Term Project – Section One

Student Name: Duong Anh

Student ID: 1605670

MGT 4478: Managing in a Global Environment

Instructor: Dr. Charles Chekwa

Troy University
 Introduction

Taco Bell was founded in 1962, an American fast-food business known for its inventive Tex-Mex

cuisine and has become a cultural icon associated with affordable and tasty Mexican-inspired

cuisine. Taco Bell, founded on the ideals of quality, value, and accessibility, has won over

millions of people around the world. Today, Taco Bell operates thousands of restaurants across

the United States and around the world, serving millions of customers each day with its diverse

menu of tacos, burritos, nachos, and more. Despite its global presence, Taco Bell remains

committed to its founding principles of quality, affordability, and innovation, ensuring that every

customer can enjoy a delicious and satisfying dining experience.

As a result of conducting thorough research on numerous countries for potential business

expansion, considering a variety of factors including costs, potential difficulties, and advantages,

I concluded that Taco Bell should expand into Vietnam. This suggestion is based on Vietnam's

rapidly growing urban population, coupled with its increasing appetite for international cuisines,

which presents a prime opportunity for Taco Bell to establish a strong foothold and satisfy the

cravings of Vietnamese consumers with its bold and affordable Mexican-inspired fare.
 Country Study

Economic:

Gross Domestic Product

Vietnam's GDP per capita has displayed some of the most impressive growth among all the

nations of the world, according to Forbes. This trend reflects the dynamism of Vietnam’s

economy and its remarkable evolution over the years. From 2006 to 2021, Vietnam's GDP per

capita grew by 371%. A growth rate of 371% is close to Vietnam's GDP per capita increasing

five-fold.

In 2023, Vietnam experienced a significant slowdown in economic growth during the first three

quarters, attributed to weakening industrial production and exports. GDP growth in the first

quarter reached a low of 3.3%, the second lowest rate in 13 years, and only slightly improved to

3.72% in the first half of the year compared to the same period in 2022. However, economic

growth picked up in the fourth quarter to 6.72%, driven by a turnaround in exports to mainland

China. Despite missing the target of 6.5% set by the National Assembly, Vietnam's positive

economic performance still positioned it among the fastest-growing economies in the region and

the world. Experts and international media have praised Vietnam's resilience, stability, and ability

to overcome challenges, highlighting its growth rates amidst global economic uncertainties

(Thanh, 2024).

Labor by Occupation

In 2023, Vietnam's labor force expanded to 52.4 million individuals, marking a growth of

665,500 people. These figures indicate that the availability of low-cost labor, which has been

appealing to foreign companies aiming to minimize manufacturing expenses, remains plentiful.

working-age Vietnamese, resided in urban areas, while the remaining 32.9 million, or 62.7

percent, were situated in rural communities. This suggests that although labor is abundant, there

may be a mismatch between its availability and demand in certain locations (Barnes, 2024).

Total Exports and Total Imports

Vietnam marked its eighth consecutive year of trade surplus in 2023, reaching a record $26

billion, triple the amount from the previous year. Total import-export turnover for the year is

estimated at $683 billion, with exports accounting for $354.5 billion and imports at $328.5

billion. Despite facing challenges in the import-export sector earlier in the year, particularly with

a significant decrease in exports during the first quarter, Vietnam witnessed a recovery in the

latter half of 2023, with exports exceeding $30 billion per month from July onwards. Notably,

agricultural exports, including fruits, vegetables, and rice, experienced significant growth,

contributing to the country's overall trade surplus.

Conversely, the $26 billion surplus was partly attributed to a sharp decrease in imports, reflecting

ongoing challenges in the production sector, particularly concerning components and raw

materials. Economic experts emphasize the need to focus on promoting key export products,

enhancing quality, and increasing the localization rate to achieve sustainable export growth.

Additionally, efforts to address issues such as the European Union's yellow card warning for

seafood exports and promoting value-added processing in the agriculture sector are highlighted

as crucial strategies for future export development. (Việt Nam reaches record trade surplus in

2023, 2023)

Infrastructure
Vietnam is ranked 103rd in road quality by the World Economic Forum and 47th out of 160

countries in infrastructure rankings, respectively, according to the most recent World Bank

report. The influx of foreign direct investment (FDI) and the government's resolve to adopt

Industry 4.0 in Vietnam have rendered the existing infrastructure inadequate (Pham, 2022).

Vietnam's infrastructure, both physical and digital, is essential for driving economic development

and connectivity. The country has invested in extensive road networks, railways, and strategic

seaports, facilitating domestic and international trade. Tan Son Nhat International Airport and

Noi Bai International Airport serve as crucial hubs for air travel and cargo transportation.

Meanwhile, advancements in telecommunications and internet accessibility have bolstered

digital connectivity, supporting initiatives for digital transformation and innovation across

various sectors.

Unemployment

In 2023, approximately 1.07 million individuals lost their employment, representing a decrease

of 14,600 compared to the previous year, as reported by the General Statistics Office (GSO).

Vietnam's unemployment rate decreased to 2.28%, attributed to the implementation of socio-

economic recovery measures, enhancements in the business environment, and improvements in

national competitiveness. The unemployment rate among young individuals aged 15 to 24

declined to 7.63%, equivalent to 437,300 individuals, marking a decrease of 0.15 percentage

points from 2022. Notably, the southern region saw a reduction in unemployment, with its rate

dropping by 0.41 percentage points to 2.67% in the fourth quarter, while Ho Chi Minh City

experienced a decrease to 2.91%, down by 0.78 percentage points compared to the third quarter

(Minh, 2024).

Industry growth rate

percent, marking a significant decrease from previous years. This sector accounted for 36.1

percent of the nation's total GDP during that year (Việt Nam reaches record trade surplus in

2023, 2023) (Real GDP growth industry and construction sector Vietnam 2017-2023, 2024).

Vietnam's manufacturing industry is pivotal, driving exports and attracting foreign investment

due to competitive labor costs and a favorable business environment. Similarly, the construction

sector plays a vital role in infrastructure development, urbanization, and economic growth.

Despite challenges like supply chain disruptions and the impact of COVID-19, Vietnam's

industry sector remained resilient in 2023, contributing to overall economic stability amidst

global uncertainties.

Geographic

Geographically, Vietnam boasts a diverse range of natural resources, including fertile agricultural

land, mineral deposits, and abundant water resources. Access to these resources and raw

materials is facilitated by the country's extensive network of rivers and deltas, as well as its

coastal regions, which support fishing and maritime activities.

Vietnam's climate varies from tropical in the south to subtropical in the north, with distinct wet

and dry seasons. This climatic diversity enables the cultivation of a wide range of crops and

supports biodiversity in various ecosystems.

Land use in Vietnam is primarily devoted to agriculture, with rice paddies dominating the

landscape in many regions. Urbanization and industrialization have led to changes in land use

patterns, with increasing pressure on natural habitats and agricultural land.

air pollution, resulting from rapid urbanization, industrial development, and agricultural

practices. Efforts to address these issues are underway, including reforestation initiatives,

wastewater treatment projects, and air quality monitoring.

Natural hazards are prevalent in Vietnam, including typhoons, floods, landslides, and droughts,

which pose significant risks to communities and infrastructure. Climate change exacerbates these

hazards, leading to more frequent and intense extreme weather events. Disaster preparedness and

mitigation measures are crucial to minimize the impact of natural disasters on the population and

economy.

Political/Legal

In Vietnam, the government operates under a socialist-oriented market economy with a single-

party system, where the Communist Party of Vietnam (CPV) holds significant political power.

Despite occasional political tensions, the country maintains political stability, providing a

conducive environment for business operations (Ho Thanh Thuy, Nguyen Duc Ha, 2021)

Foreign investment in Vietnam is encouraged, and the government has implemented various

measures to streamline approval procedures and attract foreign capital. However, navigating

regulatory requirements can be complex, requiring compliance with laws related to investment,

land use, environmental protection, and licensing.

Labor and employment laws in Vietnam govern aspects such as wages, working hours,

employment contracts, and occupational safety. The government actively promotes labor rights

and protections, although compliance with these regulations is essential for businesses operating

in the country.
Vietnam offers governmental assistance programs to support foreign businesses, including

incentives for investment in certain industries or regions, as well as support for research and

development initiatives. Additionally, the government provides support for vocational training

and workforce development to enhance the skills of the labor force (Doing Business In: Vietnam,

n.d.).

Tax laws in Vietnam are subject to periodic updates, with applicable rates varying based on

factors such as business type, industry, and income level. Double taxation treaties with other

countries aim to prevent double taxation on income earned by foreign businesses operating in

Vietnam and promote international trade and investment. Understanding and complying with tax

regulations are crucial for businesses to avoid penalties and maintain legal compliance (Medina,

2023).
 Conclusion

After careful consideration of several factors including GDP, export/import dynamics,

infrastructure, labor market conditions, geographic features, and political-legal regulations,

expanding business operations into Vietnam presents both opportunities and challenges.

Vietnam's robust GDP growth, favorable export-import turnover, and strategic geographic

location make it an attractive destination for business expansion. The country's improving

infrastructure, including transportation and communication networks, enhances connectivity, and

facilitates trade. Additionally, Vietnam's abundant labor force offers competitive advantages,

although navigating labor laws and regulations is essential.

However, businesses must also contend with certain challenges. Geographic factors such as

natural hazards and environmental issues require careful risk management strategies. Political

stability, while favorable, is underpinned by a single-party system, necessitating a nuanced

understanding of regulatory requirements and legal frameworks. Tax laws, although subject to

updates and revisions, can impact business operations and profitability.

In conclusion, expanding business into Vietnam requires thorough research, strategic planning,

and diligent compliance with legal and regulatory requirements. While the country offers

significant opportunities for growth and investment, businesses must carefully assess and

mitigate risks to ensure long-term success in this dynamic and evolving market.
 References

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Ho Thanh Thuy, Nguyen Duc Ha. (2021). Socialist-oriented market economy: The right choice

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socialist-oriented-market-economy-the-right-choice-for-vietnam.html

Medina, A. F. (2023). A Guide to Taxation in Vietnam. Retrieved from ASEAN Briefing.

Minh, P. (2024). 2023 unemployment rate drops 2.28%. VnEconomy.

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(2024). Real GDP growth industry and construction sector Vietnam 2017-2023. Statista

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Thanh, V. T. (2024). 2023 GDP growth rate of 5.05%: happy or not happy? Viet Nam News.

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05-happy-or-not-happy.html

Việt Nam reaches record trade surplus in 2023. (2023). Viet Nam News. Retrieved from

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2023.html#:~:text=According%20to%20the%20Ministry%20of,and

%20%24328.5%20billion%20from%20imports.