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Competition of Vietnamese Exports from Integration
10 | 07 | 2007
The enhancement of competitiveness is one of the most concerning issues for Vietnamese companies after WTO admission. On the sidelines of the National Export Promotion Seminar 2007 held by the Trade Promotion Agency under the Ministry of Trade in Hanoi recently, Vietnam Business Forum interviewed Dr. Le Dang Doanh about the competition of Vietnamese exports before the crises and challenges of the international integration process.
What are your comments about the importance of competition, after Vietnam has joined the WTO?
Following Vietnam’s admission to the WTO, Vietnamese companies have wider access to the immense global market, and equitable legal status in case of trade disputes. However, one market-opening challenge is the possibility of shrinking market shares due to the presence of more experienced and professional foreign rivals. In the coming time, Vietnam will have to open the supermarket system. Logistics, warehousing, shipping, wharf, port and other supporting facilities will be further expanded. Hence, competition is a constant influence and the primary factor companies and investors are faced with.
 
What do you think about the responses of Vietnamese companies to the coming competition?
Businesses can be classified into two groups. One is competing heavily with foreign rivals like garment, textile, tourism, leather, footwear, coffee and rice. Companies of these sectors comprehensively understand competition and are trying to edge up their competitiveness. They have higher levels and better treatments, but weaker marketing and customer care.
 
The other is giant monopolies like electricity and water firms. These companies simply use their monopoly. The behaviours of monopoly companies show no competing factors. This causes many difficulties for users of their services.
 
Which competitive aspects are Vietnamese exports weak at?
In fact, it is not the value of exported commodities determines the competitiveness, but add-ons like after-sales services, legality and delivery. In Vietnam, the theoretical laws are good, open and innovating, but the practical execution is different.  
 
Another matter is the price of services. Many services are more expensive than regional rates, such as shipping, telecommunication and seaport services.
 
What should Vietnamese companies do to strengthen themselves in the integration process?
The integration of Vietnamese companies is only in the initial stage. However, one should not think competition is self-determined and done independently from A to Z. In my opinion, to obtain high competitive value, Vietnamese enterprises must associate and cooperate. When at a competitive disadvantage, they should cooperate with rivals, and distributors, to take advantage of technology transfer and focus on competitive fields. We should look at our background. For example, Vietnam is unable to produce a complete automobile, but it can invest in developing automotive supporting industries like parts production and assembly. So, why not focus on basic steps to avoid direct competition from overwhelming rivals.
 
As for products with weaker competition, Vietnam can apply the “niche market” strategy, manufacture products and then occupy the market share of its rivals. For example, Vietnam can make higher quality apparel to take up different market segments, the Middle East for instance.


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