ABSTRACT
In the last couple of years, Vietnam became one of the attractive targetcountries for international investors because of its stable political environment, higheconomic growth and enormous natural resources.This paper provides an analysis that will describe feasibility on penetratingthe Vietnamese instant noodle market and selection of the most appropriate marketentry strategy.The analysis indicates that Vietnam has a significant political stability with agreat government role in supporting investment in this country, by providing easeand guarantee for investors. This shows future certainty, a very important factor forevery investor.From economic aspect, a country with 70 million population is a huge marketHigh economic growth (more than 5% p.a) and enormous natural resources madeVietnam a promising market. The only constraint is lack of transportation andcommunication facilities in all over the country.Chinese culture that has a strong influence in the Vietnamese society givesthe community sense of appreciation toward private sector. High education andliteracy rate, and good health facilities give an added value on this market viability.Vietnamese instant noodle industry is dominated by VIFON, a state ownedcompany with 52 % market share. But it seems this monopolist emphasizes its role asgovernment agent of development (with the mission of providing food for Vietnamese) instead of a monopolist role that usually tends to keep its market dominationby killing the other competitors in the market. In general, Vietnamese instant noodlemarket still provide enough opportunities for new entrants to come and create theircompetitive advantages. Vietnamese consumers are used to consume noodle, as oneof China culture influence to their eating habits.There are some constraints which will be faced by investors, such as economic constraints (poor physical infrastructure & distribution network and differentconsumer need), managerial constraints (different managerial role and task requirement), and institutional constraints (government policy and quality of humanresources). These should be deliberately considered and anticipated by investorswho intend to enter Vietnam market.All the analysis come to the conclusion that the most appropriate marketentry strategy is Foreign Direct Investment (FDI).Financial analysis confirms that the strategy is financially feasible. Amongthe 2 scenarios, Scenario I has a better financial feasibility and that?s why it becomesthe proposed scenario.Then, in order to protect the investment from foreign exchange risk, it issuggested to do preventive actions, such as: diversification on operation and financing, and hedging via option market.