Solutions For Vietnamese Enterprises To Seize Opportunities And Overcome Challenges

At the same time, there is no policy risk management department, and no legal consulting services. In addition, when entering foreign markets, businesses are not really interested in learning about the laws and business practices of the host country. Businesses only pay attention to expanding the market to be able to export goods but forget an important step: learning about that market. This often leads to behaviors and actions that businesses think are correct but in reality are far from the customs and regulations of the host country.

- Limited competitiveness of international business enterprises: The competitiveness of enterprises is reflected in the following aspects: capital scale, technology level, quality and price of goods, ability to analyze the market and competitors, negotiation capacity, signing and implementing contracts... The competitiveness of international business enterprises has had certain improvements, but is still considered low. Overall, most Vietnamese enterprises with international business activities have small capital scale, not enough capital needed for international business activities... Poor technology is also a cause of challenges for enterprises. According to the assessment of the Ministry of Science and Technology, the capacity for technological innovation is among the weakest capacities of Vietnamese enterprises. The limitation of capital, backwardness in technology and techniques has significantly affected the business efficiency as well as the competitiveness of enterprises in the domestic and international markets.

- Slow and inaccurate ability to analyze the market and competitors: To be successful in the international market, an indispensable factor is that Vietnamese enterprises must analyze the market, analyze the industry and competitors, otherwise the enterprise will face many challenges, disadvantages and losses when penetrating the international market. Meanwhile, Vietnamese enterprises have not really attached importance to market research activities,

Passive behavior of enterprises is a major barrier causing financial risks and price risks for enterprises.

- Weak capacity for negotiation, signing and contract implementation, lack of initiative: The current reality is that Vietnamese import-export enterprises are not proactive in negotiations, and their capacity for negotiation, signing and implementation is still weak. The reason is due to limited professional qualifications and skills. Furthermore, many enterprises only care about price and delivery time, ignoring other regulations on documents and payment terms. In addition, before negotiating, they do not invest in learning about their partners and the business practices of the partner country. During negotiations, they do not come up with backup plans and are slow in making decisions. The reason is also due to the limited decentralization and delegation of initiative to Vietnamese enterprises, which sometimes results in losing business opportunities.

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- Limitations in business management capacity: Limitations in management capacity are one of the biggest weaknesses of Vietnamese enterprises with international business activities, shown in the following points:

+ Enterprises have begun to pay attention to corporate governance activities, however, this activity is still in its early stages and has not brought about the desired results. The leadership apparatus of enterprises is still cumbersome and slow to change in the face of new conditions.

+ There is no reasonable incentive system for talented people, no suitable human resource management strategy, so the company has not attracted skilled human resources to the company. There is also a brain drain to foreign companies.

+ Information channels within the enterprise are not yet smooth. Employees do not grasp the orientations and directions that the enterprise sets for them, so they do not have a direction to develop themselves and contribute to development.

Enterprise. Enterprise information channels are still organized in a pyramidal manner, which hinders employees from contributing ideas.

CHAPTER 3: SOLUTIONS FOR VIETNAMESE ENTERPRISES TO SEIZE OPPORTUNITIES AND OVERCOME CHALLENGES

Vietnam’s official membership in the World Trade Organization (WTO) brings not only opportunities but also potential challenges to Vietnamese businesses participating in the international business environment. Therefore, in order to take advantage of the benefits brought by this environment and minimize losses caused by risks, appropriate measures must be taken by each international business to seize opportunities and overcome those challenges.

Based on the analysis of the causes of the challenges that enterprises face when participating in the international business environment, some solutions can be proposed for Vietnamese enterprises with international business activities. But first, some recommendations need to be made to State agencies in helping Vietnamese enterprises seize opportunities and overcome challenges.

* For the National Assembly :

Vietnam is a country in the process of transforming a centrally planned economy into a market economy and building a rule-of-law state. Therefore, the legal system is still in the process of being built and gradually improved. In recent times, Vietnam has become an official member of the WTO, the legal system has been significantly improved. However, many areas of legal documents are still lacking and weak, not meeting the requirements of a rule-of-law administration. In order to create a legal environment, a fair competitive environment for enterprises in accordance with the requirements of production and business activities and international practices, the National Assembly needs to:

- Continue to improve the legal system in accordance with the international legal system and practices to create a favorable business environment, limit risks and challenges in international trade.

Identify and promptly issue new legal documents to regulate newly emerging economic relations on an international and national level to create conditions for Vietnamese enterprises to avoid risks in international business.

- Innovate the law-making process from drafting, discussing to official promulgation, especially attracting the wide participation of businessmen, business associations, and researchers so that legal documents fully demonstrate innovative thinking, are close to reality, and have high feasibility to improve the quality and transparency of the legal system in the context of international economic integration...

* For the Government :

To create a favorable domestic business environment for international businesses to grasp risks and overcome challenges, it is thought that in the coming time, the Government needs to:

- Directing the promotion of bilateral and multilateral trade negotiations and strictly implementing committed terms to create prestige and a favorable legal corridor for businesses in the international market.

- Direct relevant sectors, levels, and industry associations to proactively research mechanisms for resolving international trade disputes within the framework of Vietnam's multilateral and bilateral international commitments (such as with ASEAN, WTO, EU, and the United States).

- Directing sectors and levels to do a good job of providing information, legal advice and market guidance to businesses.

- Establish or support the establishment and development of an export and import credit insurance organization because export and import credit insurance with risk compensation will encourage banks to finance import and export for businesses, helping Vietnamese businesses to be more confident when exploiting new markets.

- Directing the development and implementation of a strategy for developing high-quality human resources with sufficient international business capacity in the context of Vietnam being an official member of the WTO.

- Focus on perfecting the system of legal documents to create a clear, transparent and favorable legal environment for international business enterprises. On the other hand, to ensure the quality of legal documents, the Government should find ways to attract the widest participation of entrepreneurs, business associations and researchers so that the documents fully demonstrate innovative thinking, are close to reality and have high feasibility. At the same time, with the promulgation of new legal documents, the Government also needs to review all legal documents related to the business of international business enterprises.

- Directing innovation in the work of building strategic orientations for international trade development to have a correct international trade development strategy, in which the important content is the correct orientation of the export and import market, key import and export products with accurate forecasts of influencing factors that will create favorable conditions for international trade enterprises to build production and business development plans, limit challenges and risks in the market. The Government also needs to strengthen dissemination to raise awareness of all levels, sectors, especially agencies with advisory functions on the role and importance of international trade development strategy work, especially now that Vietnam has become a member of the WTO.

- Strongly direct administrative reforms related to international business activities to limit and gradually overcome challenges caused by administrative reforms. Specifically, it is necessary to actively direct, operate and closely monitor to ensure that legal documents are properly implemented. Focus on administrative reforms, strengthen inspection and supervision of law enforcement activities of the state apparatus and state officials on the strict implementation of public duties, overcome harassment and corruption, especially

especially in agencies that have direct relations with enterprises such as tax, customs, economic police... In addition, resolutely reduce the staff of the cumbersome, incompetent, conservative, bureaucratic, authoritarian administrative apparatus, on the basis of renewing viewpoints, thinking, and awareness of building a team of cadres and civil servants with good moral qualities and high professionalism.

* For the State Bank :

To support international businesses in overcoming challenges when participating in the international business environment, the State Bank needs to:

- Flexibly manage interest rates and exchange rates to ensure domestic socio-economic stability while benefiting exports and limiting imports so that the Vietnamese Dong can soon become a convertible currency.

- Perfecting the method of announcing exchange rates. Currently, the exchange rate of VND seems to be "anchored" to USD, making Vietnam's foreign exchange market contain many risks as well as challenges when USD 31 fluctuates . Therefore, it is necessary to diversify foreign currencies in international transactions, bringing some strong foreign currencies that account for a certain proportion in Vietnam's international payments into the structure of the objects of buying and selling in the interbank foreign exchange market such as EUR, JPY, GBP...

- There is a policy to encourage commercial banks and credit institutions to create conditions for businesses to borrow capital by mortgaging inventory purchased from loan capital, instead of only borrowing when there is an export contract.

- Further strengthen the participation of Commercial Banks in export production activities for enterprises by allowing these banks to switch from credit to capital contribution or co-financing for export production projects.

* For the Ministry of Finance:

31 Although nominally the exchange rate of the Vietnamese Dong is determined by a “basket of strong currencies”, because USD reserves account for the majority of the total foreign exchange reserves of the State Bank of Vietnam, in essence the exchange rate of the Vietnamese Dong is “anchored” to the USD.

In a market economy, to support international businesses and create competitiveness for Vietnamese export goods, in the face of increasingly fierce competition, the Ministry of Finance must innovate its fiscal and tax policy management in the following direction:

- Strictly implement the Budget Law, limit the State budget deficit. Investment allocation should prioritize investment in developing the export production industry but must be based on the principle of efficiency, focus and key points.

- Timely adjust policies on export credit support and development investment credit to comply with WTO regulations on export support and subsidies.

- It is necessary to orient the cost reduction strategy for enterprises on the basis of controlling (according to the market mechanism) the prices of domestic raw materials, living materials, and wages at a reasonable level to attract the use of domestic raw materials, create an absolute advantage in labor, improve the quality of exported goods to create competitiveness for Vietnamese export goods, in the face of increasingly fierce international competition.

- Tax policy in general, especially import tax and value added tax, needs to be built towards stability, transparency, export encouragement but must be consistent with international common law. Specifically:

+ Import and export tax policies have consistent orientations so as not to cause difficulties for businesses in calculating business efficiency.

+ Import and export tax requirements must be specific and clear, avoiding ambiguity leading to arbitrary and unfair tax imposition on businesses.

* For the General Department of Customs, it is necessary to:

- It is necessary to soon deploy and expand the application of electronic customs declaration and simplify procedures at border gates to reduce time and costs for import and export enterprises.

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