Vietnam is becoming more transparent and has promised to open its borders to international trade. Whether or not this is literally happening though is questionable. This is in part due to the communist regime still present in Vietnam. The so-called bureaucratic “red tape” makes it difficult to progress. Although this is the case, huge changes have been made in the country within the last decade or so, both economically and socially. These changes have helped the U.S – Vietnam relationship greatly. The U.S. removed the embargo that had previously existed against Vietnam and has begun to establish normal trading relations with the country, which helped lower tariffs. American companies now have the opportunity to target a brand new market. In doing so, many factors must be assessed. As is the case when penetrating any new country or market abroad, there are many challenges that must be face
There are however a large number of problems that American companies face (consumer- products companies and industrial products companies alike). First of all, competition is a bit of an issue in that the U.S had a late entry due to the previous economic trade embargo which hindered all trade until quite recently. Also, the banking system is extremely weak, it is very difficult to get a loan, and all land is state owned making it hard to build factories due to unpredictability on the part of the government. The population is still very poor and the infrastructure is even poorer. All these factors make it difficult to assess the actual success that a company may or may not have if investing in Vietnam.
The overall potential the country has for investment is obvious. Together with a growing middle class (which equates a larger potential workforce), consumerism is at an all time high in Vietna
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