05 BANANA FROM HAGL GROUP PENETRATES INTO AMERICAN MARKET

Additionally, our attempt is to give recommendations to this company into one of the largest consumer market in the world - American market... HAGL GROUP INTRODUCTION OF COMPANY HAGL AGR

BANANA FROM

HOANG ANH GIA LAI GROUP

PENETRATES INTO AMERICAN MARKET

BANKING ACADEMY INTERNATIONAL TRADE AND FINANCE LECTURER: NGUYEN THU HUONG

2 0 / 0 5 / 2 0 2 2

T E A M W O R K R E P O R T

G R O U P 0 5

LECTURER: NGUYEN THU HUONG

DINH THI CAM TU - 22A4050299

TRAN THI TRUC - 22A4050182

NGUYEN THI HAI HANH - 22A4050050

NGUYEN THI ANH TUYET - 22A4050044

NGUYEN THI THU HANG - 22A4050293

KIEU THI HAI VAN - 22A4050381

THE MACRO ENVIRONMENT OF AMERICA

THE RISK THAT THE COMPANY MAY FACE WHEN THEY INVOLVE IN SUCH FOREIGN MARKET AND HOW THE COMPANY COULD MITIGATE SUCH RISKS

FIVE-FORCE MODEL IN US'S BANANA MARKET

Vietnam is a tropical country and also home to many

precious banana plants Banana plants are cultivated

in a large area with a high yield In recent years,

Vietnam's banana export market has increased

sharply in demand Countries such as Korea, Japan,

Russia, EU countries are gradually believing in the

quality of bananas in Vietnam

Grasping this situation, Hoang Anh Gia Lai Group

has promoted banana exports in recent years After

10 years of careful and meticulous screening from

customers, markets, customers, soil, and potential of

the group Group, HAGL has decided to export

bananas to foreign markets It has properly grasped

the trend and demand as well as helped Vietnamese

agricultural products obtain a certain foothold in the

international market

The purpose of this essay is to research the the

opportunities as well as challenges that a firm faces

when entering a new foreign market Specifically,

banana product of company Additionally, our

attempt is to give recommendations to this company

into one of the largest consumer market in the world

- American market

FOREWORD

Hoang Anh Gia Lai Joint Stock Company, formerly

known as Hoang Anh Proprietary Enterprise, was

established in 1993 The company is located in Pleiku

City, Vietnam In 2019, HAGL Agrico has recorded many

important milestones of the financial restructuring

process Hoang Anh Gia Lai Joint Stock Company is

organized in the form of a multi-industry corporation

with the main fields of fruit growing and cattle raising

Besides, the Group also maintains a number of other

supporting industries such as hospitals and sports

HAGL GROUP

INTRODUCTION

OF COMPANY

HAGL AGRIO

Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico) was

established in 2010, when Hoang Anh Gia Lai Joint

Stock Company (Parent company) carried out the

program of corporate restructuring Now, the Company

is operating in agriculture with rubber and fruits as its

core products Its projects are located in Vietnam, Laos

and Cambodia

FRESH BANANA OF COMPANY

Fresh bananas are the key product generating the

biggest revenue to the Company The Company always

focuses on producing high quality products, meeting

the GlobalGAP standards or equivalent standards,

eligible to export to tough markets such as China,

Japan, South Korea Currently, the Company takes the

Chinese market as a platform and will occupy the

position of the largest supplier of tropical fruits in this

market

PAGE 05

BANANA FROM HOANG ANH GIA LAI GROUP PENETRATES INTO AMERICAN MARKET

The international agricultural product market always has outstandingpotential The demand for fruits in the consumer market is very large Another benefit of expanding abroad is that it gives the opportunity tonot only sell your current product or service to a new customer base butalso to invest and introduce new products/services With a much broadercustomer base, you can generate more business and increase sales Fromthere, HAGL can export more other agricultural products, especiallytropical fruits to consumers abroad.

REASON FOR ENTERING A NEW

FOREIGN MARKET

If HAGL Group successfully participating in thebanana export market, HAGL will receive a lot

of benefits from reputation to profit

of benefits from reputation to profit

INCREASE REVENUE POTENTIAL

Revenue from export enables the Company to be more proactive in itsprevention of exchange rate risks Banana in particular, is the largestcontributor to the revenue generation in 2019, accounting to about half of the total earnings and will continue to grow in the years to come HAGL's

banana product have been exported in China, Korea, Japan So, it should

enter a new foreign market to increase revenue

NEW CUSTOMER BASE

When HAGL captures market share in even the most demanding marketssuch as America will help the quality of Vietnamese agricultural products beappreciated more with international friends A good global reputation willattract new customers Expanding abroad allows a company to build namebrand recognition and establish credibility internationally

IMPROVE HAGL'S REPUTATION

OF AMERICAN

MARKET

THE MARCO ENVIRONMENT

OF AMERICA

Government plays a vital role in overall

economic development and the business

sector The USA follows the presidential

democratic political system US has a fair

electorate process and election system

US's president falls under the category of

the world’s most powerful person because

he’s the head of the superpower country

US has a great influence over the

policymaking, political, and economic

affairs of the country and worldwide

POLITICAL

The U.S-Vietnam Bilateral TradeAgreement (BTA) is a comprehensivedocument covering trade in goods,protection of intellectual property rights,trade in services, investment protection,business facilitation, and transparency

Besides, Vietnam and US are member ofAPEC WTO, UN, IMF, World Bank

An opportunity that Vietnam has from the

US government is a good relationship bothpolitically and economically This is anopportunity to promote trade with theUnited States to receive incentives and join

US economic associations to have moredevelopment opportunities in the future

THE MARCO ENVIRONMENT

OF AMERICA

ECONOMY

The USA has the world’s largest and most stable and powerful economy The economic system is well-developed and gathers its

strength from its services and manufacturing industries

The United States is a highly developed country with a market economyand has the world's largest nominal GDP and net wealth It has thesecond-largest purchasing power parity (PPP) behind China It had theworld's eighth-highest per capita GDP (nominal) and the ninth-highestper capita GDP (PPP) in 2022

Labor is not cheap in the USA, the availability of cheap labor hasencouraged many US firms to outsource many of their business activitiesaround the world The unemployment rate is increasing and it’s decliningthe purchasing power of people because the pandemic of covid-19 has

shut down all the businesses worldwide The unemployment rate

continued its rapid decline falling to 3.6% in 2022.

The U.S is the world's largest importer and the second-largest exporter(That means it operates as a free market economy in consumer goodsand business services)

The U.S plays a major role in the international trade system and isgenerally seen as a proponent of reduced trade barriers and free tradeagreements The United States currently has more than a dozen freetrade agreements in place

PAGE 09

GDP: $25.347 trillion (nominal, April, 2022), 1st in the world

Unemployment: 3.6% (March, 2022) Inflation (CPI): 8.3% (April, 2022) Imports: $3.387 trillion (2021)

QUICK FACTS

BANANA FROM HOANG ANH GIA LAI GROUP PENETRATES INTO AMERICAN MARKET

THE MARCO ENVIRONMENT

The Vietnamese immigrant population

is the fourth-largest Asian immigrantgroup in the United States Because ofthe structure of a large immigrantpopulation and a large Vietnamesecommunity, Americans attach greatimportance to Vietnam's exportproducts

DIVERSITY: The country is the melting pot of all the world’scultures and civilizations comprising people from everywhere.Differences in culture and cultural ignorance of the market canlead to a loss of market share in the target market

HEALTHCARE: The USA has the most advanced healthcaresystem and it’s very expensive Now they’re moving towards ahealthier lifestyle, diet, and exercise However, health care is notusually free and certainly not cheap for many people

LIBERAL MINDSET: The American people are open-minded andthey have got liberal-minded It’s because they’re accustomed toseeing different cultural norms and trends

RACIAL: The racial tension has been increasing in some states ofthe US, where the police have a tyrannical attitude towardBlacks It’s mostly due to socioeconomic mobility.Socioeconomic mobility means upward and lowers the class ofpeople in society because of the social and economic level

The United States has the most technologically powerful andinnovative economy in the world Its firms are at or near the forefront

of technological advances, especially in artificial intelligence,computers, pharmaceuticals, and medical, aerospace, and militaryequipment

TECH LEADERSHIP: Ever since the foundation of the US, the countryhas always had a great fascination with science and technology Theyhave got the best technological institutes in the world and they huntdown talent from across the world The world’s top 5 tech companieslike Google, Facebook, Amazon, Microsoft, and Apple are also in the

US It won’t be wrong to say that here is the tech leader of the world

California is home to Silicon Valley, the name given to the areahosting the leading corporations and start-ups in informationtechnology This state also hosts dynamic biotechnology clusters inthe San Francisco Bay Area, Los Angeles, and San Diego

ADAPTING TECHNOLOGY: The American people have also got aflexible attitude toward technology They accept and adapt the latesttechnology and apply it in different fields The practical applicationand utilization of technology in real life is the main reason behindthe success of the USA Most importantly, technology has createdmany job opportunities and reduced production costs

RAPID CHANGE: The rate of technological innovation and change isextremely rapid in the USA However, the country faces strongchallenges from a number of countries e.g China, South Korea, andIndia

THE MARCO ENVIRONMENT

The US is a highly regulated society As such, people or enterprises that want to do business in the US need to be aware of the many regulations, standards, and guidelines that may affect the sale of their products or services.

The United States is an extremely competitive marketplace that rewards efficiency productivity and integrity while mandating rigorous compliance with the nation’s complex rules and regulations As the US economy improves the cost of doing business in the USA may rise This would require a corresponding higher level of investment in order to compete with established domestic businesses Federal, state, and local regulations require a thorough knowledge of tax, commercial, and label laws.

Obtain an Import License or Permit

In most cases, you will not need a license to import goods into the U.S But, for certain goods being imported, some agencies may require a license, permit, or other certification

Phytosanitary

Quarantine regulations in the US take place very closely and strictly In the United States, inspectors of the Animal and Plant Health Inspection Service must inspect and certify all shipments before customs declaration If signs of pests or diseases are detected, the product may be disinfected (or otherwise processed), returned to the exporting country or destroyed.

Intellectual property rights

The USA offers a strong legal system to protect Intellectual Property Rights They’re the major reasons behind the formation of giant tech companies It creates a safe environment for the intellectuals to develop programs and software so that the creator would receive credit for his/her work.

THE MARCO ENVIRONMENT

OF AMERICA

LEGAL

GEOGRAPHIC DIVERSITY: The USA has an extremely diverse geography, climate, and wildlife This diversity coupled with other factors such as breath-taking natural attractions, charming little towns, and vibrant cities has been a driving force to draw millions of tourists to the country 79.26 million international visitors came to the U.S in 2019 (Lock, 2021) Canada, Mexico, the United Kingdom, Japan, Brazil, & China are the top six countries sending tourists to the USA.

NATURAL DISASTERS: The USA faces some of the toughest weather conditions in the world The country has sustained over 220 weather and climate disasters since 1980 In 2017 alone, there were 15 weather and climate disasters with losses exceeding $1 billion each Apart from financial damages, these disasters also cause disruption to everyday life in the most technologically developed country in the world.

Business ethics: Based on the idea that it is possible to maximize wealth and profit while also being committed to upholding values and laws Many commercial ethics used regularly within the United States span a wide range of business functions and departments General professional conduct, social values, anti-discrimination, fair labor standards, financial responsibility, and honest marketing are among the most common American business ethics.

THE MARCO ENVIRONMENT

Twenty-five years after the establishment of bilateral relations in 1995,the United States and Vietnam have trusted partners with a friendshipgrounded in mutual respect Vietnam and the United States belong to anumber of the same international organizations, including the UnitedNations, ASEAN Regional Forum, Asia-Pacific Economic Cooperation(APEC), International Monetary Fund, World Bank, and World TradeOrganization Vietnam is serving a two-year term as a non-permanentmember of the United Nations Security Council in 2020-2021 and servedmost recently in 2020 as ASEAN Chair.

Since the entry into force of the U.S.-Vietnam bilateral trade agreement

in 2001, trade between the two countries and U.S investment in Vietnamhas grown dramatically The United States and Vietnam have concluded

a trade and investment framework agreement; they also have signedtextile, air transport, customs, and maritime agreements U.S exports toVietnam include machinery, computers and electronics, yarn/fabric,agricultural products, and vehicles U.S imports from Vietnam includeapparel, footwear, furniture and bedding, agricultural products, seafood,and electrical machinery U.S.-Vietnam bilateral trade has grown from

$451 million in 1995 to over $90 billion in 2020 With a total exportturnover of US$3.5 billion, the US became the largest export market ofViệt Nam's agricultural, forestry and fishery products in the first threemonths of 2022

U.S.-VIETNAM ECONOMIC AND TRADE RELATIONS

Those positive signals have opened up opportunities to

accelerate more of Việt Nam’s export goods to the US The

potential for exporting Vietnamese agricultural products to the

US market is very large due to the high demand in the market.

However, agricultural products exported to the US still face

many difficulties, especially fresh products Businesses in

general and HAGL in specific need to research all factors,

especially the potential of their products in the US market