Since the establishment of diplomatic relations in 1995, trade activities between Vietnam and the United States have grown nearly 250 times, from 450 million USD in 1995 to more than 111 billion USD in 2021. The US market has become one of Vietnam’s largest export markets. In the opposite direction, Vietnam is in the top 10 largest trading partners of the United States (2020). In this article, let’s analyze the SWOT model of the Vietnamese and US markets with Noble Network.

STRENGTH

Vietnam:

In order to attract foreign investment, the Vietnamese government has been continually improving business conditions through legal reforms and upgraded investment incentives for foreign investors that want to do business in Vietnam. This is reflected in the Law on Investment and the new Law on Enterprise which became effective in 2020.

Vietnam has abundant labor resources with broad technical skills and competitive labor costs compared to many countries in the world. Many US manufacturers are looking at markets with lower labor costs due to rising labor wages in other countries. For example company that specializes in making art glass mugs in the United States has chosen to partner with a Vietnamese business that makes plastic versions of cups because of its low cost of production.

United States:

The development of science and technology makes it easier to apply research to business, especially for agricultural projects. Typically, a wheat growing project in Vietnam will be implemented under the advice of agricultural experts from the United States on wheat varieties, soil conditions, and climate. This minimizes the risks that occur when implementing such a project.

 

WEAKNESS

Vietnam:

Many foreign investors have difficulty in understanding the legal procedures in Vietnam due to its complicated administrative procedures. For example, new products such as CBD oil or new business models that are entering in Vietnamese market for the first time do not have clear regulations, making it difficult for investors to meet administrative procedures.

United States:

The American market is easily affected by changes in the market since the U.S. economy depends heavily on consumer spending. This was most evident during the Covid-19 period when social distancing measures caused many businesses to close or restrict business. Export activities from Vietnam to this market were significantly affected.

OPPOTUNITIES

Vietnam:

Vietnam is one of the economies with the highest growth rates in the region and in the world. The explosive rise in middle class consumers diversifies demand to include foreign products and drives the economy’s spending growth, making the Vietnamese market attractive to many investors and entrepreneurs. This is why more and more luxury producers are choosing Vietnam as their next ideal destination in their global journey. One such US producer we worked with ships very high quality USDA beef products to consumers who want the best the world has to offer.. Another is the US producer of specialty functional art glass products mentioned earlier.

United States:

President Joe Biden’s $ 1,900 billion stimulus package was a driving force for the COVID-19 recovery of the US economy. Eperson received 1,400 USD from the above support package. US consumers mainly buy motor vehicles, furniture, entertainment goods and electronics, etc. Investment activities are also forecast to recover after the pandemic and again following any rebound recession, creating opportunities for Vietnamese businesses that export consumer goods to the world’s largest markets, as well as for receiving investment from US investors.

 

THREATS

Vietnam:

Being heavily influenced by the world markets, Vietnam’s economy is open and interdependent on global trade. so a change in world markets will affect the Vietnamese market. During the COVID-19 pandemic, the geographical distance between the two countries along with the scarcity of containers made the sea freight rates between Vietnam and the US soar, making it difficult for many Vietnamese businesses to export.

United States:

Vietnamese goods exported to the US must comply with very strict regulations on product quality and face rigorous price competition. For example, with plastic products used for eating and drinking purposes, the US requires thatplastic materials must not contain substances that are hazardous to health. Vietnam’s agricultural – forestry – fishery products are regularly taxed against dumping as they enter the US. Most recently, Vietnamese plywood producers are being investigated for anti-dumping. The investigation process and the results of the investigation will take about 6 months or more, causing many losses to the exporter.

 

This article has analyzed a SWOT model of US and Vietnam markets. Hopefully the above useful information will help you have a better overview of these two markets. Currently, Noble Network is actively operating in the US and Vietnam markets. We hope that with our experience and knowledge in these markets, Noble Network will be able to support many successful businesses to expand revenues and profits through trade international market.

 

Learn more about our available services here!