Business Report of Ideal lighting and smart technologies private limited
This report will analyze the details of three Indian electronic SMEs that will converge with the ideas of a Vietnamese person to open an electronic company in Vietnam. PESTLE and SWOT of the formed up company will be elucidated along with porter's five forces analysis. A market entry method, gist of threats and opportunities of the company and recommendation for the company to grow will also be presented.
- About the companies
- Ideal lighting and smart technologies private limited
ILS's in-house research and development and design departments, along with unrivalled technological knowledge, enable it to establish new developments in lighting continually. It has 101 to 500 employees. The company's end-to-end strategy, from idea to completion and maintenance, its network of partners, and the complete participation of teams at all levels all contribute to clients' long-term relationships with them (Linkedin, 2021).
After more than a decade of pioneering the acceptance and transformation of new technologies, their flameproof and weatherproof LED luminaires are setting the industry standard with unmatched knowledge and capability. ILS’s manufactured products are used in the petrochemical, chemical, refinery, oil and gas, fertilizer, bulk medicine, pharmaceutical, and pesticide sectors, while weatherproof lights are ideal for general industries, warehouses, shopping malls, and airports, among others.
- NS engineers and management consultants
It was founded in 2005 and is led by a technocrat with over 30 years of expertise in operations management, marketing, and management process of small, medium, multinational, and big public sector companies. It has 250 to 499 employees. They are committed to manufacture the most productive when it comes to industrial electronic components for the areas of power, manufacturing, transport, communication, and energy (NS Engineers, 2021). They offer industrial automation services while using a minimal amount of work or expense, which allows us to obtain maximum productivity.
NS Engineering is the global leader in the design and production of wire harnesses, and as such, are the exclusive importers and distributors of several types of electronic connecting systems, including “cable assemblies”, “air release vents”, ‘Harting connections”, “machine lights”, and many more. They are dedicated to delivering consistently fulfilling demanding client demands.
Harson India Private Limited is a private business formed on July 27, 1963. It is an unlisted private business categorised as a “company limited by shares”. This company has 100 to 249 employees (Harson, 2021). Harson India Private Limited has been primarily engaged in manufacturing electronic products for the previous 58 years.
· Ideal lighting and smart technologies private limited
· Flameproof Switch Station
· Flameproof Rotary Switch
· Flameproof Switch Socket
· Flameproof Well Glass
· 150W LED High Bay Light
· Led Highbay Light
· LED Flood Light
· Junction Box
· Flameproof Flood Light
· Flameproof Street Light
· LED Street Light
· LED Stadium Light
· NS engineers and management consultants
· Cable assemblies
· Machine lamps
· Air release valves
· Cable and Wires
· Conduit Pipe
· LED Lightings
· Switches & Sockets
· Wiring Accessories
- Project Objectives
Ideal lighting and smart technologies private limited NS engineers and management consultants, and Harson are three Indian electronic SME which has the employee between the number of 100 to 600, these companies will be chosen by the Vietnamese person who wanted to collaborate with three Indian electronic SMEs and open an electronic goods factory in Vietnam as these three companies are leading SMEs in India with goodwill and positive feedback. This collaborative project will be named Hoang Hung Co Ltd.
The objective of the project is to build a strong company that will be a synthesis of the thoughts and works of Vietnam and Indian which will in turn aid in building a strong and potent electronic goods factory in the market of Vietnam. The company will choose the H? Chí Minh City of Vietnam to operate its functions from. It is the economic centre of the market in Vietnam and has a large population which would provide the company with the necessary market.
2. Environmental Analysis: Target Market
- PESTEL Analysis:
Vietnam's political environment
- Vietnam's political theory is socialist; most of its economic policies are capitalist in nature. And, Vietnam supports a strategy of developing and maintaining friendly ties with all nations, regardless of political views on global issues. It is a member of many renowned international organizations (Tien and Ngoc, 2019). It can favourable in supporting the electronic market to grow.
- Vietnam, on the other hand, has an extremely bad human rights record, which may adversely impact the electronic market as it can pose threats to the workers.
- Similarly, corruption is also an issue prevalent in its markets, although Vietnam has made significant attempts to remove it since 2016.
Vietnam's economic environment
- Vietnam is the world's 46th “largest economy”. The ‘gross domestic product (GDP)” was $245 billion in 2018 and exceeded $265 billion in 2020. It has a good and robust economic forecast in the next few years. These will positively help the electronic market of Vietnam to encounter success (Hoang and NGOC, 2019).
- Vietnam's main exports are electronic equipment, broadcasting equipment, phones, and integrated circuits etc, which are shipped to many nations such as the United States of America, China, Japan, South Korea etc, so it has a chance of amplifying its success in the market of electronic goods.
Vietnam's social aspects
- Vietnam has made tremendous economic development over the years; concerns about income distribution are rising. Electronic products have a high demand in the market of Vietnam (Khoa and Nguyen, 2020). Many opportunities are therefore available to earn money by operating in the sector of the electronic market of Vietnam.
Factors impacting Vietnam's technological development
- For a long time, Vietnam's IT revolution has been fueled, the country is home to several technology parks, Vietnam is presently the world's seventh-largest provider of information technology services (Phong, Khoi and Le, 2018). So it is evident from the facts that the electronic market has a chance to get flourished which is an also a persisting fact in Vietnam and it also can be said that the market of electronic goods will be more flourished in the long run.
Vietnam's environmental factors
- It is worth mentioning that “coronavirus (COVID-19)” has posed a danger to its business environment and as swift economic development has resulted in “unsustainable use” of “natural resources”, these can adversely impact the growth of the electronic market and pose threat (LE, 2021).
- Carbon emission from electronic firms in Vietnam poses a grave threat.
Vietnam's legal environment
- Foreign firms are authorized to function in Vietnam and are recurrently optimistic to invest “directly or indirectly” by the government. Indeed, business law has grown considerably simpler in recent years and International investors also have the opportunity to quickly establish limited liability corporations, so these will favourably aid In flourishing the market (Tran and Nguyen, 2019).
- SWOT Analysis:
· The strength of Hoang Hung Co Ltd will be that it is a synthesis of three Indian Electronic SMEs so it contains a vast knowledge about the functions it performs.
· It will be a key player in its industry for its uniqueness.
· It has both Vietnamese and Indian bases which will make it stronger to achieve success.
· The carbon emission from the factory of Hoang Hung Co Ltd could cost it to pay a big price (Sharif et al., 2019).
· As it will be a novel company, people might tend to be stick to their older options than choose them.
· Other big electronic companies could overshadow Hoang Hung Co Ltd.
· It has planned put the price of its electronic goods very moderate, which will pose the ability to attract new customers and retain existing customers (Pandey and Vora, 2019)
· It could stand out in the market of Vietnam as the Indian intellect and intelligence are also fuelling its success.
· The major threat of Hoang Hung Co Ltd is that it will face the pandemic of coronavirus which imposed an adverse effect on it.
· As more businesses in the electronic market relocate operations to Vietnam, a heated struggle for skilled labour will begin, worsening an already severe scarcity.
3. Competitor Analysis
New entrants to the electronic industry of Vietnam will bring innovation and new ways of doing things, exerting pressure on Hoang Hung Co Ltd to cut prices, reduce expenses, and offer new value propositions to consumers. Hoang Hung Co Ltd must overcome all of these obstacles and erect effective barriers to maintain its competitive edge (Do, 2020).
- Bargaining Power of Suppliers
Almost every corporation in the electronic sector obtains raw resources from a broad variety of vendors. Suppliers in a dominating position may limit the market profits that Hoang Hung Co Ltd might obtain. Suppliers having strong negotiating power in the market may exploit their status to demand higher pricing from firms in the sector. Increased supplier bargaining power has the capacity to impose an influence on reducing the profitability (Cho, Ke and Han, 2019).
- Bargaining Power of Buyers
Frequently, buyers are a demanding group. They want the best products available at the lowest possible price. In the longer term, this might place a burden on the profitability of Hoang Hung Co Ltd.
- Threats of Substitute Products or Services
When a new product or service addresses equal clients’ demands, the profitability of the industry usually declines (Isabelle et al., 2020). A replacement product or service will pose a significant threat to Hoang Hung Co Ltd if it delivers a cost structure that is fundamentally different from the industry's current offerings.
- The rivalry between Current Competitors
If competition among current participants in a sector is fierce, it will push down prices and reduce the business's total profitability. Hoang Hung Co Ltd will be an electronic goods firm operating in a highly competitive market. This rivalry does affect the organization's overall long-term profitability.
4. Market Entry Method
As Hoang Hung Co Ltd is a collaborative company of three Indian electronic SMEs and the brainchild of a Vietnamese, the best market entry method that will suit it will be that of joint venture because it is formed when two or more firms form a jointly owned enterprise. A local firm will be one of the owners (local to the foreign market). The two or more businesses would then provide management for the new enterprise and share control of it.
This sort of enterprise has several advantages. It will enable the company of Hoang Hung Co Ltd to take advantage of the local expertise of a foreign market and to share costs. Nevertheless, there also might be some difficulties — there may be disagreements about who invests how and what earnings are divided.
5. Summary of Key Opportunities and Risks
From the SWOT analysis it can be assessed that it has many opportunities available for it as, due to its reasonable pricing, the value proposition for electronic items will put them in a position to capture new customers and keep existing customers (Ali and Anwar, 2021). Its capability to stand out in the Vietnamese market will be fueled by Indian intelligence. As this company works as a synthesis of two completely different cultures, it will be achieving success because it being completely distinct from the other companies in its functional arena.
It can also be evaluated that it has many threats to deal with as well, at first as the world of business is continuously fighting with the negative impact of coronavirus; Hoang Hung Co Ltd will also be affected (Chang, McAleer and Wong, 2020). The workers are suffering from the impact of lockdown; productions are being minimized as Govt. is not allowing all the workers to come to work. This is why revenue will also be lesser than expected. The conflict in the market of electronic companies will get increasingly fierce as more firms start their operations in Vietnam, this will pose a grave threat to the company of Hoang Hung Co Ltd.
A robust internet presence enables any company to develop its brand and establish the credibility necessary to attract additional consumers (Samiee, 2020). Along with making the business more visible, an internet presence provides a simple method for clients to learn more about what the company has to offer. Hoang Hung Co Ltd should build an internet presence for attracting customers and swelling a big amount of profit. They also should launch an advertising and marketing campaign aimed at potential investors so that they start their business catching all the eyes on them. COVID-19 has already affected the business environment of Vietnam so the company should take the required measures to safeguard the business from running in loss (Hiremath et al., 2020). They should prepare the business in such a way that it can overcome any hazards that it will meet in its way through success. And for that, they have to save a percentage from their profit and make insurance.
The previous sections of this study thoroughly analyzed three Indian SMEs that will partner with a Vietnamese individual to establish an electronic business in the Vietnamese market. Additionally, a discussion of the project's objectives and environmental analysis of the target market was also conducted. Additionally, a competitor analysis and market entrance strategy was also assessed. A comprehensive examination of major risks and opportunities has also been presented along with a variety of recommendations.
Ali, B.J. and Anwar, G., 2021. Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. Ali, BJ, & Anwar, G.(2021). Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. International journal of Rural Development, Environment and Health Research, 5(2), pp.26-39.
Chang, C.L., McAleer, M. and Wong, W.K., 2020. Risk and financial management of COVID-19 in business, economics and finance.
Cho, W., Ke, J.Y.F. and Han, C., 2019. An empirical examination of the use of bargaining power and its impacts on supply chain financial performance. Journal of Purchasing and Supply Management, 25(4), p.100550.
Do, N.M., 2020. An overview of strategic responses of Vietnamese higher education institutions. International Journal of Educational Management.
Harson, 2021. Home. [online] Harson. Available at: https://harsonindia.com/ [Accessed 4 Aug. 2021].
Hiremath, P., Kowshik, C.S., Manjunath, M. and Shettar, M., 2020. COVID 19: Impact of lock-down on mental health and tips to overcome. Asian Journal of Psychiatry, 51, p.102088.
Hoang, C.C. and NGOC, B.H., 2019. The Relationship between Innovation Capability and Firm's Performance in Electronic Companies, Vietnam. The Journal of Asian Finance, Economics, and Business, 6(3), pp.295-304.
Isabelle, D., Horak, K., McKinnon, S. and Palumbo, C., 2020. Is Porter's Five Forces Framework Still Relevant? A study of the capital/labour intensity continuum via mining and IT industries. Technology Innovation Management Review, 10(6).
Khoa, B.T. and Nguyen, M.H., 2020. Electronic loyalty in social commerce: Scale development and validation. Gadjah Mada International Journal of Business, 22(3), pp.276-300.
LE, Q.H., 2021. Factors Affecting Consumer Purchasing Behavior: A Green Marketing Perspective in Vietnam. The Journal of Asian Finance, Economics and Business, 8(5), pp.433-444.
Linkedin, 2021. Ideal Lighting & Smart Technologies P Ltd,. [online] Available at: <https://in.linkedin.com/company/ideal-lighting-india> [Accessed 4 August 2021].
NS Engineers, 2021, NS Engineers. [online] www.nsengineers.co.in. Available at: https://www.sengineers.co.in/ [Accessed 4 Aug. 2021].
Pandey, G. and Vora, A., 2019. Open electronics for medical devices: state-of-art and unique advantages. Electronics, 8(11), p.1256.
Phong, N.D., Khoi, N.H. and Le, A.N.H., 2018. Factors affecting mobile shopping: a Vietnamese perspective. Journal of Asian Business and Economic Studies.
Samiee, S., 2020. International marketing and the internet: a research overview and the path forward. International Marketing Review.
Sharif, A., Raza, S.A., Ozturk, I. and Afshan, S., 2019. The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: a global study with the application of heterogeneous panel estimations. Renewable Energy, 133, pp.685-691.
Tien, N.H. and Ngoc, N.M., 2019. Coping With Challenges and Taking Opportunities in International Business Strategies of Foreign Enterprises in Vietnam.
Tran, T. and Nguyen, N., 2019. Identify factors affecting business efficiency of small and medium enterprises (SMEs): Evidence from Vietnam. Management Science Letters, 9(12), pp.1987-1998.
Van Hong, P. and Nguyen, T.T., 2020. Factors affecting marketing strategy of logistics business–Case of Vietnam. The Asian Journal of Shipping and Logistics, 36(4), pp.224-234.