Enhancing the effectiveness of import and distribution channel of vindrink ,JSC

There are three main parts of the thesis: Chapter 1: The theoretical basis of Import Activity at VID Chapter 2: Evaluate Import Department at VID Chapter 3: Orientation and Solutions to

Import and export has been holding the leading position in tồreign tradeactivities Nowadays, not only in developed countries where this activity hasbeen going wild, but also in developing countries, this trend has been growingstrongly Incorporating with this trend, many import and export companies inVietnam have been bom which making a new development of tồreign trade inVietnam

Aware of this, after a period of studying professional subjects and as therequest of the school about the intemship, I applied for 4-week intemship atVINDRINK.,JSC According to the knowledge that I have gained throughclasses as well as the useful information which was accumulated during the

intemship, I decided to choose project: “Enhancing the Eííectiveness of

Import and Distribution Channel of Vindrink.,JSC” in order to

understanding and practically learn about the import activity

There are three main parts of the thesis:

Chapter 1: The theoretical basis of Import Activity at VID

Chapter 2: Evaluate Import Department at VID

Chapter 3: Orientation and Solutions to enhance import business efficiency at VID

In order to accomplish this minor thesis, first of all, I would like to thank theBoard of Directors and Sales Department of VINDRINK., JSC for creatingfavorable conditions for me to practice at the company in the past few months Iwould like to sincerely thank MSc Pham My Hang Phuong - Who haswholeheartedly guided, contributed advices, answered questions for me in theprocess of writing this graduate thesis

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Despite trying to improve the thesis, but due to the short time of internshipand the limited understanding, this graduate thesis cannot avoid errors.Contributions from teachers would help me to make this thesis more complete.

Student

Bui Nhat Ha

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Chapter 1 The Theoretical Basỉs

1 Definitions, characteristics and roles of importation

1.1 Definitions

Importing play a pivotal role of íồreign trade, it is one of the two basic

activities that constitute tồreign trade According to article no 28 in Vietnam

Commerciaỉ Lcrw 2005 “Import of goods means the bringing of goods into the

territory of the Socialist Republic of Vietnam from tồreign countries or specialzones in the Vietnamese territory, which are regarded as exclusive customszones according to the provisions of law”

According to Clause 1, Article 28 of the Commerciaỉ Lcrw 2005, the

definition is as follows: 'ĩmporting goods means that goods are brought into theterritory of Vietnam from tồreign countries or from special areas located in theterritory of Vietnam to be considered regions Private customs in accordancewith the law"

The Market Business Ne\vs also detĩnes the tenn “Import” is understood as

“Imports are goods or Services of tồreign origin that hnporters bring into acountry”

Imports are hnportant for the economy because they allow a country tosupply nonexistent, scarce, high cost or low quality of certain Products orServices, to its market with Products from other countries Import also aims tostrengthen the economic facilities, modem advanced technology enhancetechnology transfer, save production costs, labor time, and contribute to theproduction development of society is a highly effective way

On the other hand, import creates a driving force for domesticmanufacturers to optimize production System, create apparatus to compete with

íồreign manufacturers So in this thesis, I used the definition as article

Import activities are organized, perform many tasks and many differentstages Starting from tồreign market surveys, selection of imported goods,transactions, conducting negotiations and signing contracts, organizing contractimplementation until receiving goods and paying Steps and tasks must bethoroughly researched and analyzed to capture the advantages and achieve theresults that company wants

Import includes activities of trading transactions between people orcorporates from different nationalities With the characteristics of large, difficult

to control market, the payment currency must be tồreign currency for a country

or both, and different countries participating in import activities must follow thecustoms of the locality and intemational practices

Import activities take place on a very wide range both in space and time Itcan be carried out on the territory of a country or in many other countries aroundthe world Besides, it can take place in a short or even yearly period depending

on the contract signed between the parties

Import activities take place in all areas Imported goods can be consumergoods or production materials, machinery or high-tech technologies to benetĩtimporting countries

Import brings benetĩts not only to the enterprises themselves but also to theeconomy and people's lives A developed import sector contributes in reducingthe unemployment rate as well as improving the economic State of importingcountry.

1.3 The roles of Importation

Importing is an important activity in international trade It directly affectsthe production State and human life (through consumption of imported goods).Through import, it enhances the technical facilities, advanced and modemtechnology for the production process and people will also be able to consumeProducts that cannot be produced in their country or production cannot meetdomestic demands

Import has the following major roles:

1.3.1 For the World economy

Betồrehand, through import activities, countries around the world haveopportunities to understand the customs, culture and political of othercountries which they co-operate with Thereby contributing to speeding up theprocess of economic integration among countries, fully exploiting theircomparative advantages and using human and natural resources moreappropriately

Import activities will stimulate production and consumption in eachdeveloped country It makes the volume of goods and demand in the worldeconomy increase, thereby also improving people's living standards

Import will help developed countries or developing countries have theopportunity to leam a lot of experience in managing and acquiring scientific andtechnical achievements as well as serving the industrialization and modemizationprocess

Import promotes economic integration between countries and regions Itmakes the intemational division of labor take place all over the world, creating areputation for each member State to be enhanced At the same time, activitiessuch as insurance, tourism, Services and trade also developed rapidly.

1.3.2 For the State economy

Vietnam is a developing country so that importing goods is indispensablefor the process of developing the economy and accelerating the industrializationand modemization of the country Thus, import activities have a huge role for theVietnamese economy

Importing construction equipment helps process of material and technicalconstruction to shorten time and effort It facilitates the development of theeconomy with modem equipment lines By importing modem equipment, ithelps domestic workers have opportunities to improve their skills andknowledge, managers have conditions to improve knowledge of qualificationsand management

Importing goods makes it possible to diversitỳ sorts and types of goods,consumers will be able to choose goods that are more suitable for their income.This also makes a contribution in improving people's lives At the same time,import activities also timely replenish domestic goods due to inadequatedomestic production

Thanks to importation, the domestic manufacturing industry will be able toeliminate weak production units with no competitiveness Besides, businesseshave to face the need to innovate both technology and management in order tomaintain protĩts and improve the competitiveness of their goods, facilitate thedominance of the domestic market and gradually proceed to exportation

Eventually, importation will create opportunities for our country to expanddiplomatic relations with other countries Then enlist their support for oureconomic development.

1.3.3 For the Enterprises

Through import activities, enterprises must innovate and improve qualitytechnology and product Services in order to increase the competitiveness ofdomestic Products Thereby, production efficiency is enhanced, workers findjobs, and workers' life is improved

Import activities are complex intemational activities because of theexchange of many different economies of culture, politics, customs, andlanguages Therefore, enterprises are forced to perfecting and innovatingbusiness management, officials and individuals always have to gain experienceand improve professional skills It enhances the professional capacity ofmembers of the enterprise

Importation plays an important role in increasing the position and reputation

of the company both in domestic market and intemational market The protĩtfrom business allows the company to build technical facilities, expand businessfields in both depth and width, contributing to solving jobs for workers andimproving life of officials and employees, solving problems of society,improving and developing business relationships

Import brings conditions for businesses in connecting between domesticand tồreign entities in a self-conscious way, stemming from the interests of bothsides, creating the strength of the subject in the enterprise in a practical way

Therefore, imports mean very important for a nation's development, it exists

as a necessity

2 Types of importation

Import business activities can only be conducted in import-exportenterprises directly, but in fact, due to the impact of business conditions,Vietnam creates various import and export forms In this section, we onlyconsider a few common and popular forms of import that are being applied atenterprises in Vietnam

2.1 Direct Imports

Definitions: According to the Commercial Law 2005, direct import is

detĩned “For this form, the buyer and the seller of the goods directly deal witheach other, the buying and selling process is not tied to each other Buyers canbuy without selling and vice versa Direct import is conducted quite simply Inparticular, the importer wants to sign an import business contract, must study themarket, find suitable partners, sign and perform contracts, self-invest, bear allrisks and costs in deal ”

Characteristics: In direct import, businesses must take all the tasks This is

an activity that must be carefully considered accurate from the initial step ofresearching information to signing the contract The reason for this due tobusinesses have to invest their own Capital to bear all transaction costs, marketresearch, delivery, warehousing, cost to consume goods, taxes payable whenbusinesses Self-trading, enterprises are allowed to import imports and whenconsuming goods, enterprises are subject to sales tax and item tax As usual, thebusiness only needs to make a contract with the foreign party, and the domesticpurchase contract will be made after the goods arrive

2.2 Entrusted Imports

Definitions: According to the Decision no 1172/TM/XNK dated September

22, 1994 which released by the Minister of the Ministry of Trade, entrusted

import is deíĩned “Entrusted import and export is commercial Service activities

in the form of leasing and importing for export or import Services This activity

is carried out on the basis of an export or import entrustment contract between

enterprises, in accordance with the provisions of the Ordinance on Economic

Contracts”.

In other words, entrusted import is activity formed between a domesticenterprise with its own tồreign currency Capital and a demand for import of acommodity but they do not have the right to participate in direct import-exportrelations, thus they entrust one enterprises with the function of directlyconducting tồreign trade transactions shall import according to theirrequirements On the other hand, authorized importers are importers that act asintermediaries to import goods

The entrusted party must negotiate with tồreign countries to import goods atthe request of the entrusting party Normally, a entrusted party is entitled to aremuneration of 0.5% to 1.5% of the total contract value, also known as a entrustfee and they must pay income tax on this source also, when conducting importEntrusted enterprises only calculate import and export turnover, not includetumover and pay value added tax

Characteristics: In this import operation, the entrusted enterprise does not

have to invest Capital, nor apply for quotas, nor study the imported goods market,but only to act as a representative to find and deal with foreign partners, signcontracts and import procedures as well as changing the trustees' claims,claiming compensation with foreign parties when there are damages

When choosing the type of entrusted import, enterprises must set up 2 kinds

of contract:

- A foreign contract (purchase with foreign countries)

- An intemal contract (entrusted importation with the trustee)

2.3 Joint Venture Imports

Definitions: According to the Commercial Law 2005, joint venture import

is detĩned: This kind of importation is based on the basis of voluntary economiclinkages between enterprises (of which at least one direct import-exportenterprise) with an aims to coordinate skills to jointly trade and set up advocatemeasures related to import activities, promote this activity to develop in the mostbenetĩcial way for both parties to share protĩts, losses and damages

Characteristics: Compared with self-trading imports, enterprises are less

exposed to risks because each joint venture enterprise only has to contribute acertain amount of Capital, the rights and responsibilities of each party alsoincrease with the Capital contribution The division of cost and tumover taxaccording to the ratio of Capital contribution, interest and loss depends on thetwo parties' agreement to divide based on contributed Capital plus theresponsibility that each party must handle

In joint venture import, enterprises that import goods will be counted forexport tumover but when they bring goods to consumption, they only calculatethe tumover on the number of goods calculated according to their Capitalcontribution ratio and only pay sales tax on those goods

Direct import and export enterprises must implement 2 contracts:

- A purchase contract with tồreign countries

- A joint venture contract with another business

2.4 Processing Imports

Definitions: Processing activities are stipulated in Chapter 6 of the

Consolidated Document 09 / VBHN-BCT in 2017 “Processing import is a form

of import whereby the importing party (the processor) processes the import of

raw materials from the exporter (the outsourcer) to carry out the Processing

according to the provisions of the contract signed between two parties”.

Characteristics: The relationship between the outsourcer and the processor

is detĩned in the Processing contract In the Processing contract relationship, theProcessing party shall bear all costs and risks of the process of manufacturingProcessing

In the Processing relationship, the processor will collect an amount calledProcessing fee while the outsourcer will buy back all finished Products producedduring the Processing

In Processing contracts, it is speciíĩed that commercial conditions such asfinished Products, raw materials, Processing prices, acceptance, payment anddelivery

2.5 Re-export Imports

Definitions: Based on the provisions of the 2014 Customs Law and Decree

No 69/2018 / ND-CP, the concept of temporary import for re-export is

understood as the fact that a Vietnamese trader imports goods from one country,

is íĩlled enough customs clearance procedures for import into Vietnam, thenVietnamese traders carry out procedures for exporting these imported goods toanother country or it may be the country that originally exported At the sametime, temporarily imported goods are re-exported in the form of business, there

is time to stay in Vietnam not more than 60 days from the time when Vietnamesetraders do temporary import procedures through customs areas

Thus, re-export imports always attract 3 participating countries: exportingcountry, re-exporting country and importing country

Characteristics: Enterprise in re-exporting country must establish 2 types

of contracts

- Import contract

- Export contract

Enterprise in re-exporting country must calculate the costs of the export andimport parties so that they can obtain a sum greater than the total cost in order toconduct the operation

3 Main content of Goods Importation

Import operations have much more complex tasks than domestic businessactivities due to differences in subjects and geographical distances Therefore, inorder to carry out import activities effectively, import and export enterprisesneed to clearly detĩne their responsibilities, content and work order Each step,each operation must be studied, fully implemented, carefully and placed inmutual relationships, taking advantage of the advantages to ensure the operation

of the highest efficiency, full Service, Timely for domestic production andconsumption In this part, I refer to a dissertation written by ms Huynh NgoeDoan Trang, 2015

3.1.1. Identiíy Imported Products

The purpose of identifying imported Products is to choose the mostprotĩtable business item To do this, businesses must answer the followingquestions:

- What kind of commodities are needed in the domestic market?Businesses need to identify the goods along with the brand, model,quality, price and quantity of the goods.

- How is the consumption of that product in the country? Each type ofgoods has its own consumption habits, which is retlected in theconsumption time, tastes and changing rules of supply and demandrelation on that market

- Which stage is the item in the life cycle? Any product has its own lifecycle Capturing the commodity that the business is planning to live

in at any stage of its life cycle will determine the measures needed toboost sales and eam more protĩts

- What is the production status of that item in the country? If thecompany wants to do business effectively, regardless of any businessmust pay attention to the relationship of supply and demand forbusiness Products The problem that import-export businesses need toconsider here are: production capacity, production season, growthrate of that product in the country The selection of imported goods isbased not only on the calculations, estimates and specificmanifestations of the goods but also on the experience of the marketresearcher to predict tluctuations in market prices Domestic andtồreign schools, the ability to negotiate to reach more favorabletrading conditions

3.1.2. Market Capacity Research

For importers, it is important to understand the market volume of goods toimport We can understand the market capacity of a good as a commodity traded

on a certain market range, usually a year Market capacity research needs todetermine the real needs of customers, including the amount of reserves, the13

changing trend of demand from time to time, regions in each production andconsumer sector Besides, along with determining demand capture, knowing themarkets ability to supply includes consideration of characteristics, properties,altemative production capabilities and the ability to choose to trade.

Market capacity is not fixed, it varies depending on the situation of thesituation, the combined effect of many factors in certain periods

3.1.3 Market Prices Research

In the worldwide market, prices not only retlect but also regulate thesupply-demand relationship Properly determining the price of goods in importshas a great meaning to the effectiveness of intemational trade

Prices in import operations are intemational prices International prices arerepresentative for a certain type of goods on the world market That price must

be the usual commercial transaction price, without a special condition and paid

in freely convertible foreign currency

Predicting the íluctuating trend of commodity prices in the world is verycomplicated, sometimes it is in an upward direction, sometimes it is in adownward direction, there are times when commodity prices tend to be stable butthis trend is only temporary In order to accurately predict the volatility trend inthe world market, we must íĩrst rely on the research results and predictions aboutthe market situation of such goods, to appreciate the impact of factors affectingmovement trend of commodity prices

The factors affecting commodity prices in the world market are many andcan be classiíĩed in many different ways When predicting the trend of priceíluctuations in the long term, it is necessary to analyze and assess the impact oflong-term factors such as cycle, value when predicting the trend of priceíluctuation in short time, it should be analyzed to assess the direct impact of

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changes in supply and demand and temporary factors such as seasonal

factors.

3.1.4. Business Planning

Based on market research then proceeded to establish import business plan

A business plan is a specitĩc action plan of a purchase or sale of goods orServices Business plan is the basis for professional staff to perform tasks, dividebig objectives into specific small objectives to lead and manage businesscontinuously and closely

Creating a business plan includes these following steps:

Step 1: General assessment of the market situation

Analyzing and evaluating the market situation and tồreign suppliers, thegoal of this step is to compare many supplier markets in order to select someattractive suppliers for the businesses First of all to save time and cost, it isnecessary to limit the assessment by immediately eliminating some marketswhich are obviously unattractive for businesses because many reasons belong tothe product itself are also the Standard immediately some supply markets

After eliminating supply markets with absolutely no prospects, theremaining suppliers are generally evaluated in the following aspects:

- Political environment

- Economic - Cultural environment

- Competitive environment

Step 2: Evaluate the ability of the company

In front of competitors, company needs to establish a relative assessment oftheir strengths and weaknesses On the one hand, how does the enterprise havesuperior capabilities, the current or potential status of the business, the resources

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that company and competitors can mobilize from themselves or from other

sources outside of the firm.

Step 3: Identify markets, Items and Quantities for importation

After analyzing suppliers' capabilities and business capabilities, the nextstep is to select imported goods that are suitable for company conditions Thisitem must meet the requirements set out by both parties: price, quality,packaging

Determining the object of the transaction to import including:

- Location and trading time

- Trading representative company name

- Trading volume and price

- Delivery form and payment method

Step 4: Identify markets and Consumers

The market is a whole that always includes a very large number ofcustomers with different buying characteristics and financial capabilities, so thatcompany needs to determine the market segment to consume Products so thatthey can be effective

Most attention should be paid to the following points:

- Customers that company aim at must be specitĩc

- The size and effectiveness of the market must be measured feasibility

- Company must recognize and serve the market segment that has beendivided according to certain criteria

Step 5: Determine Domestic prices

The price of imported goods will be agreed by the two parties but theimporter must base on the following factors to provide the minimum price inorder to maximize the benetĩts of the company:

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- Analyzing commodity prices of the same type on the domestic andintemational markets at the present time or the reference prices ofcompetitors entered

- Price must meet the objectives set by the enterprise as the target ofnet protĩt, tax

Step 6: Evaluate Effectỉveness and Overcome limitations that reduce business performance

Goods imported into firm in the market, the results obtained may be losses

or protĩts due to many factors arising in the business process Aíter consuminggoods at the end of the period, it is necessary to summarize and evaluate thebusiness efficiency and find out the causes affecting the business situation of theenterprise to propose remedial measures

3.1.5 Dealing, Negotiating and Signing Contracts

Dealỉng

After the market research phase, customer selection, business items andbusiness plan, the next step is that the company needs to approach the partners inorder to proceed with the purchase and sale The dealing process is the process ofexchanging information about trade conditions between parties The transactionincludes following steps: ask for price, offer, order, refund, accept - confirm

Negotiating

This is a negotiation step, exchanging with each other the conditions forbuying and selling import-export businesses to come to an agreement to signcontracts Negotiations often take the form of: negotiation by mail, telephonenegotiation and face-to-face negotiations

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Signing Contracts

The contract is an agreement between the parties, the seller (exporter) whohas the duty to deliver the goods and transfer the ownership of the goods to thepurchaser (importer), and the purchaser is obliged to pay the whole amount ofmoney according to the contract

Contracts can be considered as signed only if the parties sign the contract.The parties must have legal status and address specitĩed in the contract Thecontract is considered signed only when the authorized participant signs thedocuments, otherwise the contract is not recognized as a legal document Inmany cases, a contract with three or more parties can be done by all partiessigning a unitĩed document or by a written contract with a hand-written quotecontained in each contract

3.1.6. Preparing for the Import Contracts

This period includes the following tasks: hiring transport vehicles,purchasing cargo Insurance, customs clearance, receiving goods, checkingimported goods, making payment procedures, making complaints and settlingcomplaint (if any)

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Purchasing cargo Insurance

Insurance is a commitment of the insurer to compensate the insured partyfor the losses or damages of the insured subject to the risks (agreed) caused, only

in the case of insured party has paid a sum called Insurance fee for their goods

Customs clearance

Custom declaration: Goods owners must declare details of goods intocustoms declarations honestly and accurately, and at the same time, goodsowners must determine by themselves the goods codes, tax rates and taxcalculation prices of each imported and calculate the payable tax amount on thecustoms declaration

Presenting imported goods: Customs authorities are allowed to inspectgoods if necessary

Implementing Customs decisions: After checking the documents and goods,the customs make a decision to allow goods to cross the border (customsclearance) or go through with some conditions or worst, goods are not allowed to

be imported However, goods owners must strictly abide by customsregulations

Receiving goods

Importing enterprises need to perform tasks such as signing a trust contractfor transport agencies to receive goods; contĩrm with transport agency plans toreceive goods on ship schedule, goods structure

Making payment procedures

There are myriad of payment methods such as cash payment, payment bytelegraphic transfer (T/T), collection of payment, letter of credit (L/C) Any ofthese payment methods must be clearly specitĩed in the sales contract.Enterprises must conduct payment in accordance with the signed contract ofpurchase and sale of goods

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Complaỉnỉng and Settling complaỉnts

While import contracts are períồrming, in cases goods owners find that thegoods are damaged or have losses not in accordance with the signed contract, theenterprises shall have the right to file a complaint to the carrier or the seller.Depending on the content of the complaint, the importer and the complainedparty have different Solutions If the two parties cannot resolve the disputetogether, they can file an application to an economic arbitration or an economiccourt according to the contract However, the complaint will take a lot of timeand money for both parties, so the consideration of the law should be consideredcarefully

4 Factors Affecting Importation

4.1 Internal Factors

The domestic market is growing along with consumer psychology preferred

to use tồreign goods rather than domestic goods, it derived from the difference inquality and design This is a great opportunity for import and export companies

in general and VID in particular

4.1.1 The organizational structure

Import activities need a complete leading organization which is suitable for

a characteristic of an importing company In the case that the organizationalstructure is fail, it will affect the effectiveness of the company businesses

4.1.2 Human Factor

In import activities and importing companies, starting on marketresearching to signing and implementing the contracts needs the staff tounderstand clearly and proíessionally proíĩcient, especially when they have towork with foreign partners

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Human factor plays a vital role in the effectiveness of the organization andthe success of the firms.

4.1.3 Capital and Technology íactor

Capital and technology directly affects to the business activities of thecompany as well as import activities Capital and technology decides businessarea as well as the size of the business These factors help company cansmoothly operate and get highly effective

Capital and technology has a strong connection with each other If theenterprise has a solid source of money (Capital), they can have the State-of-the-art

technology as a result of it and get high level of effectiveness and vice versa

4.2 External Factors

4.2.1 Political and Economic Policy Factors

In general, import and export business activities and import activities, this is

an intemational trade trading activity, so it is directly intluenced by politicalfactors, laws of each country as well as of intemational Import tradingcompanies are required to comply with the regulations of the relevant countries,intemational practices and laws

Stable political environment, strict open-air laws that do not changeregularly have great intluence on the operation of the economy in general and

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import activities in particular The stable environment promotes intemational

trade between countries and between economic entities in different countries.

In contrast, unstable political and legal environment will greatly limit thenation's international trade activities in general and import activities ofenterprises in particular

Along with the trend of globalization, importation has been holding animportant position in the country's economy The Comprehensive andProgressive Agreement for Trans-Pacific Partnership (CPTPP) became effective

as from early 2019 and the EVFTA Agreement is expected to come into force inthe year 2019 will be an opportunity for businesses in expanding and developingrevenue

Since 2007, Vietnam has officially become a member of the WTO, marking

an important milestone in the process of intemational economic integration,opening a new era for VietnanTs trade The ASEAN-Japan Closer EconomicPartnership (AJCEP) which was signed in 2009, help company gain greatbeneíĩts when VID directly beneíĩting from 92% of goods in the Thailand will beexempted from tax

In recent years, our country has accelerated the signing of agreements such

as the ASEAN Free Trade Area (AFTA) which was officially accepted in 2012.Thanks to this agreement, import and export enterprises in general andVINDRINK Company is directly beneíĩted from preíerential tariffs, import andexport tax rates are reduced help company be able to be more competitive thanother competitors on the market

4.2.2 Exchange rate and Foreign currency rate of imported goods

The exchange rate between Vietnamese currency and foreign currencies has

a great inHuence on import and export business It affects the choice of payment

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currency The exchange rate is sometimes not fixed and will often

down Thereíồre businesses need to have research and predict the trend of exchange rate tluctuations to make appropriate decisions for imports such as

selection of partners, choice of payment currency

Likewise, the íồreign exchange rate may change the direction betweencommodities, between business plans of import-export businesses

4.2.3 Domestic and Foreign market íactors

Situation and volatility of domestic and tồreign markets such as changes inprice, supply capacity, consumption capacity and market volatility All factorshave an effect on import activities

The up and down in price changes will affect the ability to consumeimported goods When the price of imported goods increases, the demand forimported goods will tend to decrease, consumers will shift to consuming thesame or similar goods in the country, then it will take photos In the case ofimported goods of the enterprise, except for imported goods that the domesticmarket is unable to provide, then the price will íluctuate according to the market.The íluctuations in supply and market capacity affect the volatility ofimport prices, thereby affecting the company's ability to consume and importoperations

4.2.4 Inírastructure Factors

Infrastructure elements serving International trade in goods exchange have

a direct impact on imports such as:

Transport System and seaport: if this System is modemly equipped, it willreduce the loading and unloading time, delivery and reception procedures as well

as ensure saíety for purchased and sold goods

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Banking System: The more developed the banking System is, the moreconvenient it is for intemational payment as well as Capital mobilization Thebank is a factor to ensure the benetĩts for traders by payment Services throughbanks.

Insurance System, quality inspection: Allowing intemational tradingactivities to be carried out more safely and at the same time reducing risks aswell as the extent of possible damage to the businesses in intemational trade

5 Efficiency of Importation

5.1 The nature and Classification of import efficiency

5.1.1 The Nature of Import efficiency

International trade business in general and import operations in particular

do diversiíy items or increase the volume of value used for the nationaleconomy On the other hand, along with exports, import activities also create abalance in the balance of payments Besides, imports also create more advancedfacilities for domestic production by importing advanced equipment in theworld

In theory, the basic content of economic efficiency in import activities is aneffective contribution to accelerating social labor productivity and increasing thevolume of use value

5.1.2 Classification of Import Efficiency

Individual economic efficiency and socio-economic efficiency: Individualeconomic efficiency is the economic efficiency obtained from import activities

of import-export enterprises The general expression for individual economicefficiency is the proíĩt that each business achieves The socio-economicefficiency of import business is a contribution to import activities to develop24

production, renew economic structure, increase labor productivity, increasebudget and improve people's lives.

Efficiency of cost and aggregate cost: The purpose of business operation is

to maximize protĩts Therefore, enterprises must base on the market to solve keyissues such as: goods, production technology, consumers and product prices Thecost is actually the social labor cost But in each enterprise, the evaluation of theefficiency and social labor costs is expressed in the form of specific costs suchas:

- Raw materials cost

Comparative efficiency and absolute efficiency: The absolute effect iseffective calculated for each specific plan by determining the level of benetĩtsobtained at the cost For example, calculate the protĩt eamed from a co-production cost or a spent Capital Comparison efficiency is determined bycomparing the absolute efficiency indicators of the altematives In other words,the comparison effect is the difference in the absolute efficiency of the options,thereby allowing to choose the optimal plan

5.2 Evaluate the eííectiveness of Import activities

Import business efficiency is the financial benetĩt gained through the importperformance of goods and Services of enterprises by direct comparison of resultswith expenses

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Accordingly, business períồrmance of enterprises with direct and speciíĩccalculation contents and scope is different from business períồrmance, importbusiness efficiency including íồreign relations, embracing the intemationalnature of organic attachment to the national situation It is this complexity thatrequires unification of methods and related conditions to create the basis forassessing the economic performance of businesses.

Building a System of criteria for evaluating import business efficiencyaccording to the formula:

Business Efficiency =

-7— -Input Expenses

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Chapter 2 Evaluate Import Department

Full name: VINDRINK IMPORT EXPORT TRADING., JSC

Short Name: VINDRINK., JSC

Head office: Quarter 4, La Khe Ward, Ha Dong District, Hanoi City

Along with the slogan "Providing what you need with the best quality",VID Company specializes in providing genuine Products with the best quality atreasonable prices to help customers feel secure when trading and buying soldwith the company.

Prestige, quality and competence are the business foundation that thecompany has set out Therefore, the company has become a reliable address ofsuppliers, namely becoming the sole agent and exclusive agent of corporationsand large companies

The company's staff is highly qualitĩed, knowledgeable about importedexpertise Ability to negotiate cooperation and sign contracts with domestic andtồreign partners

1.3 The target of company

In the current market economy, any business that wants to survive anddevelop must detĩne for itself the goals and ways to achieve those goals becausethe goal is very important in guiding the activities of the whole enterprise

A business that operates without a goal or does not know what it is like aboat disoriented in the vast sea On the contrary, if the business sets out its ownobjectives in accordance with the existing resources and strives to achieve them,

it is certain that the business will grow and become stronger

With the desire to develop a strong company, right from the start, theDirector of the company has established a business policy based on the followingprinciples:

- Get the top credit

- Honest business commitment

- Commitment to meet the requirements of signed contracts

The company has been investing boldly in market research, customerrelations and partners, oíten for employees to go on business to explore andexpand import Products gradually prove their position in the intemationalbusiness market.

1.4 The Functions and Tasks

1.4.1 Functions

VID trades and distributes food and beverages, especially soft drinks andenergy boosters, which are popular from Thailand, England, Australia inVietnam Joint venture with investment companies with other companies, importand export all kinds of beverages imported from the company to tồreigncountries to expand the market and promote product image and enrich thecountry

The company operates under the direct selling method, directly contactingcustomers to capture information, so the Company also has the function ofcontacting, creating relationships and reputation with partners, from there Theprestige of the Company has increased and there are many people looking to theCompany

Marketing and distribution of wholesale quality food and beverage Productsfrom well-known tồreign manufacturers, VID strives to bring consumers the bestquality Products to ensure the health of people consumption Thus, VID has built

a dense customer network throughout Vietnam with more than 300 distributionchannels of MT and GT and dedicated logistics network, professionaldistribution team

1.4.2 Company’s Tasks

Managing and exploiting and using the most effective sources of businessCapital The company constantly improves the efficiency of Capital use and

business efficiency to meet the increasing needs of customers, compensating

self-costs and fulfilling obligations to the State budget on the basis of application.

Best way of trading ability of the Company and promote the application of new

technology into business.

Doing business in registered industries, for the right purpose to establish theCompany and perform the tasks assigned by the State As a domestic enterprise,the Company must comply with the policies and financial regimes in accordancewith the regulations of the Ministry of Finance

In addition, the company is also responsible for fulfilling all obligations ineconomic contracts with domestic and tồreign partners, constantly improvingproduct quality, bringing quality and image to the Company new high

Training, taking care of and fostering and fully implementing the State'sregimes and policies for employees such as bonuses, fines, remunerationpolicies, benetĩts, etc Implementing distribution according to TB social justiceand justice, organization to take care of life and constantly improve the culturaland professional level of the employees in the company

1.5 Company Structure

1.5.1 Company structure’s diagram

Diagram 2.1 Company Structure

1.5.2 Functions and tasks of each department

Board of Directors:

Directly organize and take responsibility for operating the company'sactivities in accordance with the law and the company's charter Directlyparticipate in signing contracts, participating in tồreign affairs At the same time,determine the objectives, build the development direction of the company in allareas of planning, tĩnance, development investment

Director is the manager of operating daily business and production activities

of the Company, appointed by the Board of Directors or signed a lease contract

Directly organize and run the company's activities in accordance with thelaw and the company's charter At the same time, determine the objectives, buildthe development direction of the company in all areas of planning, tĩnance,development investment

Particularly, the director of the company is tasked with manpowerallocation, monitoring business progress, expanding relationships with agentsand commercial brokers to promote import and export activities, bringing moredistribution customers to the company

Responsible for the implementation of the plan, directing the execution ofagency operations, arranging appropriately for agents, allocating plans to agents,directly participating in negotiating and signing contracts, participating intồreign affairs, taking general responsibility for the operation of the entireagency

Administration Department:

Monitor and observe administrative issues of the agency, carry out thearchive of documents, manage warehouses, and distribute equipment for theagencies

Recruit and arrange officials and employees Solving HR issues in thecompany such as emulation and reward, training of employees in the company.Performing administrative tasks according to regulations such as: Regent,reception, repair and preservation of assets

Assignment, staff moderation (driver and assistant) to transport goods tocustomers reasonably and on schedule

Performing the repair, maintenance and maintenance of the entire System ofmachinery, equipment, transport vehicles, ensuring the quality for vehicles to beoperated in the best way Provide and control the level of fuel consumption

Financial and Accounting Department:

This department in charge of document fully, update accounting books andrecords in accordance with the law, accurately retlect the data on the productionand business situation of the company

Organize the fulfillment of obligations to pay taxes and amounts payable tothe State budget according to the provisions of law, detect and prevent in time theuse of Capital, properties and supplies for wrong purposes

Manage the budgets of departments, monitor the performance of thecompany: revenue, costs, protĩts

The Financial and Accounting Department is responsible for monitoringexpenses, revenue, protĩts of the company, on payment orders and bills ofcustomers' debts, making business reports quarterly and annually

Warehouse Department:

Prepare and deploy packing plans to meet the shipment schedule.Implementing and supervising packing, shipment on time At the same timeparticipating in solving problems related to product quality to meet the progress

of goods export

Inventory management of goods according to accurate and neat standards,easy to find and see for inspection Execute quick, accurate and grounded ordersfor warehousing, warehousing and inventory

Checking the actual State of warehouses in terms of infrastructure and areafor timely repair and adjustment, in accordance with warehouse standards.Ensuring security, safety, fire protection for warehouse area As well as cargoinsurance

Import Department:

This department in charge of strategic orientation' of import and exportbusiness activities of the company; organize and manage market activities, findimport and export markets for companies and member units

Develop a policy of traders, direct, monitor and manage import and exportwork and carry out tồreign trade operations and direct production programsunder large contracts with the partners; at the same time perform the tasksentrusted by the company leaders

Take care of existing customers, find and develop potential intemationalcustomers Management of sales staff (management, administration, supervisionand training of sales staff)

Import department responsible for the accuracy, time to complete the work

of import and export business department, not to affect prestige and causematerial and property damage to the company

The structure of the company is quite reasonable As a small company, salesdepartment is only undertaken by two employees to secure the number ofcustomers and to find new customers in the company's ability to provideServices Particularly for document department, due to the large amount ofdocuments to be handled and solved for customers, this department has twostaffs, including: 1 employee takes care of imported goods and 1 employee runsfor documents (deliver documents) for guests, pick up containers, etc In theaccounting department, because the company books are not so much, this job isundertaken by an employee The function of the director as mentioned aboveensures that the company's business is stable