Ib report official (1)

International Business Report - Báo cáo Kinh Doanh Quốc Tế Phân tích quy trình kinh doanh xuất khẩu cafe sang Italia So sánh tình hình chính trị, các chiều văn hóa Hofstede giữa hai quốc gia Nếu rủi ro, lợi nhuận, giải pháp khi xuất khẩu cafe sang thị trường Ý.

FACULTY OF INTERNATIONAL BUSINESS

MID-TERM GROUP ASSIGNMENTS REPORT

TOPIC:

ANALYSIS OF INTERNATIONAL BUSINESS ACTIVITIES

EXPORTING COFFEE TO ITALY

Introduction lecturer : Phung Nam Phuong

: Nguyen Le Phuong Thao : Le Truong Thi Huyen

: Vo Thi Cam Thy

: Tran Le Thuy Ngan

Danang, 2023

I TRUNG NGUYEN LEGEND CORPORATION 2

II ITALIA 3

1 Introduction 3

2 Political 3

2.1 Democracy 3

2.2 Individualism 4

3 Economic 5

4 Legal 8

5 Cultural values 9

5.1 Italia based on Hofstede’s model 9

5.2 Vietnam based on Hofstede’s model 11

5.3 Comparison Vietnam and Italia based on Hofstede's model 12

6 Business problems in Vietnam when doing business in Italy 13

6.1 Benefits 13

6.2 Costs 15

6.3 Risk 16

7 Cultural communication 17

7.1 Language & Communication 17

7.2 Politeness - Formality 17

Figure 1 Revenue of Trung Nguyen Legend Corporation 2

Figure 2 Trung Nguyen Legend’s product 2

Figure 3 Italy's democracy index 3

Figure 4 Index of Economic Freedom 5

Figure 5 Index of Economic Freedom about Open Markets 6

Figure 6 GDP of Italy by region 7

Figure 7 Italia based on Hofstede’s model 9

Figure 8 Vietnam based on Hofstede’s model 11

Figure 9 Vietnam and Italia based on Hofstede's model 12

Figure 10 Five largest coffee supply markets for Italy 14

Figure 11 Italy’s location 14

Since implementing the open-door policy and trading with countries in the gion and around the world, Vietnam's economy has begun to make remarkableprogress Among them, export activities have contributed greatly to the GDP growth

re-of our country With the advantage re-of being an agricultural country, agricultural ucts have been one of our country's main export products and have contributed signifi-cantly to GDP growth And coffee is one of the most popular products exportedabroad

prod-Nowadays, Vietnam is a large potential country in the field of coffee supply tothe world market Specifically, Italy is a potential market with high demand for coffeeconsumption and among the 5 non-EU markets supplying the largest coffee to Italy,Vietnam ranks second

With the Vietnam - EU Free Trade Agreement (EVFTA) contributing to moting exports to the EU and making trade easier thanks to commitments on reducingtariff barriers and other commitments

pro-Realizing the great benefits and potential in exporting coffee to Italy, ourcompany - Trung Nguyen Legend, which has experienced to export coffee products tomore than 60 countries around the world, decides to choose Italy as the next destina-tion in the coffee supply chain to foreign countries

I TRUNG NGUYEN LEGEND CORPORATION

Trung Nguyen Lengend Corporation is a Vietnamese business group involved inthe production, processing and distribution of coffee and franchising the brand TrungNguyen is the largest domestic coffee brand within Vietnam, and exports its products

to more than 60 countries, including major markets such as the United State, theUnited Kingdom, Germany, China, From 2020 to 2022, revenue of Trung NguyenLegend Corporation experienced a significant increase, reaching at 6200 billion

[CITATION Wik \l 1033 ]

Figure 1 Revenue of Trung Nguyen Legend Corporation

The King of Coffee - WEASEL Coffee, applied “bio-fermentation”, successfullyreplicates the know-how of brewing yeast in the body of wild weasel to create aspecial raw coffee for the perfect coffee product of TRUNG NGUYEN LEGEND,representing the Culture & Spirit of Vietnamese Coffee.[CITATION 2 \l 1033 ]

Figure 2 Trung Nguyen Legend’s product

[CITATION 4 \l 1033 ]

2 Political 2.1 Democracy Democracy: Italy's political system is a democracy It is a parliamentary repub-

lic with a multi-party system, and citizens have the right to vote, participate in politicalactivities, and express their opinions freely Italy upholds the principles of individualrights, the rule of law, separation of powers, and political pluralism

“Italy is a Democratic Republic founded on labour” It’s mean that the

govern-ment very care for their people, determine Italy is a Democratic, the power for people

[CITATION 5 \l 1033 ]

Italy's democracy index is 7.69[CITATION 6 \l 1033 ] Italy is classified as a fective Democratic country It can be said that this proves that Italy puts democracyfirst, elections, voter safety, citizens' freedoms and the influence of outside forces onthe government that country

de-Figure 3. Italy's democracy index

Italy holds regular free and fair elections at various levels of government zens have the right to vote, and elected officials represent the will of the people

Citi-Italy has a multi-party system, allowing various political parties and groups toparticipate in elections and offer diverse policy choices to voters This pluralism allowsfor a variety of voices and perspectives in the political arena This country upholds therule of law, and its legal system is based on principles of justice and equality An inde-pendent judiciary ensures that laws are applied impartially

Like most democracies, Italy separates the powers of the executive, legislative,and judicial branches of government to prevent any one branch from becoming toopowerful.[CITATION 7 \l 1033 ]

Italy's engagement with the EU and WTO signifies a commitment to shaping afuture characterized by economic resilience, international cooperation, and sustainabledevelopment This dual participation fosters adaptability, positions Italy as a keyglobal player, and underscores its dedication to addressing contemporary challenges

on the world stage

2.2 Individualism

Italy is generally considered to be more individualistic than collectivist While

no political system is purely one or the other, Italy's emphasis on individual rights,democratic principles, and market-based economy aligns more closely with individual-istic values

Individual freedom, one of the core values of modern society, plays a crucialrole in assessing the level of development and quality of life in a nation In the case ofItaly, statistical data from 2021 indicates a high level of individual freedom, with a score

of 90, showing an increase compared to 2020 and remaining consistent with 2019,which were both at 89 The increase in the index of individual freedom in Italy in 2021

is a positive sign, demonstrating the nation's commitment to preserving and promotingthe rights of individual freedom It is not only the result of governmental efforts but alsothe support and understanding of the community towards this value

Although the current figures are optimistic, maintaining and enhancing thelevel of individual freedom requires continuous and profound efforts Monitoring andevaluating new policies and measures will determine the direction Italy takes in the fu-ture From this data, we can expect that Italy will continue to stand firm on the path ofindividual freedom and improve the quality of life for the entire community.

It can be said that this is an impressive number about Italy's freedom in terms

of human freedom Human right in Italy has many specific right for women, childrenand LGBT people[CITATION 8 \l 1033 ]

3 Economic

Mixed economy: Italy can be considered a mixed economy rather than a purelymarket economy While it predominantly operates on market principles, there is also asignificant level of government intervention and regulation in certain sectors and areas.The government plays a role in supporting strategic industries, providing infrastructuredevelopment, implementing social welfare programs, and enacting labor market regula-tions These interventions and regulations are indicative of a mixed economic systemwhere both market forces and government influence are present

Figure 4 Index of Economic Freedom

With Index of Economic Freedom is 62,2[CITATION 9 \l 1033 ] , It’s mean thatItalia is High Economic Freedom (Higher Index): A high index of economic freedom isoften associated with less government intervention in the economy, freedom of choiceand innovation for businesses and individuals higher multiplication This may apply toItaly's economy, which shows a relative degree of individualism and economic freedom

Italy has a market-oriented economic system, where supply and demand largelydetermine prices, production, and distribution of goods and services The private sectorplays a significant role in driving economic activity and investment While Italy has amarket-oriented economy, the government also plays an active role in certain sectors

and areas It implements policies to support strategic industries, provide infrastructuredevelopment, and promote research and development The government also sets policiesrelated to taxation, international trade, and industry-specific regulations Italy has sev-eral government-owned enterprises that operate in key sectors, such as energy and trans-portation For instance, ENI, a state-owned company, is a major player in the oil and gasindustry This demonstrates government intervention in strategic industries.

Italy has comprehensive labor laws that protect workers' rights, including lations on working hours, minimum wages, and workplace safety The government's in-volvement in labor market regulation ensures workers' protections and helps maintain abalance between employers and employees

regu-Figure 5 Index of Economic Freedom about Open Markets

According to Index of Economic Freedom about Open Markets[CITATION 9 \l

1033 ], we have Trade Freedom, Investment Freedom and Financial Freedom are decideabout the level of open market that

Trade Freedom: Italy's commendable score of 78.6 in trade freedom reflects a

nation that embraces openness and innovation in the realm of commerce This elevatedlevel of trade freedom not only indicates a willingness to engage in international tradebut also suggests a commitment to fostering competition and fortifying trade relationswith other nations

Investment Freedom: Italy's significant score of 80 in investment freedom

un-derscores its attractiveness for both domestic and international investors This highlevel of investment freedom creates an environment conducive to economic develop-ment, as it facilitates substantial investments in infrastructure and acts as a catalyst foroverall economic growth

Financial Freedom: Despite the moderate score of 50 in financial freedom,

Italy maintains a certain degree of flexibility in managing financial affairs This ity is essential for adapting to economic dynamics and responding to financial chal-lenges However, effective risk management becomes pivotal to guarantee financial sta-bility and to preempt any potential crises that may arise due to the inherent constraintsassociated with the moderate level of financial freedom

flexibil-Italy has a diversified economy, ranked as the third-largest in the Eurozone and theeighth-largest in the world The nominal GDP estimated for 2021 is about USD 2.106

[CITATION 11 \l 1033 ]trillion, with a GDP pro capital of USD 34,997 (25th in theworld), but with a significant economic gap between north and south [CITATION 10 \l

1033 ]

Industry accounts for about 29% of national income, and is dominated by theengineering, fashion, industrial design, iron and steel, and agro-food sectors, which notonly have the greatest relevance in terms of turnover, employment and number of com-panies, but have made Italy famous throughout the world and made the country one ofthe EU's main exporters (2nd in Europe).[CITATION 1122 \l 1033 ]

Italy's manufacturing sector, the sixth largest in the world, is mainly composed

of small and medium-sized enterprises (SMEs), which make up more than 90% of ian companies [CITATION 1122 \l 1033 ]

an-The Italian Civil Code, which deals with property ownership, is a huge taking as it covers many aspects of property ownership and transactions It provides acoherent and detailed legal framework for property ownership, not only describing le-gal regulations but also setting out basic principles to ensure fairness, transparency,and protection rights of property owners in the Italian economy Some rights that can

under-be mentioned include:

Property Ownership Rights

Governing Law: Property rights are detailed in many parts of the Codice

Civile, especially in Libro III (Part II)

Rights and Obligations: Refers to the rights and obligations of the owner, cluding the right to use, enjoy, and control the property

in-Beside, Asset Transactions, Protection of Property Rights, Land Management Wills and Inheritance Rights, Business Ownership:

In the realm of business, ownership rights play a pivotal role in attracting bothdomestic and international investments The legal protection and clarity surroundingproperty rights foster a sense of security for businesses, encouraging them to engage

in long-term ventures and strategic developments Additionally, these rights contribute

to the establishment of a reliable collateral system, facilitating financial transactionsand lending practices The ownership rights in Italy, with their historical foundationand adaptability to modern legal standards, not only provide a solid legal foundationfor businesses but also contribute to the overall economic stability and growth of thecountry

5 Cultural values

5.1 Italia based on Hofstede’s model

Figure 7 Italia based on Hofstede’s model

Power distance:

With a score of 50, Northern Italy tends to prefer equality and a decentralization

of power and decision-making

The younger generation generally dislikes control and formal supervision andprefers teamwork and an open management approach Certainly, the high score onindividualism accentuates the aversion of being controlled and tells what to do

In Southern Italy, all the consequences of the above-mentioned index are oftenhigh, quite the opposite of Northern Italy

Individualism:

At a score of 76, Italy is an individualistic culture, “me” centered, characterized

by subjects strongly focused on themselves

In this view, having own personal ideas and objectives in life is a fundamentalpoint and the route to happiness is through personal fulfillment

This dimension presents differences in Southern Italy where less individualisticbehavior can be observed: the family network and the group one belongs haverelevant influence on society

Masculinity:

At 70, Italy is a masculine society—highly success oriented and driven

Children are taught since the beginning that competition is good and the materialdemonstration of personal success is a fairly normal occurrence

As the working environment is the place where every Italian can reach his/hersuccess, competition among colleagues for making a career can be very strong

In work terms, high uncertainty avoidance results in large amount of detailedplanning As a consequence, the low uncertainty avoidance approach (whit flexibleplanning to changing environment) in this context can be very stressful.

Long term vs short term orientation:

Italy’s high score of 61 on this dimension shows that Italian culture is typicallypragmatic

In societies with a pragmatic orientation, people believe that truth is influenced

by situation, context, and time They show an ability to adapt traditions easily tochanged conditions, a strong propensity to save and invest thriftiness and perseverance

in achieving results

Indulgence vs restraint:

A low score of 30 indicates that Italian culture is restraint-oriented

Societies as the Italian one, with a low score in this dimension, have a tendency

to cynicism and pessimism

Moreover, in contrast to indulgent societies, they do not put much emphasis onleisure time and strictly control the gratification of their desires People with thisorientation have the idea that their actions are restrained by social norms and feel thatindulging themselves is somewhat wrong.[CITATION 1318 \l 1033 ]