing factors like political
stability, economic growth, and consumer preferences (PESTLE) is essential. This
understanding allows Vinfast to tailor its approach for maximum impact.

An effective strategy also involves smart resource allocation and minimizing risks like
intricate regulations. Vinfast's three-year plan should focus on achieving specific
goals, like capturing a significant market share, boosting brand recognition, and
achieving steady sales growth. Establishing a robust dealer network and prioritizing
customer satisfaction are equally important. By recognizing the need for a strategic
roadmap and setting clear objectives, Vinfast demonstrates its commitment to
dominating the Philippine auto market.

Introduction

Vinfast is a promising Vietnamese startup founded in 2017 by billionaire Pham Nhat

Vuong. Initially focusing on electric motorcycles, Vinfast has since expanded into the
production of electric cars and buses. Aiming to become a leading global electric
vehicle manufacturer, Vinfast is heavily investing in research and development, as
well as expanding its market to other countries.

The Philippines is a Southeast Asian nation with a population of over 110 million. The
Philippine economy is growing rapidly, and the middle class is expanding. This is a
potential market for Vinfast's electric vehicles.

Vinfast has chosen the Philippines as one of the key markets in its global development
strategy. Vinfast has invested in building an electric vehicle manufacturing plant in
the Philippines and is expected to start selling electric vehicles there in 2025. Vinfast
is also cooperating with Philippine partners to develop a network of electric vehicle
charging stations.

With its strong investment and well-defined strategy, Vinfast is expected to succeed in
the Philippine market. Vinfast will contribute to the development of the electric
vehicle industry in the Philippines while bringing the Vietnamese brand to the
international level.

In addition, Vinfast can also contribute to:

Reducing environmental pollution in the Philippines

Creating jobs for the Philippine people

Promoting economic cooperation between Vietnam and the Philippines

1. PESTLE analysis (about 1500 words)

1.1. Political

The political system of the Philippines is a unitary presidential republic, with the
President serving as both the head of state and head of government. The Philippine
Congress consists of two chambers: the House of Representatives and the Senate.
Despite maintaining a relatively high level of political stability, the country faces
challenges such as corruption and activities of insurgent groups.

The Philippines and Vietnam share friendly and cooperative relations, marked by
numerous agreements across various domains. These agreements encompass areas
such as economy, trade, investment, defense, security, education, culture, healthcare,
and tourism. Examples of such agreements include the Trade Agreement (1998),
Investment Promotion and Protection Agreement (1992), Agreement on Avoidance of
Double Taxation and Prevention of Fiscal Evasion (2007), and the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

1.2. Economic

Product consumption in the Philippines is on the rise, particularly evident in the

automobile sector. According to the Chamber of Automotive Manufacturers of the
Philippines (CAMPI), car sales soared to 331,764 units in 2022, marking a significant
27% increase from the previous year. This surge reflects the growing demand for
automobiles among Filipino consumers. Furthermore, the average income of Filipino
citizens is also experiencing an upward trajectory. With the per capita GDP reaching
$3,642 in 2022, as reported by the World Bank, there's a notable 5.7% increase
compared to 2021, indicating improving economic conditions and purchasing power.
Additionally, the economic ties between the Philippines and Vietnam are
strengthening, evident in the escalating bilateral trade. The Ministry of Industry and
Trade reported that the two nations' trade volume reached $11.1 billion in 2022,
marking a substantial 15.2% surge from the previous year. This flourishing trade
relationship underscores the mutually beneficial economic collaboration between the
two countries.

1.3. Social

With a population exceeding 110 million people, the Philippines presents a significant
market opportunity for various automotive products. Among these, the public
perception of Vinfast's VF9 car, particularly in relation to electric vehicles (EVs), is
notably positive. According to a survey conducted by Pulse Asia, a reputable market
research company, 72% of respondents in the Philippines expressed interest in
purchasing electric cars. This favorable attitude towards EVs reflects a growing trend
of environmental consciousness and a desire for sustainable transportation solutions
among Filipino consumers. The shift towards electric vehicles aligns with global
efforts to reduce carbon emissions and combat climate change. Vinfast's VF9, as an
electric vehicle, appears to resonate well with the preferences and concerns of the
Filipino market. Factors such as rising fuel costs, environmental awareness, and
government initiatives promoting electric mobility contribute to the increasing appeal
of EVs in the Philippines. Additionally, the positive perception of Vinfast's products
may also stem from the company's reputation for innovation and quality in the
automotive industry. As such, the Philippines represents a promising market for
Vinfast and other manufacturers looking to capitalize on the growing demand for
electric vehicles in the region. By leveraging this favorable attitude towards EVs,
companies like Vinfast have the opportunity to establish a strong foothold in the
Philippine automotive market while contributing to the broader transition towards
sustainable transportation.

1.4. Technological
In the global landscape of e-commerce, the Philippines emerges as a promising market
with significant potential. Statista reports that the country's e-commerce revenue
surged to $12 billion in 2022, a figure projected to escalate to $28 billion by 2025.
This exponential growth reflects the increasing digitalization of consumer behavior
and the expanding online retail landscape within the Philippines. As internet
penetration deepens and access to technology becomes more widespread across the
archipelago, the e-commerce sector is poised for further expansion, offering ample
opportunities for businesses to thrive in this dynamic market. Moreover, the
Philippines boasts a relatively robust legal framework for the protection of intellectual
property rights. As a member of the World Intellectual Property Organization (WIPO)
and a signatory to numerous international conventions on intellectual property, the
country demonstrates its commitment to safeguarding innovation and creativity. This
legal infrastructure provides assurance to businesses operating in the e-commerce
sphere, fostering an environment conducive to investment and growth. With a
combination of a burgeoning e-commerce market and a supportive regulatory
environment, the Philippines presents an attractive destination for both domestic and
international players seeking to capitalize on the digital economy's vast potential. As
the country continues its journey towards becoming a key player in the global e-
commerce landscape, businesses are primed to seize the opportunities presented by the
burgeoning digital marketplace, driving economic growth and innovation in the
process.

1.5. Legal

The legal system of the Philippines is rooted in the Anglo-American legal tradition,
providing a framework that guides the country's legal processes and institutions. This
system reflects influences from both British and American legal principles, shaping
the development of laws, regulations, and judicial practices within the nation.
Additionally, the legal landscape of the Philippines exhibits compatibility with
Vietnamese law, sharing numerous parallels and similarities. Such alignment
facilitates Vinfast, a Vietnamese automotive company, in adhering to the legal
requirements of the Philippines with relative ease. With commonalities between the
legal systems of both countries, Vinfast can navigate regulatory frameworks and
compliance measures more efficiently, enabling smoother operations and facilitating
business transactions within the Philippine market. This compatibility not only
streamlines legal processes but also fosters a conducive environment for foreign
businesses like Vinfast to operate, promoting investment and economic growth. By
leveraging the familiarity and synergy between the legal systems of Vietnam and the
Philippines, Vinfast can navigate legal complexities, mitigate risks, and capitalize on
opportunities in the Philippine automotive sector. This underscores the importance of
legal harmonization and cooperation between nations in facilitating cross-border trade
and fostering a conducive environment for international business ventures to thrive.

1.6. Ethics

In terms of ethics, the Philippines faces challenges related to corruption and

environmental consciousness. The country contends with a relatively high corruption
rate, as evidenced by its position at 85th out of 180 countries in Transparency
International's Corruption Perception Index for 2022. Corruption poses significant
obstacles to good governance, economic development, and the equitable distribution
of resources within the Philippines. Additionally, the Filipino population demonstrates
a growing awareness and concern for environmental issues. According to a survey
conducted by the Social Weather Stations, a staggering 87% of Filipinos perceive
climate change as a severe and pressing problem. This heightened awareness reflects a
broader global trend towards environmental consciousness and underscores the
importance of addressing climate-related challenges in the Philippines. Despite the
prevalence of corruption and environmental concerns, there are signs of progress and
initiatives aimed at combating these issues. Civil society organizations, government
agencies, and advocacy groups are working towards promoting transparency,
accountability, and sustainable practices. Efforts to strengthen anti-corruption
measures and raise awareness about environmental conservation are crucial for
fostering a more ethical and sustainable future for the Philippines. By addressing these
challenges head-on and fostering a culture of integrity and environmental stewardship,
the Philippines can pave the way for greater prosperity, social justice, and
environmental sustainability in the years to come.

2. Market audit

The automotive market in the Philippines shows promising potential, with growing
demand and a projected increase in sales. According to the Chamber of Automotive
Manufacturers of the Philippines (CAMPI), car sales reached 331,764 units in 2022, a
notable 27% rise from 2021. The market currently exceeds 300,000 units annually and
is expected to expand to 500,000 units by 2025. Dominated by Japanese, Korean, and
American manufacturers, the market offers lucrative opportunities for automotive
businesses aiming to capitalize on the country's increasing demand for automobiles.

In the competitive landscape, Vinfast competes directly with industry giants like
Toyota, Kia, Hyundai, and others. Additionally, it faces indirect competition from
alternative modes of transportation such as motorcycles, buses, trains, and airplanes.
This direct and indirect competition underscores the challenges Vinfast encounters in
establishing its presence in the automotive market. However, by leveraging its unique
selling propositions and focusing on innovation and quality, Vinfast aims to carve out
its niche and compete effectively in both the domestic and international automotive
sectors.

In the political and legal environment, the Philippine government offers support
policies such as tax incentives and research and development assistance to the
automotive industry. Vinfast, as a participant in this industry, must adhere to legal
regulations governing automobile manufacturing, business operations, and vehicle
usage. These regulations ensure compliance with standards and promote responsible
practices within the automotive sector. By navigating and adhering to these policies
and regulations, Vinfast can operate effectively within the Philippine market while
contributing to the growth and development of the automotive industry in the country.

The socio-cultural landscape significantly influences the automotive industry in the

Philippines. Consumer preferences are shifting towards high-quality, fuel-efficient,
and eco-friendly vehicles. While motorcycles remain a popular mode of transportation
among Filipinos, automobiles are regarded as symbols of success and prestige. These
cultural norms shape consumer behavior and market trends, impacting the types of
vehicles preferred by the populace. Understanding and adapting to these socio-cultural
dynamics are essential for automotive companies like Vinfast to effectively penetrate
and succeed in the Philippine market, aligning their offerings with the preferences and
values of Filipino consumers.

3. The plan

Determine strategy for the next 3 years

Over the next three years, Vinfast will execute a comprehensive strategy to solidify its
position in the Philippine market and emerge as the leading electric vehicle brand. The
strategy is delineated by clear objectives and targeted approaches designed to drive
growth and establish a strong brand presence. Vinfast's primary goal is to become the
foremost electric vehicle brand in the Philippines within three years, reflecting its
ambition to swiftly capture market share and dominate the electric vehicle segment. A
key milestone in this strategy is achieving sales of 10,000 units of the VF 9 vehicle
within the same timeframe, demonstrating Vinfast's commitment to tangible growth
and measurable success. To achieve this, Vinfast will focus on penetrating the high-
end market segment, positioning itself as a provider of premium electric vehicles that
meet the discerning demands of Filipino consumers while ensuring affordability.
Central to Vinfast's strategy is the establishment of a robust and trustworthy brand,
emphasizing consistent delivery of high-quality products and services to influence
consumer behavior positively. Expansion of the dealership network and enhancement
of after-sales services will be prioritized to bolster customer satisfaction and loyalty,
essential for sustaining long-term success. Vinfast will also implement attractive
promotional programs and incentives to incentivize purchase decisions and foster
brand loyalty among customers. These initiatives, coupled with a heightened focus on
marketing activities across various channels, will amplify the reach and impact of
Vinfast's promotional campaigns, effectively communicating its value proposition to
consumers. By executing this multifaceted strategy with precision and agility, Vinfast
aims to establish itself as a dominant player in the Philippine automotive market and
emerge as the preferred choice for electric vehicles among Filipino consumers.
Determine the form of market entry

In determining the market entry strategy, Vinfast has two primary options: joint
venture and direct export. The joint venture approach involves partnering with local
com `panies in the Philippines, leveraging their market expertise, distribution
networks, and after-sales services to gain a competitive edge. This collaboration
allows Vinfast to tap into the local knowledge and resources of its partners, facilitating
smoother market entry and operations. On the other hand, direct export entails
independently exporting vehicles to the Philippines and establishing a dedicated
distribution network. By opting for direct export, Vinfast retains full control over its
operations and distribution channels, enabling greater flexibility and autonomy in
navigating the market. Both strategies present unique advantages and considerations,
with joint venture offering localized insights and support while direct export provides
autonomy and control. Vinfast must carefully evaluate these options based on factors
such as market dynamics, regulatory environment, and business objectives to
determine the most suitable approach for entering and establishing a strong presence
in the Philippine automotive market

Product line

In terms of product line, Vinfast is primarily focusing on its VF 9 model, an upscale

electric SUV characterized by its modern and luxurious design, advanced features,
and impressive range. Additionally, there is potential for the introduction of various
versions of the VF 9 to cater to different market segments and consumer preferences,
including standard, premium, and sport variants. Building on the success of the VF 9,
Vinfast may consider expanding its product offering by introducing and importing
other vehicle models such as the VF 5 Plus, VF e34, and VF 8. This diversification
strategy allows Vinfast to broaden its market reach, appeal to a wider range of
consumers, and capitalize on emerging opportunities within the automotive industry.
By continuously innovating and expanding its product line, Vinfast aims to solidify its
position as a leading player in the electric vehicle market, both in the Philippines and
beyond, while meeting the diverse needs and preferences of customers.

Price
Vinfast employs a strategic pricing approach to position its VF 9 electric SUV
competitively within the premium segment of the Philippine automotive market. The
pricing strategy offers three distinct variants: the standard version priced at 1,800,000
PHP (approximately 80,000 USD), the premium version at 2,200,000 PHP
(approximately 96,000 USD), and the sport version at 2,600,000 PHP (approximately
112,000 USD).

To bolster its competitive edge, Vinfast implements a range of promotional programs

tailored to entice potential customers. These initiatives encompass discounts, loan
interest support, and complimentary gifts. For instance, early or bulk purchasers may
benefit from enticing discounts, incentivizing swift action and bulk purchases.

Moreover, Vinfast collaborates closely with banking institutions to offer favorable

loan interest rates, thereby easing the financial burden for customers opting for
installment payment arrangements. This strategic alliance with banks enhances
accessibility to financing options, making the purchase process more seamless and
affordable for customers.

Additionally, Vinfast sweetens the deal by offering complimentary gifts such as

accessory sets or insurance packages upon the purchase of a VF 9 vehicle. These
added incentives not only enhance the perceived value of the purchase but also
contribute to fostering customer satisfaction and loyalty.

Through these multifaceted promotional initiatives, Vinfast endeavors not only to

attract customers but also to cultivate lasting brand loyalty and solidify its position as
a prominent player in the Philippine automotive industry. By delivering value-driven
products and services that cater to the evolving needs of consumers, Vinfast aims to
carve out a distinct niche and thrive in the competitive market landscape.

Distribution

To distribute the VF 9 in the Philippines, Vinfast has outlined two key strategies:
expanding its dealer network and establishing an online sales channel. Firstly, Vinfast
plans to collaborate with local partners who possess extensive experience in
automobile distribution and have a broad dealership network across the Philippines.
Cooperation agreements will be carefully negotiated to define the rights and
responsibilities of both parties, with Vinfast providing support in staff training,
showroom construction, and brand promotion to ensure the success of its partners.
This approach aims to efficiently reach potential customers, enhance brand
recognition, and deliver superior customer service. However, challenges such as
identifying suitable partners and negotiating mutually beneficial agreements may
arise. Secondly, Vinfast intends to develop an online sales platform featuring a
visually appealing and user-friendly interface, providing comprehensive product
information and offering online consulting and support services. This initiative seeks
to broaden the reach of potential customers, reduce sales costs, and provide
convenient customer service. Yet, challenges such as establishing a reputable online
presence and ensuring secure online transactions must be addressed. Additionally,
Vinfast may explore other distribution methods such as participation in auto shows,
organizing test drive events, and collaborating with car rental companies to further
penetrate the market. Through these strategies, Vinfast aims to achieve success in the
competitive Philippine automotive market.

Promotion

Vinfast's comprehensive promotion strategy for the VF 9 in the Philippines

encompasses a diverse array of approaches, meticulously designed to enhance brand
visibility and ignite widespread product awareness. Employing a synergistic blend of
traditional and digital advertising channels, Vinfast aims to cast a wide net, ensuring
effective engagement with a broad spectrum of potential customers across various
demographics.

A pivotal component of Vinfast's promotional blueprint involves strategic partnerships

with influential figures in the Philippines. By collaborating with renowned
personalities, Vinfast seeks to leverage their vast social media reach and credibility to
endorse the VF 9, effectively tapping into their extensive follower base and fostering a
sense of trust and desirability around the vehicle.

In addition to influencer marketing, Vinfast places significant emphasis on

experiential marketing through the organization of test drive events. These events
provide prospective customers with an immersive opportunity to get behind the wheel
of the VF 9, allowing them to personally experience its performance, comfort, and
innovative features. This hands-on approach not only deepens consumers'
understanding of the product but also cultivates a sense of connection and affinity
towards the brand.

Furthermore, Vinfast strategically positions itself within the automotive landscape by

actively participating in prestigious auto shows. These platforms offer a targeted
environment to showcase the VF 9 to a captive audience of automotive enthusiasts
and potential buyers, enabling Vinfast to spotlight the vehicle's cutting-edge design,
advanced technology, and unparalleled driving experience.

By executing this holistic promotional strategy with precision and agility, Vinfast
endeavors to establish a commanding presence and generate fervent interest in the VF
9 within the fiercely competitive Philippine automotive market.

Budget

Vinfast has earmarked a significant investment budget of $70 million to bolster the
successful introduction and growth of the VF 9 electric SUV in the Philippines. To
fund this ambitious endeavor, the company has devised a multifaceted approach,
leveraging various financial avenues.

A substantial portion of the allocated budget, totaling $40 million, will be sourced
from capital mobilization efforts aimed at attracting investors. This demonstrates
Vinfast's unwavering dedication to securing external funding to propel its expansion
plans forward. In parallel, $20 million will be secured through bank loans,
highlighting Vinfast's strategic utilization of leverage to support its aggressive growth
strategy.

Moreover, the company anticipates generating $10 million in profits from ancillary
business activities, which will further bolster its financial resources and supplement
investment initiatives. This well-rounded investment strategy encompasses a broad
spectrum of areas, including marketing and promotional campaigns, expansion of the
dealer network, and enhancement of after-sales services.
Vinfast's comprehensive approach underscores its commitment to establishing a
robust presence and driving success within the competitive Philippine automotive
market. With a meticulously planned budget and diversified funding sources in place,
Vinfast is poised to execute its strategic initiatives effectively. This positions the VF 9
electric SUV for long-term prosperity and solidifies Vinfast's position as a leader in
the electric vehicle segment.

4. Conclusion

In conclusion, the Philippines market offers a promising landscape for Vinfast's

expansion efforts. With a growing demand for automobiles and a sizable market scale
projected to increase substantially by 2025, there is ample opportunity for Vinfast to
establish a strong presence and capture market share. Moreover, supportive policies
from the Philippine government and a relatively moderate level of competition within
the automotive industry further enhance Vinfast's prospects for success in the market.
By leveraging these favorable conditions, Vinfast can strategically position itself as a
leading player in the Philippine automotive sector, capitalizing on the increasing
consumer demand and driving growth through innovative products and effective
marketing strategies.

However, despite the favorable aspects of the Philippines market, there are also
notable challenges and risks to consider. The relatively low average income of
Filipino consumers presents a hurdle, particularly concerning the affordability of
electric vehicles, which may hinder widespread adoption. Additionally, unevenly
developed transportation infrastructure across different regions of the Philippines
poses logistical challenges for distribution and after-sales services. Moreover, political
risks and the potential for intensified competition from rivals launching new products
or engaging in price wars necessitate a cautious approach. Overall, while the
Philippines presents significant opportunities for Vinfast, navigating these challenges
will require careful strategic planning and execution to ensure long-term success in the
market.