Vietnam may be the last chance for U.S. companies to establish and maintain a dominant market presence in Asia. They will have to be much more aggressive than in the past because requirements for success in Vietnam will be tougher than elsewhere in the region.
For instance, the number of competitors that U.S. corporations will face in Vietnam is much larger than confronted in Indonesia, Thailand, Malaysia or China. Rivals from Taiwan, Singapore, Thailand and Korea have proved they can compete with businesses from the United States, Europe and Japan.
The United States has the advantage of a large core of Vietnamese-Americans capable of speaking the language and knowledgeable about local customs. Individuals such as myself, who served with the U.S. military in Vietnam, also have a heightened interest in the country. Interest and competence may not be sufficient, but they represent intangible assets that give us an advantage over companies from other countries. These assets need to be exploited.
I see several problems with the way U.S. corporations try to compete in Asia. Some are a result of our national mentality, but some are specific to individual companies. Our national export mentality is weak; our ability to think in international ways is highly generalized; institutional means of evaluation discourage the cultivation of developing markets, and we rely too much on government.
Individuals in most countries know that exporting is important, and that export success affects all levels of society. Government officials do not have to give speeches to business leaders telling them that it is important to export.
In the United States, most companies consider doing business in California far more important than gaining sustainable competitive footholds in developing countries and emerging markets. This occurs because the United States is a big market and our international perspective is limited.
Also, the American educational experience is really not very international. For instance, most of our business schools talk a good game when it comes to globalization. Deans will assert that they have internationalized the curriculum.
However, most American business schools do not require students to meet college-level foreign language requirements, much less have programs directed at less commonly taught languages such as Vietnamese.
International research tends to involve analyzing international data, rather than acquiring first-hand knowledge about international operations in other countries.
Much of the talk about integrating international issues into the curriculum is public relations gibberish. Most young managers do not start off with the type of knowledge needed to understand and evaluate international markets, and their capabilities dissipate with time.
Another difficulty is that the time perspectives used for managerial evaluation have changed very little over the years. Annual reviews, based on measurable accounting indicators, are still the rule. Smaller and medium-sized companies are likely to face the same type of time perspective when they seek external financing. This limits their international ventures to those that can provide returns in the shorter term. Ventures into new and developing markets require a high degree of patience, which is unlikely to be the norm in many organizations.
Finally, U.S. companies should not sit back and wait for government assistance. They will face both tariff and nontariff barriers, but so will their competitors. Those waiting for Washington to successfully deal with these issues will be left out in the cold.
Big governments are best at dealing with big issues. Visiting Vietnam and establishing a local presence will be more important to a company's longer-term success than anything the U.S. government is likely to do or provide. Businesses need people who understand both the capabilities of your company and the Vietnamese market. Identifying and exploiting opportunities is the key to success.
Vietnam presents a good opportunity for U.S. companies to develop a market presence, which will pay off in the future. For this to happen, they have to begin to establish a market presence now.
The payoff will not be immediate. However, waiting for success is a lot more satisfying posture than sitting around and complaining about the unfair advantages of our rivals.
John Butler teaches management and organization and directs the Southeast Asia Center at the University of Washington. This article originally appeared in Newsday.
Pub Date: 3/02/97