Outsourcing activitiesin Vietnam

Phạm Ngọc Quỳnh Như - BABAIU11131Nguyễn Minh Vân - BABAIU10271Trần Thị Uyển Nhi - BABAIU11151

Contents

References

Benefits, chances and challenges to Vietnam

Why Samsung choose Vietnam?

Outsourcing activities in Vietnam

Introduction

I. Introduction

Samsung Group Founded in 1938

Exporter of dried fish, vegetables, and fruits Flour mill and confectionery machines

1950’s Economic Stabilization Korean War - Samsung lost all assets Aimed to help rebuild Korean economy; entered the

manufacturing industry (sugar, fabrics) Became a leader in modern business practices (recruiting from

outside) 1960’s Expansion of Key Industries

Entered electronics and chemical industries 1969 established Samsung Electronics Co.

I. Introduction

% of Sales ($72B)

Electronics28%

Machinery & Heavy

Equipment6%

Chemicals2%

Financial Services

26%

Other38%

• Distribution• Hotels• Amusement

theme parks• Trading• Construction• Textile• Advertising• Baseball team• Security

• Cameras• Aircraft• Ships• Dump trucks• Oil trucks

• Polymerized compounds• Plastics• Specialty chemicals

• Life insurance• Credit card services• Securities trading• Finance and trust

management services

• Home appliances• Wireless

communication• Semiconductors

I. Introduction

Samsung Electronics

HOME APPLIANCES

MOBILE

TABLETS

TELEVISIONS

DIGITAL IMAGING

COMPUTERS

HOME AUDIO

II. Outsourcing in Vietnam

• 2009: Samsung opened the first smartphone plant in Bac Ninh, Vietnam

• 2013: The second plant was opened in Thai Nguyen, Vietnam

II. Outsourcing in Vietnam

Investment: US$11.2 billion Samsung Electronics: US$8.9 billion Samsung Electro Mechanics: US$1.23 billion Samsung Display Project: US$1 billion R&D Center Project

III. Reasons

Why Samsung shift to Vietnam?

III. Reasons

1. Competition

III. Reasons

2. Labor force

III. Reasons

3. Government's policies

III. Reasons

4. Geographical location

III. Reasons

Difficulties

1. Lack of local suppliers

2. Lack of employees’

commitment

3. Poor ethics from employees.

IV. Benefits, chances and challenges

Benefits- Job creation

- Contributing to national export turnover and budget

- Attracting more investments from the hi-tech electronics firms

- Attracting foreign part suppliers and

using local suppliers

- Helping Vietnam in moving from low-

value-added FDI to high-value-added

manufacturing projects

IV. Benefits, chances and challenges

Chances and challenges - Turn Bac Ninh into an Agglomeration

- Support industries needed

- Risk of transfer pricing for tax avoidance

- Slow tech transfer

- Labor exploitation

IV. Benefits, chances and challenges

Lessons for Vietnam- Improve tax policies to prevent tax avoidance.

- Focus more on education to have the next generation who will

be able to have vision and ability to adopt and develop new

technologies and catch up with the world.

V. References

• http://dantri.com.vn/kinh-doanh/sep-samsung-viet-nam-noi-ve-diem-yeu-nhan-luc-viet-nam-1000107.htm

• http://ipc.danang.gov.vn/en/web/ipc-english/-/samsung-vietnam-prioritizes-local-part-suppliers-but-few-qualify

• http://tuoitrenews.vn/business/23343/vietnam-firms-left-behind-in-race-to-supply-parts-to-samsung-report

• http://vietnamnet.vn/vn/kinh-te/173574/samsung-phat-khiep-khi-nguoi-viet-an-cap-tien-ty.html

• http://vnreview.vn/goc-nhin-vnreview/-/view_content/content/1344844/vi-sao-cong-nhan-nha-may-samsung-nhan-luong-chuc-trieu

• http://cafef.vn/doanh-nghiep/quy-mo-dau-tu-cua-samsung-tai-viet-nam-trong-tuong-lai-se-con-tang-hon-nua-2014112017115415717ca36.chn

• http://dddn.com.vn/thi-truong/vi-sao-cac-dai-gia-cong-nghe-chon-viet-nam-20140904022328134.htm

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