INTERNATIONAL BUSINESS MANAGEMENT a

NATIONAL ECONOMICS UNIVERSITY
EXCELLENT EDUCATIONAL PROGRAM
----------

BACHELOR THESIS
MAJOR: INTERNATIONAL BUSINESS MANAGEMENT

IMPROVING EFFICENCY OF COAL IMPORTATION AT
VINACOMIN JOINT STOCK COMPANY

Tran Tuan Kiet

HANOI - 2020
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NATIONAL ECONOMICS UNIVERSITY
EXCELLENT EDUCATIONAL PROGRAM
----------

BACHELOR THESIS
IMPROVING EFFICIENCY OF COAL IMPORTATION AT
VINACOMIN JOINT STOCK COMPANY

Student
Major
Class
Student’s ID
Supervisor

: Tran Tuan Kiet

: International Business Management
: International Business Management K58
: 11162633
: Associated Professor, PhD. Ta Van Loi

HANOI - 2020
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ACKNOWLEGEMENT
In order to successfully complete this thesis, I would like to express my sincere
thanks to the teacher who instructed Dr. Ta Van Loi for guiding me enthusiastically
during the process of my thesis.
I would also like to send my sincere thanks to the board of director of
Vinacomin Coal Import Export Joint Stock Company and its employees.
In particular, I would like to thank Mr. Dao Xuan Viet, Head of the Coal Import
and Export department, for helping me during my internship at the company.
Thank you sincerely!

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TABLE OF CONTENTS

STATUTORY DECLARATION
I herewith formally declare that I myself have written the submitted Bachelor
Thesis independently. I did not use any outside support except for the quoted literature
and other sources mentioned at the end of this paper.
I clearly marked and separately listed all the literature and all other sources
which I employed producing this academic work, either literally or in content.

Ha Noi, …/ 05/ 2020
Tran Tuan Kiet

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5


LIST OF TABLES

LIST OF FIGURES

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INTRODUCTION
1. Rationale
The energy industry of Vietnam after 20 years of renovation and development
has made remarkable changes through its every step, contributing to building and
renewing the country, ensuring fuel resources for manufacturing sectors and
consumption sectors. In the energy industry, we need to mention the essential fields
such as electricity, crude oil, gas, uranium, coal ... especially among the above areas,
we need to pay attention to the coal industry because this is considered as one of
Vietnam's strengths when it is ranked 26 th in coal exportation and 23 rd in coal
importation in the world
Vinacomin coal import-export joint stock company, formerly known as
Coalimex, is a company with extensive experience in the field of mineral coal in
Vietnam. With the constantly growing trend of the economy and also with Vietnam's
accession to the World Trade Organization, the company has expanded its business

activities in many areas such as coal import and export, importing materials and
equipment, exporting labour, offices construction, renting buildings, …but coal
importation and exportation is still the number one priority of the company as it
contributes 80% of revenue. Although the coal importation and exportation sector play
an important role for the company, most of the revenue in this field is from
Vinacomin's coal exportation, which is understandable given that Vietnam is a country
with the 3rd largest coal reserves in the world. The company's coal importation
efficiency is very limited by many different reasons. Facing the difficult situation
because of the world economy and the youngness of the domestic economy which is
integrating into the world, improving the efficiency of coal importation at Vinacomin
is extremely necessary. For this reason, when practicing and learning about the
business process of the company, I would like to choose the topic "Improving the
efficiency of coal importation at Vinacomin coal import-export joint stock company".
Through the topic, I would like to offer some solutions and recommendations to help
the company import coal more effectively and at the same time help businesses to have
an overview and assessment of the status of their imported coal business.
2. Related literature review
In 2016, the thesis “Improving the efficiency of importing materials at C&T
Construction and Trading Joint Stock Company” Ms Nguyen Thanh Thuy analyzed the
import activities of at C&T Construction and Trading Joint Stock Company but not in
depth

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In 2011, the thesis “Solutions to improve the efficiency of import and export
activities at Phu Mai Fiber Joint Stock Company “Mr Vo Ham Thinh showed some
solutions to improve import activities. However, Phu Mai Fiber Joint Stock Company
is the company operating in the garment industry and the way they do import is
different with Vinacomin Joint Stock company import

In 2012, the thesis “Enhancing business efficiency of Binh Hoa Electronics
Joint Stock company” Ms Nguyen Thi Hai Hoa pointed out the organizational
structure of the company but it is different from Vinacomin Joint Stock Company
In 2015, the thesis “enhancing the efficiency of importing machinery at
Mecanimex State-owned Limited Liability Company” Ms Vu Huong Lien provided
solutions and recommendations to enhance efficiency of importation but Vinacomin is
a Joint stock company which is different from Mecanimex State-owned Limited
Liability Company
In 2017, the thesis “ Improving efficiency of importing frozen food at Intimex
Export-Import Joint Stock Company “Mr Tran Nhat Tan demonstrated the same
problem with Vinacomin company but the company size of Intimex Export-Import
Joint Stock Company is smaller than Vinacomin company so in my viewpoint I need
to make it more accurate with the scale of Vinacomin company
3. Research and objectives
3.1. Research goal
The thesis will be focusing on the study of the coal importation performance at
Vinacomin, assessing the efficiency of coal importation and therefore proposing
solutions to improve efficiency of coal import activities.
3.2 objectives
Giving statistics on the situation of coal importation of Vinacomin coal importexport company and assessing the status of business efficiency through indicators
Through the above criteria and evaluation, propose solutions to improve the
efficiency of the company's coal importation and make recommendations to the
government.
4. Research object and scopes
4.1. Research object
Propose solutions to improve efficiency of coal importation at Vinacomin coal
import-export company

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4.2 Scopes
Space: The thesis focuses on research to improve the efficiency of coal
importation at Vinacomin coal import-export joint stock company
Time: Thesis which studies the efficiency of coal importation at Vinacomin coal
import-export joint stock company from 2017-2019 and vision to 2024
5. Research methodology
5.1. Data collection method
5.2. Research methods
• Synthetic method: The purpose of this method is to systematize and contribute to more
elucidate basic theoretical issues on improving efficiency of coal importation at
Vinacomin Joint Stock company
• Quantitative method: Using statistics and surveys to calculate, analysis and compare
about the situation of improving efficiency of coal importation at Vinacomin Joint
Stock company
• Qualitative method: From the results of the actual survey and the interview, author
make assessments and explain the results.
6. Research structure
In addition to the introduction, conclusion, appendix and references, the main
content of the thesis is divided into 3 chapters as follows:
Chapter 1: Theoretical framework of improving efficiency coal importation at
Vinacomin Joint Stock Company
Chapter 2: Situation of improving efficiency of coal importation at Vinacomin
Joint Stock Company from 2017 to 2019
Chapter 3: Suggested recommendation to improve efficiency of coal
importation activities at Vinacomin Joint Stock Company

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CHAPTER 1: THEORETICAL FRAMEWORK OF
IMPROVING EFFICIENCY IMPORTATION AT
VINACOMIN JOINT STOCK COMPANY
1.1 Overview of import
1.1.1 Concept of import
It is unequivocal that imports are the components of international trade. Imports
consist of transactions in goods and services of jurisdiction (such as a nation) from
non-residents. Importation is the action of buying or acquiring products and services
from another country to another nation. The buyers of goods and services is referred to
as “importers” and are based in the country of import.
The national accounts provide a general delimitation of imports as below:
An import of good takes place when there is a shift of ownership from nonresident to a resident; this does not imply that the good in question physically crosses
the borderline. However, in specific cases national accounts impute changes of
ownership even though in legal terms of no change of ownership occur (e.g. cross
border financial leasing, cross border deliveries between affiliates of the same
enterprise, goods crossing the border for significant processing to order or repair)
In conclusion, import is one of the core activities in the international trading
business, the process of exchange goods between countries based on the principle of
currency exchange or barter. It is not a single act of trading but system of trading
relationships in an economy that has both internal and external organizations.
Moreover, imports are foreign goods and services bought by residents of a country,
including citizens, businesses, and the government. It doesn’t matter what the imports
are or how they are sent. Imports are anything produced in a foreign country and sold
to domestic residents. They can be shipped, sent by email, or even hand-carried in
personal luggage on a plane
1.1.2 Characteristics and roles of import
1.1.2.1 Characteristics of import
• Market: The import markets are diverse, goods and services can be imported from many
different countries, based on the comparative advantage of each country that
businesses have many opportunities to expand, narrow or change their import markets

to adapt to the needs of the market
• Legal aspect: import activities involving owners, partners, business owners, companies
in different countries, each country has different laws on economic and import. As a
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result, it bears the dominance of many legal systems and procedures and is governed
by the legal system, the filing procedures related to different countries Input and
output: Inputs (sources of supply in which the source of imports) and output
(customer) of the business are diverse and often change according to the needs of
consumers in the country and the business conditions of the company. Transportation
modes: Depending on the type of goods, materials, equipment, agreements on both
sides that have different modes of transportation, which is often followed by
INCOTERM and The Uniform Custom and Practice for Documentary Credits. Some
main modes of transportation are airways, roadways, railways and seaways. The
shipping and handling costs should be clearly stated in contracts to avoid affecting the
business performance of the business.
• Methods of payment: In the import business, the parties use a variety of payment
method such as: Cash-in-advance, Documentary collections, Consignment and so on,
which is agreed by the two parties and stipulated in the terms of the contract. However,
the mainly used method of payment is letter of credit (L/C). Currency used in payment
in import depends heavily on the exchange rate between local currency and foreign
currency
1.1.2.2 Roles of import
Firstly, imports offset the shortage of demand due to inadequate domestic
production. Moreover, imports also create new demands for society with a variety of
types, models, quality for the market. It means that imports contribute to a positive
balance between supply and demand in the domestic market to meet the needs of the
imbalances of the economy, ensuring the development of a stable economy.
Secondly, imports help the country exploit its comparative advantage,

exploiting the economic advantage of economies of scale when participating in
international trade. Not only create more domestic consumption goods, importing but
also create input materials for domestic production, creating technology transfer. As a
result, it contributes to the development of social production, saving costs and time,
creating a uniform level of socio-economic development, saving costs and time,
creating a uniform level of socio-economic development, contributing to the
elimination of monopoly status in the country.
Thirdly, imports increase competitiveness in the market with highly competitive
imported products, creating new capacity in production. Domestic enterprises have to
face in a great competition, in order to survive they have to be more active and rise. As
a result, the efficiency of domestic production has been improved, domestic goods

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become more competitive, labors have more opportunities to find jobs, thus
contributing to improving the socio-economic life.
Finally, combined with exports, imports create a close relation between
domestic
production and consumption and the world economy, facilitating international division
of labor development.
1.1.3 Types of import
1.1.3.1 Direct import
Goods are purchased directly between seller and buyer without the help of
any intermediaries, the exporter sends the goods directly to the importer. In the field of
self-trading, the enterprise is in full control of itself and conduct the activities of
seeking partners, negotiating the signing of contracts and have to invest their own
capital of trading in imported goods and bear all transaction costs, market research,
freight forwarding, payment of goods and consumption tax. Enterprises shall have to
pay their own capital for expenses incurred in their business activities and gain all the

profits earned as well as take responsibility for such losses if they suffer from losses.
When consuming the import goods, the enterprise shall be liable to turnover tax and
/or profit tax. When conducting the import under this method, endeavors must lead
statistical surveying at home and abroad, completely figure costs, guarantee beneficial
import business, follow national legitimate approaches and universal.
1.1.3.2 Indirect import
- Entrusted import
Entrusted import is one of indirect import activity, which formed between a
domestic enterprise operating in the field of trading of some imported goods but
failing to meet conditions on financial capability and business partners. The functions
of direct foreign trade shall proceed to import goods at their requests. The consignee
shall negotiate with the foreign party to carry out the import procedures at the request
of the consignor and be entitled to a commission called the consignment fee. The
relationship between the trustee and the trustee is fully regulated in the trust contract.
The trustee will pay a sum of money to the trustee in the form of a trust fee, while the
trustee is responsible for fulfilling the terms of the entrustment contract entered into
between the parties. This method helps enterprises to receive the trust does not take
much cost, low risk but profit from this activity is not high.
• Barter import
Barter import is one of the main operations of convection trade, which is a
form of importation for export. This activity is not paid in money but in goods.
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Imported and exported goods are equally valued. The purpose of import barter is not
only to gain profit from import but also to export goods and have income from export.
- Joint ventures import
It is an activity of importing goods on the basis of economic integration
voluntarily between enterprises, of which at least one party is a direct importing
enterprise in order to coordinate skills for the same transaction and proposal. The

rights and responsibilities of each party shall be determined according to the
proportion of their contributed capital. Compared to self-employment, joint ventures
are less risky because each joint venture enterprise imports only a portion of its capital,
the rights and responsibilities of the parties also increase with the capital contribution.
The cost sharing, the business imposes as per the extent of contributed capital, the
benefits separated by the two gatherings isolated relying upon the understanding in
light of contributed capital, in addition to the obligation of each side to bear. Moreover,
enterprises that receive goods will be calculated import-export turnover. When selling
goods for consumption, only the turnover on the number of goods shall be calculated
according to the capital contribution percentage and subject to turnover tax on such
turnover.
- Processing import
Processing is a form of import whereby the importer (being the processor)
imports the raw materials from the exporter (the processor) to carry out the processing
in accordance with the provisions of contract signed between the two parties.
- Import for re-export Import for re-export is the import of goods but not for
domestic consumption but for export to a third country for profit. These imports are
not prepared in the re-sent out nation. Along these lines, this method of import is
actualized through three nations: importing nation, exporting nation, re-exporting. This
transaction includes both import and export for the purpose of recovering the amount
of foreign currency that is larger than the original amount spent. When conducting
temporary import for re-export, enterprises must concurrently carry out two separate
contracts, including the goods purchase contract signed with the trader of the exporting
country and the goods sale contract signed with the trader of the importing country.
1.2 Theoretical background of business efficiency and business efficiency of import
activities
1.2.1 Conceptual definition of the business efficiency of import activities
1.2.1.1Concept of business efficiency
According to clause 16, article 4 of Law on Enterprises (2014) in Vietnam
stated that "Business means the continuous execution of one, some, or all of stages of

the investment process such as manufacturing, selling products or services on the
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market to earn profit." Therefore, in essence, all businesses seek to maximize their
profits. In Oxford University dictionary, efficient is defined as accomplishing most
extreme efficiency with least squandered exertion or cost. However, depending on the
field of study, there are many different opinions about business efficiency, which is
divided into four basic groups.
At the first group, British economist Adam Smith (1998) said that business
efficiency is the result obtained in business operations, especially the sales of goods. In
this view, business efficiency is similar with business results and pointer reflect
business execution and it does not mention the cost, meaning that if the businesses
have the same result, they are equally effective despite the fact that operations have
two different cost levels.
The second group believes that business efficiency illustrates the relative
proportion amongst results and expenses to accomplish that outcome. The benefit of
this view is that it mirrors the inherent idea of monetary effectiveness. Be that as it
may, the quantitative and subjective connections between the outcomes have not yet
been shown and the level of linkage has not been completely reflected.
The third group points out that business efficiency is the amount estimated by
the exchange between the addition of the outcome got and the expansion of the cost. In
this view, business execution is considered through relative uses and mirrors the
relationship between the outcome acquired and the cost spent, the development of
business results and business costs. In any case, the greatest inconvenience of this
definition is that undertakings don't assess the business execution in the usage time
frame since they don't consider indisputably the level of business results and business
costs. As needs be, the expansion of income might be considerably bigger than the
increment in costs but it cannot be presumed that the business is productive.
The fourth group says that business efficiency demonstrates the relationship

between the development of cost that makes the business result and mirror the level of
production resource utilization. This point of view meets enough necessities of
business proficiency like mirroring the correlation of development speed amongst
results and expenses and demonstrates endeavors' capability of utilizing resources.
To sum up, business efficiency is the economic category which shows the
concentration of economic development in depth, reflecting different levels of use of
resources in the process of reproduction in order to achieve business objectives. It is an
important measure of economic growth rate and is the formation to assess the
economic performance of businesses in each period. In practice, trade and economic
efficiency does not exist in isolation from production, in contrast to the effects of trade
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having a multifaceted effect on the economy, measured on the basis of indicators,
efficiency of the entire production process. Theoretically, the basic content of
economic and commercial efficiency is the driving force for economic development,
contributing to increasing social productivity, saving social labor and increasing
national income. It will create more income for production and improve the living
standard and consumption of domestic consumers.
1.2.1.2Concept of business efficiency of import activities
Import-export business is a form of business activity in general and revolves
around business activities, it is expanded in the space of exchange of goods and
categories of goods. Business efficiency of the import products is based on the view of
business efficiency in general. Thus, the nature of import and export activities is the
nature of the business. Moreover, import business efficiency is the level of cost
savings and the increase in economic efficiency that is specific to the import business
in other word. It reflects the level of human resources used of to achieve the highest
results at the lowest cost. Efficiency of importation of goods is a measure of the
between the results obtained from the Import business and all costs incurred to achieve
that result (including physical and labor costs)

In terms of business: business efficiency of import products is only possible to
be gain with the return on maximum profit at minimal cost which indicates the ability
to use the resources necessary to serve the importing business of the company
In Term of social: The business efficiency of import products is only be
achieved when the aggregate social benefits of imprisonment for goods and services
are larger than the costs of' producing these goods and services domestically, which
means that importing has contributed to increased efficiency social security, quality
and reduce product's price.
1.2.2 Business efficiency of import activities classification
1.2.2.1Cost effective parts and cost-effective aggregation of import activities
Each enterprise conducts its business activities in the conditions of its own
resources: the level of technical equipment, the level of organization, labor
management and business management. By their ability, they provide the society with
products at a certain cost and every businessman wants to consume his goods in the
most quantity. However, the market operates according to its own rules. One of the
most standout amongst the most evident market rules influencing the economy is
administer of law. The market just acknowledges the normal social utilization required
to deliver a unit of merchandise. Esteem law puts all organizations at various cost
levels on a typical trade plane, which is the market cost. In general, the cost of labor is
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•
•
•
•
•
•

•

•

social labor, but for every business that evaluates business performance, the cost of
social labor is reflected in other types of expenses
The market is the place to decide the price of the product. When importing
business enterprises, it is essential to guarantee the cost to be lower than the sales
products in the market. When assessing economic efficiency, social labor costs will be
represented by specific costs:
• - Cost during the import operation
• - Costs outside of the import operation
1.2.2.2 Absolute efficiency and relative efficiency of import activities
The determination of efficiency serves two basic purposes:
Firstly, to show and assess the utilization of various sorts of expenses in business
Secondly, to dissect the monetary hypothesis of various options in the execution of a
specific errand
For the two purposes above, the business efficiency is divided into two categories:
- Absolute efficiency is the amount of efficiency that is calculated for each specific
business plan by determining the level of benefits obtained with the amount of costs
spent
- Relative efficiency is determined by a comparison of the absolute efficiency of the
options, or the difference in the absolute effectiveness of the alternatives. This is a
fundamental base to decide the best import business plan
Determining the absolute effectiveness is the basis for determining the relative
efficiency. However, there are relatively well-refined performance indicators that do
not depend on the determination of absolute efficiency. For example. Comparing the
cost of different options to the lowest cost option is essentially just a comparison of the
cost of the options rather than the comparison of the cost effectiveness
1.2.3 Factors influencing the business efficiency of imports
1.2.3.1 Internal factors

• Financial resources
The financial resources of the enterprise can be: own capital, capital from
mobilized sources, owner capital, or investment capital, etc. In the business strategy,
finance is a crucial factor in the existence, development and expansion of the company
Importers often have to borrow money to deposit, collateral or pay for imported
goods. If the capital is limited, business will miss out on business opportunities,
particularly while completing numerous agreements, the dissolvability of endeavors is
low
• Human resources
Human is the center of all business, the key component of the management and
have great influence on the success of the firm on the way of doing business. Other
than doing the employment to profit, people with ability to utilize gear productively
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and refresh new innovation add to business effectiveness. Besides, nature of their
employments additionally depends on their insights to apply new developments that
assistance them to run all the more successfully
• Corporate Governance
Corporate governance focuses on identifying a business right direction in a
changing business environment. Quality of the business strategy is the first and most
vital factor deciding achievement success or failure of a business. A group of officials,
particularly senior administrators, who drives the business by prudence and ability has
a part to play the most imperative, the definitive impact on the achievement of a
business. The outcomes and execution of corporate administration are exceedingly
reliant on the expert level of the administration group and in addition the authoritative
structure of the corporate administration.
• Facilities
Facilities, from storage yards, transportation vehicles, office equipment, are the
cornerstone of business operations, which can bring strength in business. The technical

facilities provide the partner with trust, creating a competitive advantage with
competitors.
• Reputation
Business credibility is the decisive factor in the competitiveness and position of
the business. If the function of entrusted import, when the prestigious enterprises will
have many units in the country entrusted import for enterprises. The goods of the
business easier to consume than the business do not indecent, lose credibility with
customer.
1.2.3.2 External factor
• International environment
International political context:
International business first and foremost requires executives and businessman to
pay attention to international law, the laws of each country in which the business has
been and will operate. Each country has its own legal systems to regulate international
business activities, including international trade law ( export, import of goods,
services), foreign investment law, tax law. Each country often sign agreements and
treaties and gradually form the business cooperation process on the basis of treaties or
agreements. True financial execution as of late has demonstrated that with the rise of
monetary unions, traditions associations, political cooperation and respective or
multilateral assertions have developed, making positive conditions for exchanging
business in the district and global. In the manner, it can be stated that it is just based on
17


a firm comprehension of the lawful arrangement of every nation and that
understandings between the new nations enable the business to settle on the correct
choices in the decision of nation, district, business frame, business things to expand
benefits while limiting risks.
International economic context:
Economic is factor that attracts the attention of all executives, the impact of the

elements of this environment is more direct and dynamic than some other factors of
the general environment. The evolution of the economic environment always contains
opportunities and threats for businesses in different sectors and has a potential impact
on the strategies of the business.
In the conditions of the globalization trend and the regionalization of the world
economy, international business especially import activity is increasingly expanded
and developed, to adapt to this trend, enterprises must gradually increase their ability
to adapt the new conditions of domestic and foreign business environment. In addition,
the speed of economic development of the country reflects the market's ability to
consume goods. When a country has a high growth rate, the ability to consume goods
on the market increases, the demand for imports and the ability to exchange goods is
also greater. Inflation and deflation also affect the ability of the economy to participate
in international trade, import and export of goods.
International technology context:
Science and technology influence all zones of financial and bring numerous
advantages, especially in the field of import it is likely to bring high proficiency. The
development of science and technology in the world has diversified the categories of
goods, created new goods as well as the modernization of the communication system.
Advanced technology allows enterprises to actively raise high quality of goods, labor
productivity and lower production costs. These factors have impact on the product
aspects such as product characteristics, product prices and competitiveness of the
product. As a result, businesses can increase their competitive ability, enhanced
turnover of working. On the contrary, if technical level is low, it would reduce the
competitiveness of enterprises, hence, reduce the profit.
• National Environment
Political context
Politics is the first element that investors and corporate executives care about in
order to forecast the level of safety in their operations in countries and areas where
business is concerned. Factors, for example, political shakiness or vacillations in a
nation or district are starting signs that assistance chiefs distinguish what the

18


opportunity or risk to settle on speculation choices, creation and business in the market
zone of national or universal.
• Government stability
Political factors have a strong impact on imports. If a country's political situation is
unstable, with civil war or high rate of protest, import activity is limited because
exporters are afraid of risk
• Foreign trade policy and the legislation across different countries
The policy regime, the law of the state are the factors that businesses of import and
export are bound to be unconditional. Enhancing import business is led among the
subjects in different nations, therefore, it is not just influenced by the administration,
approaches and laws in the nation. National laws are common practices or regulations
that unify nations into common treaties, forcing states to adhere to all activities
including commercial activity. In addition, international laws prohibit countries from
importing commodities that have a negative impact on the community, such as drugs
or nuclear weapons.
Economical context
The economic environment determines the attractiveness of the import market. The
key factors in the economic environment of a country where business is often
concerned are the level of economic growth, living standards, population structure and
social stratification
• Exchange rate
The exchange rate between foreign currency and VND directly affects the profit of
import-export businesses. As in export-import business, sales and cost of goods sold
are calculated in both the strong currency and the domestic currency. On the basis of
comparing the foreign exchange rate of imported goods with the exchange rate,
ventures will decide how much benefit and misfortune when they propel the import of
such products from which it is conceivable to ascertain the cost all the more effectively

for development of import business effectiveness
• Tariff barrier
Tariff barrier are taxes levied on each unit of imports and exports of a country, this
is the most important measure to implement trade policy. Import tax is the
commitment that the business needs to pay to the state. The duty including VAT,
import charge, extract impose, and so on, that influences the benefit of the undertaking
through the activity or lessen the aggregate cost with the exception of benefit expense
and pay impose, expanding the cost of working together so the benefit of the business
will be diminished.
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• Growth rate of the economy
The economy in the high development time frame will have more opportunities for
venture to extend business exercises of endeavors, though the economy will diminish
prompting decrease of utilization costs, at the same time rise the aggressive power.
• Inflation
High or low inflation would affect the rate of investment in the economy. When
inflation is too high it will not encourage savings and create big risks for businesses'
inflation is too high it will not encourage savings and create big risks for businesses'
investment, the purchasing power of society will be reduced and the economy will be
stagnant.
Social and cultural context
Natural conditions include geographical location, climate, natural landscape, these
factors are not only vital in human life but also important factor in shaping the ntext:
competitive advantage of products and services. Moreover, each country has its own
unique culture and social environment.
- Demographic population
Population has impact on different components of the full-scale condition,
particularly social elements and monetary variables. Changes in the populace

condition will straightforwardly influence the difference in the financial and social
condition and influence the business methodology of the business.
- Geographical location
Geographic location is a critical factor for economic development as well as for
import and export activity of a country, Favorable geographical location is a condition
for a country to take advantage of international labor allocation, or to promote the
import and export of services such as tourism, transport.
• Natural resources
Natural resources are one of the important factors that underpin national and
regional structures for import and export. It affects the type of goods, the size of
imports and exports of the country
• Natural condition
These natural conditions such as weather, climate, and season have greatly affected
the technological process and business progress of enterprises, especially enterprises
deal in importing seasonal items such as agriculture, forestry, fishery. With the weather
conditions, climate and certain crops, the business must have specific policies suitable
20


to that condition. And when such factors are unstable, it will make the business policy
of the business is not stable and is the first factor destabilizing business directly affect
business performance.
1.3 Theorical background on improving the business efficiency of import
activities
1.3.1 The necessity to improve business efficiency of import activities
• Scarcity of production possibility urges the enhancement of business efficiency of
import activities
The needs of resources is accelerating rapidly while the social production
resources are limited. Because the market only accepts the right kind of products with
the right quantity and quality, the rule of scarcity requires all businesses to answer

exactly three questions: What produce? How to produce? Who to produce? In order to
see the necessity of improving business efficiency for enterprises in the market
economy, we first have to study the market mechanism and operation of enterprises in
the market mechanism.
For enterprises engaged in import activities, the resources used are the amount
of foreign currency spent, time and labor. In the event that the firm does not utilize
resources monetarily, at that point the cost of contributions for imports builds,
prompting expanded costs for organizations to meet difficulties in production and
consumption.
• Fierce competitive market
Competitive environment requires enterprises to explore and invest in making
progress in business. As the market grows, the competition between businesses is
getting fiercer. It is no longer competitive in products but also in terms of quality, price
and other factors. While the general target of the business is maximize the profit,
rivalry is a factor that drives the business up but vice versa it is likely to make the
business does not exist competition in the market. Therefore, they must provide goods
and services of good quality at reasonable price. On the other hand, business efficiency
is synonymous with reduce the cost of increasing the volume of goods sold, the quality
is constantly in the market. To achieve the goal of survival and expansion, enterprises
must win the improved.
• Improvement in living standards and mental health of employees
When business efficiency is enhanced, enterprises have the opportunity to
develop and increase the number of new occupations. In addition to, the productivity
of import exercises specifically is a fundamental condition for ventures to survive and
create, if the proficiency of import exercises is continually enhanced, the outcomes
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acquired increasingly, this implies the wage of the specialists additionally increments.
At the point when specialists have high pay, they will have conditions to deal with

material and profound life for themselves and their families.
1.3.2 Measures to enhance the business efficiency of import activities
1.3.2.1 Measures to increase revenue
Increasing sales is one of the essential approaches to enhance business
proficiency for all organizations in general and import organizations specifically.
Businesses need to find a way to boost up output or in other word, the company needs
to sell more products or sell products at a higher price.
Develop a sound business strategy and plan that is appropriate to business
situation. The right strategy and business plan allow the business to shape the direction
that the business is going to achieve in the future and it allows the company to make
the most of resources, contributing to the increase of profit.
Develop and implement marketing plans and policies, promote research and
explore the market to understand the needs of customers. The implementation of
marketing plans and policies: product policy, price policy, promotion policy,
distribution policy along with the promotion of market research and marketing,
contributing to increase the efficiency of business operation.
1.3.2.2 Measures to reduce the cost
Cost of production is one of the main determinants of profit and price of the
products, cutting unnecessary costs would increase profits and reduce product costs,
hence, enhance the business performance. Therefore, cost management is a top
concern for managers.
Cut down on cost of raw materials, for instance, price fluctuations depend on
both objective (changing supply and demand in the market, changes in government
policy ...) and subjective reasons (choosing quality of goods, calculation method price
of raw materials and warehouse). Volatility of raw materials used depends on the level
of management of raw materials, skills of workers directly producing, status of
operation of machinery and equipment, conditions of production. Raw materials
account for a very large proportion of production costs of manufacturing enterprises
usually about 60 - 70%.
Improving labor productivity can cause the quantity of hours spent to deliver a

unit of item to be decreased or to influence the unit of work in a unit of time to be
expanded. The consequence of enhancing work profitability will bring down the cost
of wages per unit of item. In addition to, raising the professional level of all employees
in the enterprise, arranging jobs suitable to the professional qualifications of each
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person, well labor efficiency, incompletely to expand compensation, another part to
build the benefit of the business. This can both guarantee creation and enhance the
expectations for implementing salary levy and bonus. Creation comes about because of
the expansion in everyday comforts of workers.
1.3.2.3 Measures to increase revenue growth rate faster than increase rate
Enhance work productivity in actuality, not very many organizations can carry
out the activity of lessening input costs without affecting the output and vice versa, so
the ideal arrangement is ventures are searching for measures to accelerate income
development quicker than the increase rate of cost.
The business structure of the enterprise affects the consumption of goods and
services of enterprises. Therefore, in order to increase the profitability, the enterprise
must choose a suitable business structure in terms of quantity and density of goods in
the structure to promote the strengths of enterprises, attract customers to businesses.
Choosing the right business line structure in line with the segmentation of the
consumer market that the company has selected along with the implementation of the
marketing plan to attract customers will bring success to the business.
1.3.3 The criteria to assess enhancing business efficiency of import activities
1.3.3.1 Indicators reflect the efficiency of integrated import business
• Absolute indicator
Import profit = Import revenue – Import Costs
Import profit is the company's profits from import activities in a given period. The
quotas indicate the results of the import business process. It reflects the quantity and
quality of import activities of enterprises, reflecting the results of the use of basic

elements of production such as labor, materials and fixed assets. This indicator reflects
the financial gain earned through the efficiency of the importation of goods and
services by direct comparison of the results with costs in a given period.
• Relative indicator
• Business performance according to turnover
Import efficiency =
This indicator shows how much revenue is earned for each dollar spent on
import. The large indicator demonstrates that businesses have effectively utilized their
resources and vice versa.
• Profit margin at revenue
Profit margin at revenue =
This indicator shows how much import income is earned in a given import
revenue. The higher the number, the greater the profitability of capital.
• Profit margin at cost
Profit margin at cost =
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This indicator shows how much profit is earned for every dollar of cost spent on
import activities. The large indicator shows that high profitability and low cost
• Profit margin at capital
Profit margin at capital =
This indicator shows how much profit is earned for every dollar of equity spent
on import activities. The vast marker shows that organizations have adequately used
their assets and the other way around
• Import rate of foreign currency
Import rate of foreign currency =
This indicator illustrates the amount of foreign currency earned for every home
currency spent on import activities
1.3.3.2 Indicators reflect each parts of business efficiency

• Capital performance indicators
The business capital of an undertaking is the entire property of the
endeavor expressed in cash, comparing to two kinds of advantages, we have two sorts
of capital: Fixed capital and Working capital
- Efficiency of using imported fixed capital:
Imported fixed capital efficiency =
This indicator shows that one dong of fixed capital is put into import
activities, how much profit earned. The higher the number the higher the efficiency of
using fixed capital in the company
- Efficiency of using working capital
Imported working capital efficiency =
This indicator indicates that one working capital is invested in import
activities, how much profit earned. The higher the number the higher the efficiency of
using working capital in the company
-

Number of revolutions of capital
Number of revolutions of capital =

This indicator shows that one working capital is put resources into import
exercises how much income is earned or what number of rounds of capital are
included portable. The more noteworthy the quantity of turns, the more noteworthy the
productivity of working capital.
-

Coefficient of capital
Coefficient of capital =

This indicator shows the amount of working capital needed to create one
dong of revenue. The lower the coefficient, the higher the efficiency of capital use.

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Turnaround time


Turnaround time =
This indicator reflects the number of days needed for working capital to be
credited back to the import business. The longer the gravidity turns, the greater the
transfer speed, the higher the import efficiency and vice versa
-

Total imported capital turnover
Total imported capital turnover =

This indicator describes the amount of revenue gained on each of dollar
capital invested in import activities or the number of imported capital turnover.
• Human resource performance indicators
Labor is an immediate member in the financial improvement process and is
a fundamental piece of working-age individuals who can work in the work drive
-

Profitability of a worker engaged in import activities
Average profitability of labor =

This indicator shows how much profit is generated for each employee
involved in analyzed period. The bigger the indicator, the higher the efficiency of
employment.
-

Labor productivity

Average labor productivity =
This indicator illustrates the amount of revenue gained for each employee
involved in the analyzed period. The greater the pointer, the higher the productivity of
work

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