Case study: Vietnam

1. In what way dose the political environment in Vietnam pose both an opportunity and a threat for American MNCs seeking to do business there?
Opportunity:
Since Vietnam has lagged behind other countries in Asia, it needs some improvement in economic growth. And the U.S trade embargo was lifted in 1994, it’s offering good opportunity for investors.
Threats:
1). The implementation of the structural reforms which can modernize the national economy and produce more competitive exports for sale in the global economy.
2). The bilateral trade agreement that opens up trade and foreign investment in Vietnam and gives Vietnamese exporters access to the vast U.S market.

2. Why are U.S multinationals so interested in going into Vietnam? How much potential dose the country offer? How might Vietnam compare to China as a place to do business?
1). Based on the nature of economy of Vietnam, it has a large population, inexpensive labor and considerable natural resources, which is attractive to foreign investors. In addition, the Vietnamese government is establishing stronger economic ties with other countries. (For example Vietnam is on its way in establishing trading relationship with U.S; it made China become a useful economic ally).
2). Potential: the cheap labor cost and the natural recourses can make it very competitive. To some degree, these two aspects are the main concern of investors to pick a foreign country for manufacturing. Because the point of doing this is to low