PEST Analysis of Vietnam

Posted by admin on January 31, 2018 in Articles

2.1 Political
Vietnam has had a colourful political history (Sterling, 2006) and is currently renowned for its communist leadership. However, when you examine the policies of the current government it could be argued that Vietnam is communist in name only.1An example of this being its policy for International Trade – Vietnam has a very receptive attitude towards welcoming FDI and developing Trade relations which contradicts the whole Communist ethos, the government is committed to improving the country?s business and investment climate.
In 1986 Vietnam introduced Doi Moi („economic renovation?) the key aim of this policy was to open Vietnam to foreign investment. Vietnam became the 150th member of the World Trade organisation on January 11th 2007. 2
Vietnam has not recently faced any serious threat to its powers and the situation is expected to remain the same in the coming years (Data Monitor 2009). Vietnam?s head of state is the President who does not have any administrative powers; however he undertakes the roles of nominal commander of the armed forces and chairman of the Council on National Defense and Security. The Vietnamese Prime Minister holds the administrative powers and also heads a cabinet made up of three deputies and the heads of 26 ministries and commissions.
Potential Impact
Any organisation wishing to enter the market must take cognisance of the fact that there are considerable limits on political activities and free speech. A large police and military presence is common. While it is not seen as a major risk in the case of Vietnam suggestions as to reducing political risk include using local partners, making operations invaluable (ensuring indispensability), localised banking and minimising fixed investments (Jeannet and Hennessey, 2004).
2.2 Economic
In economic terms Vietnam is a rapidly rising power (Vierra and Vierra, 2010). Since the beginning of this century, it has held 3rd place in average annual GDP growth, just behind China and…