IMPORT SITUATION OF LAPTOP PRODUCTS OF FPT DISTRIBUTION COMPANY LIMITED IN THE PERIOD OF 2009 – 2012

Research objective: Import situation of laptop products of FDC in the period from 2009 to 2012 Scope of the study Due to concentrated content and limitation of time, my study will focus

My midterm internship report would hardly be completed without theenthusiastic helps from my advisor, my lecturers, my friends and colleges in FPTdistribution Company Limited (FPT Distribution Co., LTD)

I would like to express my gratefulness to my supervisor, MA Hoang Thi Doan

Trang for her guidance, insightful comments about my detailed outline and extremepatience throughout my study I highly thank her for sharing her knowledge, adviseswith me by email

I am also grateful to all lecturers of Foreign Trade University who have createdvaluable lessons and help me enhance my knowledge during the time I studied ExternalBusiness Economics there Without the basic knowledge they convey to me, myinternship would be much more challenges

Furthermore, I wish to thank to Mrs Do Mai Linh, Deputy of ProcurementDepartment of FPT Distribution Co., LTD who has been helpful with general advisingand supporting from beginning to end of my internship period What is more, I wouldlike to send my billion thank to Mrs Dang Thi Le Trang and all of my colleges inProcurement Department of FPT Distribution Co., LTD for their training and providingsome helpful data for my internship report

I would like to thank my friends; especially those are in the same midterminternship group because of their kindly support Had it not been for their exchangeknowledge, my report would have been impossible

LIST OF ABBREVIATIONS

3 CIF Cost, Insurance, and Freight

5 CSC Certificate of Shortlanded Cargo

7 FCD FPT computer distribution

8 FCO FPT Computer and Office Equipment Center

9 FDC FPT distribution company limited

11 FPT Financing Promoting Technology Corporation

14 ROROC Report on Receipt of Cargo

15 SWOT Strengths, Weaknesses, Opportunities, and Threats

17 USA United States of America

18 USD United States of Dollars

LIST OF FIGURES AND TABLES

PAGE

CHART

Chart 1.1: Allocation of human resource base on gender 6Chart 1.2: Allocation of human resource according to degree 6Chart 1.3: Number of employees from 2009 to 2012 8Chart 1.4: Revenue of FDC from 2009 to 2012 11Chart 2.1: Import structure of main imported laptops 15Chart 2.2: The proportion of import value from markets in

2012

17

Chart 2.3: Market structure of laptops FDC imported in 2012 18Chart 2.4: Import value of laptops from 2009 to 2012 19Chart 2.5: The number of imported laptops from 2009 to

Table 1.3: Summary of financial statement in FDC in 2009

Table 2.1: Imported products of FDC from 2009 to 2012 13Table 2.2: Import market value of FDC from 2009 to 2012 16Table 2.3: The average number of days in inventory of

PREFACERationale to the study

In the modern world, international trade is booming dramatically in many fields,especially in economic ones After joining WTO – 7th November, 2006; Vietnam hasalready enhanced trade with many countries all over the world In many internationaltrade activities, importing activity would be particularly mentioned The reason for this

is that importing activity has brought lots of benefit to not only internal economics butalso organization, person inside one economy Import plays an integral part in Vietnameconomy, which should be much more paid attention

In particular, importing activity is a key role in boosting revenue and remainingthe existence of FDC There are three main reasons to explain for that: Firstly,Importing helps FDC to have more resources for distribution For example, each year,FDC imports many kinds of information technological equipment such as mobilephones, laptops and so on that are used to distribute to many retailers Secondly, thank

to import, FDC has golden opportunity to get products with high quality, competitiveprice It leads to the fact that import creates benefits for not only FDC but alsoconsumers Finally, import also creates a good environment for FDC to enhanceexperience, business knowledge and stabilize relationship with big suppliers such asApple, Dell, and IBM

Moreover, in the period from 2009 to 2012, Vietnam witnessed economy crisisthat had put lots of individuals and companies under excessive pressure In spite ofthat, FDC had tried their best to increase revenue, boosting import activity to getproducts for distribution With the hope that I can understand more about importingsituation of FDC in this period, I have already chose importing field to research.However, it is clearly seen that FDC has distributed a variety of technological products

If I did not choose a specific type of product, it would be difficult to have a deepunderstanding about problems that I want to research In recent years, demand forlaptops in Vietnamese market has boomed, the number and kinds of laptops hasincreased at unprecedented paces

For all the reasons above, I choose topic: “Import Situation of laptop products

of FPT Distribution Company Limited in the period of 2009-2012” to research

Aims of the study

This topic is implemented base on the purpose of understanding and researchingthe import situation of laptop products of FDC from 2009 to 2012, from which somesolutions will be given to promote importing activity in the next five years

Research objective: Import situation of laptop products of FDC in the period

from 2009 to 2012

Scope of the study

Due to concentrated content and limitation of time, my study will focus on thefollowing main points:

• Studying FDC: history and development process, organizational structure,functions of the whole FDC as well as its departments and FDC’s businessactivity from 2009 to 2012

• Examining import situation of laptop products of FDC between 2009 and 2012

• Giving out some solutions to promote import situation in the next five years

Methodology: This research is conducted by mainly qualitative method Data

and information for both chapters in this study are collected from Human resourcedepartment, Accounting department, Procurement Department and other trustfulsources from the Internet

Other methods applied in my study are comparison, description, generalizationbase on data and information appeared in this research

Design of the study

The study consists of two chapters as following:

Chapter 1: General introduction to FDC: In this chapter, I will present

overview of FDC and its general business activity from 2009 to 2012

Chapter 2: The status of importing laptop products of FDC between 2009 and 2012 This chapter will go into detail about actual situation of laptop products

imported from 2009 to 2012 by giving out data, information before analyzing it Afterthat, SWOT analysis will be used to assess this situation The last part of chapter twowill give some solutions to promote laptop product import situation in the next fiveyears

CHAPTER 1: GERNERAL INTRODUCTION TO FDC

1.1. Overview of FDC

1.1.1. History and development process of FDC

FDC is a member company belonging to FTG which is a branch of FPTcorporate company In 1998, FDC was established based on the combination of FCDand FCO Company

The year of 2001 and 2002 witnessed an establishment of FPS and FPTComputers Products Center And in 13 April, 2003, FDC was established based on theintegration of 3 above companies (FCD, FPS, and FPT Computers Products Center) tomeet the unprecedented paces of distribution market (at that time, there was 86 staff inthis company)

FDC developed and included Distribution Nokia mobile phone center (F9) andDistribution technological products & Project support Center (such as FCN, FHP, F1,FPS and so on)

In 13rd, March 2009, FPT Information Technology Distribution was establishedand then integrated into FDC At that time, there were 206 staff in FDC but FDC didnot include F9

According to the statistics of Human Resource Department, there were 252 staff

in FDC (15th May, 2014), which is much higher compared with that in 1998

At the moment, FDC becomes distributor for over 60 international branchessuch as Dell, Asus, Acer, IBM and so on

1.1.2. Organizational apparatus and human resource management of FDC

1.1.2.1. Organizational structure

Figure 1.1: Organizational structure of FDC

Boards of Directors are the persons who help company president to point out thespecific tasks to staff The tasks herein are, for example, technology, marketing, and so

on Boards of Director even solve other problems that are assigned by the companypresident

Each department will carry out a specific task I will explain it in detail in thelater part of my report

1.1.2.2. Human resource management

a. Allocation of human resource

“Source: Human resource Department of

FDC”

As we can see from the pie chart, approximately two – third of the humanresource in FDC was males, which were much higher compared with the proportion offemales (41%)

AdministrationdepartmentProcurementdepartmentBusinessdepartmentMarketingdepartment

Company

president

Board of Directors

Technical supportdepartmentAccountingdepartmentHuman resourcedepartment

“Source: Human resource Department of FDC”

“Source: Human resource Department of FDC”

The chart above shows that the majority of human resource in this company hasuniversity degree – 64% while post graduators count for 30% A mere of 6% was staffwho had diploma, vocational training

Table 1.1: Allocation of Human resource base on functionality

“Source: Human resource Department of FDC”

The table 1.1 indicates employees by functionality from 2009 to 2012 Therewere obvious an upward trend for the percentage of managers and back officer.However, the rate of specialists and sales decreased dramatically Moreover, in 2012,managers made up for a mere of 7% while the percentage specialists and sales wereboth five – times higher than that of the former ones (37% and 36% respectively)

Table 1.2: Employees by age range

“Source: Human resource Department of FDC”

The table 1.2 points out allocation of employees by age ranges Clearly, half ofthe staff was at the age between 25 and 30 year – old (51%) while only a mere of

approximately 0.4% and 2.3 % respectively were the group of 41 – 50 years old andabove 50 year age group 31 – 40 year – age group also constitutes for a large part –approximately 40%, which stands the second biggest group of human resource based

on age

b. Labor situation (from 2009 to 2012)

“Source: Human resource Department of FDC”

The bar graph reveals the number of staff in the year from 2009 to 2012 It isclearly seen from the chart that this number increased gradually from 206 to 214people between 2009 and 2011 Until 2012, the number of staff soared considerably to

225 people than the number of employees in 2009

c. Assessment the conformity of workforce, size and organizational structure withbusiness sector of FDC

Base on these above tables and charts that reveal the human resource of FDC,

we can easily assess the suitability of labor with the business situation of FDC (in theperiod from 2009 to 2012)

The majority of employees in FDC is bachelor and post graduate (count up to94%) who have specialized in economic and technical knowledge This combined withthe surge of staff (225 people in 2012) and a large percentage of specialists (37% in2012) have helped FDC not only adapt to the increase of consumer demand forproducts that FDC distribute but also promote importing process, enhance foreignpartners

Another point is that below 30 years – old people make up for big proportion inthe total percentage of human resource (66.33% over 100%) It is a “golden resource”

of FDC and a base for successes of this company

1.1.3. Mandates and functions of FDC

1.1.3.1. General functions and responsibilities of FDC

Generally, the main function of FDC is to distribute technological products such

as laptops, mobile phones, hardware and so on from big braches all over the world tothe end users The company will order and buy product before shipping it to shop

selling modern technology products If products were out of order, FDC also bearsresponsibility for checking and amending faults in order to meet customers’expectation Moreover, FDC, as far as I know, is also distributing technologicalproducts for projects related to technology in schools, hospitals or banks If thesepublic places want to establish modern equipment like computers or projects, FDC willprovide products and helps them to install

In terms of responsibility, FDC has to expand distribution network technologicalproducts and to increase International Corporation Another responsibility of FDC is toenhance labor skills in the modern world and remains working culture of company

1.1.3.2. Duties of each department

The duty of Administration Department is sealing the legal documents, transferdocuments from boards of directors to the staff, pay monthly salary for staff

Because I interned in Procurement department so to some extent, I know itsduties quite exactly Main function of this unit is implementing import procedure,doing statistics for import products (both value and volume), making orders forproducts from big suppliers, caring about logistics problems of one consignment.Another duty of this department is making payment for supplier’s bank For each week,staff has to prepare payment documents which include purchasing order, commercialinvoices, B/L and customs declaration This department also has to link to accountingand administration department to check all the legal documents before transferring it tothe bank

Business department shall be responsible for analyzing business activity,supervise orders intended to import before Procuring Department will order theproducts, claim money from suppliers for wrong products

Marketing Department is responsible for exacting the trend and forecastingcustomer demand in order to adjust the volume of importing products Moreover, thisunit is liable for giving out effective and efficient strategic plans that are needed topromote company’s products

Technical Department is responsible for creating information sharing systemused for internal access to data and information of company Furthermore, this divisionhas to warranty products that are found to be wrong when being distributed to retailers

Accounting department bears responsibility of checking debts, presenting bills,deploying deliver the goods, keeping products, managing costs.

Human Resource Department is in charge of managing, evaluating weekly andquarterly performance; working progress of staff, and recruiting new staff for company

• Mobile phone: from Apple, Lenovo supplier

• Printer: from HP branch

• Computer: IBM and so on

• Computer accessories: from the following suppliers: Transcend, Seagate, Kingstontechnology, Intel, Asrock, Art of colors

• Products for projects: taken from many branches: Linksys, Dell, Ca technologies,Microsoft, Lenovo, Asrock, HP, Art of color, IBM, Intel, Asus, Acer, Cisco, Oracle,Corel,

“Source: Business Department of FDC”

The chart 1.4 shows the growth in revenue of FDC during four years from 2009

to 2012 Revenue of FDC increased gradually and peaked at 4693.33 billion VND in

2011 before declining slightly to 4437 billion VND in 2012 There was obviously an upward trend of revenue and growth rate of revenue increased 12.36 % over the period researched (from 3949 to 4437 billion VND between 2009 and 2012) It can withdraw the conclusion that revenue of FDC had risen considerably over the period studied This is a big success, huge effort of FDC in the period of economic crisis

Table 1.3: Summary of financial statement in FDC in 2009 and 2012

Unit: Billion VND

No Items 2009 2012 Growth rate (%)

“Source: Accounting Department of FDC”

Moreover, the table 1.3 reveals that profit before and after tax rose 60.92% and 56.61% respectively From the chart and table, we can see that FDC had gained lots of success: Revenue of company soared considerably, profit after tax stood at a high level (285.06 billion VND)

CHAPTER 2: THE STATUS OF IMPORTING LAPTOP PRODUCTS OF FDC BETWEEN 2009 AND 2012

2.1. Import laptop products – actual situation from 2009 to 2012

2.1.1. The proportion of laptop imported compared with other products in FDC and

laptop import structure

2.1.1.1. The comparison between laptop imported and other products in FDC

Table 2.1: Imported products of FDC from 2009 to 2012

Unit: million USD

“Source: Procurement Department of FDC”

A glance at the table 2.1 shows that laptops constitute a big value in the totalvalue of imported products (from 31.56% to 43.68% between 2009 and 2012).Imported value for laptops soared from 6.896 in 2009 to 11.714 million USD in 2012(nearly doubled) and had highest value compared with other products FDC imported

In 2009, economic crisis covered all the field of business; however, informationtechnology still faced with these difficulties and developed more than before In thatyear, Microsoft issued Windows 7, for that reason the import value of products forprojects in FDC was much higher than three years after that (1.81 million USD) It can

be clearly seen that in 2009, imported computer has biggest value compared with otherimported products in FDC (7.25 million USD) Laptops only followed slowly computer

in terms of import value – 6.896 million USD which was tripled import value ofmobile phones

Over the period considered the imported value of laptops soared up to 11.714million USD – increased nearly two times compared with the year of 2009 Anotherproduct also witnessed a surge in the imported value is mobile phone (from 2.159million USD to 5.4 million USD in four years) A reverse pattern was seen in the value

of imported computers in FDC, which declined to 5.32 million USD in 2012 - by farlower than that of laptops in the same year Unlike other products, the import value ofprinters always made up for a very small proportion during the period studied

All the things commented above can be explained by the fact that laptops areproducts of great value Price paying to buy one laptop was very high compared withcomputers In 2009, because of economic crisis, people did not consumed more to buylaptops so FDC imported it at a lower value compared with computers In 2012, oureconomy has improved considerably, and at that time price of laptops declinedcompared with the year of 2009 because many big producers competed together to giveout new products into markets Together with that, consumers found that laptops weremore convenient than computers – which were heavy and could not be brought toanywhere so they tend to use laptops instead of computers

2.1.1.2. Laptop import structure

FDC imported different kinds of laptops Lenovo, Apple, Asus, Acer, Hp, Delland so on; however, because of the limit for one laptops combined with the dataprovided by Procurement Department, I will mention some main imported laptops inthe period from 2009 to 2012

“Source: Procurement Department of FDC”

The chart 2.1 represents the import structure of main laptops that FDC imported

A first glance shows that proportion of Dell imported outweighed that of Apple and HPbrands The justification for this is that Dell was very durable, and has a reasonableprice These three kinds of laptops imported all witnessed an upward trend in the totalpercentage of all laptops, in which the proportion of Apple imported surge considerably(from 10.3% to 16.8% from 2009 to 2012) The reason is that in the year of 2009 –FDC wanted to try import a proportion of Apple to see the customer’s behaviors

because it was a very expensive brand The percentage of imported HP also rosegradually and reached 24.5% in 2012 – a little bit below that of Dell Hp also has areasonable price as Dell, however, many people still like Dell because Hp is not asdurable as Dell

Other laptops such as: Lenovo, Asus, Acer counted for a biggest value during the period studied; however, the proportion of the others plunged from 46.8% to

30.8% If in 2009, the rate of other laptops imported nearly doubled that of Dell (46.8

% and 22.4% respectively), in 2012, the proportion of the former ones was only a little bit higher that of the latter, namely 30.8% and 27.9%

2.1.2. Import market structure of laptop products

Initially, FDC has orientation to import laptops from countries which havestrengths in information technology and trusts in international markets In particular, as

I mentioned before, laptops have high value so it is better for FDC to import productsfrom these nations in order to create trusts for Vietnamese customers

2.1.2.1. Import market value of FDC from 2009 to 2012

According to Procurement Department, we have some information about importmarket value imports (of all products) from main market of FDC in the period of 2009

“Source: Procurement Department of FDC”

The table 2.2 represents that the import market value of FDC from 2009 to

2012 In 2009, FDC imported its products mainly from China (14.486 million USD).Followed closely by China, USA and other nations supplied to FDC quite a high value(2.525 and 3.862 respectively), which was extremely higher compared with Hongkongand Singapore market After increasing dramatically to 18 million USD, the importvalue from China plunged to 12.517 million USD but it still remained the first rank inthe markets FDC imported A reverse pattern can be seen in HongKong, Singapore andUSA market, which witnessed a soar in the import value of FDC in the periodconsidered However, the import value from these markets FDC imported was stillmuch lower compared with that from China market

Source: Procurement Department of FDC”

When considering the proportion of import value from markets in 2012, it isclearly seen that over half of import value FDC imported belonged to China market,which was tripled that in USA market FDC also imported quite a large part (15.53%)from other markets; however, it imported a mere of 4.38% from Singapore market

2.1.2.2. Market structure for laptop products in 2012

From 2.1.2.1, we have already known the market structure for all products inFDC It is worth to note that there are four main markets FDC imported their products:China, USA, Singapore, Hongkong However, there was a little bit different when wecome to market structure for laptop products in 2012 We can look at the pie chart 2.3:

“Source: Procurement Department of FDC”

When it comes to market structure for laptops only, we can see from the piechart 2.3 that there are only 3 main markets and the proportion for laptops importedfrom each market is completely different from that for all products FDC imported Ifmost of products were imported from China, laptops which were imported from USAcounted for over a third quarter of the total proportion of market structure for laptops(76.86%) – extremely higher compared with percentage of laptops imported fromChina market (only 8.39%) This can be easily explained by the fact that USA is a big