Mcdonald Gains Entering To Vietnam Marketing Essay

McDonald has visited Vietnam and announced programs to open mercantile establishments in Vietnam market to capture populace ‘s attending. The ground of McDonald visited to Vietnam is to happening concern chances and profitable market ( McDonald ‘s and The Great Challenges It Faces When Entering Vietnam, 2012 )

McDonald as a Quick Service Food ( QSF ) and is an internationally well-know trade name. Truong & A ; Bennett ( 2012 ) noted that QSF has grown significantly in Vietnam and transnational have operated long period in Vietnam such as KFC, Jolibee and Lotteria have started earning net income. From preliminary study, the value of the QSF industry in Vietnam could be up to VND870 billion ( USD41.4 million ) in 2011 ( Tre & A ; Tri, 2011 ) . The buying power of franchising fast nutrients has increased quickly because Vietnamese comusumer more favourable fast nutrient trade names ( US companies taking Vietnamese franchise market, 2012 ) .Thus, McDonald besides want take this advantage entry into Vietnam to derive their net income for their rival and increase their gross revenues.

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Besides that, Vietnam has a possible market for McDonald to spread out their concern because of the big population with 90.5 million ( Appendix 1 ) which is the 3rd largest population in Southeast Asia. The half of the population is under 30 old ages old. McDonald eating houses are specially located in extremely populated urban metropoliss and mark for immature population. Therefore, McDonald plans open up their eating house in the two high population metropoliss which are Hanoi and Ho Chi City to get down their concern. Harmonizing to Truong et al. ( 2012 ) , Vietnamese consumers change their life styles and go more interested in Western nutrient and designed of the eating house in Western manners. Therefore, demand of McDonald will increase with the big immature population and Vietnamese consumers change their life style.

Furthermore, McDonald entry into Vietnam can derive cheaper labour cost. Harmonizing to Lucintel ( 2012 ) , Vietnam ‘s minimal labour costs was the 2nd lowest in Asia. Besides that, most of the immature people willing work for low rewards ( Cheap Labour a Double-edged Aword for Nation ‘s Development, 2012 ) . Harmonizing to Meyer, Tran, & A ; Nguyen ( 2006 ) , Vietnamese employees are hardworking and ambitious. So, McDonald entry into Vietnam market can run their concern with the low production cost and more productiveness because of the low labour cost and good attitude of the employees.

Vietnam joined a member of World Trade Organization ( WTO ) in January 2007 which to cut down import and export duty ( Tumbarello, 2007 ) . So, McDonald entry into Vietnam market can assist them cut down their import stuff beginning duty such as tomato catsup, lily-livered meat and etc. By this manner, McDonald can salvage their import duty. Besides that, Vietnam has ease limitations on nutrient service operators and let them open their store without a local spouse ( Smith ) . Besides that, Vietnam opened doors for transnational investing to Vietnam market. So, McDonald can easy opens their ain mercantile establishments in Vietnam and cut down the coat of operate in Vietnam because do non hold many jurisprudence and ordinance.

2.2 McDonald defect of come ining to Vietnam

Majority of planetary fast nutrient concatenation are perforating into Vietnam market, and spread outing subdivisions in worldwide. ( TUOI TRE, DAN TRI, 2011 ) However, specializers believe that although McDonald is planetary well-known trade name, it still face many challenges within Vietnamese market. ( McDonald ‘s and the great challenges it faces when come ining Vietnam, 2012 )

First of wholly, it is late entry and market impregnation for McDonald come ining into Vietnam market. McDonald will confront intense competition from both local and foreign rival in Vietnam. ( Abiri, 2012 ) For an illustration, KFC, Lotteria, Jolibee, Pizza Hut and others has been exist in Vietnam ‘s fast nutrient industry for few old ages.

The chief rival that McDonald will confront in Vietnam is KFC which has 130 mercantile establishments and operate within twelvemonth. Vietnamese client familiar with KFC trade name with a growing rate of 20 to 30 new eating houses per twelvemonth, said Le Hoai Nam, KFC Vietnam ‘s selling manager. Recently, KFC is be aftering to implement drive thru eating house to accommodate Vietnamese demands and increase their satisfaction degree. ( Abiri, 2012 ) Besides that, Lotteria is the 2nd successful fast nutrient company in Vietnam market with 50 mercantile establishments. Lotteria is aggressive in supplying price reduction from 15 % to 20 % to increase consciousness among the Vietnamese. ( Abiri, 2012 )

Harmonizing to appendix 2 and 3, KFC is the 1 who own bulk figure of mercantile establishments which is 130 mercantile establishments and incorporate 39 % in Vietnam market. Besides that, Lotteria is ain 50 mercantile establishments and remain 36 % in Vietnam market. The other company such as Jolibee, Pizza Hut, Domino Pizza, Burger King and Popeyes, they will have the remainder 25 % mercantile establishment from Vietnam market. ( TUOI TRE, DAN TRI, 2011 )

Therefore, when rival company offer similar merchandises and service in fast nutrient industry, the effects is there are fewer clients per location. ( Fast Food Industry Analysis 2013 – Cost & A ; Trends, 2013 )

Consequently, it pressures the net income borders towards McDonald. ( Fast Food Industry Analysis 2013 – Cost & A ; Trends, 2013 ) One of the planetary market research company Nielsen has completed a study conducted in Vietnam, 2010. The determination shows that they are merely 42 % from the questioned people have purpose to seek fast-food. The most frequent group who enjoy fast nutrient was ages within 20-30, and it generated 76 % for fast-food concern. Although it remains a profitable gross revenues for McDonald but it is difficult to bring forth greater gross. KFC will rule 60 % of fried poulet market portion and Lotteria besides accounted 60 % -70 % beefburger market portion. Based on Phuang, the staying market portion was distributed among other western fast nutrient trade names. . ( Vietnam investing reappraisal – Young person get down up fast nutrient, 2012 )

In add-on, the stuff beginnings which still can non fulfill McDonald demand included the particular gustatory sensation of Vietnamese consumers. ( McDonald ‘s and the great challenges it faces when come ining Vietnam, 2012 ) It will be hard for McDonald direction because if they import the natural stuffs from other states, it will decidedly increase the cost. In add-on, McDonald direction might experience that to accommodate Vietnamese gustatory sensation, they need to engage professional to redesign their bill of fare and it is expensive.

Furthermore, McDonald may confront merchandises imitation from Vietnam ‘s local eating houses. ( Abiri, 2012 ) Due to McDonald success in planetary market, it offer a great chance to copy McDonald merchandise such as the proprietor might seek to acquire similar natural stuffs to bring forth similar merchandise to their clients.

Finally, the challenges confronting by McDonald in Vietnam is nutrient safety. ( Abiri, 2012 ) Nowadays, insecure nutrient spreads everyplace globally. Vietnamese consumers think that eating in a esteemed fast-food eating house such as KFC is thought to guarantee nutrient quality and traceability. Food companies, McDonald in Vietnam and abroad has to step up their attempts to vouch quality and specifically placing its beginning. Traceability is indispensable for McDonald to guarantee Vietnamese clients have assurance in the safety and beginning of the nutrient they serve. ( Food Safety on the Menu, 2012 )

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