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<b>FACULTY OF INTERNATIONAL BUSINESS</b>

<b>MID-TERM GROUP ASSIGNMENTS REPORTTOPIC:</b>

<b>ANALYSIS OF INTERNATIONAL BUSINESS ACTIVITIESEXPORTING COFFEE TO ITALY</b>

Introduction lecturer : Phung Nam Phuong

: Nguyen Le Phuong Thao : Le Truong Thi Huyen : Vo Thi Cam Thy : Tran Le Thuy Ngan

Danang, 2023

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<i><b>I. TRUNG NGUYEN LEGEND CORPORATION...2</b></i>

5.1 Italia based on Hofstede’s model...9

5.2 Vietnam based on Hofstede’s model...11

5.3 Comparison Vietnam and Italia based on Hofstede's model...12

<b>6. Business problems in Vietnam when doing business in Italy...13</b>

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Figure 1. Revenue of Trung Nguyen Legend Corporation...2

Figure 2. Trung Nguyen Legend’s product...2

Figure 3. Italy's democracy index...3

Figure 4. Index of Economic Freedom...5

Figure 5. Index of Economic Freedom about Open Markets...6

Figure 6. GDP of Italy by region...7

Figure 7. Italia based on Hofstede’s model...9

Figure 8. Vietnam based on Hofstede’s model...11

Figure 9. Vietnam and Italia based on Hofstede's model...12

Figure 10. Five largest coffee supply markets for Italy...14

Figure 11. Italy’s location...14

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Since implementing the open-door policy and trading with countries in the re-gion and around the world, Vietnam's economy has begun to make remarkable progress. Among them, export activities have contributed greatly to the GDP growth of our country. With the advantage of being an agricultural country, agricultural prod-ucts have been one of our country's main export prodprod-ucts and have contributed signifi-cantly to GDP growth. And coffee is one of the most popular products exported abroad.

Nowadays, Vietnam is a large potential country in the field of coffee supply to the world market. Specifically, Italy is a potential market with high demand for coffee consumption and among the 5 non-EU markets supplying the largest coffee to Italy, Vietnam ranks second.

With the Vietnam - EU Free Trade Agreement (EVFTA) contributing to pro-moting exports to the EU and making trade easier thanks to commitments on reducing tariff barriers and other commitments.

Realizing the great benefits and potential in exporting coffee to Italy, our company - Trung Nguyen Legend, which has experienced to export coffee products to more than 60 countries around the world, decides to choose Italy as the next destina-tion in the coffee supply chain to foreign countries.

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<b>I.TRUNG NGUYEN LEGEND CORPORATION</b>

Trung Nguyen Lengend Corporation is a Vietnamese business group involved in the production, processing and distribution of coffee and franchising the brand. Trung Nguyen is the largest domestic coffee brand within Vietnam, and exports its products to more than 60 countries, including major markets such as the United State, the United Kingdom, Germany, China,.... From 2020 to 2022, revenue of Trung Nguyen Legend Corporation experienced a significant increase, reaching at 6200 billion.

<small>[CITATION Wik \l 1033 ]</small>

<i>Figure 1.Revenue of Trung Nguyen Legend Corporation</i>

The King of Coffee - WEASEL Coffee, applied “bio-fermentation”, successfully replicates the know-how of brewing yeast in the body of wild weasel to create a special raw coffee for the perfect coffee product of TRUNG NGUYEN LEGEND, representing the Culture & Spirit of Vietnamese Coffee.<small>[CITATION 2 \l 1033 ]</small>

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<i>Figure 2. Trung Nguyen Legend’s product</i>

<b>1. Introduction</b>

Italy, officially the Italian Republic, is a country in Southern and Western Europe. Italy covers an area of 301,340 km<small>2</small>, with a population of nearly 60 million.

It is the tenth-largest country by land area in the European continent and the third-most populous member state of the European Union. <small>[CITATION 3 \l 1033 ]</small>

According to a 2023 Ipsos survey, 61% of the country's residents are Catholic, 4% are Protestants, 3% other Christians (68% are Christians overall), 28% are irreligious, 2% prefer not to say, 1% are Muslims, and 1% adhere to other religions.

<small>[CITATION 4 \l 1033 ]</small>

<b>2. Political</b>

<b>Democracy: Italy's political system is a democracy. It is a parliamentary </b>

repub-lic with a multi-party system, and citizens have the right to vote, participate in political activities, and express their opinions freely. Italy upholds the principles of individual rights, the rule of law, separation of powers, and political pluralism.

<i>“Italy is a Democratic Republic founded on labour”. It’s mean that the </i>

govern-ment very care for their people, determine Italy is a Democratic, the power for people.

[CITATION 5 \l 1033 ]

Italy's democracy index is 7.69[CITATION 6 \l 1033 ]. Italy is classified as a de-fective Democratic country. It can be said that this proves that Italy puts democracy first, elections, voter safety, citizens' freedoms and the influence of outside forces on the government. that country.

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<i><b>Figure 3.</b>Italy's democracy index</i>

Italy holds regular free and fair elections at various levels of government. Citi-zens have the right to vote, and elected officials represent the will of the people.

Italy has a multi-party system, allowing various political parties and groups to participate in elections and offer diverse policy choices to voters. This pluralism allows for a variety of voices and perspectives in the political arena. This country upholds the rule of law, and its legal system is based on principles of justice and equality. An inde-pendent judiciary ensures that laws are applied impartially.

Like most democracies, Italy separates the powers of the executive, legislative, and judicial branches of government to prevent any one branch from becoming too powerful.[CITATION 7 \l 1033 ]

Italy's engagement with the EU and WTO signifies a commitment to shaping a future characterized by economic resilience, international cooperation, and sustainable development. This dual participation fosters adaptability, positions Italy as a key global player, and underscores its dedication to addressing contemporary challenges on the world stage.

Italy is generally considered to be more individualistic than collectivist. While no political system is purely one or the other, Italy's emphasis on individual rights, democratic principles, and market-based economy aligns more closely with individual-istic values.

Individual freedom, one of the core values of modern society, plays a crucial role in assessing the level of development and quality of life in a nation. In the case of Italy, statistical data from 2021 indicates a high level of individual freedom, with a score of 90, showing an increase compared to 2020 and remaining consistent with 2019, which were both at 89. The increase in the index of individual freedom in Italy in 2021 is a positive sign, demonstrating the nation's commitment to preserving and promoting the rights of individual freedom. It is not only the result of governmental efforts but also the support and understanding of the community towards this value.

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Although the current figures are optimistic, maintaining and enhancing the level of individual freedom requires continuous and profound efforts. Monitoring and evaluating new policies and measures will determine the direction Italy takes in the fu-ture. From this data, we can expect that Italy will continue to stand firm on the path of individual freedom and improve the quality of life for the entire community.

It can be said that this is an impressive number about Italy's freedom in terms of human freedom. Human right in Italy has many specific right for women, children and LGBT people[CITATION 8 \l 1033 ]

<b>3. Economic</b>

Mixed economy: Italy can be considered a mixed economy rather than a purely market economy. While it predominantly operates on market principles, there is also a significant level of government intervention and regulation in certain sectors and areas. The government plays a role in supporting strategic industries, providing infrastructure development, implementing social welfare programs, and enacting labor market regula-tions. These interventions and regulations are indicative of a mixed economic system where both market forces and government influence are present.

<i><b>Figure 4. Index of Economic Freedom</b></i>

With Index of Economic Freedom is 62,2[CITATION 9 \l 1033 ] , It’s mean that Italia is High Economic Freedom (Higher Index): A high index of economic freedom is often associated with less government intervention in the economy, freedom of choice and innovation for businesses and individuals. higher multiplication. This may apply to Italy's economy, which shows a relative degree of individualism and economic freedom. Italy has a market-oriented economic system, where supply and demand largely determine prices, production, and distribution of goods and services. The private sector plays a significant role in driving economic activity and investment. While Italy has a market-oriented economy, the government also plays an active role in certain sectors

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and areas. It implements policies to support strategic industries, provide infrastructure development, and promote research and development. The government also sets policies related to taxation, international trade, and industry-specific regulations. Italy has sev-eral government-owned enterprises that operate in key sectors, such as energy and trans-portation. For instance, ENI, a state-owned company, is a major player in the oil and gas industry. This demonstrates government intervention in strategic industries.

Italy has comprehensive labor laws that protect workers' rights, including regu-lations on working hours, minimum wages, and workplace safety. The government's in-volvement in labor market regulation ensures workers' protections and helps maintain a balance between employers and employees.

<i>Figure 5.Index of Economic Freedom about Open Markets</i>

According to Index of Economic Freedom about Open Markets[CITATION 9 \l 1033 ], we have Trade Freedom, Investment Freedom and Financial Freedom are decide about the level of open market that

<b>Trade Freedom: Italy's commendable score of 78.6 in trade freedom reflects a</b>

nation that embraces openness and innovation in the realm of commerce. This elevated level of trade freedom not only indicates a willingness to engage in international trade but also suggests a commitment to fostering competition and fortifying trade relations with other nations.

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<b>Investment Freedom: Italy's significant score of 80 in investment freedom </b>

un-derscores its attractiveness for both domestic and international investors. This high level of investment freedom creates an environment conducive to economic develop-ment, as it facilitates substantial investments in infrastructure and acts as a catalyst for overall economic growth.

<b>Financial Freedom: Despite the moderate score of 50 in financial freedom,</b>

Italy maintains a certain degree of flexibility in managing financial affairs. This flexibil-ity is essential for adapting to economic dynamics and responding to financial chal-lenges. However, effective risk management becomes pivotal to guarantee financial sta-bility and to preempt any potential crises that may arise due to the inherent constraints associated with the moderate level of financial freedom.

Italy has a diversified economy, ranked as the third-largest in the Eurozone and the eighth-largest in the world. The nominal GDP estimated for 2021 is about USD 2.106

[CITATION 11 \l 1033 ]trillion, with a GDP pro capital of USD 34,997 (25th in the world), but with a significant economic gap between north and south. [CITATION 10 \l 1033 ]

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Industry accounts for about 29% of national income, and is dominated by the engineering, fashion, industrial design, iron and steel, and agro-food sectors, which not only have the greatest relevance in terms of turnover, employment and number of com-panies, but have made Italy famous throughout the world and made the country one of the EU's main exporters (2nd in Europe).[CITATION 1122 \l 1033 ]

Italy's manufacturing sector, the sixth largest in the world, is mainly composed of small and medium-sized enterprises (SMEs), which make up more than 90% of Ital-ian companies. [CITATION 1122 \l 1033 ]

<b>4. Legal</b>

The legal system of Italy is based on Civil Law, and this determination is grounded in the historical factors and origins of Italy's legal framework.

Italy's Civil Law system has its roots in Roman Law and legal systems of an-cient Roman empires. The influence of Roman Law, particularly the Corpus Juris Civilis, laid the foundation for civil law in many European countries, including Italy. The Civil Code (Codice Civile) of Italy, first enacted in 1865, is a significant and de-tailed document playing a crucial role in Italy's legal system. It encompasses numerous principles and rules related to property rights, contracts, and various legal areas.In Civil Law systems, the parliament or legislature often holds substantial power in establishing and amending legal provisions. In Italy, the parliament and legislative bodies play a sig-nificant role in constructing and modifying legal regulations. In Civil Law systems, the role of the judiciary is primarily to apply established laws, not to create legal principles. This differs from Common Law systems, where judges have a significant role in estab-lishing legal principles through their decisions.<small>[CITATION 12 \l 1033 ]</small>

The Italian Civil Code, which deals with property ownership, is a huge under-taking as it covers many aspects of property ownership and transactions. It provides a coherent and detailed legal framework for property ownership, not only describing le-gal regulations but also setting out basic principles to ensure fairness, transparency, and protection. rights of property owners in the Italian economy. Some rights that can be mentioned include:

<b>Property Ownership Rights</b>

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Governing Law: Property rights are detailed in many parts of the Codice

<b>Civile, especially in Libro III (Part II). </b>

Rights and Obligations: Refers to the rights and obligations of the owner, in-cluding the right to use, enjoy, and control the property.

Beside, Asset Transactions, Protection of Property Rights, Land Management Wills and Inheritance Rights, Business Ownership:

In the realm of business, ownership rights play a pivotal role in attracting both domestic and international investments. The legal protection and clarity surrounding property rights foster a sense of security for businesses, encouraging them to engage in long-term ventures and strategic developments. Additionally, these rights contribute to the establishment of a reliable collateral system, facilitating financial transactions and lending practices. The ownership rights in Italy, with their historical foundation and adaptability to modern legal standards, not only provide a solid legal foundation for businesses but also contribute to the overall economic stability and growth of the country.

<b>5. Cultural values</b>

<b>5.1Italia based on Hofstede’s model</b>

<i>Figure 7.Italia based on Hofstede’s model</i>

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<b>Power distance:</b>

With a score of 50, Northern Italy tends to prefer equality and a decentralization of power and decision-making.

The younger generation generally dislikes control and formal supervision and prefers teamwork and an open management approach. Certainly, the high score on individualism accentuates the aversion of being controlled and tells what to do.

In Southern Italy, all the consequences of the above-mentioned index are often high, quite the opposite of Northern Italy.

At a score of 76, Italy is an individualistic culture, “me” centered, characterized by subjects strongly focused on themselves.

In this view, having own personal ideas and objectives in life is a fundamental point and the route to happiness is through personal fulfillment.

This dimension presents differences in Southern Italy where less individualistic behavior can be observed: the family network and the group one belongs have relevant influence on society.

At 70, Italy is a masculine society—highly success oriented and driven.

Children are taught since the beginning that competition is good and the material demonstration of personal success is a fairly normal occurrence.

As the working environment is the place where every Italian can reach his/her success, competition among colleagues for making a career can be very strong.

<b>Uncertainty avoidance:</b>

At 75, Italy has a high score on uncertainty avoidance which means that, as a nation, Italians are not comfortable in ambiguous situations.

Formality in Italian society is fundamental and, for this reason, the Italian penal and civil code are complicated with clauses, codicils, etc.

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