1 MEMORANDUM 5
2 COUNTRY OVERVIEW 7
2.1 GEOGRAPHIC LOCATION 7
2.2 POPULATION 8
2.3 GOVERNMENT 9
2.4 ECONOMIC 10
2.5 OTHER INFORMATION 12
3 ORGANIZATIONAL PROFILE & PRODUCT CHOSEN 14
3.1 COMPANY 14
3.2 THE 4Ps 17
4 BUSINESS ENVIRONMENT 19
4.1 BUSINESS PRACTICES 19
4.1.1 HOFSTEDE’S 4 DIMENSIONS 19
4.1.2 DOS & DON’TS 21
4.2 SOCIAL CONDITIONS 22
4.3 ECONOMICAL CONDITIONS 23
4.4 FINANCE 25
4.5 REGULATIONS/ LEGAL ISSUES 27
4.6 COMPETITORS 28
4.7 SWOT ANALYSIS 30
6 GLOBAL COMPETING STRATEGY 74
6.1 DECISION MATRIX 74
6.2 SUPPORTING ARTICALS 76
6.3 ACTION PLAN 81
7.5 Vuong Ngoc Trinh _ S3183238 94
8 REFERENCES 97
This report presents the strategy that An Giang Company will use to enter Liberia market. In order to operate more effectively, we have done some research and analysis about Liberia country, regulation, economic, or culture. We also come up with some strategy, compare them and reach the final decision by using Decision matrix.
The Republic of Liberia
Located in Western Africa, Liberia is a small country. Its total area is 111,369 sp. Km, rank 110 on the world and 3 times smaller than Vietnam. As the result of the war, it has a big influence from many Western countries such as the USA or French, however, it also quite close to other country since there are many things we should notice when travel to Liberia such as drink, dress, or photograph.
Land area 111,369 sp km
Official Language English
Government type Republic
Region 40% _ Christian
20% _ Muslim
40% _ Indigenous
An Giang Company
An Giang Import – Export Company (ANGIMEX) has been established in 1976. With more than 30 years operate in agriculture industry, especially rice, ANGIMEX is one of the biggest rice export in Mekong Delta. ANGIMEX not only successful in procure and process domestic and export directly rice, it also join in other industry such as consumer goods, electronics, appliances and manchineer, foodstuff, technology and training education. In the year 2004 – 2007, the company won the reward of Prestigious Export Business, which has increase the reputation of ANGIMEX in both domestic and foreign Market. In order to handle the production and reach the standard of ISO 9001:2000, ANGIMEX has invested a lot in its factory, warehouse, and milling machinery system.
Enter Market Strategies
There are 5 differences strategies that ANGIMEX can apply when they enter Liberia market; they are Exporting, Acquisition, Joint-venter, Licensing and Greenfield. Each strategy does have its all advantages and disadvantages that ANGIMEX will faced or benefit all. In other to choose one best strategy among 5, we have use some decision factors to compare between them.
Capital requirement 30%
Time to set up the business 20%
Product’s Quality 15%
Control the output 15%
Export strategy is our final decision. For a new market, exporting is always the best strategy since we do not know much about the market. If we fail in operate, we can get out of the business easier with less damage in term of finance. When we decide using export to sell our rice to Liberia, we also do some research and evaluate the current situation of Liberia through articles; therefore we can eliminate the loss and reduce risk.
1 COUNTRY OVERVIEW
1.1 GEOGRAPHIC LOCATION
Liberia located in Western Africa, its bordering with North Atlantic Ocean in the Southwest, Guinea from the North and Cote d'Ivoire and Sierra Leone in the East. It totally area is 111,369 sp.km, almost 3 times smaller than Vietnam. The capital of Liberia is Monrovia, a city that quite close to the sea, a main port of Liberia since The United Stated had expanded it in the World War II. Economic of Monrovia depend also in export and import transaction. Vietnam firms, such as An Giang Co., who wants to export their product to Liberia, should take a consideration on this best position.
With the tropical climate, hot, humid, and dry in the winter, Liberia does not have the best condition to growth many foods such as rice or corn. According to Lao Dong.com.vn, in beginning of year 2009, some Vietnamese farmer has brought the rice seed from Vietnam and growth in Liberia, the result is worse than we grow in Vietnam, but better than the local seed that grow in Liberia. It has its own meaning, but it also mean that Liberian is accepted Vietnamese rice and taste, which can opened a potential market for Vietnamese farmers.
Currently, the number of Liberian people is approximate 3,441,790 including the rate of sex 0.99 male /female (CIA World Factbook 2009) and placed at a position 133 in the worlds. However, the population growth rate is 2.665% which is considered at high growth comparing to the world. Besides that the figure below forecasts that Liberia has a young generation. Most Liberian people are from 15 to 65 years old which occupied more than 97% of population.
With young population, Liberian is faced with a very huge problem AIDS. During last year, the death rate is 21.45 deaths/ 1,000 populations. This is a disadvantage for Liberia to develop their country because health care is the best expectation of people. Lacking of health care will lead to be inefficiently working.
Since Liberia became independent from American Colonization on July 26, 1847, Liberia’s government controlled in republican form with three main branches. The Executive, headed by the President of the country (elected by majority of vote for 6years-term, can be re-elected but more than two terms).Secondly is the Legislature who makes laws, consists of the Senate and the House of Representatives. Lastly, the Judiciary is a combination of the Supreme Court and four Associate Justices (appointed by President of the country).
On 8 November 2005, Ellen Johnson was elected to become the Liberia’s President. She will also be the head of government and chief of state. The elections will be due in the next 2011. Beside 30 political parties, Liberia also has a mutual operation system of statutory law (Anglo-American common law) and customary law of tribal practices. They are considered as main subjects to establish the Constitution on January 6, 1986. However, there still have some conflicts between these laws so that Liberia now seeks to the improvement of harmonization.
According to CIA’s report, Republic of Liberia is in the top ten poorest countries in the world which GDP per capita was $494 in 2008. With the civil war (1990-1997), Liberia’s economy and infrastructure were destroyed and have not rebuilt yet. As the result, many foreign companies and businesses left Liberia after the war. However, Arica Economic Outlook (2009) stated that the economic showed the sigh of recovering after the civil war which real GDP increased from 2004. The growth is directly reflected to the forestry operation, rising gold and diamond exports, improvement of infrastructures and security and donor fund expenditures. The report also stated that GDP will increase about 10.8% in 2009 and 11.2 % in 2010.
The main economic sector is agriculture which held 67.7% GDP in 2008 (OECO 2009). Their main products are rice, cocoa, coffee and palm oil. Agriculture is the primary source of livelihood for the majority of the population. However, due to low productivity and technology, Liberia still needs to import rice from other countries. The major income came from export iron ore, timber and rubber industry but there is decreasing revenue from iron ore. Nowadays, gold and diamonds exports are new resources of revenue for Liberia as well as domestic manufactures such as beer, glass, cement and plywood.
Although there are some positive economic developments, Liberian finance and technologies still depends on UN agencies, international non-government donors and foreign investors such as infrastructure and communication. They also face with many challenges such as a huge debt, high employment and high level of poverty.
According to CIA and OECO reports, Liberia has
GDP (purchasing power parity): $1.212 billion (2008 est.)
GDP- per capital (PPP): $494 (2008 est.)
Labor force- by occupation: Agriculture: 70%
Services: 22% (2000 est.)
Unemployment: 85% (2003 est.)
1.5 OTHER INFORMATION
Society and Culture
The Liberia’s culture is the combination between the traditional culture and the Western lifestyles (‘Liberia Culture’ 2009). In urban areas, most values and customs are influenced by the Western styles. Inversely, traditional culture is favored in rural areas. Football is also the most popular sport in this country (‘Liberia Culture’ 2009).
According to the article ‘Liberia: Country and Foreign Investment Regime’ 2009, Liberia is the first independent Black African nation. In the society, English is the official language, which is the advantage for foreign investment and Liberia also. However, there are about 16 other indigenous languagues which are rarely used (‘Liberia: Country and Foreign Investment Regime’ 2009). About the religion, there is 40% of whom are Christian, 20% Muslim, and 40% with other beliefs.
The main issue in Liberia is the shortage of food supply, especially rice. Rice is the essential foodstuff of Liberians. According to Skoch 2008, 90% rice of Liberia is imported from the U.S. and Asia. When the rice’s price increases more than double, Liberians have to change their life long habit; they switch to eat pasta which is cheaper (Skoch 2008).
Liberia has traditional relations with Western countries and others such as: Libya, Cuba and China. It is a member of the United Nations (UN), the African Union (AU), the Economic Community of West African States (ECOWAS), the African Development Bank (ADB), the Mano River Union (MRU), and the Non-Aligned Movement (‘Background Note: Liberia’ 2009). During the Charles Taylor’s administration, the relations between Liberia and other West African countries were strained and those relations were improved better by the administration of Ellen Johnson Sirleaf (‘Background Note: Liberia’ 2009).
Liberia has maitained good relations with the West Africa and the world, especially the United States because it is the strongest supporter for Liberia (‘Background Note: Liberia’ 2009). The U.S. Agency for International Development (USAID) which is organized by theU.S.’s Government to assist Liberia in many fields such as: HIV prevention, health care, educational programs, business development, etc. (‘Background Note: Liberia’ 2009).
All of foreign businesses are welcomed to Liberia. They can be operated directly by the authorization of the Minister of Foreign Affairs or indirectly through the local agents (‘Liberia: Country and Foreign Investment Regime’ 2009). Foreigners who live in Liberia can also establish their own businesses with the allowance of Business Corporate Act (BCA) and Ministry of Commerce, Trade and Industry to get the business licenses (‘Liberia: Country and Foreign Investment Regime’ 2009). According to the article ‘Liberia: Country and Foreign Investment Regime’ 2009, many corporations are registered as maritime and corporate haven in Liberia because it is one of a developed martitime country in Africa. Moreover, Liberia has a very open business climate to attract foreign investment. The Government offers some benefits for foreign businesses such as: the exemption of income tax, custom duties, stamp fees, etc. Also, the country’s infrastructure, communication, etc. are improved to facilitate the businesses’ operations (‘Liberia: Country and Foreign Investment Regime’ 2009).
2 ORGANIZATIONAL PROFILE & PRODUCT CHOSEN
Company Name An Giang Import – Export Company
Head office 01 Ngo Gia Tu Street, My Long Ward, Long Xuyen City, An Giang Province
The Mekong Delta is the biggest granary of Vietnam because the river silt has raised the level of the field. It supplies rice for the whole country and exporting. ANGIMEX is one of the biggest companies in the Mekong Delta. It was established in 23 July 1976 with the great contributions of Mr. Ha Quang Chan who promoted to set up the company and Mr. Pham Phung Tu who was the first director (‘ANGIMEX Figures’ 2008,). The company was first located in Chau Doc, and then changed to Long Xuyen City (’32 years old ANGIMEX’ 2008). After changing the company’s name many times, the company got the official name An Giang Import – Export Company in 1992 and licensed to direct import and export by the Vietnamese Ministry of Commerce in 1998 (’32 years old ANGIMEX’ 2008). Moreover, ANGIMEX has officially transformed into the stock company since 2008 in order to raise more funds in order to expand their organization (‘32 years old ANGIMEX’ 2008). Until now, ANGIMEX has received many awards such as: First class honored labor medal, Prestigious Export Business of years 2004, 2005, 2006, 2007, etc. (‘General Info’ 2008).
ANGIMEX’s functions include processes, produces rice, paddy to supply domestic trading and export (‘General Info’ 2008). Besides, the company has other operations: consumer goods, electronic appliances and machinery, foodstuff, technology, training, education, etc. (‘General Info’ 2008). The organization chart below will show more clearly about the company’s functions (‘General Info’ 2008).
2.2 THE 4Ps
As mentioned earlier, ANGIMEX is one of the biggest company in Vietnam which produce, import and export rice. The company has received many awards for its achievements and product’s quality. ANGIMEX produce rice with modern rice polishing and milling machinery systems and it can export around 300,000 – 350,000 metric tons of rice each year (‘Rice’ 2008). Furthermore, the product’s quality is managed by the standards of ISO 9001:2000. The table below will show more about various products’ types of ANGIMEX for different tastes of customers (‘Rice’ 2008).
According to Van (2008), the price of rice is calculated based on the prices of fertilizer, seed rice, labours, etc. Moreover, the rice’s price increases or decreases will be affected by the market’s demand or supply. On average, the rice’s price is between 9,750 – 10,750VND/kg and during the rice shortage; it should not be higher than 11,000VND/kg for the normal rice and 14,000VND/kg for the special rice. For exporting, this price is very competitive because if comparing with other countries, Vietnam has low price for rice exporting. Also, Vietnam is one of the countries which have the biggest amount of rice exporting all over the world because cheap labors and plenty of natural resources.
Rice is one of the most important foodstuffs of Vietnamese and Liberian because it is the main food for daily uses. Rice is the necessities, so there are no marketing strategies or promotion campaigns for this type of product. The main criteria which customers decide to buy a type of rice are price and quality. Later, they might consider about country of origin, the company’s reputation, etc. Price and quality of products are always considered by ANGIMEX. The company always provides product with high quality which is managed by the standard ISO 9001:2000 and competitive price. Nevertheless, the company still offers some promotions to get customers’ attentions. For example, customers will get premium pottery bowls when buying Jasmine rice of ANGIMEX (‘Activities’ 2008). Besides that other community activities such as helping poor people and supporting poor students also increase the company’s reputation.
ANGIMEX currently supply rice for people within Vietnam and exports to other market such as: Singapore, Malaysia, Philippines, Indonesia, Iran, Iraq, Cuba, Cambodia, etc. (‘Rice’ 2008). The company does not directly export product to those countries. The distribution channel is usually through the intermediations. To illustrate, Liberia is a high potential market for ANGIMEX because its high demand of this product. According to Skoch (2008), 90% rice of Liberia needs to be imported for domestic uses. In order to export rice to Liberia, ANGIMEX will consider Bridge Way Corporation as an intermediary. Bridge Way is an international import and export company in Liberia.
3 BUSINESS ENVIRONMENT
3.1 BUSINESS PRACTICES
3.1.1 HOFSTEDE’S 4 DIMENSIONS
Since there is no study about Liberia Hoftede’s 4 Dimensions, we use the general study of Western Africa to evaluate the culture of Liberia, which can help us to operate our business more effectively. Comparing these dimensions between Vietnam and some countries in Western Africa such as Liberia, there are some big differences and some similarities.
Power Distance Index (PDI)
This dimension is refer to the gap between people and people in the society, whether rich and poor, power and less-power, boss and worker. The figure above giving that, Western African has 77 PDI, which is quite high. The role of manager, boss in an organization is very important, the followers have to respect the manager’s decision, listen and work under these directions.
Both Western African and Vietnamese people prefer work in team, stay close, contribute to the society and focus on group value. They would think of doing thing that giving the benefit to more people rather than themselves. In addition, with the same background of being war in a long time, Vietnam and Liberia are similar in this perspective, we are educated to contribute to the country and respect others’ work.
In Masculinity dimension that Vietnam and Western African countries are quite similar in term of index.
Western African: 46
The gap between genders in a society is medium, meaning that the role of man and woman are quite the same in term of characteristic: assertiveness, competition, relationship and environment. In these countries, man and woman can switch their role to contribute the best to the family and society.
Uncertainty Avoidance Index (UAI)
Western African countries have 54 in UAI, which is the medium imdex compares to the world countries and high index compares to Vietnam. It can be seen as a disadvantage point for Vietnamese firms, who want to operate in these countries, may face with a lot of rule and complex organization’s structure. They will not accept many risks and protect themselves with rule and law.
Long Term Orientation (LTO)
This dimension is closely related to the truth between people and people, which is very important in the business environment as well as human being in the society. There is a big gap between Vietnam (80) and other countries in West Africa (16). With short-term orientation, Western African (Liberia, Nigeria) will work quickly to get the job done and move to other ones. Seeing the quick reture and short payback period in their investment is what they expect. In the agriculture business, for an example, growing rice needs round 1 month or more, this can be count as short time producing. If we one to cooperate with other firm in Liberia, it can be seen an advantage, which we can persuade them agree on.
3.1.2 DOS & DON’TS
Suffer from war, internal conflicts and influent from Western culture, Liberian does have many think that visitors should notice so that visitors will not get trouble to themselves or ruining out the business relationship with local people. According to Gladson, there are many difference in term of eat, drink, dress or payment methods in Liberia. It also has a high volume of crimes; therefore, we must be careful when going out.
Smoking in public
Chewing gum in public
Giving money in beggars/panhandlers
Shaking hand when leaving a small group
Eat everything in your plates
Check with the hotel to verify the identity of employees who come to your room
Accepted travel’s check
Best time to present gifts: at the end of a visit
Best time for conversations: before and during the meals.
Drinking directly out of a bottle/ can
Chewing gun in governments office
Wearing black glasses
Kissing in public
Taking photographs of people (without permission)/ airport/ public buildings
Eating by left hand or both hand
People discuss about their wealth
Wearing of look-alike military
Be tempted by people selling land in Liberia unless you are of African descent
Moving around night -> criminal
Carry valuables in public
accepted ATM or Credit card
accepted drink or food from stranger
assume police will be able to protect you
3.2 SOCIAL CONDITIONS
An Giang Company has a potential opportunity to enter the Liberian market because of three following reasons.
The first reason is that rice is one of the two main recourse foods for Liberian life beside pasta. If the price of rice is increase so much, they will shift to consume pasta (Skoch 2008). An Giang Company has a variety of price of rice depending on the quality, which can help them to increase its competitive advantages and reach more class of customer.
Not only occurred in Liberia, but also in many Africa nations, most people are faced with poverty (Ted 2008). They only need some basic food for their life and rice is an essential one. Also, according to this article, Liberian is lacking of food supply because a lots of farms were destroyed during the war. People do not have enough farms to raise foods, which can be seen as a major cause of poverty.
“Liberia is the third world’s poorest country in capital income” (Debt relief first of many recovery challenges 2008). Low income is one of the most important issues. People, who get high income, they can purchase whatever they want. In contrast, the poor people only purchase some most basic things for their life such as rice, or water. They do not have enough money to serve expensive nutrition foods for their need. As the result, An Giang Company might take this advantage to export low rice.
3.3 ECONOMICAL CONDITIONS
Although agriculture is main economic sector in Liberia but the domestic product only meets one quarter to third of the population requirement for rice. The country need import 60% of rice consumed and in Greater Monrovia nearly 99%. With huge demand of importing rice from, An Giang Company can consider it as an opportunity to export rice to it. However, there are some factors that An Giang Company should take into account.
• The inflation rate of Liberia increased from 11.4% in 2007 to 17.49 in 2008. The data below shows that the consumer price inflation is high due to high cost of import. The inflation is forecasted decrease in 2010 but the prices of products may be falling but the general price level is still rising, albeit at a lower rate. With high price of rice, the power of consumption will be decreased and consumers may find other substituted products. An Giang Company can consider types of rice to export to Liberia that meet their finance.
• In Liberia, they use both Liberia Dollar (LRD) and US Dollar (USD). The LRD is used for small purchases, especially in rural areas, for government to pay civil servants’ salaries while USD is held for exchange in trade and financial transaction. In 2008, dues to global crisis, the exchange rate of Liberia depreciated to an average of 1USD =63.5 LRD and 72.55 LRD (update 31 August, 2009). The exchange rate may be more depreciated because the USD depreciated against Euro and other currencies. ANGIMEX should evaluate and analyze a pricing method that is suitable with the situation.
• The income of Liberian is still low and not everyone can afford to buy the rice so the company will focus on urban areas such as Greater Monrovia, Ganta and other 3 urban centers. According to Liberian report (2008), the urban cities are heavy reliance on importing food for population’s consumption while the rural households have less demand from importing because they depend on their own production such as cassava, vegetables or fishes. There is also high demand on raining season and wholesalers couldn’t satisfy the requirement so it leads to higher prices on the rice market.
Liberian finance has been developed better due to support from donor agencies and foreign investors. The government has made strong effort in improving tax and customs administration, preparing budget and implement a cash-based balanced budget. Also domestic revenues have increased from 1999/2000 which due to commitment to transparency and accountability, and the development of policy measures. On the expenditures side, the government tried to ensure the spending will be suitable with the funds available and they successful kept expenditure in line with the revenues. However, in 2007/08, the overall fiscal surplus is declined to 1.1% of GDP because of global crisis and spending in development infrastructure and the rate will be continued increase in following years.
The data below shows Liberian deficit declined from 51.6% in 2006 to 28.8% in 2008 and it expected to continue decrease in 2009. With expectation from the timber and mining industries, current account balance will be surplus in 2010. As the result, Liberia can able to clear debts which owed by major multilateral institutions. Moreover, the country had received reduction debts from US, Germany, Denmark and China. As a consequence of the relief, total external debt fell from USD 4.7 billion (643.2 % of GDP) in 2007 to USD 3.3 billion (508.7 % of GDP) by December 2008 (OECO 2009).
From these analyses, we can see that the finance situation of Liberia is development with positive views.
3.5 REGULATIONS/ LEGAL ISSUES
When enter Liberian market, ANGIMEX should concern about the regulation, policies or registration process for business. According to Work Bank (2008), Liberia is ranked 157 out of 183 countries in the Ease of Doing Business. The Heritage Foundation’s report (2009) ranked Liberia’s level of economic freedom in some sectors which will be listed below:
• Business Freedom: starting business in Liberia is faster than world average (27 days < 38 days) through simpler registration processes and business licensing. However, the cost for starting business is high and sometimes the regulations inconsistent. • Trade Freedom: Liberian tariff rate weighted average about 15.6% in 2007. There are some import bans and restrictions from the country. • Fiscal Freedom: Tax rates of Liberia are high. For example. The tax rates for top income and top corporate are 35%. The taxes that includes property, goods and service, plan to increase in next few years and also change to a value- added tax (VAT). • Investment Freedom: Liberia is in reconstruction part so the country has to review any investments. The government permits foreign investor but they also reserve a number sectors for Liberian. Moreover, ownership of land is limit to Liberian citizens. 3.6 COMPETITORS Liberia is a poor country with more than three million people who has huge demands for rice as their staple food. Thus, Liberia is a very attractive market for countries that are expertise in exporting rice products like Vietnam, one of the biggest rice exporters in the world. When Vietnam rice exporters like ANGIMEX wish to penetrate their product in Liberia, it has to consider two aspects of competitor: foreigner exporters and Vietnamese exporters. Beside two common competitors like Thailand and India (two leaders of rice exporter in the world), ANGIMEX also has to concern about China and Pakistan rice export companies because they have highest market share in Liberia. Recently, the Vietnam’s rice price increase rapidly compared to other strong competitors like Thailand (“Rice: A review of the news in 2001”, 2002). Being one of the leaders of rice exporter in Vietnam, ANGIMEX provide high quality product goes along with reasonable price. They consider Thailand and India, who have the same competitive strategies as our direct competitors. Whereas, China and Pakistan stick with the “low cost leadership” strategies provide cheaper products, they are indirect competitors of ANGIMEX. ANGIMEX also have to concern about some famous Vietnamese exporters such as Tigifood and Gentraco companies. These are some information for each competitor’s aspect of ANGIMEX (“Leading rice exporter countries” 2008). Country Companies represented Productivity volume of country % of global rice exports Thailand Six Star Rice Co. 10 million tons/ year 34.5% India Aishwarya Co 4.8 million tons/year 16.5% Vietnam Gentraco Co. 4.1 million tons/year 14.1% Pakistan Jaffer Sons Import & Export Co. 1.8 million tons/year 6.3% China Yotoo Import & Export Co. 901,550 tons/year 3.1% Country Company Website Logo Product Thailand Six Star Rice Co http://www.sixstarsrice.co.th/ India Aishwarya Co http://www.aishwaryaoverseas.com. Vietnam Gentraco Co http://www.gentraco.com.vn/index.php Pakistan Jaffer Sons Import & Export Co http://amjmorani.trustpass.alibaba.com/ China Yotoo Import & Export Co.,ltd http://yotoo.en.alibaba.com/ 3.7 SWOT ANALYSIS 4 GLOBAL COMPETING STRATEGY 4.1 DECISION MATRIX Based on the analysis of each strategy (refer to next section), there are three possible strategies: Exporting, Licensing and Greenfield. Although each strategy all has advantages and disadvantages, Acquisition and Joint Venture are not considered because they all have the big concern with the capital. ANGIMEX has limited capital, so these strategies are not suitable because they need a huge investment in Liberia. For example, for Acquisition strategy, ANGIMEX need to invest a huge capital to buy a business in Liberia to continue running. For Joint Venture, the company also needs a lot of money to buy shares and join with another Liberian business. Greenfield strategy is also need huge investment. However, establishing a new company requires less time and simple procedure than buying or joining a Liberian business. For Exporting and Licensing, they just need limit investment to expand a business to foreign countries. Briefly, Exporting, Licensing and Greenfield are three possible strategies. The most appropriate strategy will be considered based on the decision matrix below. Decision Matrix with the scale from 1 to 10 (1 is bad and 10 is good) In this matrix, there are some criteria which are used to evaluate the efficiency of each strategy. The most important criterion which is considered is capital requirement because it is the big deal of ANGIMEX. The next ones are time and risks when setting up a business. The last ones are the product quality and ability to control the outputs. For the capital requirement, Greenfield strategy needs a lot of money to buy land, hire expert, labours, etc. in Liberia to operate the business. It is not good, so the score is lowest. Licensing and Export have higher scores because these strategies can help to limit the company’s investment to a foreign country. Greenfield needs huge investment, but this strategy can help to control the product’s quality. Because rice is planted, harvested, packaged, etc. in Liberia, it can get highest product’s quality if comparing with other two strategies. For Exporting and Licensing strategies, the quality control is decreased because products could be damaged when go shipping or cheating of licensees. When considering about the time to set up the business, Greenfield strategy gets lowest score because it takes a lot of time to establish the farm in a foreign country. Export and Licensing are faster because it just takes time to get the licences to export products. For risks, Greenfield gets lowest score because it has highest risks among three strategies. Because this strategy needs huge investments, ANGIMEX will lose a lot of money if they fail to run their business. The other strategies just need limit investment, so the risk for losing money is lower. The last one is the ability to control the outputs. Greenfield strategy has highest score because rice is produced in Liberia, so the outputs’ quantities are controlled better than other strategies. Export and Licensing strategies could get the delay from shipping, so the outputs control is not tight. Briefly, based on the calculation, Exporting strategy gets highest total score. This means it has more advantages when applying this strategy to a foreign market. The articles below will support for the reasons why Exporting is chosen to expand ANGIMEX’s business in Liberia. 4.2 SUPPORTING ARTICALS Article 1: The impact of high prices on food security in Liberia ‘The impact of high prices on food security in Liberia’ 2008 http://ochaonline.un.org/OchaLinkClick.aspx?link=ocha&docId=1095478 Analysis 1 The graph above clearly shows how rice is imported in Liberia. The importers will import rice from foreign countries. It is distributed to wholesalers and wholesalers give to retailers. Retailers will sell to customers or could be go to micro retailers and then customers. Sometime, rice is sold directly from wholesalers to customers. This will give general information for ANGIMEX about the process how rice is delivered to the customers. Rice is delivered through many intermediaries to customers; it will increase the price of rice in Liberia. Article 2: Safety Net for Industries ‘Global export price push’ 2009, Vietnam Investment Review, 31 August – 6 September Analysis 2 The article above states that the ministries Industry and Trade and Agriculture and Rural Development (MARD) is analysing the needs of enterprises in each sector. During the global financial crisis, Vietnam’s exports have decreased. However, many experts predict that Vietnam’s economy will recovered soon in this year. Hence, Vietnam Government is trying to promote trade to increase exports. The Government has signed many contracts for local companies to export their products with high turnover rates. Moreover, the Government provides financial supports for enterprises and farmers to produce with hygiene processes. Agriculture also gets supports from MARD overcome technical barriers and ensures products get international standards. This is the great support which helps local products to export and compete with foreign competitors. Rice is also the product which will take this advantage to increase the export volumes. Article 3: Global Export Price Push Thanh Dat 2009, ‘Safety Net for Industries’, Vietnam Investment Review, 3 – 9 August Analysis 3 The article states that exports will bring big profits to exporters and rice farmers. The prices of some commodities are reduced because of speculators decrease buying to control the prices. The reduction in prices will have bad impacts on the local companies and farmers; especially for rice because Vietnam is the second biggest country which exports rice. Therefore, the Government should have flexible strategies to control the rice’s price. Vietnam is one of the world’s leading exporters for rice. Hence, Vietnam should “participate in deciding the prices instead of following the world prices” (Lien Huong 2009). It will protect the local companies and farmers from prices’ reduction. 4.3 ACTION PLAN Task Requirement Time Finding the creditable partnership At least 2 partners 1 month Arrange the shipping methods and way By road, rail, ship Compare the price 2 months Do or buy market research Using reliable sources (AC Nielsen) 3 months Establish an oversea representative office 3 months Prepare all the documentation, paper work Check the regulation and law 1 month Prepare the price strategy Must be competitive 2 month Task Aug Sep Oct Nov Dec Jan Feb Mar Finding the creditable partnership Arrange the shipping methods and way Do or buy market research Establish an oversea representative office Prepare all the documentation, paper work Prepare the price strategy 5 REFERENCES • ‘Activities’ 2008, ANGIMEX Website, viewed 22 August 2009,
• ‘ANGIMEX Figures’ 2008, ANGIMEX Website, viewed 22 August 2009,
• ‘Buying an existing business’ 2009, Business Link, http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1074410852
• ‘General Info’ 2008, ANGIMEX Website, viewed 22 August 2009,
• ‘Rice’ 2008, ANGIMEX Website, viewed 22 August 2009,
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