Vietnamese businesses believe they can control difficulties in 2011

The survey conducted on 500 Vietnamese fastest growing enterprises (FAST500) shows that Vietnamese enterprises remain calm when facing new difficulties and they remain optimistic about their business performance in 2011, believing that their high growth rates will continue this year.

The three factors that decide success

When asked what are the most important factors that spelled success for the enterprises in the last four years, 23 percent of the enterprises cited the development of new products and services and heavy investment to improve technologies.

Besides, the expansion of the domestic market and the recruitment of talented staff both have also helped enterprises rapidly grow (16.3 and 13.9 percent). Very few enterprises said they could grow rapidly from changing the highest ranking leaders.

Not many enterprises could obtain high growth rates due to the expansion of foreign markets or reliance on closed relations with leaders of state management agencies.

Besides, 12.3 percent cited the restructuring of sale networks and 12.7 percent of enterprises cited the restructuring of corporate governance as the most important factors for their successes.

Joint stock companies are the majority

50 percent of the enterprises which attended the FAST500 report releasing ceremony and FAST500 Forum are joint stock companies, managed by many important shareholders.

Meanwhile, 1/5 of the enterprises are being managed in accordance with the models applied in developed economies. Very few enterprises have been managed under the management model of state-owned enterprises or family run enterprises.

It is understandable why such the models have become more popular among fastest growing enterprises. These are the dynamic and flexible ways of managing enterprises way, that fits the new circumstances of modern and professional business.

The challenges and the growth prospects

18.3 percent of enterprises cited rapidly increasing costs as one of the biggest challenges to maintain their growth in the next three years. The problem of limited capital was also cited by many enterprises (17 percent).

Besides, the problems in the business environment and labor management, the changes in the government’s policies, and the branding have also emerged as the worries of many enterprises.

Meanwhile, very few enterprises have worries about financial losses in their inner companies, and about the lack of new feasible projects (3 percent).

When asked about the expected growth, very few enterprises said their growth rates would slow down in the next two years (7.1 percent). Meanwhile, the majority of enterprises believe they will be able to maintain the current high growth rates or would obtain higher growth rates (46.4 percent).

As such, Vietnamese enterprises are remaining calm in light of current difficulties and they have prepared different scenarios to overcome their challenges.

Enterprises still can control their business

Answering a question about the macro economy’s prospect in 2011, the majority of enterprises said that though the macro economy in 2011 could be worse than in 2010, they would still be able to control their business (45.2 percent).

Meanwhile, some enterprises believe that the situation in 2011 will be better than in 2010 (29.8 percent). Very few enterprises think that the situation will be very bad (4.8 percent).

One of the factors that make businessmen think the macro economy would be worse in 2011 is the high inflation rate.

More than a half of enterprises that attended the FAST500 report ceremony and FAST500 Forum think that the inflation rate in 2011 will be relatively high at 10-14 percent.

However, only 11.5 percent of enterprises think the inflation rate will exceed 14 percent. Some enterprises think the inflation rate will be less than 8 percent (3.8 percent).

No labor cuts

A lot of enterprises said they plan to recruit more workers in 2011 (62.8 percent), while only 5.1 percent said they would lay off workers.

This is a bright picture for employment , which means that the rate of unemployment will not increase in 2011, even though there are still many challenges for enterprises.

78.2 percent of enterprises expect their turnover and profit to increase in 2011, while only 6.4 percent of enterprises worry that their profits and turnovers may decrease. - Vietnam Report

Tags: Vietnamese businesses