PHÂN TÍCH SWOT CÔNG TY cổ PHẦN XUẤT NHẬP KHẨU VIFOCO KHI THAM GIA THÂM NHẬP THỊ TRƯỜNG MALAYXIAE

Bac Giang vegetable and fruit processing factory Address: Lim Xuyen village – Song Khe commune – Yen Dung District –Bac Giang province - Vietnam.. In 2009, VIFOCO invested to build Bac G

PHÂN TÍCH SWOT CÔNG TY CỔ PHẦN XUẤT NHẬP KHẨU VIFOCO KHI THAM GIA THÂM NHẬP THỊ TRƯỜNG MALAYXIA

Table of content

I ENTERPRISE’S INTRODUCTION 1

1 B ACKGROUND : 1

2 I NTRODUCTION TO MARKET PENETRATION ’ S PRODUCTS : 3

3 M ALAYSIA M ARKET – R EASON FOR PENETRATION : 4

II CHALLENGES AND OPPORTUNITIES FOR EXPANSION TO MALAYSIA MARKET: 4

1 M ALAYSIA B ACKGROUND : 4

2 E CONOMIC SITUATION : 5

3 E CONOMIC RELATIONSHIP WITH V IETNAM : 6

4 O PPORTUNITIES FOR INVESTMENT : 7

5 C HALLENGES FOR INVESTING IN M ALAYSIA MARKET : 8

III STRENGTH AND WEAKNESSES ANALYSIS OF PRODUCT IN MALAYSIA MARKET: 8

1 S TRENGTH : 8

IV STRATEGY FOR EXPORT ACTIVITY: 9

1 D ISTRIBUTION CHANNEL OF IMPORTED FOOD IN M ALAYSIA : 9

2 P LAN FOR MARKET PENETRATION OF VIFOCO’ S PRODUCTS IN M ALAYSIA : 9

V C ONCLUSION : 10

VI R EFERENCES 10

I ENTERPRISE’S INTRODUCTION

1 Background:

Enterprise’s name: VIFOCO IMPORT AND EXPORT JOINT STOCK COMPANY

Head Office: No 85 Nguyen Van Cu Street, Bac Giang city, Bac Giang province

Factory: Song Khe Industrial Zone – Bac Giang City.

Telephone No: (84) 240 6 502 688 - Fax No: (84) 240 3528525

Email: vifoco.food@gmail.com or vifoco_bg@yahoo.com

Registered business activities:

- Specialize in producing, processing, importing and exporting vegetable and farming produce

- Specialize in investment on animal husbandry and agricultural cultivation to provide inputs for producing and processing canned vegetable and agricultural food

- Import and export industrial and agricultural machineries, office equipment, electrical equipment and accessories

-Provide services on restaurant, hotel, transportation as well as good transportation

Enterprise’s members:

1 Anh Son limited liability trading company

2 Bac Giang vegetable and fruit processing factory

Address: Lim Xuyen village – Song Khe commune – Yen Dung District –Bac Giang province - Vietnam

The geographical location is very easy for trading goods

The area for growing input materials for vegetable and fruit processing factory accounts for 100 ha within the average radius of 25 km

In 2009, VIFOCO invested to build Bac Giang vegetable and fruit processing factory for exporting on the area of 6000 m2, assembled two modern vegetable and fruit processing lines which cost more than 1 million USD with capacity of 100 tons of product per day

Vegetable and fruit products of the company are highly appreciated by business partners because of high quality as well as meeting strict requirements

The major exporting markets for company’s products include: Russia, German, China, India and Canada

VIFOCO always employs its quality policy to ensure that all products can meet the increasingly strict requirements of business partners

In order to better serve the higher demand of customers, VIFOCO always improves, renovate its business activities, and especially pay attention to adapt and transfer new technologies with better products and services

2 Introduction to market penetration’s products:

Canned pineapple, canned potato, canned cucumber, canned pumpkin, etc

Currently, the company is developing a new product – canned litchi for exporting to Malaysia market

3 Malaysia Market – Reason for penetration:

Malaysia is a middle income and populous country with high health consciousness of local people which is demonstrated through the choice of low sugar & calorie, cholesterol free, rich polyphenol & cellulose food and drink VIFOCO’s products are made from natural fruits and vegetable therefore they are low sugar, low fat, low calorie and cholesterol free Products are processed by modern technology keeping the nutrition as well as cellulose which are vital to human body

VIFOCO’s products are processed from fruits and the demands for these types of food are increasing significantly in Malaysia In one hand, there is a tendency to neutralize the food and

to balance between the fast-food with high cholesterol and vegetable and fruit products to purify, cool down and supplement the celluloses for the body On the other hand, there is raising concern on heart diseases and obesity In addition, the Muslim accounts for more than 60% of the Malaysia population, therefore, canned fruits and vegetable are favorite diet food

in the country

II CHALLENGES AND OPPORTUNITIES FOR EXPANSION TO MALAYSIA MARKET:

1 Malaysia Background:

Official name: Federal constitutional monarchy of Malaysia

- Geographical location: South Eat Asia

-Natural Area: 329,750 km2

- Population: 29,179,952 (July 2012 est.) ranked 43th globally

- Capital city: Kuala Lumpur

- Major cities: Subang Jaya, Klang, Jhor Bahru, Ampang, Ipoh,Kuching, Shah Alam, Petaling Jaya, Batu Patah, Kota Kinabalu, Sandakan, Cheras, Seremban, Kuantan, Kajang, Tawau, Kuala Terengganu, Kota Bahru, and Taiping

- Major languages: Bahasa Malaysia, English, Chinese, and Tamil

- Religion: Judaism (60.4%), Buddhism (19.2%), Catholics (9.1%).

- Money Unit: Ringgit

- Government: constitutional monarchy

- National day: 31/8/1957

- Member of following major organizations: ADB, APEC, ARF, ASEAN, BIS, C, CICA (observer), CP, D- 8, EAS, FAO, G-15, G-77, IAEA, IBRD, ICAO, ICC, ICRM, IDA, IDB, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURSO, MONUC, NAM, OIC, OPCW, PCA, PIF (partner), UN, UNAMID, UNCTAD, UNESCO, UNIDO, UNIFIL, UNMIL, UNMIS, UNMIT, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, and WTO

2 Economic situation:

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer

of raw materials into an emerging multi-sector economy In 2009, the economic growth of the country was -1.6% In 2010 and 2011, the economy recovered with the growth rates of 7.2% and 5.2% respectively

Economic indicators of Malaysia:

- GDP (purchasing power parity) in 2011: 447 $ billion - ranked 30th globally

- GDP (Official Exchange Rate): 247.6 $ billion

- GDP per capital : 16.200 $USD – ranked 75th globally (2011)

- Real GDP growth rate : 5.2% (2011)

- GDP by sectors: agriculture 10.2%, industry: 42.1%, services 47.8%

- Labor force: 11.9 million agriculture : 13%; industry: 36%; Services: 51%

- Total Export and import Revenue: 380.7 $ US billion (2011) ; export revenue accounts for 212.7 $ US billion with main commodities: electronic equipment, petroleum and liquefied natural gas, wood and wood products, palm oil, rubber, textiles, chemicals Import Revenue accounts for 168.0 $US billion with main commodities : electronics, machinery, petroleum

products, plastics, vehicles, iron and steel products, chemicals.

- Main import partners : Singapore: 13.4%, China: 12.6%, Japan : 10.4%, US 9.5%, Thailand : 5.3%, and Hong Kong : 5.1%

- Main export partners: China : 12.6%, Singapore : 11.4%, America : 10.7%, Thailand : 6.2%, and Indonesia : 5.6%

3 Economic relationship with Vietnam:

Economic ties signed by both countries:

- Agreement on flights between and through the territory of the two countries (signed on 10/15/1978)

- Agreement on Promotion and Protection of Investments (signed on 21/01/1992)

Maritime Agreement (signed on 03/31/1992)

- Agreement on cooperation in economic, scientific and technical (dated 20/04/1992)

- Cooperation Agreement postal and telecommunications (dated 04/20/1992)

- Trade Agreement (signed on 11/08/1992)

- Bilateral Payment Agreement between the State Bank of Vietnam and the National Bank of Malaysia (signed March / 1993)

- Agreement on Science, Technology and Environment (12/1993)

- Agreement on cooperation in tourism (dated 13/04/1994)

- Cultural Cooperation Agreement (signed in April / 1995)

- Avoidance of double taxation agreement (signed on 07/9/1995)

- Agreement on Youth and Sports (signed 06/14/1996)

- Agreement on visa exemption for ordinary passport holders (09/25/2001)

- Total import and export revenue between Vietnam and Malaysia reached 6.78 $ US billion in

2011 and Vietnam exported 2.83 $ US billion and imported 3.92 $ US billion increased by 22.6% in comparison to 2010

4 Opportunities for investment:

Since the turning from domestic focus to external focus economy, the foreign trading activities of Malaysia have been diversified to become main forces of economic growth The country also applied suitable policies in each period to develop foreign trading activities including:

- Favorable conditions for investment projects (both inside and outside the country) and tax incentives for projects on producing goods for export

- Establish free trade areas

- Encourage enterprises to export products

- Allow foreign investors to own 100% shares of domestic companies which have at least 80% of the total products for export

- Implement credit for exporting good including risk insurance in exporting

- Simplify the procedures related to exporting activities

- Establish the department specialised in exporting (MATRADE)

- Organise many trade promotion fairs

There are many reasons which make Malaysia become first choice of investor:

- The country is populous with different religions such as Muslim, Malaysian, Indian and Chinese and different ethnic groups living harmoniously

- Malaysia is a safe country with low criminal rate The legal framework and business environment are favorable

- Malaysia is always open for foreign investors to run business and they can purchase real estate on their own names which is not allowed in almost all other South East Asia countries

- The trade promotion body of Malaysia (MIDA) is very professional on supporting investors who want to explore business chances as well as establish business in the country

- Malaysia has good relationship with all countries in the world without conflict with any neighboring country

5 Challenges for investing in Malaysia market:

The Malaysia business environment is the mixture of Chinese and Indian business cultures

The official language in Malaysia is Bahasa Malaysia and it’s used in meeting with

government officials, therefore, interpreter should be sourced in this situation

III STRENGTH AND WEAKNESSES ANALYSIS OF PRODUCT

IN MALAYSIA MARKET:

1 Strength:

a High reputation for products:

Currently, VIFOCO is the first company operating on dried food and canned fruit

The company was audited and certified internationally with HALAL, BVQI, ISO, HACCP and GMP

b Techology:

The company has successfully applied the modern technologies imported from America and Taiwan, which ensure the nutrition sources and natural favors of the products

In 2009, VIFOCO invested to build Bac Giang vegetable and fruit processing factory for exporting on the area of 6000 m2, assembled two modern vegetable and fruit processing lines which cost more than 1 million USD with capacity of 100 tons of product per day

Vegetable and fruit products of the company are highly appreciated by business partners because of high quality as well as meeting strict requirements

VIFOCO has its official website in English and Vietnamese with updated information on company profile as well as all products to exert the image of the company to customers

nationwide and internationally

c Environmental friendly and organic products:

VIFOCO’s products are made from natural and environmental friendly input materials, which is one of competitive advantage for exporting to care – for - environment countries like Malaysia

In addition, these products are from vegetable and fruits with rich celluloses, fat and

cholesterol free which are suitable for eating as snack, main course and diet

2 Weakness:

Firstly, the sources of input materials are small and seasonal which has great influence on productivity as well as production turnover of the company In addition, farmers produce on small scale and lack of linkage which is impossible to diversify products in large quantity to meet the demand of the company

Secondly, there is difficulty in exchanging information from production, collecting, processing and reaching the market

IV STRATEGY FOR EXPORT ACTIVITY:

1 Distribution channel of imported food in Malaysia:

Main distribution channel:

2 Plan for market penetration of VIFOCO’s products in Malaysia:

In the first two years, rapid injection will be enhanced via retail groceries and supermarkets in all big cities in Malaysia

It can be seen from the above chart that VIFOCO will directly export to big supermarket systems and retail groceries via import companies and wholesalers

VIFOCO (exporter)

Malaysia import companies

Wholesalers

Retailed groceries/ supermarkets

V Conclusion:

To penetrate and develop sustainably in the challenging and potential market, it requires the efforts on business management, mobilization of innovation and strategic thinking We affirm that we can do and enjoy the good achievement

VI References

1 VIFOCO:

2 Trading department – Ministry of Trade and Industry: http://www.vietrade.gov.vn

4 World Economic Forum: The Global Competitiveness Report 2012–2011.

5 CIA : https://www.cia.gov/library/publications/the-world-factbook/geos/my.html