Enhancing Corporate Competitiveness in International Economic Integration

 

In reality, the Vietnamese business community has not formulated strong competitive power. According to a survey carried out by the authors of the Scientific Thesis 2012 of the Vietnam Chamber of Commerce and Industry (VCCI), entitled “Impacts of international economic integration five years after Vietnam's WTO entry on the development of Vietnamese business community," the median labour productivity was below VND200 million a year, a very modest value in comparison with similar countries in the region.

 

In specific cases, some companies had relatively high labour productivity. However, a majority rested productivity and income in exclusive relations and natural resources. So, the question raised is "How to enhance corporate competitiveness" in a long-term and sustainable way in the socialist-oriented market economy as stated in the Resolution of the 11^th National Party Congress.

 

There are many answers, both objective and subjective, to this question. However, in this article, we can put forth at least three important issues at macro and micro levels:

 

1. Improving the business environment: According to the 2012 business survey by the ASEAN Business Advisory Council (ASEAN -BAC), Vietnam is one of ASEAN countries with most limitations in basic business environment criteria (general coefficient at 3.64) to create a business environment in comparison with other countries in the region. Building a market-oriented business environment where ensures the equal participation of economic entities such as government, businesses and consumers will create a synergy for rapid and sustainable economic development. In that business environment, efficiency, law and business ethic factors must be upheld.

 

2. Developing market analysis tools: The current high-level development of global economies certainly clings to market economy. The market economy is the most important invention of mankind in economic development. The drives of market economy are to liberate wisdom, ability and aspiration of mankind. In that market mechanism, business is an important entity that promotes and perfects it. Therefore, if a business wants to survive and develop, it must understand its capabilities, the nature of the market economy and have necessary competing tools. In other words, if it wants long-term sustainable development, its competition must be based on the market, its products and services.

 

According to competition theorists, a company must build at least two market analysis tools for itself: (1) Advantage and disadvantage analysis; (2) Competitor analysis; and (3) Competitiveness analysis.

Advantage and disadvantage analysis: This helps us identify strengths, weaknesses, threats and opportunities in the industry.

 

Competitor analysis: This helps us analyse strategic rivals in the same industry in the region or in the world, by which we can assess the comparative advantages of competitors, particularly manpower.

 

Competitiveness analysis: This plays a decisive role in building and developing products and services. To analyse competitiveness, a business must identify the market and the market share of a product to make a good investment decision, which necessarily optimises its inputs and outputs. Or in other words, it must answer questions about the position, stability and development of the market and customers it targets. In addition, it must also be able to analyse conditions of production elements in the industry, including basic input costs, direct costs, raw materials, fuel, labour and other indirect input costs like servicing, packaging, quality assurance, research, brand development, technology, finance and logistics. Moreover, competitiveness analysis also covers the coherence of supporting industries and related factors like research, training, promotion, transport, finance, customs and land.

 

3. National economic development planning: In a market economy, businesses also need to understand that, in addition to market and consumers, the Government is also an important economic actor which determines the quality of the business environment. Industry, regional or national development planning must certainly serve as the platform for enterprises to build business development strategies. Said another way, a socioeconomic development plan, with development-prioritised industries clearly and consistently planned and advocated by the Government, will create sustainable competitiveness for the business community. This must be underscored points in promotion activities to boost the roles of business associations and VCCI. According to strategists, given its economic transition and restructuring, Vietnam should focus development priorities on the five following industries.

In summary, in the process of international integration and national economic development, enhancing the competitiveness of enterprises in the market economy plays a leading role on the way to success. In Vietnam, the competitiveness of enterprises is generally low and not sustainable in comparison with the region and the world. Besides many other factors, improving the quality of the business environment, the ability to use market analysis tools of enterprises and planning socioeconomic development strategy of the nation are important solutions to raise the competitiveness of the business community and ensure the effectiveness of international economic integration.