English
On the occasion of the early spring of the Year of the Tiger (2022), Assoc. Prof. Nguyen Dang Minh, President of GKM Finest Institute, GKM Vietnam Corporate, and lecturer at the Institute of Business Management, National University of Economics, Hanoi, gave a talk in the early spring on the economic flow program of the Voice of Vietnam (VoV1) on the 3rd day of the Lunar New Year, the Lunar New Year (February 3, 2022).
VOV Correspondent, Bao Ngoc: Thank you for participating in the economic flow program today.
Assoc. Prof. Nguyen Dang Minh: Good morning, The Voice of Vietnam’s audience. Good morning, Bao Ngoc.
Bao Ngoc: What do you think, sir, after listening to the recent summary of the evaluations by international organizations for Vietnamese brands?
Assoc. Prof. Nguyen Dang Minh: I think Vietnamese brands are becoming more and more known to the world, especially brands of traditional Vietnamese landscape beauty (for example, the beauty of Son Doong cave, Ha Long Bay, area ecotourism resorts, and tourism products of Vietnam are becoming increasingly known worldwide). Next are the brands related to the garment industry. Besides, recently we have had a number of brands related to agriculture, for example, Luc Ngan litchi, which is known in Europe and Japan, some handicraft brands made from bamboo and coconut… Especially after the COVID epidemic, the world has returned to living closer to nature. Vietnam’s industrial products are mainly known when we participate in the supply value chain and do outsourcing for large corporations such as Samsung and the world’s major firms such as Intel… The final products of Vietnamese people, like agriculture and tourism, are not known as much as the final products of They are made in Vietnam and made by Vietnam, and they reach the end consumer without further assembly or processing. Yes, but not much.
Editor, Bao Ngoc: In order to achieve the current achievements, the Vietnamese brands are still quite young. What factors could it be due to, sir?
Assoc. Prof. Nguyen Dang Minh: Among the brands of nearly 200 countries flowing on the world economic map, there are many factors contributing to a good brand. The first is to have “a very good human resource with hands and brains to ensure the fastidious criteria of consumers in different countries”. Examples are EVFTA in Europe and Japan, and G7 countries (the human factor). The second is the “management factor,” that is, how we manage so that cost and quality are maintained regularly according to shipments. Next is the “technological factor,” which aims to jointly maintain quality and a good source of raw materials to create good products. If we cannot manage all four factors at the G7 level, we won’t be able to export to the G7. If we do not manage well at the G20 level, we cannot export to the G20 and not only be equal to them, but must be better than them because every country prioritizes domestic products. Ours must then be better than theirs in terms of those criteria to be able to sell them. Many criteria are set for quality competition, price competition, or environmental protection. Those criteria are for all countries competing with each other, not just giving priority to only one country. Because Vietnam has not met those criteria, we still have many difficulties.
Editor, Bao Ngoc: Many Vietnamese corporations are aware of that. Do you think investing in Made in Vietnam and Made by Vietnam products is a very open direction?
Assoc. Prof. Nguyen Dang Minh: I agree that the countries that want to escape from the middle-income trap and become prosperous have all their key products under the national brand “Made in and Made by,” which means made in that country and made by the hands and minds of the people of that country. from R & D to production and distribution. The added value often lies in the product design technology and the design of the after-sales and sales processes. Production is also available, but if we can only do production, we may lose about 80% of the value and get only the processing cost. Therefore, many countries focus on investing in production in their own countries and by their people for a number of key products in which that country has advantages. So, if before globalizing, we say “Made in” is synonymous with “Made by,” then when globalized, rich countries can move factories to poor countries to do outsourcing, so it could be “Made in” the country but not necessarily “Made by” that country. So, it is important to understand that with Made in Your Country, the added value received will be enough to get out of the middle-income trap. As a result, it is critical that it has established a competitive advantage.
Bao Ngoc: especially for businesses that benefit from export advantages. Can you give some typical models in production and business that you feel are appropriate during the ongoing epidemic period?
Assoc. Prof. Nguyen Dang Minh: Previously, we joined the global value chain to produce a part or parts and export them to a few countries where they could control the chain, which means they made the product from the beginning to the end. When the epidemic took place, the supply chain was broken; the exchange of final products between countries was done through shipments and air cargo, and that is a chance for countries to look back. If the global supply chain is broken and we have the final product, we can still trade internationally. I think we humans will enter a new era where we exchange goods with each other in a different way, i.e., we will exchange end products, those products that a country has strengths in both nature and people. So, countries focus on exploiting their strengths, which are the final products made by them, and completing their value chains. The COVID epidemic has made it clear that if we can only participate in a few details when the global supply chain is broken, the whole system will be closed and we will lose all our value. The theory of the value chain and participating in the global value chain due to the pandemic needs to be re-examined very clearly after the pandemic, especially for developing countries where we must exploit our competitive strengths to make final products to escape from the middle income trap.
Bao Ngoc: However, according to Nikkei Asia, Vietnam’s COVID recovery index in the months of August and September of 2021 was close to the bottom of the table, ranked 118/121, then recovered but still ranked low, while other ASEAN countries had a higher recovery index. What is the reason Vietnam has not been able to make a strong breakthrough during and after the pandemic, sir?
Assoc. Prof. Nguyen Dang Minh: When talking about causes, we have to talk about what factors are needed to make a good product. Firstly, we must have good people. Good people here must be understood as people with good management and technology capabilities. Secondly, we must have a strategy to find the key products of each company, the Made in Vietnam products. The third is that we must have technology. And finally, businesses must have the advantage of facilitation from state agencies in the easiest and most convenient way to work together in the direction of a Made in Vietnam business, Made by Vietnam. And Vietnamese people must have the spirit of supporting Vietnamese goods throughout the nation’s startups. A country recovering quickly must have that spirit. They quickly define their main products and quickly analyze the factors influencing their recovery, especially human and policy factors. That is, everyone looks in the same direction and acts in the same direction, not in determination but in action. Fast or slow, it is due to the synchronization of the way of thinking and doing, especially related to people, technology, and management, materials, and determining what the key products are, and keeping making key products to reach the next level. If you can do that, it will be a fast recovery. If you cannot do it or are slow, it will be a slow recovery. In Vietnam, we think that Made in Vietnam has just started, so in terms of policy, human resources, management technology, and technical technology, preparing for Made in Vietnam is just the beginning.
Bao Ngoc: As you have just shared, so far, we are still familiar with Vietnamese enterprises that only participate in a small stage in the production chain, such as processing and assembly. However, now a number of enterprises are also able to produce end-to-end chains but are still limited. So, do you have suggestions for manufacturing enterprises to close the chain to increase product value?
Assoc. Prof. Nguyen Dang Minh: Previously, we considered foreign enterprises to be the owners of the chain, and we had to meet their criteria to join their chain, which were strict criteria such as manufacturing auto parts for motorcycles, manufacturing agricultural products, or whatever. They ask us how to do it, and we try to do it accordingly to be able to sell it to them. However, if Vietnamese people can produce Made in Vietnam goods and own the chain, chain ownership will be transferred to Vietnamese enterprises, and Vietnamese enterprises will own the chains. Vietnamese enterprises own the supply chain, and other Vietnamese enterprises participate together in the supply chain of Vietnamese people. And we work together to make products. So, we can make better products cheaper to export to that country. For example, if I want to sell Made in Vietnam products to Germany, my goods must have the same quality, but the price must be lower, or I must have something outstanding that Germans want to consume, or those products must be better than those of Southeast Asian countries. This means that Vietnamese businesses must join hands to create Made in Vietnam products, and those products must contain the same value as products from developing countries that are consumed in Vietnam. That is the challenge for chain owners. And businesses participating in the chain must have the spirit of the Vietnamese people. In this way, we hold hands together to make Made in Vietnam products to conquer the world, in addition to revenue and profit, to ensure national pride. And we will be able to overcome the trap of joining the global value chain. In order for us to overcome that trap, we will need state agencies and media agencies to really encourage support in terms of policy and morale, so that Vietnamese consumers will believe that these products are real, made real and proud of themselves. All of that needs to start, and once it’s on track, one business learns from another. We participate in both of the global values and have the product as the owner of the chain. And gradually, we shift to being that Vietnamese people can make products that only Vietnamese people can do, much like the Japanese having products that only Japanese can make and the Germans also having products that only Germans can make. Each country has its own key product. It is necessary to change the mindset, change the perception, and change the actions and role of the chain owner to lead the businesses in the chain for national self-respect and ethnicity.
Bao Ngoc: Reality has proven that digital transformation plays an important role in helping Vietnamese brands survive the COVID-19 pandemic as consumers change their online shopping habits. Can Vietnamese products sold on e-commerce platforms reach more customers? Is this a sustainable direction for Vietnamese brands in the near future?
Assoc. Prof. Nguyen Dang Minh: Digital transformation is just one of the ways. As I understand it, digital transformation must be a smart and scientific way of doing things based on the potential of our own country for the transformation from negative to positive. I can do whatever I can to turn a negative or bad figure into a positive and good number. For example, sales numbers, profit numbers, quality numbers, price numbers, those numbers are all measurable and those numbers are translated by scientific methods of management with technology and policy support. But we understand that digital transformation uses a lot of digital conversion solutions. I think that is not enough. And we must promote the spirit of total force, and the numbers must be transformed for the digital transformation to take place from bad to good and good to better. If so, what you just said is also a way for us to multiply the brand. The brands that want to be elevated must be lifted from the product research stage, to the production stage, to the sales stage, not just the final stage of bringing the product away. On the contrary, if the product is not good, it will bring out bad information. And it has the opposite effect. I think digital transformation must start with changing awareness, changing technology methods, and management methods to make more real products at reasonable prices to conquer domestic and international markets. Only then can we push the digital tools. That means changing from business strategy to business method, the way of technology management, to have a good product and test it very carefully. Then we will bring it to the media, so Vietnamese products will be recognized. Vietnamese and international customers trust and love it.
Bao Ngoc: What should be the future direction of Vietnamese businesses to be able to elevate the Vietnamese brand and make a mark on the path of integration?
Assoc. Prof. Nguyen Dang Minh: I think Vietnamese businesses must look back to see what the strengths of Vietnam, or of Vietnam, or the quintessence of the land are, and what the good products are, which can be very good stories to tell the world that these products are coming from Vietnam. Branding is a journey, not a short-term investment. All factors affecting Vietnamese products, such as quality and price, especially the way the product is branded, must be in place so that the new brand is sustainable. Otherwise, we only use marketing methods to create a brand for a short time, and then the brand falls off on its own. So, we must pay attention to sustainability so that people talking about that product mean they mention Vietnam. The third is that we have to manage technology and manage operations so that customers can experience it through stories. And we have to aim for the elite of business, trying to go a long and sustainable way from generation to generation to be able to create quintessential Vietnamese products.
Bao Ngoc: Thank you, Prof. Nguyen Dang Minh, for your sharing.
GKM on the 3rd of February, 2022