EVALUATION OF THE REAL SITUATION OF IMPORT ACTIVITIES OF VIETNAM ENERGY DEVELOPMENT SUPPORT JOINT STOCK COMPANY FROM 2009 TO 2011. PROBLEMS AND SOLUTIONS.

EVALUATION OF THE REAL SITUATION OF IMPORT ACTIVITIES OF VIETNAM ENERGY DEVELOPMENT SUPPORT JOINT STOCK COMPANY FROM 2009 TO 2011. PROBLEMS AND SOLUTIONS.

FACULTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENT

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-VO THI KHANH CHI

EVALUATION OF THE REAL SITUATION OF IMPORT ACTIVITIES OF VIETNAM ENERGY DEVELOPMENT SUPPORT JOINT STOCK

COMPANY FROM 2009 TO 2011.

PROBLEMS AND SOLUTIONS.

Hanoi, April, 2012

VO THI KHANH CHI

EVALUATION OF THE REAL SITUATION OF IMPORT ACTIVITIES OF VIETNAM ENERGY DEVELOPMENT SUPPORT JOINT STOCK

COMPANY FROM 2009 TO 2011

PROBLEMS AND SOLUTIONS.

Supervisor : LE THI THU HA

This report would not have been possible without helpful and sinceresupport Therefore, I would like to express my deep gratitude to those people whosedirect and indirect support helped me complete my report in time

Firstly, I would like to show my warm and sincere thanks to all thelecturers of the Faculty of Foreign Languages of National Economics University

By being taught the related subjects, I have learnt many essential skills and businessknowledge to carry out this research and finish this report Besides, it is pleasure tothank to Mrs Nguyen Thi Thuy who gave me guidance during the period of thisstudy

Secondly, I am grateful to my supervisor, Mrs Le Thu Ha who has directlyguided me during my study She has spent much time supporting, correcting myreport to help me accomplish this report From bottom of my heart, I honestly wishher the best health and more success in her life and career

Thirdly, I also would like to thank all the members of Vietnam EnergyDevelopment Support Joint Stock Company especially my supervisor, Mr NguyenThe Binh They have shared about their experience and knowledge in importbusiness as well as support me the helpful documents, data related to my research Iwill never forget their sincerity and encouragement

Finally, I owe my deepest gratitude to my beloved family and friends whoalways stand by me and create favorable conditions for me to complete the report

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

TABLE OF CONTENTS ii

LISTS OF ABBREVIATION v

LISTS OF FIGURES v

EXECUTIVE SUMMARY vi

INTRODUCTION 1

1 Statement of the problem 1

2 Purpose and Scope of work 2

3 Research question 2

4 Methodology 2

CHAPTER I: NTRODUCTION OF VIETNAM ENERGY DEVELOPMENT SUPPORT JOINT STOCK COMPANY 3

1.1 History of foundation and development 3

1.1.1 General information 3

1.1.2 The establishment and development 3

1.1.3 The business 4

1.2 Strategic Orientations 5

1.3 Organizational Structure 6

CHAPTER II: THEORETICAL FRAMEWORK 9

2.1 Terms and definitions 9

2.1.1 Concept and characteristics of import 9

2.1.2 Roles of import 10

2.1.2.1 The role of import for national economy: 10

2.1.2.2 The role of import for enterprises: 11

2.1.3 Forms of import 11

2.1.3.1 Direct import 11

2.1.3.2 Commission import 12

2.1.3.4 Temporary import or re-export 12

2.2 Factors affecting import activities 13

2.2.1 External factors 13

2.2.1.1 Political and legal environment 13

2.2.1.2 Fluctuations of exchange rates 14

2.2.1.3 Competitors 14

2.2.1.4 Other factors 14

2.2.2 Internal factors 14

2.2.2.1 Financial resource 14

2.2.2.2 Human resource 15

2.2.2.3 Management level 15

2.2.2.4 Target customers 15

2.3 The importation process 15

CHAPTER III: EVALUATION OF THE REAL OPERATION OF IMPORT ACTIVITY OF VIETNAM ENERGY DEVELOPMENT SUPPORT JSC DURING THE PERIOD FROM 2009 TO 2011 17

3.1 The real situation of the company from 2009 to 2011 17

3.1.1 The company’s capital 17

3.1.2 Business results in recent years 18

3.2 The real situation of the company’s import business from 2009 to 2011.20 3.2.1 Import items 20

3.2.2 Import turnover 22

3.2.3 Import market 23

3.2 Overall assessment 24

3.2.1 Strengths 24

3.2.2 Weaknesses 25

3 3 Causes 26

3.3.1 Internal causes 26

3.3.2 External causes 27

CHAPTER IV: SOLUTIONS AND RECOMMENDATIONS TO ENHANCE ACTIVITIES OF IMPORT IN VIETNAM ENERGY DEVELOPMENT

SUPPORT JOINT STOCK COMPANY 29

4.1 Using business capital effectively 29

4.2 Researching and expanding market 30

4.3 Improving the quality of human resources 31

4.4 Implementing product strategy to be compatible with the market 32

4.5 Improving the way of import 33

4.6 Strengthening and widening business relationship 33

CONCLUSION vii

REFERENCES viii

APPENDIX ix

LISTS OF ABBREVIATION

VNEDS JSC: Vietnam Energy Development Support Joint Stock Company

EU: European Union

&: And

LISTS OF FIGURES

Chart 1: Organizational structure of Vietnam Energy Development

Support Joint Stock Company 7

Chart 2: the Company’s total revenue compared with its profit after tax from 2009 to 2011 19

Chart 3: Import turnover (2009-2011) 23

Table 1: Total business capital of the company from 2009 to 2011 17

Table 2: Results of the company’s business from 2009 to 2011 18

Table 3: The main import items of VEDS JSC from 2009 to 2011 21

Table 4: Import turnover (2009-2011) 22

Table 5: Import markets of VEDS JSC from 2009 to 2011 24

EXECUTIVE SUMMARY

In recent years, in the context of blooming globalization and deepintegration of countries into the world’s economy, import and export business inVietnam is significantly considered as an effective tool to promote growth andeconomic development of the country, expand integration into the internationaltrade market As a young company in the field of import of energy -supportedequipment, the Vietnam energy development import support joint stock company isconstantly developing to confirm its reputation in the domestic market However,during global economic crisis, the business activities of company especially importfaced many difficulties and obstacles The import business‘s efficiency of thecompany influenced by many inside and outside factors was not maintain stably andnot improved significantly Consequently, assessing its import activities andproviding some useful solutions to promote its business’s effect is seemed to benecessary and practical That’s the reason why I chose “Evaluation of the realsituation of import activities of Vietnam energy development support joint stockcompany from 2009 to 2011 Problems and solutions” as the subject of this report Apart from the introduction and conclusion, the final report is divided intofour chapters The first chapter provides readers with the knowledge of thecompany’s establishment and development, strategic orientation and organizationalstructure The second chapter presents theoretical background which mentions basictheories about import activities and factors affecting the company’s importefficiency Chapter three deals with analysis and evaluation of import activities ofVietnam energy development support Joint Stock Company The last chapter givessome recommendations to improve the effectiveness in import activities of thecompany

1 Statement of the problem

Nowadays, in the age of global economic integration, promoting import andexport activities is considered as the biggest priority of Vietnam to expand andoccupy regional and international markets Besides encouraging export in order toboost domestic production and increase foreign exchange earnings, import isconsidered as a basic aspect of foreign trade and an important way for economicdevelopment Import has been helping the nation explore its potentials, advantagesand supplement the products which cannot be produced domestically or the amount

of products cannot meet consumption

However, despite the advantages of importing, many economists andgovernments believe that importing goods can lead to the erosion of their nationaleconomies—especially when imports exceed exports There are many discussionsaround the negative effects of the import on the global as well as individualeconomies The economists have talked much about the trade balance deficit or theloss of competitiveness resulting from the over-reliance on the import and theworries that the super-import will kill the domestic production seem to never end Moreover, the international economic integration has created not only newchances but also big risks for enterprises The multinational trade agreements andtheir regulations along with respective national trade policies causes greatchallenges for the enterprises to import the best technology, machine and equipmentwith low cost in short time Being established in this context, Vietnam energydevelopment support joint stock Company which focuses on importing energysupported products had to face various inside and outside difficulties threatening itssurvival Thus, in order to continue to maintain stably and confirm its reputation inthe domestic market, it is necessary for the company to have an evaluation of theimpacts of the import on the company’s business, especially its business results.The evaluation will bring an insight into the company’s business state in recentyears and solutions to improve its efficiency Therefore, through the activities of thecompany in recent years that I researched during my internship period, I would like

to make a report on: “Evaluation of the real situation of import activities of Vietnamenergy development support joint stock Company from 2009 to 2011 Problems andsolutions”

2 Purpose and Scope of work

This report mainly aims at:

- Finding factors affecting import activities of Vietnam energy developmentsupport Joint Stock Company

- Analyzing the situation of import activity of the company in recent years

- Evaluating the importance and effectiveness of those activities

- Recommending some solutions to enhance import activities

Scope of this report:

The scope of this report is about the real situation of import activities ofVietnam energy development support Joint Stock Company during the period from

2009 to 2011 Based on findings and analyses, the author would give somesuggestions to enhance export activities in the near future, first of all, in 2012

3 Research question

The report will be analyzed to answer these questions as follows:

1 How did the import activities operate during the period from 2009 to 2011?

2 What difficulties has the company encountered?

3 What should be done to improve the effectiveness of import activities andstrengthen the company’s position in market?

4 Methodology

The study is primarily based on the data from the Vietnam energydevelopment support Joint Stock Company Within the scope of this research,growth factor analysis is utilized Besides, table chart analysis is used to furtherclarify matters

Furthermore, descriptive analysis is also made use of through looking at thehistory and development of the company Through results of the analysis from thedata, the author point out achievements and shortcomings in import operation of thecompany Finally, some critical solutions are recommended to narrow down thedisadvantages and enhance its import operation efficiency

CHAPTER I:

INTRODUCTION OF VIETNAM ENERGY DEVELOPMENT SUPPORT

JOINT STOCK COMPANY

As a young company in the field of import of energy -supported equipment,

the Vietnam energy development import support joint stock company is constantlydeveloping to confirm its reputation in the domestic market Vietnam energydevelopment support joint stock company with just three years in operating, it hasbeen high appreciated and recommended by its foreign and Vietnamese clientswhom trust the company by giving it more projects like telecommunication,broadcasting, networking system, finance banking, education, hospital, commercialoffice, factories, etc… because of the experienced engineers, skill staffs, theirloyalty at work and the quality of work However, during global economic crisis,the business activities of company especially import faced many difficulties andobstacles The import business‘s efficiency of the company influenced by manyinside and outsidefactors was not maintained stably and not improved significantly.Therefore, in this chapter, the author will provide the viewers with an overview ofthe company including its history of foundation and development, strategicorientation and organizational structure to understand more the matters which thecompany is being coping with

1.1 History of foundation and development

1.1.1 General information

Name: Vietnam Energy Development Support Joint Stock Company

Headquarter: Number 365, Hoang Quoc Viet Street, Tu Liem District, HanoiTel: 0903430580

Email: VNEDS@vnn.vn

1.1.2 The establishment and development

Our society is progress rapidly in accompany with the development ofscience and technology, sophisticated and highly susceptible microprocessor based

on electronics and data communication networks are created to serve people.Vietnam energy development support joint stock company is one of the professionalcompanies specialize in the energy development and support in Vietnam

Being founded in 2009, the company is responsible for importing anddistributing lightning protection products and electrical equipment such aselectronic meters, insulators; providing installation, maintenance, consultancy anddesigning services; supervising of installation of system and measuring of lightningprotection, grounding systems and transient voltage surge suppression technology Vietnam energy development support joint stock company with just threeyears in operating, it has been high appreciated and recommended by its foreign andVietnamese clients whom trust the company by giving it more projects liketelecommunication, broadcasting, networking system, finance banking, education,hospital, commercial office, factories, etc… because of the experienced engineers,skill staffs, their loyalty at work and the quality of work The company provideshigh quality products to satisfy variety customer’s needs by choosing the worldleading manufacturers like Alltec (USA), Aplicaciones Tecnologicas (Spain), Cylix(USA), Citel (France),etc in order to distribute and develop their products in thelocal market.

At the early stage, the company had the start-up capital of 610 million VNDand the labor force of only 12 people Up to present, the capital of the companyreached 4,5 billion VND and the total workforce is 45 people Almost employeeshave graduated university with the major of Economic, Technology andInternational Trading

1.1.3 The business

Vietnam energy development support joint stock Company specializes intrading lightning protection products and electrical equipment such as electronicmeters, insulators, fuse cutout, disconnect switch The company also providinginstallation, maintenance, consultancy and designing services; supervising ofinstallation of system and measuring of lightning protection, grounding systems andtransient voltage surge suppression technology

Among all the business activities, importing and distributing electricalequipment is the key activity that generates the majority of the company’s revenue.Approximately, the contribution of that activity to the company’s overall revenueaccounts for two thirds of the total The company also determines that activity to bethe key for its sustainable development The others activities constitute a third of itsearnings

VEDS SJC has strong business relationship with many suppliers around theworld , including : Toyo Tanso Co., Ltd in Japan, Alltec Corporation in USA,Aplicaciones Tecnologicas, S.A in Spain, Chauvin- Arnoux in France, Cylix inUSA, Citel in France ,etc

The major market of the company’s products is North Vietnam The area’sconsumption accounted for up to 87% of the total sales of the company in 2011.The Central Vietnam and the others took up the last 13% of revenue generated fromthe activity

The customers of VEDS JSC are mainly commercial offices, factories,hospitals, schools and households Up to 57% of its products are sold to factories,around 38% for commercial offices, hospitals, schools and the last 5% forhouseholds

The main competitors of Vietnam Energy development support joint stockCompany on the market is Cat Van Loi Industrial Electrical Equipment Companyand Viet A Electrical Engineering Limited Company These companies do the samebusiness as VEDS JSC with a very similar product list Therefore, there are alwaystacit competitions among the companies in the price as well as quality of theproducts

- Bringing success to customers, business partners and contributing to thecommunity

 Strategic vision

- Becoming a large-scale multi-sector Group in the field of Power Industryand Energy Development in Vietnam

- International quality product and brand

- Pioneering research and development of qualified electric equipment

 Quality objectives:

- Ensuring to provide products and services that satisfy all committedagreements.

- Improving quality of products and services to satisfy customers’ higher andhigher demand

- Being a reliable partner and a loyal companion of customers

 Business philosophy:

- Prestige maintenance

- Best quality guarantee

- Sustainable relationships and partnership with business partners andcustomers

- Employees’ benefits guarantee

1.3 Organizational Structure

As a small-scale enterprise, VEDS JSC‘s management structure includes a

general director and two deputy director (one deputy director is in charge of financeand administration and the other is in charge of technique) In which, the generaldirector is the head of the company and he is responsible for controlling anddeciding all company’s activities The two vice-directors assist the director inrunning the company They are responsible to the director for the functioning oftheir department

Chart 1: Organizational structure of Vietnam Energy Development

Support Joint Stock Company

a The Board of Director including General Director and two Deputy Directors

are responsible for commanding and controlling all business activities of thecompany such as ensuring profitability, growth and development of the entirecompany, achieving the objectives of the company on sales growth, profit,personnel development and others

In particular, the Director’s missions are:

- Laying down the objectives and broad policies of the company

- Preparing strategic plans and policies for the company

- Controlling and cooperating the activities of all departments

The Deputy Director of Finance and Administration is in charge of all financial andfiscal management aspects of company operations Key duties of Deputy Director

of Finance includes staff management, cash and risk management, accounting andfinancial controls and budgeting

The Deputy Director of Technique is in charge of the issues related to technology

b Import Department is managed by the deputy director who is in charge of

finance and administration Its main functions are:

- Researching foreign markets about energy-supported products to design andimplement import business plan

- Directly importing products, setting up import plans and implementingimport procedures

- Signing economic contracts, jointing ventures with businesses in and outsidethe country and other relevant organizations

- Borrowing from domestic and foreign organizations to invest in producing,purchasing with foreign countries

c Administration Department advises on Director to:

- Arrange mechanism of organization and of the personnel;

- Scrutinize performance of local units;

- Implement policy of training and foresting staff;

- Protect internal organization;

- Reward and discipline employees

d Accounting Department is responsible for helping Director check, manage,

control financial and monetary activities; manage, calculate the efficiency inbusiness

f Equipment Department or Technical department is in charge of selling

equipment and providing after sale services It is responsible for installingequipment and instructing customers on how to operate them, repairing theequipment when customers request It also organizes professional training, andcoordinates with the import department to train workers for the implementation ofprojects

g Research and Development Department conducts researches for new

products and develop new solutions

CHAPTER II:

THEORETICAL FRAMEWORK

In this chapter, the author will provide all information about import,including concept, characteristics, roles and forms of import Besides, some issues

of import products and factors affecting energy- supported product import activities

of Vietnamese enterprises as well as VEDS JS Company will also be presentedhere

2.1 Terms and definitions

This part of the report will be helpful to understand more about findings andanalysis part later The definitions of import and energy supported product import aswell as matters related to these will be used as foundation for analyzing data Theyare stated as follows:

2.1.1 Concept and characteristics of import

a Import’s definition:

Import together with export is the two crucial components of internationaltrade The term” import” is derived from the conceptual meaning as “to bring in thegoods and services into the port of a country” (Joshi, Rakesh Mohan, (2009)International Business, Oxford University Press, New Delhi and New York, pp.178)

or “to consist of transactions in goods and services( sales, barter, gifts or grants)from non-residents to residents” (Lequiller, F; Blades, D.: Understanding nationalAccounts, Paris: OECD 2006,pp 139-143) In other word, import business isconsidered as the transactions of goods and services from overseas to developdomestic business and social life under the provisions of the international market(import quota, tariff and trade agreements) Enterprises import goods and services tosupply to the domestic market at a cheaper price and better quality than competinggoods manufactured in the local market They also import products that are notavailable in the local market The buyer of such goods and services is referred to an

“importer” who is based in the country of import whereas the overseas based sellers

foreign-based companies, selling them in domestic market or re-exporting with theaim of making profit and connecting production between countries.

b Importing activities have basic characteristics based on different countries such as:

- Import operation is controlled by many kinds of law such as Internationalagreement on foreign trade, International trade customs and national law

- Trading methods on international market are diversified: ordinarytransaction, mediated transaction or transaction at fairs

- There are varied methods of payment: barter, cash in advance, letter ofcredit, documentary collection or draft, open account and other paymentmechanisms

- Currency used in transaction : strong currencies ( USD, Sterling, Euro)

- Import activities provide firms that have different nationalities with thechance for long-term cooperation International trade directly affects thepolitical economy relation and strengthens external economic relation ofexporting countries

2.1.2 Roles of import

In the context that economic integration is gradually becoming an inevitableand popular trend all over the world, import activities play an important role instimulating the economy’s expansion Import is generally essential for the country’sdevelopment and for enterprises in particular

2.1.2.1 The role of import for national economy:

Imports are extremely important to the sustainable development of theeconomy as follows:

- Bringing more products to the country’s market, helping enrich the market’scurrent product base and giving consumers more choices in buying goodsand services

- Allowing countries to achieve higher standards of living by obtainingproducts and resources that cannot be obtained domestically

- Satisfying the demand of the market of special goods

- Creating favorable conditions for the transfer of technologies amongcountries, helping to bridge the technological gaps

- Participating in the international distribution of labor and enhancinginternational cooperation.

- Creating competition between domestic goods and foreign goods whichforces domestic producers to make innovation

2.1.2.2 The role of import for enterprises:

Nations all over the world, nowadays, are increasingly involved in the globalintegration There are various reasons for the firms to buy goods and services fromoverseas Some firms may import goods to resell in domestic market to gain profits.The others may meet difficulty in controlling the whole production process; theyhave to import goods and services to make up for its production disability

With the firm specializing in trading imported goods, import is the coreactivity of its business

- Helping gain profit by buying and reselling the imported products

- Deciding the firm’s existence, its success or failure

With production firm importing for production purpose, the import directlyparticipate in the firm’s production process

- Helping solve serious problems about the inputs for the production process,therefore, ensuring the production’s continuity

- Helping cut down the company’s overhead cost, from which enhancing thecompany’s profit

As a result, import is crucial to the firm’s development

2.1.3 Forms of import

There have been a various forms of import used all over the world Alongwith the development of science and technology and the cooperation amongcountries, forms of import are increasingly professional and achieve greatefficiency Depending on the enterprises’ capacity as well as the requirements ofpartners, they can apply one of four forms of import or combine these follows:

2.1.3.1 Direct import

Direct imports are products imported directly into a country and not throughthe manufacturer's authorized agent/distributor Since there is no factory-authorizedmiddleman involved in the import of these products, the added costs are lower andthe customer pays less In addition, many items that are in short supply or are notimported at all by the manufacturer's authorized distributors can be procured as

direct imports There is no difference in the actual products In most cases, they aremanufactured in the same place by the same people and with the same materials.Occasionally, manufacturers will give them a different name In order to signimport contract, domestic firms must carefully research the demand of importingmaterials and equipment in local market, calculate expenses that can ensure theefficiency of import business, negotiate about the terms of trade with exporters andcomply with legal corridor and global practice

Direct import is simply to carry out The importer has to research market,find partner, sign and fulfill contract, provide capital, incur risks and costs oftransaction, merchandise exchange and other costs related to goods consumption,customs

2.1.3.2 Commission import

Commission import occurs when a local company wants to import productsbut not entitled to do that by its own That company, hence, must entrust anothercompany to finish the import procedure After the consignee completes importprocedure it will gain remuneration called ‘entrusts fee”

In this mode of import, entrusted company has not to do market research orpay any financial contribution The consignee must draw up two contracts One tobuy products from foreign manufactures, another is the written agreement betweenthe consigner and the consignee

2.1.3.3 Reciprocal trade

Reciprocal trade is a transaction method in which import closely combineswith export, the buyer is also the seller and vice versa The amounts of goods andservices exchanged have equivalent value Reciprocal trade depends on fourprinciples of balance: commodity balance, price equilibrium, balance in the sameterms of delivery and balance in the total amount of goods exchanged

The advantage of reciprocal trade is that with only one contract, firms mayimport and export all the same time Goods delivered have equivalent value withgoods received

2.1.3.4 Temporary import or re-export

Temporary import or re-export means a company import products not for localconsumption but for export to the third country for profit The imported goods are

countries participate in this import procedure: the import country, the re-exportcountry and the export country The re-export firms have to perform two contracts:one import contract and one export contract They don’t have to pay import-exporttax.

2.2 Factors affecting import activities

In fact, every movement of the company is influenced by business

environment which includes external and internal factors As a result, beforeconducting any import activity, the company must carefully consider all the factors

to minimize the cost and maximize the profit The detail information about externaland internal factors is given as follows:

2.2.1 External factors

External factors are the factors from outside environment and the businessescan not adjust but can only harmonize and adapt to the changes These factorsinclude:

2.2.1.1 Political and legal environment

Business efficiency is strongly affected by the developments in the politicalenvironment The political environment consists of laws, government agencies, andpressure groups that influence and limit various organizations and individuals in agiven society Well-conceived regulation can encourage competition and ensure fairmarkets for goods and services Thus, governments develop public policy to guidecommerce-sets of laws and regulations that limit business for good of society as awhole

Moreover, the biggest difference between doing business locally andinternationally is the impact of foreign laws, and international conventions Importcontracts and import activities must abide by the laws of the exporting country, thelaw of a third country (if specified in the import contracts), international businesspractices and international conventions, treaties that the parties participate The lawsand regulations of the exporting country can make the process of import businesssimpler or more complex, which affects the import operating costs and thus importactivities’ efficiency

Therefore, before conducting import, enterprises must clearly understandinternational laws and the laws of the exporting countries

2.2.1.2 Fluctuations of exchange rates

The exchange rate is an important factor affecting import prices or the cost of

imported products, thus affecting the efficiency of the import business When theexchange rate increases, the cost of one unit of imported goods increasesaccordingly and therefore it reduces the competitiveness of the goods, theirconsumption and business efficiency Conversely, when the exchange rate falls, theprice of one unit of imported goods also declines, and thereby it increases thecompetitiveness of the products, their consumption and business effectiveness

2.2.1.3 Competitors

For a business, competitors include current competitors and potential

competitors Enterprises must study the current competitors and potentialcompetitors to find out their strengths and weaknesses in order to look for suitableorientations, especially suitable marketing programs This will make businesses andtheir goods not be confused with other businesses, and increase theircompetitiveness in the market

2.2.1.4 Other factors

Other factors in domestic and international markets include demographic

factors, culture, traditions, and natural conditions These factors will affectproduction practices and consumption habits of each country

Law and business environment are external factors that individual businesscannot change They must comply with them and take steps to adjust theiroperations, organizational structure in accordance with the rules in the markets theyoperate in

2.2.2 Internal factors

In contrast to external factors, internal factors are factors that businessesthemselves can control and adjust In order to raise efficiency of import activities,enterprises should pay attention to these factors:

2.2.2.1 Financial resource

This is also a considerable factor to the success of the company A businessneeds to develop and maintain an adequate level of working capital in order to runsmoothly No business can run successfully without an adequate amount of capital.When there is not enough working capital, the following problems occur: businesscan no longer operate effectively and become disrupted, business may need toliquidate their assets in order to meet their financial obligations, and business may

2.2.2.2 Human resource

These reflect in the number of employees, their qualifications and workingability and management level Human resources are the determining factor in everybusiness The qualifications and capabilities of human resources must be consistentwith the type of business Therefore, enterprises should evaluate and develop theirhuman resource

2.2.2.3 Management level

Each enterprise is a unified system made up of multiple linkages towards agoal In order to succeed in long run, enterprises need create a level oforganizational management which is correlative to its own financial strength.Organizational management level refers to the perfection of organizationalstructure, the efficiency of management system, etc

2.2.2.4 Target customers

The target customers and the types of goods a company offers can have effect

on the level of price elasticity of demand For example, when there is inflation orprice increases, the demand for commodities aiming at high incomes group willdecrease less than that for low and middle-income groups On the other hand,different target clients will have different requirements for the same productcategory, and therefore, the marketing strategy, and product introduction for eachtype of customer is different

2.3 The importation process

To import products, companies must first establish agreements with

international producers in accordance with national and international regulationsand trade covenants Companies considering importing products often begin theirresearch into what products to import by contacting various international consulates,which can offer information on the manufacturers and distributors in theirrespective countries

Besides, importers must obtain the appropriate licenses from the government,which authorizes them to import goods Then, they must follow the Vietnameseprocedures to bring about the legal "entry" of imported goods When the shipment

of these goods arrives at one of the country's officially designated ports of entry, theimporter must file entry documents with the port director and pay all relevantduties

Importers can enter goods for consumption, storage at the port of arrival, ortransportation to another port of entry following the same procedures as for the port

of arrival The entry of imports for consumption involves two steps First, importersmust file the mandatory documents within five days of the arrival of the goods tohave the goods released from customs' custody Second, importers must filedocuments for duty assessment If importers want to store the incomingmerchandise at the port of entry, they may have it placed in a customs warehouse as

a warehouse entry for up to five years During this period, importers may enter thestored merchandise for consumption following the appropriate procedures

Moreover, an invoice must accompany all imported goods and the invoicemust be prepared following the regulations The invoice must include essentialinformation such as the port of entry, the names of the importer and exporter, adetailed description of the goods, the quantity of the goods, the value of the goods,the currency, and the country of origin Specific products or kinds of products mayrequire the inclusion of additional information in the invoice

In the second chapter, the author provided the theories background aboutcompany’s import business The chapter also mentions causes affecting importactivities The real situation of import activities of the company will be evaluated indetail in the next chapter