Select a country anh product or services you feel will be a wise anh long term investment potential for your Vietnamese company expansion in to a foreign country Chapter 1: ASIA SILK CORPORATION (ASC) 1.1 Introduction Asia Silk Corporation (ASC) is formerly knowed under the name of Hiep Sang company which is founded in 1994 From 01/01/2001, the company is officially converted into Asia Silk Corporation The company is one of the leading companies in the production of mulberry silk in Vietnam Products of ASC have been certified of the management quality according to international standards (ISO 9001:2000) by SGS Products are exported to many countries, receiving the trust and high appreciation of international customers Traditional customers of companies from Japan, India, the former Soviet Union, Singapore, Thailand, Malaysia, Indonesia, Laos and Bangladesh Name of company: CÔNG TY CỔ PHẦN TƠ TẰM Á CHÂU  Trading name: ASIA SILK CORPORATION  Brief name: ASC  Businesses: produce and provide silk products and related goods   Capital: 50.000.000.000 VND  Foreign investment: Total investment: 2.849.163 USD At present, ASC has a subsidiary and three joint ventures (one in Uzebekistan and in Taijikistan) 1.2 Silk of Van Van Phuc – Subtle feature of tradition and modern Van Phuc silk is not only the peak of the silk weaving industry but also the epitome of visual style on silk of Vietnamese folk artists From the old days, the most beautiful, thinnest, softest silk sheets which were weaved and knitted sophisticately were the tributes to the Court For girls, the most precious gifts were the shirts made from silk of Ha Dong So, for a long time, Van Phuc silk has become a "brand" that every Vietnamese know and respect Currently, the domestic designers also pay attention to the use of silk as raw materials for their works Particularly, young designer David Minh Duc used the finest silk of Van Phuc to launch the wedding dress collection which is designed according to the Hue royal style The wedding gowns are embroidered by images of dragon and phoenix are sophisticated, polished and have a strange attraction Perhaps it is because the silk makes charming, soft features and brings a special soul to the dress The collection is sold at very high price, about 3500 $/dress 1.3 Reason of selections Currently, export products of ASC are mulberry silk and silks In which, silk is the main product and takes high proportion of the company's business strategy However, the silk which is sold are quite popular without breakthrough on the brand Thus, the product of ASC has not been well known while Van Van Phuc silk is in high-quality and made by artisans of Van Phuc silk village However, the silk of Van Phuc is facing up with the eriosion for many reasons, for example, the appearance of cheap Chinese silk Though Van Van Phuc silk has been improved, investments in design, materials are not taken seriously so the application of the product is not high, and competition is not high too Since then, the cooperation of ASC and Van Van Phuc silk is an effective way to preserve and promote the value of a pure aesthetic beauty and increase competitiveness of ASC Thus, ASC implements the strategy of using Van Van Phuc silk to enter the US market in the future 1.4  Reason for choosing US market The US is a big market with high population (over 300 million people); The US economy is highly developed, the standard of living is also very high  The US has a big community of Asian (over 14 million people), in which, Vietnamese community has million people  Vietnam – US relation has many improvements  Moreover, US is a potential market which ASC has yet penetrated while other textiles companies like Viet Tien, Thanh Cong, Phuong Dong… had come into for a long time and gained big success This is really a big chance for ASC and silk of Van Van Phuc when US is the biggest market for garments Chapter 2: US market 2.1 Economic environment: Currently, the US remains the largest and most competitive economy in the world Although the proportion of US in the total GDP of the world tends to decrease, the US still has the highest national income and income per capita in the world In 2012, the total national income of the US is estimated at over 16 trillion USD, accounting for 20% of global gross national income… the USD has a developed infrastructure, industry and business support services 2.2 Legal environment: The US applies the system of UK- US law Regulatory environment of the US is very strict, clear and detailed, especially for the system of commercial law Some regulations relating to the exports of silk in the US: About detailed vouchers, the company must contact the importer or the buyer to get updated information and specific instructions of the state US companies often hire companies specializing in customs brokerage to the customs declaration If the importer does not know their procedures, contact the dealer for more information * Note: for textile products, companies should contact importer to get detailed information about vouchers, and always provide the percentage of fibers in the product according to the Textile Fiber Products Identification Act - TFPIA, see details in the appendix Other regulations: Regarding to the export environment, the constitutional provisions of US Congress are set to manage foreign trade and decisions of import tax However, due to the increase or reduction of import duties, fixing of import quotas or the complex of international trade agreements affect the interests not only of the U but also of other countries, so many responsibilities in these areas have been authorized by Congress for the law enforcement agencies In the process of implementation of the tasks authorized by the National Assembly, the law enforcement agencies have duties of regular consultation with the relevant committees of the National Assembly and advisory groups of private sector 2.3 Social-cultural environment: Generally, dressing of US people is quite simple, not fussy; and only in special cases such as the ceremonies or parties, they pay more attention to dress elegantly and aristocratically The US people not have too much prejudice to the origin of products Apparels had to be very comfortable and pleasant The quality is considered as a very important factor Dressing of US people, in general, comes from the concept of not judging anything by their appearance For the Asian community in the US in general and the Vietnamese community in particular, the culture of dressing is also influenced by the Western way of life, which means that Asians in the US also loves to dress simply and comfortably However, in some respects, when living outside the community, Asians tend to pay more attention to form Therefore, dressing formally is still seen as a way of showing respect for others Chapter 3: SWOT analysis 3.1 S (strengths)  Asia Silk Corporation (ASC) has a young, dynamic and highly professional staff  The products of the company are manufactured in a closed process, modern production lines, advanced technology which is imported from the developed industrial countries such as Japan, EU  Before entering the US market, Asian silk stock company (ASC) has exported a lot of their products to Japan, Bangladesh, Thailand, India…So, it can be said that the company has a lot of experience in the field of export and market penetration It can be clearly seen through the Japanese market which is a very tough market with strict technical standards  The quality of the company's products are tested strictly before packing, the reputation of the company was highlighted in all the stages of product consumption 3.2 W (weakness)  Have yet had a direct system of marketing  Advertising is done mainly through journal, have yet accessed directly to consumers  Shortage of experience in copyright registration and protetion  The organizational structure is not specialized so that the company can not take full potential  Van Van Phuc silk is hand-made good so the productivity is not high, affecting to the price and the competitiveness in the market  The sources of materials are not stable and scattered in many places like Vinh Phuc, Thai Binh, Ha Nam, Ninh Binh, Thanh Hoa, Da Nang, Lam Dong… 3.3 O (opportunities)  The purchasing power of the US for garments, especially for traditional crafts like silk, is great and is the first in the world  The US market has high population and the gap of income in society is quite big Thus, the US is a big and diverse market  The abundant and avaiable supply of raw materials due to the oldest traditional industries of Vietnam, even today there still are many large areas of Quang Nam, Nghe An  Policies of the Government are implemented to preserve and promote the traditional villages, which help those silk weaving villages recover and support for business activities of silk products and products derived from silk 3.4  T (Threats) Brand of Van Phuc is very famous, so there is a trend of mimic and lowquality products  The product is traditional so it is very hard to change the design, which makes the product become popular and less interested  The product has no highlights, outstanding features in comparison to other strategic products of other companies although there have been a lot of beautiful designs  One of the characteristics of market economy is the unstability, which creates risk of losses for farmers, making them give up and leading to the oblivion of the villages Chapter 4: Strategies and plans for market penetration 4.1 Product strategies 4.1.1 Core values of products:  Highlight the noble beauty, human charming, traditional but not a lack of integration  The products are designed suitably to be gifts  The materials are made from nature, are friendly with the environment 4.1.2 Realistic value of products:  Quality ( Polish the image by creating a credibility of quality) Our business focuses on developing and manufacturing products which are ensured by the quality, environmentally friendly and complied with the quality management standard ISO 9000, ISO 14000, environment management system SA 8000 to overcome barriers to the US market At the same time, it is necessary for the company to confirm that Van Phuc is Vietnamese oldest silk brand, standards for a product is very demanding, always more outstanding quality traditional products from India , China,  Designs (diversify designs to fulfil the tastes of customers) The Department of marketing in collaboration with the company's representatives in the US continuously monitors and understands consumers’ preferences for all kinds of designs to keep up with the development of taste, fashion, styleway of life Since then, the company strengthens investment, research and design models to meet the rising needs  Trademark (Strategy of trademark standard) The company will use a combined trademark ASC – VAN PHUC SILK So, the company can make use of the reputation of ASC in the world and highlight the fame of Van Phuc silk  Packing When exporting to countries with a high standard of living like the US, the packaging needs to be perfect We use the best materials available and economically feasibleto make the packages The package: We set up a stable order on packaging and size of package Transport codes on packages are accurate, clear and ensured to comply with international regulations The bag/box is stamped or printed on one side with all codes with unfading ink Packaging material which is used is renewable in order to solve environmental problems Packages which are under the standard may damage the products and cause problems for importers such as: disposal of shipments, commodity marketing 4.1.3 Supplemental value of products: Design a special sales program: have commercial discount for large orders, have different preferences for traditional customers such as the trading conditions In the process of offers, the company tries to convey this information to customers Have cources to train employees attitudes, communication skills and customer services so that the staff can advise customers how to select fabrics, the way of storage and use to help customers make the best selection with highest satisfaction Ensure fast and perfect method of delivery: Establish working partnerships with reputable transport units to meet the transport requirements of the customers If the customers have needs of home delivery, the company will try to it in the shortest possible time; and if the product is purchased as a gift, the company can wrap and send gifts at the request of customers Customer Caring: regularly receive, promptly provide and share relevant information, the company's policy to customers, creating relationships between the customers and the companies 4.2 Price strategies 4.2.1 New strategy of setting price Joining the US market, Van Phuc products will be priced equally or slightly higher than its competitors in order to enhance the brand value of Van Phuc 4.2.2 Strategy of price control  Discount pricing Cash discount: for customers who pay early Quantity discount: for customers who buy much Function discount: for members of distribution channels  Psychological pricing Pricing products with odd number (For example, 99$ instead of 100$) 4.2.3 Strategies of price adjustment  Increase the price actively The price of new products ỉmported to the US market is low due to the price strategy of penetration This hiddens the risk of violating anti-dumping policy of the host country and reduces the low rate of return for the company These issues combined with the cost of persistent inflation make the company raise prices A successful increase of price can makes the profit go up To get the success, the company needs a strategy of slow increase to avoid shocking customers Also, it is necessary to have a traditional program to tell the customer the reason for the price increase Accompanied by price increases is the improvement of product designs, packagings, after sales service and advertisements which make customers know about the superiority of products and they are willing to pay more money to get the produeys they want  Adjust to changes of competitors On the US market, ASC - Van Phuc SILK products always face up with the fierce competition of competitors coming from China, India and Thailand So, the company needs to keep a close watch on the changes in the price of competitors In the case the competitors reduce the prices of their products, the company need to have certain reactions to remain the market shares Depending on the specific circumstances, the company can adjust the strategies flexibly: keeping the cost unchanged while improving the quality, accepting discounts of rivals, or reducing price together with increasing the customer's impression of the quality 4.3 Strategy of promotion 4.3.1 Advertising The message the company wants to convey to customers is that ASC - Van Phuc Silk - "bringing traditional sophistication for you." The slogan is written in English and Vietnamese (smaller below) to attract the attention of potential customers Since the targeted customers are Americans who love Oriental beauty, especially the overseas Vietnamese patriotism Thus, we choose the message to highlight the core values of products: distil the essence of culture but also bring the beauty of integration Advertising medium: mixed media, taking advantage of media marketing to bring the image of ASC - Van Phuc Silk to end-consumers Press: Instead of big, expensive and uneffective advertisings on television, we will apply ads published in as many newspapers as possible, especially the fashion press; the contents are filtered to reduce the costs and increase the frequency of appearance of products 4.3.2 Promotion Promotional tactics that businesses use in the first release is a gift to the first 200 customers who buy products, and customers who have many orders will also get discounts Issue loyalty cards to some customers and have discounts for them in order to maintain the loyalty from customers 4.3.3 Sales Forces Because the main customers are in Vietnamese community, the sales forces hired are overseas Vietnamese people The sales force has an understanding of Vietnamese culture as well as the habits, customs and needs of customers in the US Employees are trained of customer-caring knowledge and the style of services is consistent Sales teams are always ready to give out advice of fashion and guidance of laundry and storage to customers with an attitude of respect Employees always say "thank you" to the visiting customers, helping them select and finally saying "goodbye, thank you" when people leave the stores The customer always fell comfortable and cozy when entering the stores of ASC Van Phuc SILK 4.4 Strategy of distribution: The way of products distribution of Van Van Phuc will be done as following:  Firstly, the company will open a store to display and sale products in California or Texas where many overseas Vietnamese are living (especially the Little Saigon), then expand the network of distribution to other states  Secondly, the company will offer and provide products for shops selling silk products only It is because salespeople there will know more about silk products so that they can advise customers in the shopping  Thirdly, the company implements the strategy of franchising to Vietnamese businessmen living in local areas Referrences: http://www.vinacorp.vn/news/gioi-thieu-cong-ty-co-phan-to-tam-achau/ct-283394 Department of Trade Promotion, the Ministry of Industry and Trade: http://www.vietrade.gov.vn/ ... consumers’ preferences for all kinds of designs to keep up with the development of taste, fashion, styleway of life Since then, the company strengthens investment, research and design models to meet... have discounts for them in order to maintain the loyalty from customers 4.3.3 Sales Forces Because the main customers are in Vietnamese community, the sales forces hired are overseas Vietnamese... So, the company needs to keep a close watch on the changes in the price of competitors In the case the competitors reduce the prices of their products, the company need to have certain reactions