Hewlett Packard Company in Vietnam Case Summary – Case John Peter, a Marketing Manager of Hewlett-Packard Asia Pacific (HPAP) was evaluating HPAPs long-term strategic investment options for doing business in Vietnam. Before start up business in Vietnam, John needs to know the current business environment in Vietnam. History, Economic and Politic Environment are important to know about the country whether is stable from others control. Current workforce is important to find the skillful employee when it’s start up the factory in Vietnam.
Foreign exchange and investment regulations are also important to know hether Vietnam market was open to global market or not. Hence, facility in Vietnam such as financial services, communicate services, utilities provider and others also important to start up a factory. Before John want to start up a factory in Vietnam, he has made a business visit to Vietnam and meet with local experience Director to find out the best solution and the possible modes of entry in Vietnam are majority Joint venture with local partner or become independent partner. Problem Statement Listed problem 1 .
What strategies that Hewlett-Packard Company should adopt to explore the Vietnam market? 2. What way should Hewlett-Packard Company enter the market? 3. How Hewlett -Packard Company explore the Vietnam market? 4. What are the factors that make the Hewlett-Packard Company so hard to explore the Vietnam’s market? The main problem statement in this case is “What strategies that Hewlett-Packard Company should adopt to explore the Vietnam market? ” Symptoms 1. In January 1995, Jon has made a business visit to Vietnam and have meeting with local experience director. 2.
Vietnam is still new to explore the IT market and it’s new for the local market. State your problem statement by integrating the problems and looking from a onceptual view. Hewlett-Packard Company is a big company and has its headquarters that located in Singapore. Vietnam is adopted to open the market of Hewlett Packard. The environment and the market analysis show that the information technology market in was uncertain. Alternative Strategies 1 . Joint venture with the local partner. HP can use the Joint venture strategy to enter the Vietnam market. By the Joint venture, it can reduce the risk.
It is because the company already familiar with the systems there so the company can perform well in the business. Since there is familiar, so the company can make the decision easily. Therefore it can reduce the risk for the company to avoid any problem. A local Joint-venture partner could be a valuable resource where the relationship was the vital for doing a business. The company can built long lasting business relationship. 2. Independent HP can independently enter the Vietnam market. HP could appoint 1 or more independent organizations as distributors, as well as service and support providers.
With the independent, HP can earn a lot of profit. By understand more about the environment and the current market place in Vietnam, and then the company can enter it directly. . Franchising HP Company can do the franchising. Franchising is a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate the markets. It is because franchising is one of the only means available to access investment capital without the need to give up control in the process.
It is also a marketing system for creating an image in the minds of current and future customers about how the company’s products and services can help them. Besides, it is the methods for distributing products and services that satisfy ustomer needs. So it is convenient for the HP Company to do the franchising to enter the Vietnam market. Evaluation of Alternative Strategies 1 . Joint-venture with the local partner The positive outcome of this strategy is that the company is easy to adapt to the current market.
It is because through the Joint venture, the company is more familiar with the situation of the company there. The negative outcome is that the management system different between the company. So it is hard to make a decision making. It is because there is different opinion of each person. 2. Independent The positive outcome of this strategy is that the company will get more profit. It is because the company no need to share the profits with others company. The negative outcome is that it is more risky.
The government will take action to take over the company because there have no acknowledge of the company. 3. Franchising The positive outcome of this strategy is that the company is easy to control the market. It is because through the franchising, the local company needs to get the agreement contract from the main company. The local company can manage the local market well because it has already familiar with the cultural of that country. The negative outcome is that the local company didn’t follow the rules that have set by the main company and boycott them because they take control of the business. . Joint venture with Local partner The best strategy to resolve the problem of “What strategies that Hewlett-Packard Company should adopt to explore the Vietnam market” is Joint venture with local distribute. The Hp Company doesn’t know with the environment there so through the Joint-venture, the company can more acknowledge about the policy and the culture of the company. By Joint-venture, it also can save the cost because there is no need the esearch cost for doing any research. Apart from that, from the Joint-venture, there is more opinion and the company can choose the best one.
There is more product and the idea is more attractive the Vietnam market. The capital for Joint-venture is low and the risk is also low because the risk is sharing together. 2. Direct Presence To enter Vietnam market, HP could have a direct presence in Vietnam by setting up a subsidiary or representative to provide marketing, sales support, and management services. Regarding to the Vietnam government, they planned for “IT-2000 Program” o create a national data communications network for almost all government personnel and the financial sector.
The government hopes follow in Singapore’s footsteps and accelerate the countrys entry into high technology. Furthermore, they also provide each secondary school and university student. Thus, HPAP may take this chance to bargain with government to subsidiary HP computers, such as personal computers, minicomputers, RISC workstations, and mainframes enter toVietnam. Since government support HP, it had developed strong reputation and brand identities which will be the tops in Vietnam since the industry is still its infancy and on’t have any competitors in the market.
Besides, the level of education was comparatively high and there are 70% of the citizen is under 35 years old. Therefore, most of them will need computers to do their stuff. Implementation In the short run, it is easy to see the effect. The outcome is that there is more people to accept and response to the market. It is because the development is expanding very fast. In the long term, there will have the conflict. It is because the people are no agreeing with each others. They have their own opinion and have the different idea of the management.