VIETNAM MARITIME UNIVERSITY DEPARTMENT OF ECONOMICS INDUSTRY: FOREIGN TRADE ECONOMYDISERTATION INTERNATIONAL BUSINESS INTERNATIONAL BUSINESS COURSE PROJECT PLAN TO EXPORT LEATHER SHOES O
SOME THEORIES OF INTERNATIONAL BUSINESS
Theories of international business
- International business: is activities that include all exchanges and commercial transactions such as the transfer of goods, services, resources, labors, ideas and technologies between countries.
International business administration involves the strategic planning, organization, implementation, leadership, and control of an enterprise's international business processes Its primary aim is to achieve organizational goals and enhance the development of international operations.
- Supply Chain: A system of organizations, activities, information, people, and resources that are directly or indirectly involved in the movement of goods from the supplier to the final consumer.
- Strategy: is the framework that managers apply to determine the competitive moves and business approaches that run company.
- Global Strategy: a competitive strategy to increase profits by cutting costs on a global scale.
International marketing involves a set of processes and organizational functions aimed at creating, communicating, and delivering value to customers It focuses on managing customer relationships in a manner that benefits both the organization and its stakeholders.
- Tariff rate quota: is a measure applied by a competent state agency to decide the quantity, volume, and value of imported or exported goods at a specific preferential tax rate.
Non-tariff barriers to trade (NTBs) are regulatory measures implemented by governments to control the quantity of imported and exported goods, aiming to safeguard domestic businesses by limiting imports.
Make a goods export planner of international business
Before we dive deeper into the process of preparing and implementing a complete business plan, let's explore the concept of a business plan and its importance to businesses:
• What is an export business plan?
An export business plan outlines the strategy for conducting business and exporting goods over a specified timeframe It includes an analysis of the target market, identification of key customers, assessment of the current business landscape, evaluation of industry competitors, and a roadmap for future growth.
• The purpose of the export business plan:
+) How to determine your export readiness.
+) Learn more about European requirements, legislation and certification.
+) Find out which opportunities there are for your company on international markets.
• Why is it necessary to make an export business plan?
An export business plan is crucial for any enterprise, serving as a tool to evaluate current performance and identify strengths, weaknesses, market opportunities, and external challenges Additionally, it acts as an essential document for external stakeholders, including partners, investors, and customers, to understand the business's operational processes and make informed future decisions.
• Benefits of Exporting for business:
+) Reduce dependence on existing markets.
+) Exploit corporate technology and know-how.
+) Extend the sales potential of existing products.
+) Enhance potential for corporate expansion.
+) Gain information about foreign competition.
• How to make this planner?
To develop a complete export business plan, it is necessary need to follow these steps:
1 Determining a long-term vision: To develop and be stable, enterprises need to have a long-term and short-term export business strategy This will be the target orientation for enterprises in the future business and export process.
2 Set specific goals: Goals in the business plan are a must-have item. But it also needs to be specific, easy to set, practical, and challenging A good goal should follow the S.M.A.R.T principle:
+) Specific: means coherent A good goal should be clear Be clear about: the goal set?, where?, when?, how to change?.
+) Measurable: In setting goals, businesses must incorporate measurable factors Often these factors are indicators, profits, revenue, etc,
+) Achievable: The set goals must be feasible with the current situation of the business.
+) Realistic: Objectives must be realistic with the current market and customer context.
+) Time-bound: Goals must have a specific timeline to limit.
3 Identify a unique selling advantage: A unique selling point (USP) is a business's point of departure from its competitors This is what helps the business stand out in the eyes of customers.
4 Research competitors: Need to find out what the current state of the business market is?, how many competitors are there?, who are they?, what is their size? From there, businesses can easily map out the right plan in the future.
5 Understanding key customers: Focused customers are those who will directly consume products and services of the business An important thing when making an export business plan is to accurately determine the audience you will serve, to have the appropriate direction.
6 Market supply and demand research: Accurately determining the supply and demand of the market has an important impact on the business planning to produce and supply products to the outside.
7 Develop business goals: After doing market research, businesses need to plan for specific financial, sales and marketing goals for their products.
8 Make a specific business strategy: With certain goals, businesses need to develop a specific strategy for each goal For example: Introduce your products through which media channels?, how to apply product marketing programs?, how long does the application last? How much capital is required? How much business capital is needed?
9 Carrying out activities: After setting specific goals and strategies, it is time for businesses to put their plans into practice At the same time, you must regularly monitor the changing process of the market to have certain updates for your export business plan.
Overview of Vietnam's leather footwear export industry
Vietnam ranks second in the world in terms of footwear exports after China, exporting 1 billion pairs of footwear each year to countries around the world.
Leather and footwear exports flourished
By the end of 2021, Vietnam had approximately 2,200 footwear manufacturing enterprises, primarily located around Ho Chi Minh City, generating around $20.78 billion in footwear exports While China remains the largest producer of footwear globally, it also has the highest overall spending on footwear Notably, residents of Hong Kong led the world in per capita footwear expenditure.
Vietnam's footwear industry is thriving, exporting billions of pairs annually, despite having lower domestic demand than China As manufacturers shift production from China to Vietnam, the country is poised for continued growth in this sector According to the Observatory of Economic Complexity (OEC), footwear ranked as Vietnam's third largest export item in 2020, with a significant focus on key international markets.
US (6.43 billion) USD), China ($2.24 billion), Germany ($1.03 billion), Japan ($953 million) and South Korea ($730 million) The OEC noted that Vietnam's fastest growing footwear export markets from 2019 to 2020 are China (USD
272 million), Poland (USD 25.6 million) and Taiwan (USD 22.6 million). USD).
Research and Markets projects that Vietnam's footwear production and exports will experience significant growth from 2022 to 2031, with a compound annual growth rate (CAGR) of 8.1% By 2031, the Vietnamese footwear market is expected to reach $38.7 billion, nearly double the 2022 estimate of $19.1 billion This growth is largely attributed to companies relocating from China, with Nike indicating plans to expand production in Vietnam Additionally, the presence of a young and motivated workforce is likely to attract more companies to shift their operations to Vietnam.
Local industry leaders indicate that the sector is still in recovery from the end of 2021, with only 80% of the workforce having returned post-pandemic, which is hindering production Additionally, competition is intensifying from other developing ASEAN nations like Indonesia and Malaysia, which boast a young workforce and lower wages than China.
Foreign invested enterprises (FDI) dominate Vietnam's footwear industry, contributing 78.8% to the total export turnover The sector's appeal to foreign businesses stems from its large labor force and competitive labor costs compared to regional counterparts The United States leads as Vietnam's primary footwear export market, representing 44.78% of total exports The European Union follows, with exports reaching US$504.09 million, marking an 8.24% monthly increase and a 19.44% rise year-on-year, accounting for 24.96% of the total In contrast, exports to China totaled US$110.01 million, reflecting a 24.73% monthly decline and a 21.78% decrease compared to the same period in 2021, making up 5.45% of the total turnover.
According to data from the General Department of Customs, in April
2022, Vietnam's footwear export turnover to the United States reached US$904.41 million, up 28.84% over the same period in 2021 footwear is the largest, accounting for 44.78% of total export turnover.
In 2020, Vietnam achieved a significant milestone by capturing over 10% of the global footwear export market, amounting to approximately 1.2 billion pairs of shoes, as reported in the World Leather and Footwear Yearbook 2021 by the Portuguese Leather and Footwear Association (APICAPS) This accomplishment positioned Vietnam as the second-largest exporter of leather and footwear worldwide.
China, with 7.4 billion pairs of shoes exported in 2020 After Vietnam, Indonesia ranks third, followed by Germany and Turkey.
The leather and footwear industry, while representing only 0.4% of total enterprises and 0.8% of production capital, significantly contributes to revenue (1.6%) and profit before tax (1.8%) This sector has created numerous job opportunities and has strategically expanded into markets benefiting from Vietnam's free trade agreements The Ministry of Industry and Trade highlights that the domestic footwear industry has effectively leveraged incentives from new-generation agreements, particularly the CPTPP and EVFTA, to enhance export growth.
The origin criteria for footwear products in new-generation free trade agreements align well with the capabilities of Vietnamese enterprises As a result, footwear consistently ranks as a high-export commodity, benefiting from a significant volume of Certificates of Origin (C/O) and a high utilization rate of preferential C/O when exporting to FTA markets In some cases, this utilization rate can reach 100%, meaning all export shipments are leveraging preferential C/O Consequently, the industry aims for a growth target of 10-15% in 2022 compared to 2021, with projected revenues of approximately 23-25 billion USD, making this goal attainable.
INTRODUCTION ABOUT COMPANY, GOODS AND US MARKET
Company name:Leather Footwear And Garment Making Exporting Corporation
Main Markets:Vietnam, ASEAN, Japan, USA, EU, Russia, etc.
Head office: 15 Ngo Quyen, Ngo Quyen District, City Hai Phong
Business code 0012452366425 issued by Hai Phong City Department of Planning and Investment.
Account number 2100201284362 at Foreign Trade Bank in Hai Phong city - VIETCOMBANK.
The company specializes in manufacturing, trading, importing, and exporting leather footwear, imitation leather, and fabric goods, along with various raw materials and accessories Its primary export markets include the EU, Japan, Mexico, and Canada Established in March 2020 as a joint-stock company in partnership with Taiwan, the business operates under the Enterprise Law, Commercial Law, and Civil Law, generating an annual production value of 130 to 150 billion VND Notably, 80% of its production is dedicated to exports, while only 20% serves the domestic market.
Figure 3.1 Organisational structure diagram of Leather Footwear And Garment
Director 1 - Manage and be responsible for all activities of the company
- Develop export business plans in the short and long term.
- Organize the implementation of business and investment plans to export goods of the company
- Decide on advertising, marketing, and export business expansion measures
- Decide on training plans for staff in the company, appoint and dismiss positions in the company
- Determine employee's salary and bonus.
1 - Responsible for the operation of the department he/she is responsible for
- Observe, check and evaluate the performance of the department's operational progress with the plans set out by the company and the director
- Advise the Director on the goals, strategies, goods, customers, for the export of the company's goods. Vice Director of Finance
1 - Responsible for overseeing the financial management of the company
- Research, analyze and handle financial relationships of enterprises
- Investigation, exploration and survey of capital sources and investment policies - Warn financial risks and make future forecasts.
1 - Responsible for the design and implementation of the company's overall HR plan (including short-term and long- term HR plans)
- Controlling data and reports related to recruitment, short- term training, long-term training and human resource development
- Provide remuneration policies, salaries, bonuses and penalties, regulations for all employees, departments of the enterprise.
6 - Responsible for coming up with ideas and measures to promote brands and goods
- Answer questions, provide information about businesses and goods to customers
- Research potential markets and customer groups for export.
- Record and report on problems of goods when exporting; about the needs, desires, opinions of customers.
15 - Collect, process and check economic and financial information by reporting financial to management.
- Storing vouchers and reconciling accounting books
5 - Perform administrative and human resource management
- Plan and conduct staff training.
- Record and report employee leave issues
- Develop and contribute to employee compensation policies.
The garment industry focuses on the production and trade of imitation leather, leather shoes, and a variety of ready-to-wear clothing items Key offerings include shoes, slippers, and products related to embroidery and knitting, with a strong emphasis on direct import and export activities.
Telecommunications, office, and professional services are essential for managing a company's operations, including visa applications and facility maintenance Additionally, contracting, repair, and construction services cater to commercial, residential, and industrial projects, while interior design and machinery installation enhance functionality The hospitality sector benefits from services related to beverages, dining, music, and fashion events, ensuring a comprehensive approach to business needs.
Purchasing and selling consumer goods, production services, spare parts, and raw materials agent for sales, consignment items Office rental and space leasing services Spend money on starting a home business.
Business performance of the company
In 2021, the company faced significant socio-economic challenges that adversely affected its production and business operations From late 2017 to 2021, input costs surged dramatically, with prices for raw materials, fuel, transportation, and insurance rising between 30% and 50% This period was marked by high inflation, fluctuations in foreign currency exchange rates, and sharply increasing loan interest rates Additionally, the global economic recession in the third quarter led to a decline in the stock market and stalled projects, all of which had a direct negative impact on the company's performance The production and business results of the units are detailed in the table below.
Table 1.2: The production and business results of the units
The results of the implementation of the company's planned targets are as follows:
-Total revenue reached 113.15 billion VND compared to the plan of 140 billion VND, reaching 80.82%.
As we enter 2022, the company anticipates significant challenges in its operations due to a declining national economy, exacerbated by the global crisis and its complex developments Additionally, input costs are expected to rise sharply compared to 2021.
The shoe industry is facing significant challenges this year, including a lack of job opportunities, low pricing, and reduced competitiveness due to high taxes compared to other countries As a result of the ongoing crisis, customers are reducing production levels The company aims to meet the targets outlined in its 2022 production and business plan despite these difficulties.
From another source: 5-15 billion VND
Striving profit: 4 to 8 billion won
+ Average income of employees: 2,300,000 VND/person/month;
+ Total salary and income fund: 58 billion dong.
Paying dividends strives to: more than 5%/year.
To enhance efficiency and foster long-term business relationships, it is essential to reorganize the management system and maintain consistent production and operations Actively seeking new partnerships, both domestically and internationally, will help secure orders and establish lasting client connections Plans should be adjusted to optimize property utilization and increase production capacity, potentially through borrowing from the city's stimulus fund for factory expansion Collaborating with partners within legal frameworks can maximize the benefits of underutilized properties Additionally, expanding the domestic business system by increasing points of sale will drive sales, boost productivity, and strengthen the brand.
In light of the government's initiatives to stimulate economic demand, it is recommended that long-term plans for production, business, and export activities be developed, extending through 2010 and 2011 This strategic approach is expected to support the growth and recovery of the Vietnamese economy, particularly in the southern region, fostering gradual development on a global scale.
❖Import and export turnover of leather shoes
The company primarily exports leather shoes and has focused on this product since its inception However, exports of leather goods have declined, with a 7.95% drop in 2001 compared to 2020, followed by a significant decrease of 16.18% in 2021 This decline is attributed to market changes, particularly affecting the company's largest market, Japan, which has consistently represented over 50% of the export value for leather shoes and clothing and faced a recession in 2020.
2021, which had a significant impact on the company's exports to this market.
The company has recently separated from a division of a leather shoe manufacturer, resulting in a lack of experience to effectively manage this transition.
About 40 countries around the world receive the company's leather shoes and clothing exports, but the EU, Japan, and currently the US are the markets where the company's export revenue is growing at the fastest rate Check out the data in the following table for more details:
Table 2.1: Export market structure of Vinatexex Company
LEGAMEX is a source, as is the planning department.
Japan has been the leading contributor to the company's export revenue, accounting for over 50% of the global market from 2017 to 2019, and maintaining a share of more than 40% in subsequent years.
2020 and 2021 We can see that over the past two years, this market has been on the decline The share of this market will fall from 51.12% to 41.54% between
The EU market has been the company's second-largest export market, valued at \$3,029,670 in 2017, which represented 44.04% of total exports However, this share declined to 42.18% in 2018, 37.55% in 2019, 33.33% in 2020, and dramatically dropped to 11.68% (or \$927,286.5) by 2021 The strict standards for leather footwear in this challenging market prompted the company to shift its focus to the US and other markets, leading to a significant decrease in the EU's share of the export market structure.
The US market is a significant consumer of leather goods, leading to an influx of leather shoes from various countries, including Vietnam Vietnamese leather products benefit from a price advantage due to the Vietnam-US Leather Footwear Agreement, which has reduced taxes Consequently, the company aims to boost exports to this lucrative market In 2017, the US accounted for only 0.06% of the export market, valued at USD 4,230 However, this share grew to 0.304% ($19,398) in 2018 and further increased to 4.97% in 2019 By 2020, the market share surged to 17.13%, amounting to USD 1,255,304.6 By 2021, the US became the company's second-largest export market, capturing 31.2% of the market, valued at USD 2,476,359.
Since its inception, the company has prioritized market diversification, actively seeking new opportunities in Asia, America, and Africa alongside its established markets in Japan and the EU This strategic focus has led to a significant increase in the share of these emerging markets, rising from 4.80% in 2017 to 15.58% in 2022.
SOME SOLUTIONS TO PROMOTE THE EXPORT OF
MARKET IN THE NEAR FUTURE.
3.1 The prospect of exporting Vietnamese leather shoes to the US market
The US market presents a significant opportunity for leather shoe exports, with a consumption demand of approximately $90 billion annually Vietnam, as a leading exporter of leather footwear, prioritizes increasing its exports to the US, facilitated by the Vietnam-US Trade Agreement A report from the US International Trade Commission highlights that Vietnam is uniquely positioned among Asian countries to compete with China in this sector The American Leather Footwear Importers Association notes that Vietnam is the second-most favored source for leather shoes, offering competitive pricing and superior quality compared to India Additionally, Vietnam's accession to the WTO in 2005 will provide preferential treatment for its exports, eliminating quotas on footwear and leather goods and significantly reducing import taxes on Vietnamese products entering the US market.
Vietnam has a significant opportunity to boost its leather goods exports to the US To capitalize on this market, leather shoe exporters need to develop effective plans and strategies.
3.2 The company's export orientation of leather shoes exports leather shoes to the US market.
After a prolonged recession, the US economy is projected to grow by 4.5% in 2021, making it a vital market for the company's leather goods and footwear exports The company aims to increase its export revenue from USD 4,000,000 in 2019 to USD 10,500,000 by 2021 To achieve this, it recommends promoting direct exports to enhance profit margins, gain market control, and establish brand recognition By reducing reliance on middlemen, the company can ensure faster delivery to consumers at competitive prices, while also moving closer to developing its own distribution network for effective brand marketing.
The company focuses on product diversification to enhance customer satisfaction by offering a wider range of options This strategy involves innovating existing products and expanding the model portfolio to better meet the diverse needs of consumers.
To effectively compete with Chinese products, the company has chosen to focus on mid-range and higher-quality product lines Vietnamese goods in the same category struggle against Chinese offerings due to their reliance on price-competitive strategies Consequently, the company's competitive approach emphasizes product quality alongside price, design, and distribution By developing unique products with a distinct aesthetic, the business aims for a sustainable long-term product development strategy that requires significant investment Additionally, leveraging market intelligence, securing capital, and optimizing supply chain relationships within its subsidiaries will enhance the company's competitive edge.
The company has established its target, prompting the need for a strategic plan to achieve this goal To facilitate success, it is essential to identify the necessary actions the business must undertake Additionally, the government should consider implementing regulations that support shoe exporters, ultimately boosting export levels.
US market? This response is included in the list of solutions that will be provided below.
3.3 Solutions to promote the export of leather shoes of the Leather Footwear Import-Export Company to the US market.
The company focuses on the US market in its development strategy, emphasizing the need to tackle challenges and capitalize on opportunities to boost exports to this key market.
The Company can actively manage its market expansion by creating a comprehensive research plan This plan should assess the capacity to utilize external resources and guide investment levels, ensuring that funding is neither excessive nor insufficient, thus avoiding disorganized or ineffective investment strategies.
Since its inception, the Company has formed market development teams; however, their efficiency is hindered by a shortage of personnel and insufficient investment capital Consequently, the Company requires additional resources to enhance productivity and drive growth.
- Recruit new employees who are able to work well with the market, rearrange personnel for this department, determine specific responsibilities for each person's work.
- Every year, organize field trips to assess how consumers react to their products, whether the price is appropriate, competitors, and distribution channels are appropriate with Company…
The company should leverage its status as a subsidiary of the Corporation to gather valuable insights on demand and pricing through Vinatex's representative office in the US Utilizing the resources of these offices will significantly reduce operational costs for the company.
Conducting market research can be costly; therefore, the Company should integrate it with product promotion by participating in fairs and exhibitions while leveraging professional insights into the market The delegation's role at these events is to showcase the Company's products and brand to American customers while gathering vital information on competitors, pricing, quality, designs, and consumer trends to evaluate the Company's competitive standing in the market.
The Company must gather information from various sources, including the Vietnam Trade Office in the United States, law consulting firms, and relevant associations such as the Vietnam Leather and Footwear Association and the American Leather Shoe Association Additionally, insights from Vietnamese banks in the US, US banks in Vietnam, international carriers, freight brokers, customs brokers, and online international publications are essential This comprehensive data collection will enable the Company to accurately assess its competitive position and market trends, as well as evaluate the factors influencing its export business in the US market.
3.3.3 Promote the company's products and images
To build customer relationships and trust, it is essential for companies to effectively introduce their products to consumers This can be achieved through strategic promotion and marketing efforts that enhance the visibility of the company's offerings and brand image Implementing targeted promotional measures is crucial for successfully engaging potential customers and fostering product familiarity.
- Actively participate in fairs and exhibitions to introduce products and images company photo with customers.
- Launched the company's product catalog with unique and fashionable products to impress customers
- Through Vinatex's representative office to introduce the company to American partners
To establish a strong brand, a company must focus on product quality, design, and after-sales services, while also considering the importance of trademarks associated with copyrights on labels and logos Effective advertising plays a crucial role in brand building, with many successful brands allocating a significant portion of their budget to this area Companies should develop a comprehensive advertising plan that utilizes various media, including newspapers, publications, and television, to effectively reach consumers While print advertising is more cost-effective, it may not achieve the same level of visibility as television ads, which, despite their higher costs, can enhance brand recognition Ultimately, the choice of advertising medium should align with the company's budget and marketing goals.
To enhance its export business in the US market, a leather shoe import and export company must prioritize human resources, as they are crucial for success Currently, the company faces a shortage of knowledgeable staff regarding the US market, including skilled designers and effective marketing and sales personnel To address this gap, it is essential for the company to invest in training and developing its workforce, thereby strengthening its capabilities and boosting its export potential.
ORGANIZATIONAL IMPLEMENTATION OF PLAN FOR
In seeking business partners, the company opted for mail transactions, a prevalent method in today's import, export, trade, and service exchanges This choice is driven by the commonality, courtesy, and cost-effectiveness of correspondence, as well as the legitimacy it provides in each transaction.
Letters used in transactions offer significant advantages over other transaction methods, allowing users to save both time and costs, particularly when dealing with geographically distant partners This approach eliminates the need for in-person meetings and negotiations, while still maintaining a certain level of legal validity in each transaction Additionally, users can engage with multiple partners simultaneously, enabling them to communicate their opinions and intentions without direct expression.
While mail transactions offer several benefits, they also come with drawbacks, such as lengthy wait times for responses, which can result in missed business opportunities In contrast, telegram transactions can effectively address this issue When engaging in correspondence, it is essential to use polite, concise, and direct language, ensuring accuracy and a sense of urgency while remaining patient.
The language employed should be widely recognized and accessible, maintaining proper grammar, structure, and a tone that is both polite and formal It is essential to ensure that the content is specific, clear, and easy to comprehend, thereby minimizing the risk of misinterpretation for readers.
To ensure complete legality and mutual agreement, negotiations must be conducted between parties, especially in cases involving the negotiation and signing of contracts for large-scale co-production and business ventures.
5.2 Send the partner's Order acceptance letter
5.3 Leather Footwear Making Exporting Corporation
Add : 424 Norton street, Liverpool city, USA.
We are pleased to confirm that we have received your order and appreciate your agreement to our requests regarding the product specifications, quantity, delivery date, and payment.
We are looking forward to receiving the confirmation from you. Yours faithfully Director
Add : 424 Norton street, Liverpool city, USA.
To : Leather Footwear Making Exporting Corporation
Add: 15 Ngo Quyen, Ngo Quyen Dist, Haiphong city, Vietnam. Tel : (84 31) 38 641 386 - 38 660 564
We are very happy to have dealing with you We send this conformation to ensure that we agree with all the iterms you gave in your offer.
Please send me a signed contract as soon as possible.
5.5 Sign export contracts with US partners according to orders:
The Buyer : Bromleys Co., Ltd.
Add : 424 Norton street, Liverpool city, USA.
Bank : HSBC Commercial Bank of UK.
Add of Bank : 232 Breck Road Everton Liverpool L5 6SN, United
Name of Account : Bromleys Co Ltd
Represented by: Mr Henry Mason - Director
The Seller : Leather Footwear Making Exporting Corporation Add : 15 Ngo Quyen, Ngo Quyen Dist, Haiphong city,
Bank : Join Stock Commercial Bank For Foreign Trade Of Vietnam
Add of Bank : 11 Hoang Dieu, Hong Bang Dist, Haiphong, Vietnam USD A/C No.: 2100201284362
Represented by: Mr Nguyen Manh Huy - Manager
The Buyer and the Seller have mutually agreed to sign this contract covering the following terms and conditions :
Name Product code Description - Quality Quantity
Classic Oxford Style Calf Leather Uppers Leather Lined Goodyear Welted Leather Sole
Fully Leather Lined Leather soles with Rubber inserts
Goodyear Welted Leather Soles Fully Leather Lined.
Total price (FOB Hai Phong) 8 000 000 (USD)
Say : US Dollars Eight million only
These price are understood FOB Haiphong as per Incoterms 2000, packing charges included.
The goods must be packed in new carton boxes of 50 pairs each one.
Shipment shall be made during the period of October to November 2022 Shipment shall be made by vessels of about 3,000 to 10,000 tons, unless otherwise separately agreed
Port of loading: Haiphong port – Vietnam
Port of discharge: Liverpool port – USA
In respect of quality to weight for each shipment certificate of inspection and certificate of weight issued by VINACONTROL at loading port shall be taken as final.
All claim by the buyer shall be made within 30 days after arrival of the goods at port of destination.
Vietcombank (Haiphong) facilitates international trade by ensuring that the Letter of Credit (L/C) is received by the Seller at least 15 days before the anticipated shipment date, with a validity period of 30 days The use of TTR is also permitted in this process.
The such L/C shall be available for payment against presentation of the following documents:
Bill of exchange at sight, drawn under the Buyer.
Full set(s) of clean on board ocean bill(s) of lading marked “Freight prepaid”.
Certificate of origin in duplicate.
The contracting parties are not responsible for the non – performance of any contract obligation on case of usually recognized force majeure.
As soon as occured the condition under which force majeure has been invoked, i.e extra ordinary, un – foreseenable and irresistible event, a cable should be sent to the other for information.
A cerificate of force majeure issued by the competent Government Authorities will be sent to the other party within 7 days.
As soon as the condition under which force majeure has been invoked has been ceased to exist, this contract will enter immediately into force.
If the Buyer does not open the Letter of Credit (L/C) on time as stipulated in the contract, the Seller can impose a penalty of 1% per day of the contract amount Conversely, if the Seller fails to deliver the goods on schedule, the Buyer is entitled to a penalty of 1% per day based on the value of the undelivered goods.
In the event of disputes arising from this contract that cannot be resolved amicably, the matter must be referred to arbitration The arbitration will take place in the country of the defending party, and the resulting awards will be final and binding for both parties Additionally, all costs associated with the arbitration will be the responsibility of the losing party.
Made in Haiphong on May 20 2022 th
For and behalf For and behalf of the Buyer of the Seller
50 agreement and signed a contract to buy and sell foreign trade goods The contract stipulates the main terms of:
.Unit price, total payment price according to FOB terms Haiphong, Vietnam – Incoterms 2020,
Volume and quantity of goods ordered by foreign partners.
Conditions on packaging and packing of goods.
Delivery terms include the delivery time and method used by the carrier Goods are inspected by VINACONTROL, which provides a quality certificate Payment is made through irrevocable documentary credit, ensuring a payment guarantee from the importing partner Additionally, provisions are in place for force majeure events that may cause damage to goods during transportation.
In the event of a dispute between the parties, arbitration conditions will apply, as outlined in this contract, which serves to define the rights and responsibilities of each party in upholding their agreed commitments.
Importing raw materials and manufacturing products.
The company establishes contracts to import raw materials from suppliers in Taiwan, ensuring compliance with the importing partner's production requirements These contracts detail essential aspects such as product specifications, pricing, volume, inspection and quality control terms, delivery schedules, payment conditions, transportation methods, force majeure clauses, and general agreements between the parties The company consistently imports raw materials from its Taiwanese partners to maintain continuous production, timely fulfillment of importer orders, and optimal working conditions for its employees.
Upon receiving raw materials and accessories, the company will initiate production based on partner orders and fulfill export contracts as per mutual agreements, ensuring timely delivery that meets established standards and quality.
Finished products are packaged in individual boxes, with each box containing 50 pairs and labeled with a code The packaging symbols must facilitate easy delivery and provide clear instructions on handling, preservation techniques, and transportation methods for efficient loading and unloading.
VINACONTROL, the inspection company, will conduct export clearance for 51 items at the request of a foreign partner, providing a quality certificate upon completion of the inspection It is important to note that leather shoes do not require export permits.
Goods after being inspected and assessed for quality and quality will be carried out customs clearance procedures at Hai Phong port border gate, including the following steps:
- Prepare a set of customs documents including:
Customs declaration of exported goods (original); detailed list of goods (original);
Contract of sale of goods (copy).
- Presenting goods: exported goods must be arranged in order and convenient for inspection.
- Pay fees and implement decisions of Customs officers.
Request the importer to open L/C
SOLUTIONS AND RECOMMENDATIONS
6.1.1 Solutions of the Leather and Footwear industry
To enhance competitiveness in the international market, Vietnamese enterprises should prioritize reducing production costs per unit by implementing new technologies and effective production management strategies A thorough analysis of their advantages will enable businesses to develop flexible strategies for market growth, select priority products, and establish unique features that differentiate their offerings Additionally, developing a robust distribution system and related services is essential for success.
To enhance the production business, it is essential to address unreasonable practices, reduce pollution, improve working conditions, and establish favorable employee regimes to stabilize human resources and lower training costs Additionally, it is crucial to develop production facilities robustly and efficiently organize the domestic supply of raw materials and accessories at competitive prices, ensuring timely service while implementing strategies to minimize input costs.
- Focus on developing high value-added products in the country, strengthen linkage activities, create effective information channels, timely grasp developments and changes in the market and consumer preferences Using
- Focusing on training and developing human resources, considering this an important factor in the process of developing and improving the competitiveness of enterprises.
6.1.2 Solutions of the Leather and Footwear industry.
- Select product strategies suitable to the conditions of each enterprise;
- Fully meet requirements on product quality, environmental standards, and requirements on good implementation of Corporate Social Responsibility;
- To invest in expansion according to the planning, contributing to the restructuring of the industry;
- Actively contribute to the sustainable development of the whole industry;
- Focus on training product design and development team, management staff, good sales team;
- Strengthening linkage activities to promote production development.
6.2 Proposing some specific solutions and measures
54 products and goods in the entire Leather - Footwear industry.
- Develop and apply Standards, Technical Regulations and Conformity Assessment Process related to Leather - Footwear products.
- Support the development and application of advanced management systems and innovative tools to improve productivity and quality of enterprises in the Leather - Footwear industry.
- Dissemination of technology application and innovation in enterprises.
- Assess the quality level of products and goods and measure the productivity of the Leather and Footwear industry.
- Measures on information work, propaganda to raise awareness about the TBT agreement and the productivity and quality movement.
- Measures on organization and human resources.
Some recommendations a For state management agencies –
The Leather and Footwear industry needs to develop and complete a technical legal corridor for Leather and Footwear products and goods.
- Enhance information transparency for all applicable subjects.
- Strengthen business support activities without violating the basic principles of the Agreements of the World Trade Organization (WTO).
- Strengthen business support through bilateral, regional and multilateral Free Trade Agreements (FTAs).
- The State synchronously renews policies and management mechanisms in the direction of a market economy to increase the competitiveness of enterprises. b For Leather and Footwear Industry (Institute, Association)
Establish a dedicated unit to consistently collect, update, and disseminate information on comprehensive technical barriers in targeted export markets and industry-specific markets This unit should operate regularly to ensure effective communication and support for stakeholders.
- Building a database on technical fence systems of countries for Leather and Footwear products and a database on Vietnam's technical fence system.
- Organize training courses, seminars to guide enterprises on the application of standards, technical regulations and conformity assessment processes of export markets and Vietnam.
- Support in researching and adapting technology for environmentally friendly production processes and applying cleaner production to enterprises' production processes.
– Develop and implement technical regulations in harmony with current standards in the world.
- Consulting and actively participating in the development and promulgation of standards, technical regulations and conformity assessment procedures, consistent with the reality of Vietnam and not contrary to international practices.
- Coordinate with the Ministry of Industry and Trade to develop technical measures for the leather industry
- Shoes within the framework of the project chaired by the Ministry of Industry and Trade (Project on improving productivity and quality, project
To ensure compliance with the TBT Agreement and Vietnamese law, it is essential to implement technical measures in export and import activities These measures must prioritize the safety of people, animals, and plants while also focusing on environmental protection and energy conservation.
- Prepare qualified human resources to be ready to meet the increasing requirements in production, business, import and export activities and international economic integration of the Leather and Footwear Industry.
- Performing the role of coordination and linkage among agencies, organizations and enterprises in the implementation of the TBT Agreement of the Leather and Footwear industry.
- Strengthen international cooperation activities to improve organizational capacity for the entire Leather and Footwear industry. c For Businesses.
- Be proactive in finding information related to their products and goods, as well as researching and updating new TBT regulations of importing countries.
- Actively participate actively in the process of developing, promulgating and applying Standards, Technical Regulations and Conformity Assessment Process
–Actively apply Standards, Technical Regulations and Conformity Assessment Procedures for their products and goods.
- Participate in the application of advanced quality management systems, quality productivity movement.
–Technological innovation and sustainable development
As the world leather shoe market transitions into the post-quota period and the Vietnam-US Leather Footwear Agreement comes to an end, the export landscape for Vietnamese leather shoes to the US has significantly changed Experts anticipated these shifts, particularly the increasing dominance of Chinese leather goods in the US market Given that the US remains the largest export market for Vietnamese leather shoes and is crucial for the Leather Footwear Import-Export Company, promoting leather shoes in this competitive environment presents a considerable challenge for Vietnam and the company.
The Leather Footwear Import-Export Company has experienced notable growth in its export business to the US market over the past few years, yet it faces challenges in further expanding these activities As part of its market development strategy, the company aims to enhance its exports to the US by addressing both its advantages and shortcomings To effectively boost leather goods exports, the company must implement proactive measures that not only increase export turnover but also enhance direct export capabilities Additionally, diversifying product offerings and improving competitiveness in the US market are essential for sustained growth.
The company will encounter significant challenges in its export activities and achieving its objectives without state support Therefore, it is essential for the government to assist leather shoe exporters by alleviating financial and time burdens This support will enhance their competitive edge and enable them to seize business opportunities, ultimately facilitating the successful implementation of the strategy to promote leather footwear exports to the US market.
1 Duong Huu Hanh, Challenges of global competition.
2 Dr Vu Anh Dung, International business strategy - Practices of Vietnam, Asia and the world, Science and Technology Publishing House 2022.
3 Newsletter for import and export of USA market.
4 Portal of the Center for WTO and VCCI Integration.
7 Notice No 241-2021 USAn Department of Agriculture, Water Resources and Environment.