Explain how market structures in Vietnam determine the pricing and output decisions of Samsung Electronics Vietnam (SEV)

The market structure is described as the interaction of distributors and customers to determine the price of the product and the number of customers. The market structure included main types: perfect competition, monopoly, monopsony, oligopoly, duopoly and monopolistic competition. Perfect competition is defined as a market includes a lot of businesses and consumers. However, nobody can affect the price of goods. It have specific characteristics: Infinite producers and consumers. The infinite consumers are able and willing to buy goods with certain price, and the infinite producers are able and willing to sell the goods with certain price. It means that a commodity will be sold by many producers, but the price is qual. Entry and exit are not barrier. It helped businesses be easy to entry and exit. In addition, saving lots of money and time for business. Having perfect information. No one can influence the price of products, so the price is steady=> every one can know exactly the information about the price and quality of product. No transaction costs. The sale or exchange goods and service, producers and customers do not have to spend the cost for transaction. Producers gain profit maximization because they have plan to sell where marginal costs meet marginal revenue. Goods is standardised. Perfect competition included many producers, that produce the same goods. Therefore, products are required to have high quality by customers. Monopoly exist when market has only one business, that provides a product or service for customers. It means that market of a certain product is possessed by a supplier. Monopoly reduces competition because the product is unique on market. The price is not controlled by other suppliers because there are not substitutes and competitors on market. Having many barrier when entry. The exclusive goods can not freely enter. The price and quality of product can be changed depending on the sense of supplier. Gain maximum profit from their products. Monopsony exist when market has only one buyer interacts with many sellers for a product or service. Therefore, the buyer has lots of impact on product. The price of product was affected so much by buyer. The quality of product is very high because the expectation of customer. Monopsony created strong competition for the sellers.

Oligopoly means that a market or many businesses were affected by a few large suppliers. Less competitive because having many barriers to entry and exit. Oligopoly has many barriers to entry and exit because businesses prevented the entry of other business into their market. The price depend on group sellers, because there are few sellers on market.

Businesses have common plan is to stabilize the market to avoid the risks that may occur with them. Duopoly means that a market exist two sellers and they will compete with each other about a line product. The price and quality of product was decided by two sellers. No significant competition. Get lots of profitable. There are many barriers to entry because two companies were afraid their profit affected, their profits have to share when other company enter their market. Monopolistic competition means that a market has lots of sellers but each seller will sell a product, that is completely different with other product. This product is not perfect substitute for other product and on the contrary. There are few barriers to entry and exit because their profit are not affected. The price of products may be equal. There are a lot of sellers and buyers. The price of products have to observe the price on market. Kim Young Chan, an analyst at Korea, talk about Vietnam: "It is a developing country and a more lucrative market of telephone companies, not just about profit but also help create momentum accounting global market. And that is why Samsung is trying to quickly dominate this market. " As we know , On 11-1-2007, Vietnam became the 150th member of the World Trade organization (WTO). Three years, on the path of international integration, Vietnam has participated in the full spectrum of global economy, expanding markets for goods and services, international investment, innovation stronger and more uniform institutions, simultaneously, improve the national administration toward modernization. 2010 will be a year marked several important events of our country, our economy will be more changes. We joined the WTO in time the world economy unfavorable twice. The first time was in 2007 the world market price increases, especially oil; the second is the crisis of global economic past. The year 2008 is quite special, in the first half, the economy of our country have to deal with high inflation. Prior to the opportunities and challenges. Samsung should seize opportunities to dominate the Viet Nam market. Need research on culture and degradation used by customers in Viet Nam. And provide

a clear strategy to turn Viet Nam market. Next, Samsung needs some information about the competitors, such as Nokia, Panasonic, Apple ..

Illustrate the way in which market forces shape Samsung Electronics Vietnam (SEV) responses using a range of examples

Market forces is economic factors directly influenced the price of products or service, it included force customers, force suppliers and five competitive forces. Five competitive forces included the threat of new entrants, threat of substitute products, bargaining power of customers, bargaining power of suppliers, rivalry amongst current competitors in the industry. The market forces created many impact to all of businesses on market. The market forces gave Samsung some advantages and disadvantages Market in Vietnam Threat of new entrants Vietnam is developing country and it has many investors who have planned invest in Vietnam. And especially about electronic. there are some new brands into Vietnam joined recently such as Philips, Sharp, etc. Samsung Electronic Vietnam Samsung is famous brand in Vietnam. Because Samsung is a reputable brand, it is difficult for new brands to its threat. But not so that Samsung becomes subjective and not interested in new brands. In order to deal with that new threat, Samsung has invested in marketing activities, investment research to find new products with high quality and reasonable price. Samsung in particular has expanded the market, Samsung not only have a branch in the city center but also in smaller cities. Samsung has very solid strategy to deal with the threat of new entrants Threat of substitute products Vietnam is a competitive market. If your company just stop at a few products that mean your company will die in this market. Vietnam growing economic and social, Samsung is a company leader in the study of the product line of "smart". For example: Samsung has released the smart phone or the phone

technology grows more powerful. Companies must to invest and researches into substitute products have more intelligent functions to meet the increasing demands of the Vietnam market.

improvements such as Galaxy Ace, Galaxy S and new product is Galaxy S II. Samsung has always welcomed the new technology. Therefore, Samsung do not worry about the threat of substitute products, but Samsung always try to improve them to provide the best products and service for customers. Thanks to this, Samsung can prevent the threat from substitute. The customer is an important factor impact directly on business of companies. They require high quality of products, reasonable price and good service. Samsung has achieved many awards and expanding market in Vietnam as well as Samsung has expanded its overseas markets so The company has successfully to reduce the bargaining power of customers. Besides, the company focuses on partnership and long-term contracts. For Samsung, in order to produce more products, the company has to need more equipment from suppliers. If Samsung only depends on one supplier, the company will face with many difficult. Samsung cannot be active on supplies and the power of suppliers will increase. To reduce the power of suppliers, the company also plans to expand suppliers and it helps Samsung can be active. Besides, the company also develops internal technology to reduce cost. Buying a larger amount of equipment that helps the company can reduce price of

Bargaining power of customers

In Vietnam there are many companies selling the same product but buyers do not demand as much as the products sold by the enterprise. So bargaining power of customers high that can reduce the profitability of the business.

Bargaining power of suppliers

The power of suppliers directly influences companies because the power of suppliers can affect to the price of raw material and quality of material. Besides, suppliers influence on the price of products and profit of the company.

equipment. Rivalry The level of completion between competitors in market is very high and pressure. It can deplete profit or lost the market share of the company. Vietnam's market is very development so the competition is very big business. More and more competitors enter the market. From small businesses to large enterprises. Gather the most competitive and that is the electronics industry The government also has police opening and attract investment from overseas. Samsung has to share the market with other competitors such as Toshiba, Panasonic and LG. Too much competitor in the market, Samsung will be lost market share (share market for different competitor). To increase competition of the company, Samsung Corporation has provided extensive service and longer warranty time of up to 2 years compared with other competitors and it makes the company be difference with other companies.

Judge how the business and cultural environments shape the behaviour of Samsung Electronics Vietnam (SEV)
Political and legal system The political and social stability Assembly. Vietnam is considered a country with the political and social stability, compared with other countries in the region. Organization of Economic Risk & Politics (PERC) in Hong Kong ranks Vietnam at the first position in the region, after the 11-9 compared to Asian countries like Indonesia, Malaysia, Philippines, China, Vietnam have fewer problems related to religious and ethnic conflict. After making innovation policy, Vietnam has achieved steady growth in GDP. The macroeconomic stability is of interest and maintain. Vietnam is considered a safe place to invest.(Source: Department of Foreign Investment) The legal system is more and more consistent with international practice, more closely on the management and protection of the interests of laborers. Towards sustainable development Vietnam increasingly deeper integration into the regional economy and globalization. The UN convention on economic, trade, investment, intellectual property, tax, environmental protection, which Vietnam has signed, negotiations to accelerate the process .. reviewing, modifying, supplement or promulgate legal documents in accordance with international rules and treaties to which Vietnam is a member. (Source: Resolution-Politburo) Trends in sustainable development more evident than in the legal system and the activities of the government of Vietnam. Vietnam is pursuing cognitive models and harmonious development between economy - society - environment. (Source: The Industry and Trade)

Period 2010 - 2015 period there will be a lot of innovation in which innovation growth model, economic restructuring to achieve the goal of industrialization by 2020 will be the driving force pushing the change of government policies, legal system consistent with development goals. (Source: Innovation & Growth patterns of economic structure - Dr. Dinh Van An) Enterprise income tax law made more stringent, regulations on social insurance, health insurance, unemployment insurance is monitored and adjusted by increasing mechanism of state management, and protect the rights of workers. Encourage the development of the labor market to develop human resources to meet development requirements in the new period. (Source: Resolution-Politburo) To promote the simplification of administrative procedures and laws, to create better business conditions for enterprises. Cumbersome administrative procedures in construction and real estate are a major obsession of the media business that has reflected so much in recent times. Recently, the Ministry of Construction reports on results of administrative review procedures within the Ministry. Accordingly, the rate of simplifying the administrative procedures to 95.8% But considering the fact is still very inadequate disclosure of administrative procedures. For example, the procedures for formulation, appraisal, approval and adjustment of detailed construction plans, in which many urban areas still mapping should rate 1/2.000 lack of facilities to manage, leading to the state must agree on planning, architecture, giving rise to many procedures, take a long time, easily lead to arbitrary negative. In general, the government is very committed to administrative reform and creates a good legal framework, open for business. Project 30 - review of the administrative reform of the Ministry of Construction was completed this year is a big step, confirming the positive trend. Businesses operating in the construction industry and real estate will benefit from this project. (Source: Project 30 - The Ministry of Construction).

Economics GDP growth stable at high levels in the region According to the Asian Development Bank (ADB - Asian Development Bank), Vietnam GDP will grow 6.5% in 2010 and 6.8% in 2011. Six months of 2010, the growth rate is 6.16% of Vietnam's GDP, which, all three areas increased: up 3.31% Agriculture, Industry and construction increased by 6.5%, services 7.05% for World economic recovery will positively impact investment flows directly and indirectly in Vietnam, is slower than in previous years. A positive sign is the speed of disbursement increased. According to official reports of the Foreign Investment Foreign Investment Agency, five months of 2010, FDI disbursement reached $ 4.5 billion, up 7.1% over the same period in 2009. Import and export turnover of FDI enterprises increased rapidly. Exports reached 13.8 billion, up 25.9%, imports totaled $ 13 billion, up 50.5% over the same period last year. These indicators show the bustling activity in the volume of FDI and the recovery of world economy. (Source: General Statistics).

With the aim of the stability of government, based on predictions of the experts, we can see the trend of interest rates will remain at around 6% in the period 2011-2015. Investment in infrastructure by the method of PPP (Public-Private Partnership) will develop Infrastructure is currently being evaluated in congested points off economic development of Vietnam. Although the structure of investment in Vietnam, the construction of infrastructure has been focused and maintain durability, but investment in infrastructure is enormous. Vietnam to be mobilized from various sources for investment in infrastructure (Source: Bloomberg - Investment in infrastructure and PPPs -) In a report sent to the Prime Minister promulgating the Regulation on investment pilot PPP, Ministry of Planning and Investment identified from now to 2020, Vietnam needs to mobilize an investment of about 150 - 160 billion U.S. dollars for the development of economic infrastructure. In particular, funds from the State budget, ODA ... meet only 50%. Thus, PPP form of investment is expected to help mobilize the remaining 50% of the capital, about 75-80 billion dollars. In the period 2010 ~ 2015, Vietnam will change the approach, change management mechanisms and operated to avoid the capital investment in infrastructure PPP method. (Source: Institute for Economic Management Central) * Inflation eases, but at high levels in the region. Difficult to control inflation and the risk of potential outbreaks Also in the ADB report, inflation in Vietnam will be no processing at 10% in 2010 and down 8% in 2011. In the first quarter - 2010, although the government has stopped the stimulus package subsidized interest rate of 4% (only 2% allowance for some sectors), but the stimulus package after a certain latency are working application. Basic salary shall be increased from 650.000VND/month up 800.000VND/month. Electricity price increases, gasoline prices rise. Inflation risk of flare up again, pulled by worrying implications for the macro economy. During this time, the government forced to contain inflation target over the target to maintain economic development. The stimulus package has stopped, tightening government spending, issued the tight monetary policy, control of the channel bank lending, trade deficit under control, control ... The consumer price dynamics This decreases the rate of inflation. GDP growth and CPI PERIOD 1995 - 2010 Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GDP 9.54 9.34 8.15 5.76 4.77 6.79 6.89 7.08 7.34 7.79 8.4 8.17 8.5 6.2 5.8 6.5 CPI 12.7 4.5 3.6 9.2 0.1 -0.6 0.8 4 3 9.5 8.43 6.6 12.63 22.5 6 10 Controlling inflation is a difficult problem in Vietnam now, as the price of the commodity groups accounted for a high proportion in the export basket of goods and abnormal fluctuations in the world economy. To protect the economic success achieved in recent years, inflation will be placed on the top target in the strategic policy of the government in the period 2011-2015.

The price of construction materials also fluctuate according to the inflation index, which affect the pricing and signing the construction contract. Inflation is difficult to predict for a long period, so, this index should be always interested and predictable for at least a yearly basis. (Source: Aisan Development Bank). Loan interest rate lower, but still at high levels in the region, and still suffer compared to ROE.

The interest rate for loans to businesses not currently subject to a very high priority, from 15 ~ 16% / year. And basically, small and medium enterprises is very difficult to access the bank's capital With the maintenance of pumping money on the open market steadily 2, 3 months under the direction of government, making the funds on the interbank market is plentiful, but the commercial banks are limited by regulations limit the use of this capital credits, making undercapitalized banks are lending can not access to capital is cheap and redundant. To keep the focus on economic growth, protect the gains made in the 5-year plan 2005 ~ 2010, Vietnam has climbed the middle-income countries, the Government of Vietnam will continue to promote the Money market funds provide, quickly removing barriers procedures, enabling the business can have access to capital, achieve the target rate "at 10 to 12" of the Prime Minister in the next period. (Source: Interest rates and loan "in 10 to 12"). Whether in the future, the government will try to implement drag down interest rates down, but with this objective, the lending interest rate in Vietnam is still very high compared with the region (Thailand about 8.5 %, Malaysia 6.3%, China 8%), and still very expensive compared with an average ROE of construction (17%).

Social The labor is plentiful, but lack the skills and workmanship. The small and medium companies are not strong enough to compete on labor. Human resources executives are scarce. According to the GSO, population structure by age in Vietnam in a positive change. After 10 years, the proportion of the population under 15 decreased from 33.1% (1999) to 24.5%. In contrast, the proportion of the population age 15-64 (age group's major labor force) increased from 61.1% to 69.1% The agency said that this is the period of our country with advantages in labor force, also known as the period of their "demographic bonus". Period of "gold" began in 2003 and may last from 30 to 50 years. This is considered a big advantage for the industrialization and modernization of the country, if you take advantage of the superiority of the Vietnamese labor force (Source: population ratio of gold). Nevertheless the human resources of Vietnam are very low quality. The time now is forming two types of workers: universal human quality and human resources. Manpower is currently popular majority, while the proportion of high-quality labor force accounted for a very low rate. But the

competitive advantage of Vietnam's human resources is now cheap, abundant, but in a few years, this advantage will disappear, when economic development, labor wages no longer so cheap Development of human resources towards improving labor quality through education and training should be targeted, and trends in the economic development strategy of Vietnam during the period 2010 ~ 2020 (Source: Human Resource Development force) The trend is so, but we still do not really have a specific strategy for human resource development of their potential. The training quality of universities in the country, if compared with other countries in the region far behind. The integration into the international market makes up the amount of labor resources, the quality of our weak to compete with high-quality human resources than in other regional countries on the domestic market. The recent economic crisis caused by the labor market we are inherently unstable. Inflation is rising, not a living wage, labor strikes broke out more and more and more scale. Lack of labor market level. The competition is looking for sources of labor leads to brain drain of small and medium companies, and companies in the country. Was difficult to recruit, retain more tenuous. Besides income, the required mode (social insurance, health insurance, unemployment insurance), the different treatment regimes, work environment, company culture ... also become competitive strength in the labor market (Source: HR executives scarce) Urbanization, industrial areas increased. For over 20 years of reform, the urbanization process takes place very rapidly especially in the last 10 years, especially in big cities like Hanoi, Danang and Ho Chi Minh City Since 1990 the urban Vietnam began to develop, then the country has about 500 urban (the urbanization rate is about 17-18%), by 2000 this number to 649 and in 2003 was 656 urban areas. Up to now, there are about 700 cities, including five central cities, 44 provincial cities, 45 towns and over 500 towns. According to the Ministry of Construction, the urbanization rate in Vietnam in 2020 will reach about 40%, equivalent to the population living in urban areas accounted for over 45 million people. Objectives for the area per capital are 100m2/people. If 100m2/people rate, Vietnam needs about 450.000ha urban land, but now, the urban land area only 105.000ha, by quarter compared with the requirements. With the growth of urban population and so, Vietnam will face increasingly complex issues arising from the urbanization process. Immigration from rural to urban areas, making population density in urban areas increased; problem solving jobs, local unemployment, housing and social evils make the social order suburban increasingly more complex; housing and management of social order and safety in urban environmental pollution, water pollution ... (Source: Current status of urbanization in Vietnam ) The rapid development of industrial parks in the country will also speed up urbanization, especially in large cities. According to development plan to 2020, Ho Chi Minh City will have 22 export processing zones, industrial zones (IZs and EPZs) with a total area of nearly 6,000 ha. Currently, HEPZA is managing three EPZs and 12 IZs with a total area of 3620 ha. Most of these zones have leased land from the rate of 60% - 100% of the total land area for rent (source: HEPZA) Technology

Investment in the development of science and technology will be the core strategies for countries and enterprises in the period 2010 ~ 2015. Construction Technology no mutations in this period In the elements necessary for economic development, social capital of a country such as human resources, management systems ... the science and technology is seen as the most important factors creating value increases for the products of labor, creating the impetus for the sustainable development and long term. Revolution in science and technology (S & T) with modern giant step forward: "A day in twenty years" is the full impact to every economy, every social system on a global scale. Competition between countries on the economic front is going very drastic. An information society, a knowledge economy has begun to take shape. It is an economy that produces and services based mainly on knowledge and technology, as the information technology sector accounted for two thirds of GDP. World summarizes and concludes: "Investing in science is a smart investment." Developed countries in S & T investment in approximately 2 - 2.5% (up to 4-5%) of GDP. Resolution of the Politburo on S & T policy has very correctly pointed out that "... the economic conditions more difficult, as the production level low, the more investment should focus on activities technical and scientific training for scientists and technicians, and technical workers "and" should increase the rate of financial investment for research and development ... ". Recently, the State has increased its investment interest in science, but still far from the requirement to keep developing countries in the region. Average cost for a staff of S & T / year: Vietnam <1000 USD, $ 194,000 Japan, Thailand, $ 18,000. (Source: The Role of Science and technology in economic development-Journal - Ministry of Science and Technology) Technology in the construction industry in Vietnam will be no sudden changes. Most new construction technology in the world have their presence in Vietnam. Manufacturing of construction materials will be managed more closely by the sustainable development policy, environmental protection in Vietnam. But technology in this industry do not have the mutation development.