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Which market structure (Perfect competition, monopoly, monopsony, oligopoly) best applies to uy chosen
company? Explain.
Today, the world has many types of market competition. Based on the characteristics that people divide the
market into categories such as:
Perfect competition
Monopoly
Monopsony
Oligopoly
Oligopoly: is a market which has few manufacturers or major suppliers, affect the price but can not controlled the
product price and the market. Based on the characteristics of Oligopoly market, we concluded Toyota Vietnam
under Oligopoly market rather than perfectly competitive market. Toyota Vietnam is a major manufacturer, famous
in Vietnam and was gradually penetrating into foreign markets, much and less influence on the market price of car
in Vietnam. However, it did not control the domestic market. Substantially, this market has many buyers and sellers
and also influenced the products of Toyota. Besides, Toyota Vietnam is also facing a number of competitors have
brand names such as Honda, KIA, Mercedes-Benz, Audi, BMW, etc. Toyota must have a unique style, distinct and
competitive price they can entice customers to use their company's products. Customers also partly influenced to
demand strongly, so manufacturers have to do as to how to respond to the needs of our customers. In any country, in
anywhere, the first concern of manufacturers is the best benefit for people on health and the environment around
them. Government has always given strict rules to ensure the best interests of consumers and the production
manager for environmental protection. In Viet Nam, they must ensure compliance with the rules and regulations and
are also in countries such as the EU or the UK. The last element to this market structure that deviates from the model
of perfect competition is the products. When customers use a certain product of Toyota, they always care about the
quality of the product such as labels, price or came from. Therefore, Toyota Vietnam wants to create a good
impression for demanding customers in the international market, they must set out the perfect strategy for quality,
product design or prices to compete equal to other companies.
The main barriers to entry which limit new entrants into the company?
Toyota Vietnam established in September 5, 1995 with the main activity is assembling, manufacturing, repair and
maintenance of vehicles. They supply and distribution to dealers across the country Vietnam. They are well known
car company in Vietnam and they have many branches there, Toyota will meet limitation of new entrants at
Vietnam. Some man barriers to entry into Toyota such as economies of scale, product differentiation, capital
requirements, switching cost, access to distribution channels, cost disadvantages independent of scale and
government policy. With large-scale production, they must fully meet cost source for the production and distribution
of products for resellers. To convenient for product diversification and development of their brand, they need to
have strong capital and attract foreign investors. Toyota is a company originated from Japan so they can borrow
from that to cover the initial costs such as building factories, established distribution channels, land rent and labor,
introduced products through media and advertising. That is the initial difficulties that Toyota needs to face and
create advantage entering the Vietnamese market later. Toyota operations in the Vietnamese market should be
concerned about the source of income of the people of Vietnam is not high. GDP in 2011 is $ 1,300 / year. So,
Toyota should offer reasonable prices for each of its product segments to help their products reach customers more
easily. To the Vietnamese government, Toyota must comply with strict administrative procedures and fully taxed.
For vehicles imported from abroad is very high taxation. A car imported to Vietnam will first be paid to import
duties, with the car from the current 68% - 78% and with the components for local assembly 20-25%. Based on the
import price plus the import tax, car will be beaten to excise duty at 45% - 50% -60% depending on the volume,
then subject to a 10% value added tax. That is the basic steps to help Toyota overcome these barriers to entry.
Protect safety laws?
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In basic theory, the existence of a fair market suggests that there is no need for legislation on product safety. In
practice, it is not always easy for consumers to find information about products and services. As a result, to protect
consumers against unscrupulous business that governments of each country have introduced laws. The Vietnam
Standard and Consumers Association (VINASTAS) which mission is twofold: to promote standardization and
product safety and to improve consumer protection in Vietnam.
The legal system operating in a country in which Toyota operates is closely related to the factors that affect its
political system. For instance, the level of independence of judicial from the political process poses a major factor
the legal existence, survival and growth of Toyota's existence in that region. National laws affect business especially
in the areas of health and safety standards, employments practices, and patents and trade probations. Consumers
have the right to request Toyota to fulfill following obligations during the time of implementing warranty:
Provide a warranty certificate and warranty period.
Provide consumers with similar goods, spare parts, accessories for temporary
Use during the period of warranty.
Change new similar goods, spare parts, and accessories or recall goods,
Spare parts, accessories and refund consumers if the traders fail to correct
The faults after 3 or more times of maintaining such goods, spare parts,
Pay the expenses for the repair and transportation
PESTEL
PESTEL is a method of analyzing the elements of the business environment. This is an essential tool for operating
and strategic planning for the Toyota Company.
Political - Legal Factors:
In the context of the economic crisis in many countries around the world include Vietnam. Each countrys
government has carried out policies to recovery, protecting and stimulating the important industry including
automotive industry. Toyota has influenced and has trouble in the global financial crisis. Because of this, they had to
ask for a loan of about $2 billion dollars from the Japanese government. Loans from government policies can
support the car companies survive in difficult times of financial crisis. In addition, with the export policies, Toyota
will get more incentives from the Japanese government.
About political, diplomatic relations between Japan and Vietnam is very good. This relationship is the basis
for the success of all the business in Vietnam has FDI of Japanese such as Toyota. In addition, tax policy
also supports Toyota development in Vietnam. For example: According Law on Domestic Investment Promotion
(1995), corporate income tax exemption or reduction in some years after its establishment company in Vietnam.
Import duty on cars components for the domestic automotive assembly much lower with import duty on
automobiles. Government supports infrastructure, land for foreign businesses investing in Vietnam. Government has
establishment of funds to support and encourage investment in Vietnam in the medium and long term.
Toyota has captured these advantages to become the first car company to invest in Vietnam.
In addition, the nations of the world in general and Vietnam in particular also have legal policies to protect
the interests of domestic automobile companies.
At Vietnam, protection policy is the policy brings many benefits for Toyota. One of the most obvious
manifestations of the policy is the customs barriers against with imported automobiles. For example: Before
January 1/1999, imported cars are taxed 155% (55% import duty, 100% excise tax), after this time shall be banned
from import, taxable in 2004 up to 180% (excluding value added tax). As a result, competition in the Vietnam
market is very weak. The price of cars assembled in Vietnam will not be affected by the relationship between supply
and demand. In such environment, Toyota has possible long-term investment in Vietnam.
Economic Factors:
Toyota joined Vietnam with the aim of looking for new markets. According to a report Finnish advisory
group Global Intelligence Alliance (GIA), Vietnam ranked 3rd in top non-BRIC emerging markets - for the 2012
2017 periods.
Vietnam has a total GDP about US$ 135.411 billion (2011 estimate), surpassed the per capita income of
low-income groups of countries. Vietnam is among the countries with the domestic market leading growth in the
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world, an economy with high growth in world trade transactions with total exports is US$72.03 billion f.o.b. (2010
estimate) and total imports is US$79.37 billion f.o.b. (2008 estimate).
In addition, Vietnam has the trust of many countries in the world. This is reflected by the amount of
funding (ODA pledges 7.905 billion USD for Vietnam in 2011) in world economic crisis. These criteria and the
numbers above is a reasonable basis to Toyota to invest in Vietnam.
Social Factors:
Vietnam has a population of over 85 million people has always been the country to attract foreign
investment. Along with a large consumer market, high social needs, this is also a young market with abundant
human resources. Social Vietnam tends to learn new things, improving education. From that, labor quality has
improved and development. Low cost of human resources explains the increase of FDI in Vietnam automotive
industry. Toyota has always regarded the market as a factor affecting the characteristics of the product. A multi-
national company such as Toyota always needs the product diversity and prices to suit the culture and society of
each place.
Technology Factors:
Toyota also benefited from the policy of research and technological development of the Japanese.
Furthermore, the technological research cooperation between government and the business was always supported.
Thus, environmental science and technology research in the country have created favorable conditions for
development of Toyota.
The world's automotive industry in general and Vietnam in particular are always strongly affected by
technology. This forced Toyota Vietnam to constantly self-study and application of modern technologies in the
production. The development and change constantly help Toyota get leading position in Vietnam and have trust
from consumers.
Environmental Factors:
Environmental factors include weather, geography, tsunamis, earthquakes, volcanoes and all the natural
conditions in the territory of each country. When Toyota interested in the environment in production activities and
create environmentally friendly products, it will bring trust and support from consumers.
For example: According Toyota's Initiatives on the Environment:
- Establishing a low-carbon society
- Establishing a recycling-based society
- Environmental protection and establishing a society in harmony with nature
Analyzing the external environment (PESTLE) helped identify advantages and difficulties from Political, Legal,
Social, Technology and Environmental around Toyota Company at Vietnam. Since then, applying the strengths,
opportunities to grow and avoid the risks and threats from external environment. External environmental factors
impact to business operations of Toyota. Toyota Vietnam should to regularly update, change and planning long-term
strategies to overcome and minimize the impact from the external environmental. This helps Toyota Vietnam can
maintain market share in the market and increase development in the future.

Technological environment
E-business is the transaction takes place between the company (B2B) and between the company with individual
customers (B2C) through the use of information technology, internet. This method helps convey information quickly
through information. Toyota will not take much time and cost to introduce their products to consumers. Toyota has
set up a website for consumers and they can keep track of the company's products as well as customer care policy.
This is one of the important factors that help retain customers for the company. A strategy developed e-business
system will effectively create a competitive advantage for Toyota than the other competitors in the market. E-
business includes customer service (e-service) and intra-business tasks. Toyota not only create a good relationship
between the customer and Toyota company by encouraging consumers to provide an email address of them, include
some comments by consumers for products and services of company. Toyota also set up internal networks to build
better partnerships between company and employees, between the company and suppliers
Benefits of e-business to Toyota:
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- E-business has helped Toyota to expand markets in regional and international
- Cost savings in operations (paper-based materials, advertising costs, telecommunications cost).
- Uptime is not limited (24 hours / 7 days).
- Easy to store documents and information. Digitization of products and the processes.
- Toyota can easy and quick in communicate with consumers and suppliers.
Limitations of E-business to Toyota:
- System security is not guaranteed, the reliability is not high.
- E-business is developing rapidly, so Toyota will always have to change technology to fit the market.
Compatibility between new technology and old technology is always a problem that Toyota needs to
overcome
- E-business has always faced the problem of increased competition quickly.
- E-business always needs innovating and developing the business model. This is a problem that Toyota
frequently encountered and need quick remedy.

Demographic
Demographic factors related to the economic characteristics of society. These factors include age, sex,
education level, income level, marital status, occupation, religion, birth rate, death rate, average size of a family,
average age at marriage. Theoretically, a region with the high rates of population is a potential market. In addition,
the factors of age and gender also affect Toyota's business activities.
Vietnam with a population of over 91 million people (2012) always is a potential market for investors. In
particular, Vietnam has entered a period of "golden population structure" opportunity that occurs only once in the
demographic history of each country and this will contribute to the socioeconomic development of the country.
Vietnam has a young population structure with more than 60% of people aged 15 54 (2012 est.), working age. The
golden population structure also is the most important factor affecting investment decisions in the development of
Toyota at Vietnam. Age always is an important factor in the demographics of each country affect businesses.
Vietnam with a young population structure will easily exposed to advance technology, e-commerce. Toyota has
been abundant human resources and high development potential. In addition, a young population structure will go
along with high market demand about automobile, people in this age usually want their own a car. This will help
Toyota could develop in the future.
Toyota may have been an insight about Vietnam market through access to demographic data, research the issues
related to the birth rate, death rate, marriage rate and divorce. All this to help Toyota can achieve high performance
about economic and development in the long term, building systems in accordance with the national environmental.

The Socio-Cultural Environment. The Eco-environment (Corporate Social Responsibility (CSR))
Since the concept of social responsibility of the enterprise (Corporate Social Responsibility-CSR) appears for
the first time in 1953, this topic has generated an argument between for and against with CSR.
In an article written for the New York Times in September, 1970, they said: "Businesses has only a single
responsibility is to maximize profits, increase shareholder value, within the framework of the rules of the market is
competitive honest and fair. This shows the nature of the businesses and the businesses manager is only responsible
for shareholders and the owner of the company. So, managers are not allowed to use the resources of the company
and use the name of the company to implement social responsibility without the permission of the shareholders or
the owner company.
Secondly, company is an inanimate entity due to man-made and therefore the company cannot be aware of
social responsibility and moral obligations which only have from a human.
Moreover, the social responsibility is the responsibility of the state, provide all public services for mutual
benefit and non-profit. The responsibility of business is to make a profit, provide jobs and income for workers. In
addition, the primary responsibility of business with state is pay tax and state must use tax to public interest in a
most effective way. So, businesses cannot pay taxes and implementation of social responsibility at the same time.
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Proponents of CSR do not reject all of these arguments. But they also offer the other arguments are very
convincingly. When the company went into operation, the company has been a subject of social, it use of social
resources and environment, therefore it can impact negative to society and environment. Therefore, businesses must
have aware about the impact from manufacturing operations of its business and have responsible for their own acts
previous social. The business activities, environmental pollution and social costs caused businesses can influence
much greater than the benefits from tax to state. Therefore, the businesses cannot deny its social responsibility.
CSR is the last hindrance to help keep businesses do not go too far because of the economic benefits and violate
ethical standards (which are not always fully reflected in the legislation), neglected the negative impact to its other
components of society.
The businesses implementation the social responsibilities also are for the benefit for growth and sustainable
development on their own. In the fact, consumers and investors are increasingly attention to issues labor,
environmental, ethics and social responsibility of the businesses. This greatly affects the competitiveness of firms in
the market. If the business does not perform the social responsibility, they can exclude from their markets and the
business community.
In Vietnam, Lego Group has always shown their social responsibility:
Health and Safety: establishing a working environment with a strong safety culture and no injuries. Lego Group
continue to advocate for and apply a proactive health and safety approach to drive a safety culture and behavior in
the company.
Respect for employees rights and well-being, is a key element in commitment of Lego Group to a great workplace.
Yearly, LEGO employees report their level of motivation and satisfaction in a corporate employee survey.
Local Community Engagement: A crucial factor in the way Lego Group work with sustainability and responsibility,
is to nurture and support the communities that are affected by their activities. In the LEGO Group, they recognize
the important part they can play as an advocate for childrens opportunities to play and develop in the local
communities.
. Toyota Vietnam often organize activities and programs for the community such as classical music night Toyota;
The program of Toyota with children learn about traffic safety; Toyota Scholarship; Program Support Technical
Training of Toyota T-TEP ; Environmental Protection Program (Go Green) - Green Journey Toyota often
strengthens community action for social and cultural development; improve the quality of education and human
resources development in Vietnam. Toyota has always been a sympathetic look in the eyes of clients and investors
in Vietnam.

Poster (Strategic positions)
Competitive strategy was first mentioned in the book by Michael Porter in 1985. Follow that, there are two
basic types of competitive advantage that a businesses can possess: low cost or differentiation. Based on these two
basic types, the enterprises have sought to combine them with the scope of activities and formed three general
strategies: cost leadership, differentiation, and focus. The focus strategy has two types that are cost focus and
differentiation focus.
In fact, the businesses in Vietnam such as Toyota need analysis and consider very carefully before determining
for themselves a competitive strategy to pursue. This is the basis helps Toyota create a competitive advantage in the
marketplace.
Cost Leadership: in this strategy, the company's goal is to pursue low-cost strategy to create competitive
advantage by creating products with the lowest cost. It has a number of characteristics such as the company focuses
on technology and management to reduce costs, not to focus on product differentiation. The company cannot a
pioneer in the field of research and offer new products. Group clients of the company often as the group "average
customer."
Differentiation: Strategic objective of product differentiation is to create competitive advantage through the
creation of unique products to satisfy customer demand that the competitors cannot perform. This strategy allows the
company can set prices the product at a high level. Company is always a pioneer in the research and creation of new
products. Cost is not important when implementing this strategy.
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Focus: The objective of this strategy is only focus to meet the needs of a particular market segment through
geography factors, customers or product characteristics. Characteristics of this strategy are to focus on serving the
target segment. It can be done by low-cost strategy or implement follow the product differentiation strategy. In
addition, cost focus that means the company finding a cost advantage in its target segment and differentiation focus
that means the company finding differentiation in its target segment.
For Toyota, they have developed the separate strategy for each major market segment in the world. With
developed countries such as Vietnam, Toyota has competitive by adopting pricing strategies. This strategy offers
several advantages such as highly competitive. For developing countries, prices always affect the decisions of
consumers and providers. Besides lots of personal attention to products of Toyota, the ability to negotiate with
suppliers also enhanced. In addition, this strategy can also help Toyota compete with alternative products and create
barriers to new businesses who wish to participate in the market at Vietnam.

Five forces:
a) General and introductory
Toyota is a Japanese company so the issue of time perspective in their culture very clear. They are always on
time, with tight work schedules and work for long hours. Today, Toyota's automotive industry is growing rapidly in
many countries around the world. Under the development, Toyota becomes one of the largest manufacturers in the
world. Only in July 2012, the company has produced 200 million vehicles. In addition, Toyota's automotive industry
in Vietnam has considerable achievements as production capacity is 36,500 vehicles/year/2 working shifts, over
1,600 employees This shows the remarkable development of Toyota in Vietnam. However, after regional
economic integration and the world, there are many foreign companies have been involved in Vietnam market.
Toyota has losing monopoly position in the market of Vietnam and automotive industry in Vietnam faces
competition increasingly fierce. Thus, in order to compete effectively in the marketplace, Toyota should use the
Porter's Five Forces analysis. Five forces analysis helps Toyota to understand the factors affecting profitability in a
specific industry, and can help to inform decisions relating to: whether to enter a specific industry; whether to
increase capacity in a specific industry; and developing competitive strategies.
Originally developed by Harvard Business School's Michael E. Porter in 1979, the five forces model is a tool many
businesses and companies use to figure out how well they can compete in the current marketplace. The model looks
at five specific factors that help determine whether or not a business can be profitable, based on other businesses that
are already in their industry.
"Understanding the competitive forces, and their underlying causes, reveals the roots of an industrys current
profitability while providing a framework for anticipating and influencing competition (and profitability) over time,"
Porter wrote in a Harvard Business Review article. "A healthy industry structure should be as much a competitive
concern to strategists as their companys own position."
According to Porter, industry structure is what drives competition and profitability not whether an industry
produces a product or service, is emerging or mature, high-tech or low-tech, regulated or unregulated.
Five forces model: To use this tool, it is critical that businesses understand each of the five forces. Porter's five
forces that shape industry competition are:
Threat of New Entrants: Profitable markets that yield high returns will attract new firms. This results in
many new competitors, which eventually decreases profitability for all firms in the industry. Unless the
entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards zero (perfect
competition).
Threat of Substitute Products or Services: The existence of products outside of the realm of the common
product boundaries increases the propensity of customers to switch to alternatives. This should not be
confused with competitors' similar products but involves entirely different substitute ones.
Intensity of Industry Competition: For most industries, the intensity of competitive rivalry is the major
determinant of the competitiveness of the industry.
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Bargaining Power of Buyers: The bargaining power of customers is also described as the market of outputs.
It is the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to
price changes.
Bargaining power of suppliers: This force analyzes how much power a businesses supplier has and how
much control it has over the potential to raise its prices, which in turn would lower a business's
profitability. In addition, it looks at the number of suppliers available: the fewer there are, the more power
they have. Businesses are in a better position when there are a multitude of suppliers.

b) Organization/industry-specific
Threat of New Entrants - Low
In the Vietnam market, the initial capital investment to participate in the automotive industry is very large. In
addition, the fierce competition between existing firms has reduced threat of new entrants. In addition, Toyota is one
of the leading brands and large market share in the automotive industry. This also makes it difficult for new entrants
to the market. However, there are still new entrants into the market such as Tata Motors.
Threat of Substitutes Medium
In Vietnam, in fact there are not many products that can replace cars by its usability. Although in the Vietnam
market is pretty much product alternative to cars such as motorcycles, buses, bikes, but cars still considered product
extremely convenient and comfortable for the consumer. So, the market of Toyota still continued expands. A major
threat to Toyota are old cars that was used, these are the perfect choice for those with moderate or low incomes in
Vietnam. However, considering the term used old cars, these products are not much impact to Toyota. In summary,
the threat of substitutes in the automotive industry at Vietnam is not high.
Rivalry of Industry Competitors High
After Vietnam joined the WTO, more the leading car brand in the world has involved in the Vietnam market as
Mercedes, BMW, Audi, Honda, Hyundai ... the competition becomes more intense. However, Toyota Vietnam is
still a leading brand is supported by the policy of low-cost production, one problem attracting consumers in
Vietnam. End of 2007, Vietnam auto market has sold more than 100,000 products. In particular, the domestic
automakers sold more than 80,000 vehicles and more than 28,000 cars imported.
Customer Power (Medium/ High)
Because of diversity of models and brands in the automotive industry in Vietnam, consumers can easily finding for
themselves a product that best suits. Vehicle conversion costs is low, they can sell their old car to buy a new car. In
addition, some companies also give their customers make installment payments, this make reduced vehicle
conversion cost. Customers in Vietnam also very price sensitive. So that, Toyota focused on reducing the cost of
production to reduce product costs. In addition, Toyota's product is very diverse and suitable with different
customer. Clients can be assured with products of Toyota. On the other hand, Toyota also strategy revolves around
customer service and customer care. This helps retain customers, making them difficult to switch to another brand.
Toyota has reduced the pressure from consumers, creating conditions for the development of the company.
Supplier Power (Low/Medium)
The number of suppliers will determine their strength for businesses. In Vietnam, Toyota is a reputed company
leading in the automobile industry. They always apply the principle: "Treat with partners and suppliers as an
extension your business." This means that Toyota considered that suppliers as business partners. However, the actual
at Vietnam, the provider get to work with Toyota is a lucky. The vendor can assert their credibility in the automotive
industry. Toyota often has long-term contracts with suppliers and rarely changes suppliers unless serious violations
occur. In addition, Toyota also has guidance and cooperation with the supplier for development. All this reduces the
competitive pressure among suppliers with Toyota.

c) Evaluative
For a multinational company such as Toyota, they can respond to the regional economic integration. Multinational
companies have always applied the concept of liberalization into the business strategy. In addition, liberalization has
greater impact than regional economic integration. So, Toyota is ready to respond with the impact of regional
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economic integration. In addition, with available resources and support from the state, Toyota Vietnam has the
ability to compete with foreign firms.
The impact of the regional economic integration was initially made difficult for Toyota; Toyota Vietnam forced
to divert trade. However, this is also an opportunity to Toyota can thrive in the region; they will have to strengthen
itself ahead of the stiff competition from other businesses. This will help Toyota reach out more effectively and
create effectively cross-border.
Toyota also recognizes the fact that, when regional economic integration, automotive industry in Vietnam has
opportunities for exposure to modern industry is increasing, the ability to work will also be enhanced. Toyota has
not stopped investment, improved equipment and improves the product quality. Pressure of market has prompted
Toyota development. They improve manufacturing productivity, expand investment in Vietnam in order to improve
competitiveness, meet customer needs and promote local content. In the plan after the economic integration of the
Toyota, they will continue to expand production and increase investment and commitment to long-term development
in Vietnam market. Toyota has responded positively to the effects of regional economic integration. They constantly
invest to develop, expand market share in Vietnam and development in the region and around the world.
Toyota has to study deeply about the foreign market through the Porter's Five Forces analysis, trade balance or
anything related to the company so it helps them success in the car market.
They also try to improve the process. It will make products better and better and more and more customers love their
products all over the world.
Japan is a favored location for so much high-technology manufacturing activities, so it is not difficult to understand
what a Toyota successful. Toyota need to give some strategic develop plan effectively in marketing strategy which
encourages growth of the company on world market.
Create customization pack for product
Development of home support pack
Development of driving program for customer
Open some official showroom in big city
Development of customer data base
FDI
FDI that is defined as the direct investment of foreign countries into a country. There are two types of FDI that
foreign company use to invest directly on a country, such as Horizontal and Vertical FDI. Horizontal FDI is the
investments for setting the businesses, which are the same as the businesses of the company in home country.
Vertical FDI has two forms, Forward and Backward. Forward Vertical FDI is the investment on business that
supplies input for the company like material supply. Backward Vertical FDI is investment on business that supplies
output for the companies like Lego Group invest on assembly factory in Vietnam market.
Toyota is mainly focus on horizontal FDI. Toyota has set up manufacturing plants assembled in many countries
around the world with a fully functional and independent as the parent company, which obtain components and parts
assembly from external suppliers. In addition, Toyota to build assembly plant products in each country in which they
are engaged. They can distribute products directly to the market without the need to pay shipping from one country
to another. The tariff and quotas are also no longer a barrier for Toyota. Toyota also easily searches for suppliers
worldwide.
Attracting foreign investment for Vietnam brings opportunities for development. Help create more jobs, more tax for
government to infrastructure upgrade. Besides, domestic companies have the opportunity to acquire the technology
modern techniques in production to improve productivity and profitability. For economy and society of Vietnam, the
acceptance of direct investment from abroad opens opportunities to develop and improve social life.
However, FDI can cause inflation. When people's income improves, the cost of housing, services, dining thereby
also increased. This easily leads to prolonged inflation. In addition, many investors involved in the Vietnamese
market can lead to exploitation of resources too much, making resources at Vietnam depleted.

Culture
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Cultural differences between countries and cultural differences between regions within a country have caused some
difficulties for Toyota after joining international markets. Cultural affects buying behavior, local demand, the
purchasing decisions and brand image. Also, for a multinational company like Toyota, culture also affects
management style, management decisions and influences the nature of business negotiations when participating in
overseas markets.
Toyota is a Japanese company so the issue of time perspective in their culture very clear. They are always on time,
with tight work schedules and work for long hours. In contrast, people in many cultures of the Mediterranean and
Latin America for quite arbitrary time. Their working time is very flexible; they often use the time to build personal
confidence before discussing work. This makes the job takes a lot of time to complete. Style of Toyota is always
worked hard. They want to show their dedication to the job. This creates unity in the organization of Toyota. When
Toyota opened companies in countries around the world, they must use local manpower. Work culture in different
countries can be difficult for Toyota. The difference in working style in each country, each region shows the impact
of culture to international trade.
A cultural element directly affects communication in the commercial activity that is language. In international
trade, the communication between the companies together through negotiations is very important. If communication
capacity is weak, the company's representatives will meet with many difficulties to convey his ideas, leading to
misunderstandings in business. Though English is commonly used in international communication, but if Toyota
company representatives can communicate in the local language, it will build good relationships in business
activities in this country.
Before participating in a new market, Toyota should assess the business environment through the implementation
of the 4P process. This helps Toyota assessment consumer culture in each country before participating in the market.
Toyota needs to have products with the appropriate characteristics for each local. Toyota track procurement
practices at each local can help them easy to distribution products to consumers.
The concept of price and quality of goods has a major impact on the business strategy of Toyota. For example:
Vietnam people prefer goods with low price but the quality must high. In contrast, for Japanese, a product with low
price does not yet attract them. Therefore, when developing pricing strategy, Toyota should pay attention to
consumer culture in each country.
The promotional activities have affected commercial activities in different countries. The same type of advertising
but may be accepted at some country but ostracized in another country. So, Toyota needs to identify appropriate
marketing methods for concept and market tastes.
So, culture has an important role for business and trade activities at each country.

MNEs
A multinational enterprise always has the advantage in business and competes with rivals in the market. Here are the
reasons for becoming a multinational enterprise (MNEs) such as Toyota.
Toyota can protect themselves from changes in business at local. Toyota is a multinational enterprise, if the
economy of Japanese declining, they will be less affected by economic changes at local.
Toyota has developed the manufacturing plants in many countries around the world. This enables Toyota to better
compete with their competitors in other countries.
Become a multinational enterprise will have a wide range of customers throughout the world. While the market in
many parts of the developing world, a multinational enterprise such as Toyota will benefit from that growth.
MNEs can benefit from a range of suppliers worldwide. Toyota has partnered with suppliers worldwide, it helped
Toyota cut transportation costs and ensure supply of raw materials stable.
Another advantage of MNEs that they can overcome tariff barriers by opening the assembly manufacturers at
locally. Some countries such as Vietnam, it has policies protecting domestic firms always the barriers to products
imported from abroad. So that, Toyota has opened factories assembling products locally to reduce tax costs.
Toyota can reduce costs associated with the production under license. If IBM wants access to its technology to a
foreign manufacturer, Toyota must to pay a fee and have to share the profits. However, if Toyota could set up
factories locally, they can hold their own profit.
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Ethical
Ethic is very significant factor because the operation of company will fail if the company just care about the profit
and do not care about the morality when doing business. The main ethic of Lego Group is to providing goods with
high quality, suitable price and good services to customers. For example, when Lego Group implement a plan which
is providing a new luxury product with high price, but the quality of the product just as same as the normal product.
It is seen that the company just care about the profit more than ethic, when the customer know that the company has
no ethic in doing business, customers will never come to Lego Group anymore. It will lead the operation of
company will dramatically fall. Thus, Lego Group should concentrate on the ethic in doing business because it could
help the company to avoid ethical issues of society.
In addition, social responsibility is also important factor which could help company to increase the reputation and
the image of company. Realizing that, Lego Group has some actions, such as creating job for people, always join
social activities. For example: Lego Group cooperate with Red Cross to place a charity box at the supermarket for
mobilization of voluntary resource officer, employees of Lego Group and customers in the donation and supporting
humanitarian relief operations, supporting the poor and disabled and Agent Orange victims and disadvantages
people by Red Cross launched . Thus, by doing this, the image of Lego Group in the eyes of customers will always
be remembered.
Consider how the requirement of contract law affects your select company.
In operations of business, the contract law is very important. A contract intends to formalize an agreement between
two or more parties, in relation to a particular subject. Contracts can cover an extremely broad range of matters,
including the sale of goods or real property, the terms of employment or of an independent contractor relationship,
the settlement of a dispute, and ownership of intellectual property developed as part of a work for hire. Lego Group is
take part in contract and the company has to obey to the law of contract but sometime, there are some problems.
A contract is considered legal when related partner satisfy the requirement of contract, In particular, the offer or will
give the offer and the contract will be tight by the time write in the contract, then the offered must confirm to agrees
with all the parts of the contracts, although The contract is formed by an offer and an acceptance, but in order to be
valid, it must also recite consideration. Lego Group signed more contracts and it required that they have to review
terms in the contracts to avoid affecting badly to company. Assuming that when Lego Group provide a purchase
contract from supplier, they have to consider the terms right or not. The supplier have agree with all term in the
contract. If one of term is not correct, Lego Group can buy some material with faults. The supplier will not accept
change the material because the term is not enough.
What are the main factors include in the ease-of-doing-business index. Explain how some of these affect in
the selected company
Ease of Doing Business (EDB) has been a bit like the weathereverybody talks about it, but doing something about
it is another matter. While you cant change the weather, you can equip yourself and your organization not only to
cope with it, but to thrive within it.
The index is based on the study of laws and regulations, with the input and verification by more than 9,000
government officials, lawyers, business consultants, accountants and other professionals in 183 economies who
routinely advise on or administer legal and regulatory requirements.
The ease of doing business index is meant to measure regulations directly affecting businesses and does not directly
measure more general conditions such as a nation's proximity to large markets, quality of infrastructure, inflation, or
crime. A nation's ranking on the index is based on the average of 10 subindices:
Starting a business Procedures, time, cost and minimum capital to open a new business
Dealing with construction permits Procedures, time and cost to build a warehouse
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Getting electricity procedures, time and cost required for a business to obtain a permanent electricity
connection for a newly constructed warehouse
Registering property Procedures, time and cost to register commercial real estate
Getting credit Strength of legal rights index, depth of credit information index
Protecting investors Indices on the extent of disclosure, extent of director liability and ease of shareholder
suits
Paying taxes Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share
of gross profit
Trading across borders Number of documents, cost and time necessary to export and import
Enforcing contracts Procedures, time and cost to enforce a debt contract
Resolving insolvency Index of recovery rate which is a function of time, cost and other factors such as
lending rate and the likelihood of the company continuing to operate
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To find out, 10 EDB factors were developed and tested with Lego Group. The 10 factors are: 1) Understands and
acts on the needs of agency personnel. 2) Is responsive in underwriting. 3) Is flexible in underwriting. 4) Provides
accurate, timely policy services. 5) Has effective, user-friendly technology. 6) Handles claims promptly. 7) Handles
claims fairly. 8) Provides marketing support. 9) Provides insurance technical support. 10) Makes it easy for the
insureds to do business with the agency.
Transformation system: The transformation system describes what happened inside the business. This is where
value is added to inputs to create outputs. All operations produce products and services by changing inputs into
outputs. They do this by using the input-transformation-output' process. In other words, operations are processes
that take in a set of input resources which are used to transform something, or are transformed themselves, into
outputs of products and services. All businesses, whatever their size, can be considered as transformation system
that convert inputs into outputs. By selling the output to customers the business hopes to collect sufficient revenue
to, at the very least, buy enough resources to continue in business.
For example: Toyota will use all of the inputs (land, material and equipment, human resource, financial resource,
technology) to create a motor car. That product (the car manufacturers output) may then act as input to another
business: a salesperson my use Toyotas car when visiting potential customers.