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Good information the key to international tie-ups
By JAN NOETHER*
The German Industry and Commerce applauds Vietnam for its remarkable achievements over the past decades. The accession to the WTO in early 2007 was certainly a highly important milestone on the way to being recognized as an integrated member of the global economic environment. It goes without saying that such achievements go hand in hand with a number of tasks and various challenges.
This letter shall not reflect legal nor administrative issues but look into more practical requirements needed to successfully tie up Vietnamese companies with their international counterparts.
Vietnamese companies are currently valued as ââ‚¬Å“commodity productsââ‚¬ and are hence price driven though they lack experience in a highly competitive global marketplace. Consequently such companies need to market their products and moreover market themselves to potential business partners.
The time of international counterparts queuing at the doorsteps of Vietnamese companies to request a business deal due to a price advantages over Chinese competitors is over. Vietnam is no more the paradise of high efficiency and low cost structures. Other countries in the region are similarly attractive or catching up fast.
How to find suitable business partners? Vietnamese companies, whether bigger groups or small and medium sized, need to be active. The participation in local and international trade shows, as visitors or (even better) as exhibitors, shall be a routine task and close relationships to relevant business associations will also be important. But how they represent themselves to their partners will be an essential factor in determining the success of Vietnamese companies.
When choosing possible local partners, foreign players will be looking for information, and lots of it. Preparedness will be the key to success for the potential Vietnamese partner.
About 90 percent of the Vietnamese company representatives enter into business meetings without or with only minor preparations. This is obviously a fatal flaw and more often than not such discussions do not lead to the desired results. If international managers arrive in Vietnam, there is an expectation that their Vietnamese business partners did their homework before entering into discussions.
The international partner does not only want to know whether the Vietnamese counterpart can master designs and shapes, the international company relies on the financial capabilities of its local partner. Will the local partner be able to buy sufficient raw materials? Is there enough financial strength to finance the production process? Will the company be able to carry out an order without disruptions?
Foreign companies know which questions they will ask potential Vietnamese partners well in advance. And the Vietnamese partners should know the answers before the meetings start.
The Vietnam Chamber of Commerce and Industry (VCCI) or local and international banks may assist with the implementation of a more comprehensive information system. It will help to create international visibility, which is one of the goals on the way to an internationally recognized economy.
* The writer is the Chief Representative of the German Industry and Commerce Vietnam, a member of the worldwide network of binational German Chambers of Industry and Commerce (AHK)