One key challenge businesses have to contend with is the need to assimilate into Vietnam’s work culture. Every business development strategy needs to take into account the acclimatization of a new environment, especially one with a completely different work culture and ways of doing business.
Before considering expanding into or entering this market to take advantage of this strong economy, though, organizations need a solid strategy that works well in the Vietnamese economic and cultural setting.
Build Strong Relationships
Relationships matter strongly when doing business in Vietnam, and more often than, these eventually become social or even personal. Vietnamese organizations certainly value professionalism and etiquette, but these are not supposed to get in the way of establishing good rapport, even if they slightly go beyond the scope of transactions.
“Personal relationships and family connections remain important,” says the BTI Project’s Vietnam Country Report 2022.
In choosing suppliers, for example, Vietnamese businesses tend to go for the option that has some form of connection or relation to them. It could be a company recommended by a trusted business partner or an organization headed by someone who is a friend to the executives of the company.
It is not uncommon for businessmen to prefer or put their trust in someone who is a friend of a friend compared to someone who may have impressive credentials but is an “unknown” to the organization.
It is important to bear this in mind when crafting a business development strategy. Dealings with a “strictly professional” thrust will not cut it. The development of a business goes hand in hand with the development of strong relationships.
There are times when businesses in Vietnam spend more time discussing matters outside of office premises and hours. Thus, it is common to have lunch or dinner with prospective business partners or clients after formal meetings, in order to strengthen relationships, learn more about each other’s companies or even personal lives, and also to discuss prospective business deals in detail.
Such meetings can also be done over coffee or beers–again a mix of personal and professional dealings.
Learn The Art Of Negotiating, And Anticipate Last-minute Changes
Businesses can stretch profit potentials and lower costs through skillful negotiating, which is quite common among Vietnamese businesses. Negotiations are not just about discussing the details of the business convincingly. It has multiple components, starting with rapport building or the process of “creating your place at the table.”
It is then followed by proper business introductions, persuasion, and feedback. Negotiations rarely succeed in one go, so it is likely to have follow-ups, which require persistence and the savviness to find a way around a denial or refusal from the other party.
With these complexities in mind, it is vital to have the right people working on the negotiations. Foreign businesses in Vietnam usually hire locals to help them not only with translation or interpretation but also to have someone adept at addressing the challenges of dealing with the local business culture.
On the other hand, it is important to strategize with the knowledge that last-minute changes are inevitable. This could range from immaterial last-minute changes in meeting venues or representatives to major decision changes on business deals and contracts.
This does not mean that it is acceptable to inconvenience other parties with sudden changes, but it helps to anticipate the possibility of changes instead of pushing hard to strictly follow earlier agreements, especially with Vietnamese government agencies and business partners.
As such, business strategies should be flexible and capable of agilely adapting to last-minute decisions. It is advisable to presume that nothing is final unless the ink on the contracts or business documents has fully dried.
In a way, this can be viewed positively in the context of business development opportunities. If deals are not yet considered truly final, there are still opportunities to advance more advantageous proposals or tweak the consensus to arrive at something better than what has been previously agreed upon.
Consider The Corporate And Employee Culture
In early 2022, Nestle Vietnam, a subsidiary of the Swiss multinational conglomerate, was recognized as one of the best employers in Vietnam.
The fourth wave of the pandemic in Vietnam particularly demonstrated how Nestle values its employees, as it adjusted corporate policies and human resource management to address the needs of its employees while making sure that the company operates within pandemic rules and restrictions.
Businesses should treat employees and everyone in the company with the utmost respect. Strong relationships should not only be with external players (business partners, customers, and government). Companies also need to nurture solid relationships with their employees and others working for and with the company.
Of note, Vietnam has labor-friendly laws, and violating these should not exist in the list of business development methods aimed at reducing costs to maximize profits.
Many other foreign businesses operating in Vietnam prove that it is not too challenging to adapt and even excel in a foreign work or business environment. The benefits of expanding business overseas do not end with the imposition of restrictions, labor-friendly legislation, and policies crafted in response to pressing challenges.
When companies create strategies that lift the business and everyone working in and with it, outcomes rarely turn unfavorable.
It is also encouraging to know that Vietnam recently approved its National Strategy on Foreign Investment: Decision 667, which further enhances the ease of doing business in the country.
This does not guarantee preferential treatment for foreign businesses, but it certainly makes doing business easier for companies that follow rules, observe good business practices, and show a genuine desire to contribute to Vietnam’s economy and society.
In Summary
It may sound easy to shortcut business development steps by underpaying or overworking people and taking advantage of the loopholes in laws and the Vietnamese government’s revitalized efforts to attract and retain foreign businesses.
Abusing the concept of bôi trơn can get businesses some favors that allow them to override fair competition. However, development or success rests on shaky ground under such circumstances.
No business development strategy succeeds when it is anchored solely on profitability. It is also dangerous to take shortcuts and disregard rules.
There are other critical factors to take into account, especially the people working in the business, relationships with customers and other businesses, relationships with the government, and the unpredictability of the business environment or situations. Not taking these into account in business strategizing usually entails crooked practices and unscrupulous undertakings.
Doing business in Vietnam successfully requires a keen understanding of what it takes to succeed in this market. With yearly experiences, our dedicated team of veterans can help your business succeed in Vietnam. Feel free to contact us for a free in-depth discussion.
