How to do topic report number 4

Topic report 4 is a re-write of topic report 3, but with an emphasis on entry barriers.
Simplify the analysis of rivalry by considering the exports of factories in Thailand and factories
located in each domestic economy of Southeast Asia.
In your analysis:
List entry barriers to the manufacture of automobiles for the mass market.
List entry barriers to domestic markets of the ASEAN nations
In your section on VinFast’s strategy, demonstrate how VinFast is dealing with each entry
barrier you have listed. If VinFast has not dealt with one or several of these barriers, make a
recommendation.
Illustrate your presentation of Vinfast’s strategy with a section on exporting VinFast automobiles
from Vietnam to the ASEAN country you chose in the first week of this course.
Submit your word file of 2000 words with the name IB#country VinFast barriers.
Information shared (or not) during the breakout session of week 11
A list of possible entry barriers
 Economies of scale
 Product differentiation
 Capital requirements
 Cost disadvantages independent of size (including learning curve which I consider to be
dependent on size)
 Access to distribution channels
 Government policy
Taken from Porter 1979, How competitive forces shape strategy.
To his list I would add switching costs for potential clients.
Another list of barriers:
https://corporatefinanceinstitute.com/resources/knowledge/economics/barriers-to-entry/
Additional readings on entry barriers to the automotive industry for Topic report 4 (taken from
the breakout sessions of week 11)
1. Pages 4-6 of https://core.ac.uk/download/pdf/4837036.pdf
2. In the US: https://www.mcafee.cc/Classes/BEM106/Papers/UTexas/351/Auto.pdf
3. http://www.asymco.com/2015/02/23/the-entrants-guide-to-the-automobile-industry
4. Parts 2 and 3 of the following: https://finance.yahoo.com/news/why-growth-shifted-
global-automotive-193845776.html
5. https://www.ey.com/en_om/automotive-transportation/the-six-trends-driving-change-in-
the-automotive-industry
How Tesla overcame barriers
Scale:
 (1) Start by bringing a quality but niche car to market that could be profitable on low
volume.
(2) Purchase a factory from an existing vendor
Design experience:
(1) Replace years of market experience with an iterative design process open to multiple
sources of criticism.
(2) Replace design talent and experience with speed, particularly emphasizing validation
stage.
(3) Partnerships (e.g. Lotus)
Established firms have dealership, distribution, and service network:
(1) Rapidly build service centers “What I’ve told the Tesla Service Division is their job is
never to make a profit.”
(2) Assign all of its patents into the public domain (this is more an issue for the electricity
powered Tesla)
Tesla also benefitted from government subsidies, although this is not a key part of the "strategy"
of Tesla.
Notes taken from Stringham at al, 2015, Overcoming Barriers to Entry in an Established
Industry: Tesla Motors

Once you have finished your topic report, recall that a new business –or even an established
business– may invent a whole new industry, and thus have no rivals… until other business join
them.