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Business Possibilities of Finnish Pulp Sector in Vietnamese Market

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Business Possibilities of Finnish Pulp Sector in Vietnamese Market Thao Huong Mai 1301189 BUSINESS POSSIBILITIES OF FINNISH PULP SECTOR IN VIETNAMESE MARKET Bachelor’s Thesis International Business September 2015 Author Degree Time Thao Huong Mai Bachelor of September 2015 International Business Thesis Title Business Possibilities of Finnish Pulp Sector in Vietnamese Market 78 pages 2 pages of appendices Commissioned by Kymenlaakso University of Applied Sciences Supervisor Senior Lecturer Pia Kaari Abstract Pulp and paper industry is a very important industry in many countries. The birth of paper was a mark of another level in science and technology, bringing human beings to new civilized era. Although pulp industry plays an important role in economy, its scale in Vietnam is considered small compared to many other countries. Pulp production technology is at a low level and has developed slowly. Moreover, the pulp and paper production process exhausts a significant amount of waste in solid, liquid and gas, which needs a high-tech process to reduce the pollution and be friendly with environment. Because of the current situation in Vietnam, paper and pulp industry is in transforming period with high potential business in pulp sector, which is demanding the developed science and high technology to meet industry requirement as well as environment issues. Therefore, this thesis is created to assist Finnish pulp and paper enterprises evaluate the potential of Vietnamese market in pulp sector. The objectives of the research are to evaluate the possibility for Finnish paper enterprises to operate technologies and equipment in pulp sector in the Vietnamese market, and to suggest these companies different market entry options to be successful in extending the business to target market. Due to the nature of the study, qualitative research is applied with the method approach is desk research where the secondary sources of data are used, and interview for primary source. In the theoretical framework, data are collected mostly from published sources such as books, articles and earlier studies. In the empirical part, data are collected from case studies, business online sources, pulp and paper industry online sources and Vietnamese government publications; and the information provided by an interviewee. The core content of the empirical part are the analyses of Vietnamese pulp market and Finnish enterprises. Additionally, pulp material function and on-going projects in Vietnam are supported along with competitor analysis. In conclusion, after analysing and synthesizing, the author suggests three market entry modes for Finnish enterprises to successfully extend the business to the Vietnamese pulp market, among which the cooperation with Vietnamese government institutions is a priority. Keywords Market research, pulp sector, paper industry, Finnish enterprises, Vietnamese market CONTENTS 1 INTRODUCTION............................................................................................................................1 1.1 Background..........................................................................................................................1 1.2 Objectives and research questions..................................................................................2 1.3 Scope and limitations......................................................................................................... 3 1.4 Theoretical framework........................................................................................................3 1.5 Research Methodology...................................................................................................... 4 1.5.1 Research methodology and methodological approach..................................... 5 1.5.2 Data sources............................................................................................................ 6 1.5.3 Data collection..........................................................................................................9 1.6 Structure of the thesis........................................................................................................ 9 2 ANALYSING TOOLS AND MARKET ENTRY MODES.........................................................10 2.1 Internal analysis................................................................................................................ 10 2.2 External analysis...............................................................................................................12 2.2.1 PESTLE analysis...................................................................................................12 2.2.2 Porter’s five forces.................................................................................................14 2.3 Market entry modes..........................................................................................................15 3 VIETNAMESE MARKET.............................................................................................................16 3.1.1 Overview................................................................................................................. 16 3.1.2 Political....................................................................................................................17 3.1.3 Legal........................................................................................................................19 3.1.4 Economic................................................................................................................ 20 3.1.5 Social and Cultural................................................................................................ 24 3.1.6 Technological.........................................................................................................25 3.1.7 Environmental........................................................................................................ 27 3.2 Trade between Vietnam and Finland.............................................................................30 3.3 Trade development between Vietnam and Finland in forestry sector and technology in production........................................................................................................ 32 4 PULP MARKET IN VIETNAM.................................................................................................... 33 4.1 Porter’s five forces analysis for pulp and paper industry in Vietnam........................34 4.1.1 Buyers..................................................................................................................... 34 4.1.2 Suppliers.................................................................................................................35 4.1.3 Substitutes..............................................................................................................35 4.1.4 New entrants.......................................................................................................... 37 4.1.5 Competitors............................................................................................................ 37 4.2 Pulp production situation in Vietnam............................................................................. 39 4.2.1 Pulp material.......................................................................................................... 39 4.2.2 Pulp material regions............................................................................................ 40 4.2.3 Projects to expand the scale of pulp production...............................................41 4.2.4 Pulp production technology and the affection to environment....................... 43 4.3 The problems of VPPA in producing pulp and paper..................................................46 5 FINNISH PAPER ENTERPRISES............................................................................................ 47 5.1 Finnish paper mills............................................................................................................47 5.2 External analysis...............................................................................................................48 5.3 Internal analysis - SWOT analysis.................................................................................51 6 MARKET ENTRY MODE SUGGESTION................................................................................ 53 6.1 Suggestion 1: Alliance..................................................................................................... 53 6.2 Suggestion 2: Joint venture subsidiary......................................................................... 54 6.3 Suggestion 3: Wholly-owned subsidiary....................................................................... 55 6.4 Potential customers for Finnish pulp and paper companies......................................55 7 CONCLUSION..............................................................................................................................56 7.1 The objective results........................................................................................................ 56 7.2 Further research and study.............................................................................................58 7.3 Reliability and applicability of the results...................................................................... 58 8 SUMMARY....................................................................................................................................59 REFERENCES...............................................................................................................................
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