(Luận văn HV chính sách và phát triển) enhancing the effectiveness of import and distribution channel of vindrink ,JSC

Preamble
Import and export has been holding the leading position in foreign trade
activities. Nowadays, not only in developed countries where this activity has
been going wild, but also in developing countries, this trend has been growing
strongly. Incorporating with this trend, many import and export companies in
Vietnam have been born which making a new development of foreign trade in
Vietnam.
Aware of this, after a period of studying professional subjects and as the
request of the school about the internship, I applied for 4-week internship at
VINDRINK.,JSC. According to the knowledge that I have gained through
classes as well as the useful information which was accumulated during the
internship, I decided to choose project: “Enhancing the Effectiveness of
Import and Distribution Channel of Vindrink.,JSC” in order to

understanding and practically learn about the import activity.
There are three main parts of the thesis:
Chapter 1: The theoretical basis of Import Activity at VID
Chapter 2: Evaluate Import Department at VID
Chapter 3: Orientation and Solutions to enhance import business
efficiency at VID

In order to accomplish this minor thesis, first of all, I would like to thank the
Board of Directors and Sales Department of VINDRINK., JSC for creating
favorable conditions for me to practice at the company in the past few months. I
would like to sincerely thank MSc. Pham My Hang Phuong – Who has
wholeheartedly guided, contributed advices, answered questions for me in the
process of writing this graduate thesis.
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Despite trying to improve the thesis, but due to the short time of internship
and the limited understanding, this graduate thesis cannot avoid errors.
Contributions from teachers would help me to make this thesis more complete.

Student

Bui Nhat Ha

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Chapter 1 . The Theoretical Basis
1. Definitions, characteristics and roles of importation
1.1. Definitions

Importing play a pivotal role of foreign trade, it is one of the two basic
activities that constitute foreign trade. According to article no.28 in Vietnam
Commercial Law 2005 “Import of goods means the bringing of goods into the

territory of the Socialist Republic of Vietnam from foreign countries or special
zones in the Vietnamese territory, which are regarded as exclusive customs
zones according to the provisions of law”.
According to Clause 1, Article 28 of the Commercial Law 2005 , the
definition is as follows: "Importing goods means that goods are brought into the
territory of Vietnam from foreign countries or from special areas located in the
territory of Vietnam to be considered regions. Private customs in accordance
with the law".

The Market Business News also defines the term “Import” is understood as
“Imports are goods or services of foreign origin that importers bring into a
country”.

Imports are important for the economy because they allow a country to
supply nonexistent, scarce, high cost or low quality of certain products or
services, to its market with products from other countries. Import also aims to
strengthen the economic facilities, modern advanced technology ... enhance
technology transfer, save production costs, labor time, and contribute to the
production development of society is a highly effective way.
On the other hand, import creates a driving force for domestic
manufacturers to optimize production system, create apparatus to compete with

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foreign manufacturers. So in this thesis, I used the definition as article no. 28 in
Vietnam Commercial Law 2015 to define what is importation.

1.2. Characteristics of Importation

Import is an international trading activity, it is a complex and organized
system of trade relations from inside to outside. Therefore, import activities
bring out high economic efficiency. However, it can also cause unpredictable
consequences from the external economic system that a participating country
cannot control by itself.
Import activities are organized, perform many tasks and many different
stages. Starting from foreign market surveys, selection of imported goods,

transactions, conducting negotiations and signing contracts, organizing contract
implementation until receiving goods and paying. Steps and tasks must be
thoroughly researched and analyzed to capture the advantages and achieve the
results that company wants.
Import includes activities of trading transactions between people or
corporates from different nationalities. With the characteristics of large, difficult
to control market, the payment currency must be foreign currency for a country
or both, and different countries participating in import activities must follow the
customs of the locality and international practices.
Import activities take place on a very wide range both in space and time. It
can be carried out on the territory of a country or in many other countries around
the world. Besides, it can take place in a short or even yearly period depending
on the contract signed between the parties.
Import activities take place in all areas. Imported goods can be consumer
goods or production materials, machinery or high-tech technologies to benefit
importing countries.
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Import brings benefits not only to the enterprises themselves but also to the
economy and people's lives. A developed import sector contributes in reducing
the unemployment rate as well as improving the economic state of importing
country.

1.3. The roles of Importation

Importing is an important activity in international trade. It directly affects
the production state and human life (through consumption of imported goods).

Through import, it enhances the technical facilities, advanced and modern
technology for the production process and people will also be able to consume
products that cannot be produced in their country or production cannot meet
domestic demands.
Import has the following major roles:
1.3.1. For the World economy

Beforehand, through import activities, countries around the world have
opportunities to understand the customs, culture and political ... of other
countries which they co-operate with. Thereby contributing to speeding up the
process of economic integration among countries, fully exploiting their
comparative advantages and using human and natural resources more
appropriately.
Import activities will stimulate production and consumption in each
developed country. It makes the volume of goods and demand in the world
economy increase, thereby also improving people's living standards.
Import will help developed countries or developing countries have the
opportunity to learn a lot of experience in managing and acquiring scientific and
technical achievements as well as serving the industrialization and modernization
process.
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Import promotes economic integration between countries and regions. It
makes the international division of labor take place all over the world, creating a
reputation for each member state to be enhanced. At the same time, activities
such as insurance, tourism, services and trade also developed rapidly.
1.3.2. For the State economy

Vietnam is a developing country so that importing goods is indispensable
for the process of developing the economy and accelerating the industrialization
and modernization of the country. Thus, import activities have a huge role for the
Vietnamese economy.
Importing construction equipment helps process of material and technical
construction to shorten time and effort. It facilitates the development of the
economy with modern equipment lines. By importing modern equipment, it
helps domestic workers have opportunities to improve their skills and
knowledge, managers have conditions to improve knowledge of qualifications
and management.
Importing goods makes it possible to diversify sorts and types of goods,
consumers will be able to choose goods that are more suitable for their income.
This also makes a contribution in improving people's lives. At the same time,
import activities also timely replenish domestic goods due to inadequate
domestic production.
Thanks to importation, the domestic manufacturing industry will be able to
eliminate weak production units with no competitiveness. Besides, businesses
have to face the need to innovate both technology and management in order to
maintain profits and improve the competitiveness of their goods, facilitate the
dominance of the domestic market and gradually proceed to exportation.

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Eventually, importation will create opportunities for our country to expand
diplomatic relations with other countries. Then enlist their support for our
economic development.

1.3.3. For the Enterprises

Through import activities, enterprises must innovate and improve quality
technology and product services in order to increase the competitiveness of
domestic products. Thereby, production efficiency is enhanced, workers find
jobs, and workers' life is improved.
Import activities are complex international activities because of the
exchange of many different economies of culture, politics, customs, and
languages... Therefore, enterprises are forced to perfecting and innovating
business management, officials and individuals always have to gain experience
and improve professional skills... It enhances the professional capacity of
members of the enterprise.
Importation plays an important role in increasing the position and reputation
of the company both in domestic market and international market. The profit
from business allows the company to build technical facilities, expand business
fields in both depth and width, contributing to solving jobs for workers and
improving life of officials and employees, solving problems of society,
improving and developing business relationships.
Import brings conditions for businesses in connecting between domestic
and foreign entities in a self-conscious way, stemming from the interests of both
sides, creating the strength of the subject in the enterprise in a practical way.
Therefore, imports mean very important for a nation's development, it exists
as a necessity.

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2. Types of importation

Import business activities can only be conducted in import-export
enterprises directly, but in fact, due to the impact of business conditions,
Vietnam creates various import and export forms. In this section, we only
consider a few common and popular forms of import that are being applied at
enterprises in Vietnam.
2.1. Direct Imports
Definitions: According to the Commercial Law 2005, direct import is
defined “For this form, the buyer and the seller of the goods directly deal with

each other, the buying and selling process is not tied to each other. Buyers can
buy without selling and vice versa. Direct import is conducted quite simply. In
particular, the importer wants to sign an import business contract, must study the
market, find suitable partners, sign and perform contracts, self-invest, bear all
risks and costs in deal…”

Characteristics: In direct import, businesses must take all the tasks. This is

an activity that must be carefully considered accurate from the initial step of
researching information to signing the contract. The reason for this due to
businesses have to invest their own capital to bear all transaction costs, market
research, delivery, warehousing, cost to consume goods, taxes payable when
businesses Self-trading, enterprises are allowed to import imports and when
consuming goods, enterprises are subject to sales tax and item tax. As usual, the
business only needs to make a contract with the foreign party, and the domestic
purchase contract will be made after the goods arrive.
2.2. Entrusted Imports
Definitions: According to the Decision no. 1172/TM/XNK dated September

22, 1994 which released by the Minister of the Ministry of Trade, entrusted

import is defined “Entrusted import and export is commercial service activities
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in the form of leasing and importing for export or import services. This activity
is carried out on the basis of an export or import entrustment contract between
enterprises, in accordance with the provisions of the Ordinance on Economic
Contracts”.

In other words, entrusted import is activity formed between a domestic
enterprise with its own foreign currency capital and a demand for import of a
commodity but they do not have the right to participate in direct import-export
relations, thus they entrust one enterprises with the function of directly
conducting foreign trade transactions shall import according to their
requirements. On the other hand, authorized importers are importers that act as
intermediaries to import goods.
The entrusted party must negotiate with foreign countries to import goods at
the request of the entrusting party. Normally, a entrusted party is entitled to a
remuneration of 0.5% to 1.5% of the total contract value, also known as a entrust
fee and they must pay income tax on this source also, when conducting import
Entrusted enterprises only calculate import and export turnover, not include
turnover and pay value added tax.

Characteristics: In this import operation, the entrusted enterprise does not
have to invest capital, nor apply for quotas, nor study the imported goods market,
but only to act as a representative to find and deal with foreign partners, sign
contracts and import procedures as well as changing the trustees' claims,

claiming compensation with foreign parties when there are damages.
When choosing the type of entrusted import, enterprises must set up 2 kinds
of contract:
- A foreign contract (purchase with foreign countries)
- An internal contract (entrusted importation with the trustee)
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2.3. Joint Venture Imports
Definitions: According to the Commercial Law 2005, joint venture import

is defined: This kind of importation is based on the basis of voluntary economic
linkages between enterprises (of which at least one direct import-export
enterprise) with an aims to coordinate skills to jointly trade and set up advocate
measures related to import activities, promote this activity to develop in the most
beneficial way for both parties to share profits, losses and damages.
Characteristics: Compared with self-trading imports, enterprises are less

exposed to risks because each joint venture enterprise only has to contribute a
certain amount of capital, the rights and responsibilities of each party also
increase with the capital contribution. The division of cost and turnover tax
according to the ratio of capital contribution, interest and loss depends on the
two parties' agreement to divide based on contributed capital plus the
responsibility that each party must handle.
In joint venture import, enterprises that import goods will be counted for
export turnover but when they bring goods to consumption, they only calculate
the turnover on the number of goods calculated according to their capital
contribution ratio and only pay sales tax on those goods. .

Direct import and export enterprises must implement 2 contracts:
- A purchase contract with foreign countries
- A joint venture contract with another business

2.4. Processing Imports
Definitions: Processing activities are stipulated in Chapter 6 of the

Consolidated Document 09 / VBHN-BCT in 2017 “Processing import is a form

of import whereby the importing party (the processor) processes the import of

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raw materials from the exporter (the outsourcer) to carry out the processing
according to the provisions of the contract signed between two parties”.
Characteristics: The relationship between the outsourcer and the processor

is defined in the processing contract. In the processing contract relationship, the
processing party shall bear all costs and risks of the process of manufacturing
processing.
In the processing relationship, the processor will collect an amount called
processing fee while the outsourcer will buy back all finished products produced
during the processing.
In processing contracts, it is specified that commercial conditions such as
finished products, raw materials, processing prices, acceptance, payment and
delivery.
2.5. Re-export Imports

Definitions: Based on the provisions of the 2014 Customs Law and Decree
No. 69/2018 / ND-CP, the concept of temporary import for re-export is

understood as the fact that a Vietnamese trader imports goods from one country,
is filled enough customs clearance procedures for import into Vietnam, then
Vietnamese traders carry out procedures for exporting these imported goods to
another country or it may be the country that originally exported. At the same
time, temporarily imported goods are re-exported in the form of business, there
is time to stay in Vietnam not more than 60 days from the time when Vietnamese
traders do temporary import procedures through customs areas.
Thus, re-export imports always attract 3 participating countries: exporting
country, re-exporting country and importing country.
Characteristics: Enterprise in re-exporting country must establish 2 types

of contracts

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- Import contract
- Export contract
Enterprise in re-exporting country must calculate the costs of the export and
import parties so that they can obtain a sum greater than the total cost in order to
conduct the operation.

3. Main content of Goods Importation

Import operations have much more complex tasks than domestic business

activities due to differences in subjects and geographical distances. Therefore, in
order to carry out import activities effectively, import and export enterprises
need to clearly define their responsibilities, content and work order. Each step,
each operation must be studied, fully implemented, carefully and placed in
mutual relationships, taking advantage of the advantages to ensure the operation
of the highest efficiency, full service, Timely for domestic production and
consumption. In this part, I refer to a dissertation written by ms. Huynh Ngoc
Doan Trang, 2015.
3.1. Market Research

The market was born and developed in line with the development history of
commodity production, where there is production and circulation of goods, there
is a market. Market research is the first job, it is essential for any business
enterprise, not just import-export business. Market research of import-export
enterprises includes the following stages:
3.1.1. Identify Imported Products

The purpose of identifying imported products is to choose the most
profitable business item. To do this, businesses must answer the following
questions:

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- What kind of commodities are needed in the domestic market?
Businesses need to identify the goods along with the brand, model,
quality, price and quantity of the goods.
- How is the consumption of that product in the country? Each type of

goods has its own consumption habits, which is reflected in the
consumption time, tastes and changing rules of supply and demand
relation on that market.
- Which stage is the item in the life cycle? Any product has its own life
cycle. Capturing the commodity that the business is planning to live
in at any stage of its life cycle will determine the measures needed to
boost sales and earn more profits.
- What is the production status of that item in the country? If the
company wants to do business effectively, regardless of any business
must pay attention to the relationship of supply and demand for
business products. The problem that import-export businesses need to
consider here are: production capacity, production season, growth
rate of that product in the country. The selection of imported goods is
based not only on the calculations, estimates and specific
manifestations of the goods but also on the experience of the market
researcher to predict fluctuations in market prices. Domestic and
foreign schools, the ability to negotiate to reach more favorable
trading conditions.
3.1.2. Market Capacity Research

For importers, it is important to understand the market volume of goods to
import. We can understand the market capacity of a good as a commodity traded
on a certain market range, usually a year. Market capacity research needs to
determine the real needs of customers, including the amount of reserves, the
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changing trend of demand from time to time, regions in each production and

consumer sector. Besides, along with determining demand capture, knowing the
market's ability to supply includes consideration of characteristics, properties,
alternative production capabilities and the ability to choose to trade.
Market capacity is not fixed, it varies depending on the situation of the
situation, the combined effect of many factors in certain periods.
3.1.3. Market Prices Research

In the worldwide market, prices not only reflect but also regulate the
supply-demand relationship. Properly determining the price of goods in imports
has a great meaning to the effectiveness of international trade.
Prices in import operations are international prices. International prices are
representative for a certain type of goods on the world market. That price must
be the usual commercial transaction price, without a special condition and paid
in freely convertible foreign currency.
Predicting the fluctuating trend of commodity prices in the world is very
complicated, sometimes it is in an upward direction, sometimes it is in a
downward direction, there are times when commodity prices tend to be stable but
this trend is only temporary. In order to accurately predict the volatility trend in
the world market, we must first rely on the research results and predictions about
the market situation of such goods, to appreciate the impact of factors affecting
movement trend of commodity prices.
The factors affecting commodity prices in the world market are many and
can be classified in many different ways. When predicting the trend of price
fluctuations in the long term, it is necessary to analyze and assess the impact of
long-term factors such as cycle, value ... when predicting the trend of price
fluctuation in short time, it should be analyzed to assess the direct impact of

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changes in supply and demand and temporary factors such as seasonal or natural
factors.
3.1.4. Business Planning

Based on market research then proceeded to establish import business plan.
A business plan is a specific action plan of a purchase or sale of goods or
services. Business plan is the basis for professional staff to perform tasks, divide
big objectives into specific small objectives to lead and manage business
continuously and closely.
Creating a business plan includes these following steps:

Step 1: General assessment of the market situation

Analyzing and evaluating the market situation and foreign suppliers, the
goal of this step is to compare many supplier markets in order to select some
attractive suppliers for the businesses. First of all to save time and cost, it is
necessary to limit the assessment by immediately eliminating some markets
which are obviously unattractive for businesses because many reasons belong to
the product itself are also the standard immediately some supply markets.
After eliminating supply markets with absolutely no prospects, the
remaining suppliers are generally evaluated in the following aspects:
-

Political environment

-

Economic - Cultural environment

-

Competitive environment
Step 2: Evaluate the ability of the company

In front of competitors, company needs to establish a relative assessment of
their strengths and weaknesses. On the one hand, how does the enterprise have
superior capabilities, the current or potential status of the business, the resources

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that company and competitors can mobilize from themselves or from other
sources outside of the firm.
Step 3: Identify markets, Items and Quantities for importation

After analyzing suppliers' capabilities and business capabilities, the next
step is to select imported goods that are suitable for company conditions. This
item must meet the requirements set out by both parties: price, quality,
packaging...
Determining the object of the transaction to import including:
-

Location and trading time

-

Trading representative company name

-

Trading volume and price

-

Delivery form and payment method
Step 4: Identify markets and Consumers

The market is a whole that always includes a very large number of
customers with different buying characteristics and financial capabilities, so that
company needs to determine the market segment to consume products so that
they can be effective.
Most attention should be paid to the following points:
-

Customers that company aim at must be specific

-

The size and effectiveness of the market must be measured feasibility

-

Company must recognize and serve the market segment that has been
divided according to certain criteria
Step 5: Determine Domestic prices

The price of imported goods will be agreed by the two parties but the
importer must base on the following factors to provide the minimum price in
order to maximize the benefits of the company:

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-

Analyzing commodity prices of the same type on the domestic and
international markets at the present time or the reference prices of
competitors entered

-

Price must meet the objectives set by the enterprise as the target of
net profit, tax ...
Step 6: Evaluate Effectiveness and Overcome limitations that reduce
business performance

Goods imported into firm in the market, the results obtained may be losses
or profits due to many factors arising in the business process. After consuming
goods at the end of the period, it is necessary to summarize and evaluate the
business efficiency and find out the causes affecting the business situation of the
enterprise to propose remedial measures.

3.1.5. Dealing, Negotiating and Signing Contracts

Dealing

After the market research phase, customer selection, business items and
business plan, the next step is that the company needs to approach the partners in
order to proceed with the purchase and sale. The dealing process is the process of
exchanging information about trade conditions between parties. The transaction
includes following steps: ask for price, offer, order, refund, accept – confirm.
Negotiating

This is a negotiation step, exchanging with each other the conditions for
buying and selling import-export businesses to come to an agreement to sign
contracts. Negotiations often take the form of: negotiation by mail, telephone
negotiation and face-to-face negotiations.

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Signing Contracts
The contract is an agreement between the parties, the seller (exporter) who
has the duty to deliver the goods and transfer the ownership of the goods to the
purchaser (importer), and the purchaser is obliged to pay the whole amount of
money according to the contract.
Contracts can be considered as signed only if the parties sign the contract.
The parties must have legal status and address specified in the contract. The
contract is considered signed only when the authorized participant signs the
documents, otherwise the contract is not recognized as a legal document. In
many cases, a contract with three or more parties can be done by all parties
signing a unified document or by a written contract with a hand-written quote

contained in each contract.

3.1.6. Preparing for the Import Contracts

This period includes the following tasks: hiring transport vehicles,
purchasing cargo insurance, customs clearance, receiving goods, checking
imported goods, making payment procedures, making complaints and settling
complaint (if any).

Hiring vehicles
Enterprises choose to hire the suitable means of transport such as: voyage
charter, liner charter... depending on the characteristics of imported goods.
If the firms import frequently in large quantities, it is advisable to hire a
voyage charter and if they import with small quantities, it is advisable to hire
liner charter.

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Purchasing cargo insurance

Insurance is a commitment of the insurer to compensate the insured party
for the losses or damages of the insured subject to the risks (agreed) caused, only
in the case of insured party has paid a sum called insurance fee for their goods.
Customs clearance

Custom declaration: Goods owners must declare details of goods into
customs declarations honestly and accurately, and at the same time, goods

owners must determine by themselves the goods codes, tax rates and tax
calculation prices of each imported and calculate the payable tax amount on the
customs declaration.
Presenting imported goods: Customs authorities are allowed to inspect
goods if necessary.
Implementing Customs decisions: After checking the documents and goods,
the customs make a decision to allow goods to cross the border (customs
clearance) or go through with some conditions or worst, goods are not allowed to
be imported... However, goods owners must strictly abide by customs
regulations.
Receiving goods

Importing enterprises need to perform tasks such as signing a trust contract
for transport agencies to receive goods; confirm with transport agency plans to
receive goods on ship schedule, goods structure...
Making payment procedures

There are myriad of payment methods such as cash payment, payment by
telegraphic transfer (T/T), collection of payment, letter of credit (L/C)... Any of
these payment methods must be clearly specified in the sales contract.
Enterprises must conduct payment in accordance with the signed contract of
purchase and sale of goods.
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Complaining and Settling complaints

While import contracts are performing, in cases goods owners find that the

goods are damaged or have losses not in accordance with the signed contract, the
enterprises shall have the right to file a complaint to the carrier or the seller.
Depending on the content of the complaint, the importer and the complained
party have different solutions. If the two parties cannot resolve the dispute
together, they can file an application to an economic arbitration or an economic
court according to the contract. However, the complaint will take a lot of time
and money for both parties, so the consideration of the law should be considered
carefully.

4. Factors Affecting Importation
4.1. Internal Factors

The domestic market is growing along with consumer psychology preferred
to use foreign goods rather than domestic goods, it derived from the difference in
quality and design. This is a great opportunity for import and export companies
in general and VID in particular.
4.1.1. The organizational structure

Import activities need a complete leading organization which is suitable for
a characteristic of an importing company. In the case that the organizational
structure is fail, it will affect the effectiveness of the company businesses.
4.1.2. Human Factor

In import activities and importing companies, starting on market
researching to signing and implementing the contracts needs the staff to
understand clearly and professionally proficient, especially when they have to
work with foreign partners.

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Human factor plays a vital role in the effectiveness of the organization and
the success of the firms.
4.1.3. Capital and Technology factor

Capital and technology directly affects to the business activities of the
company as well as import activities. Capital and technology decides business
area as well as the size of the business. These factors help company can
smoothly operate and get highly effective.
Capital and technology has a strong connection with each other. If the
enterprise has a solid source of money (capital), they can have the state-of-the-art
technology as a result of it and get high level of effectiveness and vice versa.
4.1.4. Consumer Taste

Although in the year of 2017, domestic products still held with more than
92% of consumers but the percentage of foreign products consumers is growing
up. According to the survey of Vietnam high-quality goods in 2018 showed that
after only one year, the percentage of Vietnamese consumers who loved and
often bought domestic products fell to 60% and 70% respectively. This shows
that this is a good signal for the future business of VID.

4.2. External Factors
4.2.1. Political and Economic Policy Factors

In general, import and export business activities and import activities, this is
an international trade trading activity, so it is directly influenced by political
factors, laws of each country as well as of international. Import trading
companies are required to comply with the regulations of the relevant countries,

international practices and laws.
Stable political environment, strict open-air laws that do not change
regularly have great influence on the operation of the economy in general and
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import activities in particular. The stable environment promotes international
trade between countries and between economic entities in different countries.
In contrast, unstable political and legal environment will greatly limit the
nation's international trade activities in general and import activities of
enterprises in particular.
Along with the trend of globalization, importation has been holding an
important position in the country's economy. The Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP) became effective
as from early 2019 and the EVFTA Agreement is expected to come into force in
the year 2019 will be an opportunity for businesses in expanding and developing
revenue.
Since 2007, Vietnam has officially become a member of the WTO, marking
an important milestone in the process of international economic integration,
opening a new era for Vietnam's trade. The ASEAN-Japan Closer Economic
Partnership (AJCEP) which was signed in 2009, help company gain great
benefits when VID directly benefiting from 92% of goods in the Thailand will be
exempted from tax.
In recent years, our country has accelerated the signing of agreements such
as the ASEAN Free Trade Area (AFTA) which was officially accepted in 2012.
Thanks to this agreement, import and export enterprises in general and
VINDRINK Company is directly benefited from preferential tariffs, import and
export tax rates are reduced... help company be able to be more competitive than

other competitors on the market.

4.2.2. Exchange rate and Foreign currency rate of imported goods

The exchange rate between Vietnamese currency and foreign currencies has
a great influence on import and export business. It affects the choice of payment
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currency. The exchange rate is sometimes not fixed and will often change up and
down. Therefore businesses need to have research and predict the trend of
exchange rate fluctuations to make appropriate decisions for imports such as
selection of partners, choice of payment currency...
Likewise, the foreign exchange rate may change the direction between
commodities, between business plans of import-export businesses.

4.2.3. Domestic and Foreign market factors

Situation and volatility of domestic and foreign markets such as changes in
price, supply capacity, consumption capacity and market volatility ... All factors
have an effect on import activities.
The up and down in price changes will affect the ability to consume
imported goods. When the price of imported goods increases, the demand for
imported goods will tend to decrease, consumers will shift to consuming the
same or similar goods in the country, then it will take photos. In the case of
imported goods of the enterprise, except for imported goods that the domestic
market is unable to provide, then the price will fluctuate according to the market.
The fluctuations in supply and market capacity affect the volatility of

import prices, thereby affecting the company's ability to consume and import
operations.

4.2.4. Infrastructure Factors

Infrastructure elements serving International trade in goods exchange have
a direct impact on imports such as:
Transport system and seaport: if this system is modernly equipped, it will
reduce the loading and unloading time, delivery and reception procedures as well
as ensure safety for purchased and sold goods.
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Banking system: The more developed the banking system is, the more
convenient it is for international payment as well as capital mobilization. The
bank is a factor to ensure the benefits for traders by payment services through
banks.
Insurance system, quality inspection: Allowing international trading
activities to be carried out more safely and at the same time reducing risks as
well as the extent of possible damage to the businesses in international trade.

5. Efficiency of Importation
5.1. The nature and Classification of import efficiency
5.1.1. The Nature of Import efficiency

International trade business in general and import operations in particular
do diversify items or increase the volume of value used for the national
economy. On the other hand, along with exports, import activities also create a

balance in the balance of payments. Besides, imports also create more advanced
facilities for domestic production by importing advanced equipment in the
world.
In theory, the basic content of economic efficiency in import activities is an
effective contribution to accelerating social labor productivity and increasing the
volume of use value.

5.1.2. Classification of Import Efficiency

Individual economic efficiency and socio-economic efficiency: Individual
economic efficiency is the economic efficiency obtained from import activities
of import-export enterprises. The general expression for individual economic
efficiency is the profit that each business achieves. The socio-economic
efficiency of import business is a contribution to import activities to develop
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production, renew economic structure, increase labor productivity, increase
budget and improve people's lives.
Efficiency of cost and aggregate cost: The purpose of business operation is
to maximize profits. Therefore, enterprises must base on the market to solve key
issues such as: goods, production technology, consumers and product prices. The
cost is actually the social labor cost. But in each enterprise, the evaluation of the
efficiency and social labor costs is expressed in the form of specific costs such
as:
-

Raw materials cost

-

Labor cost

-

Depreciation

-

Non-production cost

Assessing the economic efficiency of import and export activities cannot
fail to assess the overall efficiency of the above costs, but it is necessary to
evaluate the effectiveness of each type of cost.
Comparative efficiency and absolute efficiency: The absolute effect is
effective calculated for each specific plan by determining the level of benefits
obtained at the cost. For example, calculate the profit earned from a coproduction cost or a spent capital. Comparison efficiency is determined by
comparing the absolute efficiency indicators of the alternatives. In other words,
the comparison effect is the difference in the absolute efficiency of the options,
thereby allowing to choose the optimal plan.

5.2. Evaluate the effectiveness of Import activities

Import business efficiency is the financial benefit gained through the import
performance of goods and services of enterprises by direct comparison of results
with expenses.
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