31/3/2021

Acecook
Globalization
Presented by: Tran Thi Ngoc Tram

1. Introduction to the concept of globalization

2. Driving factors of globalization

3. Analysis of PESTEL, 5 Forces, SWOT, culture

CONTENTS analysis

4. Challenges of globalizations & strategic

challenges represents for Acecook

5. Recommendations

• The well-known instant food company

in Viet Nam.
• Member of Japan Acecook Group

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1. Introduction to the concept of globalization:

Globalization is defined as a concept that refers to expanding network of

international economic activities resulting from increased movement of
commodities, technology and information across national boundaries. (Wetherly &
Otter, 2008)

2. Driving factors of globalization:

The reason behind the set-up of global business is because of

both pressure and benefits that it brings to company.

▪ Technology development

▪ Deregulation

▪ Transportation

3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Political “
 Business regulation policies (The political and legal in Viet Nam considered as one.)
There are strict regulation about food safety and others regulation relate to the
company business that need to be aware of if changes or not. => Challenges as can not
be predicted.
For example, all products must have a quality declaration confirmed and update by
Department of Food Safety – Ministry of Health as “Declaration compliant with food
safety regulations”; Circular No. 24/2019/TT-BYT. (AcecookVietNam, 2016)

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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Political “
 WTO, EVFTA, JVEPA
With the deregulation from the government, numerous trade agreements Vietnam has
signed
Some of the memberships and agreements:
 Member of World Trade Organization (WTO)
 Free Trade Agreement with the European Union
 Japan Viet Nam Economic Partnership Agreements
(FDI News, 2021)
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Economic
Figure 1
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Economic “
 Consumers spending and income are expected to be higher in near future

The data shown in figure 1 has pointed out that GDP of Viet Nam are expecting to
grow. This leads to the demanding for company products might increase.

An opportunities for company to have more profits as well as the market

share

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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Social
 Consumer tastes and fashions changes
“
78% of consumers support brands that tend to protect the environment as well as their
health according to a report of Vietnam FMCG. (Mộc, 2020)
 Increased focus on health and food safety
Food safety has increased in importance among consumers in recent years.
Consumers are increasingly making choices to avoid negative dietary effects and
reading labels of the food products they purchase. (Vietnam – Market Entry
Handbook, 2020) => Challenges
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Social “
• Lifestyle trends
 Ongoing changes in retail channels used. Both modern retailers and e-commerce
are rapidly increasing in importance, particularly in urban areas.
 Online shopping has become the strongest development channel in the Urban
area, marking a 38% growth in total. (IRIS, 2020)

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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Technology
• Technology development
“
Viet Nam embrace for modern technology used in production instant noodles to
create high-quality nutritional products, which are healthy, hygienic, and safe.
 Viet Nam is likely to embrace technologies innovations => Opportunities for
company to develop technology used in the operation.

• Quality is guaranteed with Japanese technology

Since the production line is from Japanese technology. Therefore, the company must
ensure the quality of the technology is guaranteed and committed to Viet Nam
regulations about import technology, machine according to Degree 69/2018.

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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Environmental
 Environmental protection regulations
“
Viet Nam has regulation about protecting environment that company should be aware
of. For example, Degree 35/2015 about waste treatment to prevent the amount of
waste and the level of pollution to the environment. (ChínhPhủ, 2015)
Ethics
Company should consider about the ethics since cases of food poisoning have
increased in recent years. (An, 2020) Therefore, a need in having:
 CSR policies
 Control over suppliers
=> meeting the criteria of domestic and international food hygiene and safety
principles and standards. (ACECOOK VIET NAM, 2020)
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Legal “
Some of the legal that company need to be aware of if there are any changes:
 Employments law
 Consumer protection
 Health and safety laws
 Laws relating to waste/ employment

Demographic
 The population is expected to age in the future (figure 3)
=> The demographic change can influence the labor of the company

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Figure 3

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3. Analysis of 5 Forces Threat of

new entry

Supplier Competitive Buyer

power rivalry power

Threat of
substitution
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Supplier Power - Low “
 Has an extremely effective operating system.
The company owns a system of 10 factories, 04 business branches; over 300
distribution agents, covering over 95% of the retail outlets from North to
South, accounting for nearly 50% of the market share. (Toplist, 2021)
 Domestic raw materials take up 95%
So can easily use source of highly qualified raw materials that are not taxed.

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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Buyer Power - High
 Large number of customers
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Company has large number of customer from retailer customers to end consumers.
=> The larger the size of the customer, the more pressure it becomes

Threat of Substitution - High

 Substitutes are available and low switching cost
Vina Acecook's products are facing many alternative products such as soup,
vermicelli, Hue beef noodle soup, etc.
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3. Analysis of PESTEL, 5 Forces, SWOT, culture analysis

Threat of New Entry - Low

“
 The arrival of instant noodle brands from Korea, Thai Lan, etc
A series of foreign noodle products have appeared on the shelves of
Vietnamese supermarkets. (Nguyen, 2020)
 No cost advantages
Average selling price is 20,000-40,000 VND / pack (MINH, 2020)

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 Competitive Rivalry - High => Challenge

Market share by value of the instant noodle manufacturers in Vietnam

3. Analysis of
5 Forces

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3. Analysis of SWOT
Strengths “ Weaknesses
 Strong brand; large market  Not eye-catching design
share  The product is not different from the
 The product is diversified; general market
competitively priced
 Large distribution channels

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3. Analysis of SWOT
Opportunities “ Threats
 Consumer spending and income  Consumers concerned about their health
 Viet Nam joins global  Competitors are strong & new entrants
association enter the industry
 Great market potential  Political and legal challenges
 Change in demographic
 Underdeveloped infrastructures with
85,8% is rural road within Viet Nam
(htbyen, 2020) 22

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3. Analysis of culture by Hofstede

Viet Nam

Japan

Power Uncertainty Long term

Distance Individualism Masculinity Avoidance Orientation Indulgence

The chart shows the score of each cultural dimensions of Vietnam, comparing
to Japan

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3. Analysis of culture by Hofstede

 Power Distance:
Vietnam has a higher power-distance score than Japan so Vietnamese
employees accept a hierarchy order than Japanese employees. (Vy, n.d.)
 An opportunities for smoothly executing mechanisms, rules and
company policies.

 Individualism
Both Japan and Vietnam have less than 50 in individualism but Japan
doubles Vietnam, which means Vietnamese employees prefer to work in
groups to Japanese employees.
 Viet Nam are loyalty and have the common goal which is called
community responsibility.
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3. Analysis of culture by Hofstede

 Masculinity:
The score of Vietnam is low, which VN is considered as a Feminine
society
 A good environment for developing interactions between leaders and
staff and effective communication.

 Uncertainty avoidance:
The chart shown that Japan tend to avoided uncertainty while VN
willing to accept change and experiment
 Combination of Japan and Viet Nam would innovate ideas and spirit,
ability to apply technology quickly of Viet Nam and risk prediction
ability, detailed plan of Japanese.
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3. Analysis of culture by Hofstede

 Long term orientation:
It is presented in the chart that Japan is a very long-term orientated country
while Vietnam is in the middle of long and short term.
 Viet Nam show an ability to adapt traditions easily to changed conditions,
a strong propensity to save and invest thriftiness and perseverance in
achieving results.

 Indulgence:
A low score of 35 on the Indulgence dimension indicates that the culture of
Vietnam is characterized as Restrained
=> Vietnamese have the perception that their actions are restrained by social
norms and feel that indulging themselves is somewhat wrong.
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4. Challenges & strategic

challenges
Strategic challenges for
Challenges in Viet Nam:
Acecook:
 Political & legal risks
 Political & legal risks
 Technology
 Demographic
 Supply chain complexity

 Environmental issues

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5. Recommendations
 Political & legal risks => Checklist
 Demographic

 Examine the size and composition of the consumer market and

labor force

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Checklist
No. Descriptions Yes No Yes Remark
*

1 The company complies with the tax regulations X

2 The company complies with food safety regulations X

3 The company complies with environmental protection X

regulations
4 The company complies with the regulations on import of X
used machinery, equipment, production line technology
5 The company operates complying with all employment X
laws
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