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Entrepreneurs must think globally

Released at: 09:52, 08/06/2015

Entrepreneurs must think globally

Mr. Pham Phu Ngoc Trai, Chairman and CEO of the business consulting firm Global Integration Business Consultants (GIBC) and former Chairman and CEO of PepsiCo Indochina, shares his thoughts on Vietnam's enterprises and entrepreneurs.

by Nhat Binh - Son Ho

■ Thai and Japanese companies, especially retail companies, have expanded their business activities in Vietnam prior to the ASEAN Economic Community (AEC) being established and the Trans-Pacific Partnership (TPP) being signed. In your opinion, is this a warning sign for Vietnamese companies?

The AEC will be officially formed at the end of 2015, which is only half a year away. Trade Promotion Authority (TPA) legislation has recently been passed in the US, which is a good indication that the TPP will be signed in the near future.

Many of our neighboring countries have made solid preparations to take advantage of the opportunities, with support from their governments, especially Singapore, Thailand, and Malaysia.

At the end of 2014 a study by the Institute of Southeast Asian Studies (ISEAS) showed that knowledge about international integration among most Vietnamese businesses remains limited. They will therefore be unable to fully exploit the opportunities and advantages and will not understand the risks and threats when Vietnam is fully opened up.

Only a few Vietnamese businesses have undertaken extensive preparations.

We are seeing the growth of Thai businesses in many fields, especially agricultural products, light industry, and retail; areas in which they hold advantages.

I think this is the moment for Vietnamese businesses to focus and to use the time effectively in order to strengthen their internal resources and competitive ability, especially given that Vietnam’s competitive ability is ranked last in the 12 countries participating in the TPP.

Businesses need to be more active in improving their knowledge about integration, to seize the opportunities and be successful. They should not just wait for supporting policies from the government.

■ It’s believed that the AEC and the TPP will present major opportunities to Vietnamese businesses. Having consulted many of them, what is your opinion on this?

Free trade agreements and international economic cooperation are important driving forces helping Vietnam complete its market economy and renew its growth model.

FTAs help Vietnam restructure and balance import and export markets to avoid excessive dependency on certain markets. They also help businesses gain mid-term advantages over their competitors in the region when penetrating into important markets such as the US and the EU.

An open economy will create new opportunities for exports and for Vietnam to be part of the global supply chain.

Integration is now an inevitable trend. We are unable to choose to participate or not. We must recognize this as the best opportunity to restructure and improve our competitiveness, from the State to each business.

■ Many Vietnamese businesses in different fields have expanded to other countries and have found initial success, such as Viettel, Hoang Anh Gia Lai, FPT, Vinamilk, and others. What are the biggest advantages and limitations of Vietnamese businesses when entering other markets?

Investing in other countries will help Vietnamese businesses expand their markets, access high-tech technology, and learn new applications in information technology, thereby raising their competitiveness.

The government has issued policies on investing in other countries. The legal framework for direct overseas investment is being completed, which also creates favorable conditions for businesses to expand their markets.

These successful cases show that Vietnamese businesses have the desire to grow globally, but there are still difficulties to face.

The first is limited capital, capability, and technology. The second is in understanding the target market, including its legal framework, infrastructure, and differences in culture and language.

Economic and political changes in the investing market and uncertainty about the potential risks are also barriers for Vietnamese businesses when implementing projects abroad and they do not have enough experience and competitive capacity in regional markets and international markets.

Another factor is that Vietnamese businesses that have invested in other countries do not share market information.

■ Having been a judge in different contests for entrepreneurs, how would you comment on the spirit and ambition of Vietnamese entrepreneurs at the moment?

Over the last five years I have been a judge for the Entrepreneur of the Year, which is an international award held in 60 countries.

This has given me the chance to meet Vietnamese entrepreneurs from different generations. There are young entrepreneurs finding their place in start-ups, entrepreneurs who have made successful first steps, and great entrepreneurs that are the backbone of our country.

Though they are leaders of companies operating in different fields and are of different scale, I can still see that they think globally.

Young entrepreneurs who have been exposed to modern global life always tend to study business administration from the beginning.

Previous entrepreneurs, who experienced the difficult period when Vietnam restructured and changed, have now seen certain achievements. They always want to rise further and conquer the global market. With this ambition they study the requirements for operational management in regional markets, join the global field, and build multinational corporations.

These contests and awards act as a bridge to connect and promote the ambitions of Vietnamese entrepreneurs, encouraging them on their journey to global management. It also helps them join an entrepreneurial community, build business relationships across countries, and gives them vision on business management matters in the world, such as transparency, sustainable development, social responsibility, and others.

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