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International Business: Capital Land Limited

Essay by   •  March 14, 2012  •  Case Study  •  1,063 Words (5 Pages)  •  1,099 Views

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I. An introduction of the company and its product.

CapitaLand Limited is one of the biggest public companies of Singapore as well as of Asia. According to the information written on its website, its business is mainly about real estate and branches such as Real Estate Investment Trust (REITs), Financial Services and Hospitality. The company's real estate portfolio spreads out from houses, offices to commercial malls and residential services. Published in 2000, nowadays it has its presence in more than 20 countries such as Thailand, Vietnam, Indonesia, South Korean, Japan, China, Bahrain, UAE, the United Kingdom, France, Spain, etc... In 2010, the company's total revenue was approximately 3,382.74 million of Singapore dollar (SGD) and gross profit was about 1,265.46 million SGD. Some entities under the CapitaLand Group are Australand, CapitaLandCommercial Trust, CapitaMalls Asia, etc...

II. An introduction of the host country.

Although CaptaLand's presence is all over the world, however, in this report I will solely talk about its expansion to only one fully promising and potential market, Vietnam. Vietnam, officially the Socialist Republic of Viet Nam, is the easternmost country of the Indochina Peninsula, locating within the South East Asia region. Viet Nam gained its liberty in 1975 and until the present, has been quickly recovering the economy. With an approximate population of 86 million (2010), Vietnam has a wide and deep market which gives business companies, including foreign companies, a good incentive to incept or expand their business in Viet Nam. Not to mention Vietnam's copiousness of natural resources and relatively low-cost labour, many manufacturers have been striving to set up their factories in Vietnam.

CapitaLand has been doing its business in Vietnam since 1994 but they officially had its presence there only until 2004. In 2006, CapitaLand settled down its first office in Ho Chi Minh City and 2 years later, it opened another office in Ha Noi in order to easily expand the real estate business in Vietnam.

III. Financial constraints.

Seemingly there is no financial constraint to CapitaLand when they invest in Vietnam's real estate market. Established in the year of 2000, the company's market value at that time was already 8.9 billion of Singapore dollars and this value went up to over 40 billion Singapore dollars at the end of 2009. In 2010, in an interview with Mr. Yip Hoong Mun, Vice-President of CapitaLand Vietnam, he stated that CapitaLand intended to make Vietnam their 4th core market after Singapore, China and Australia by increasing the investment from 1% of the total property value of the group to 10% in 3 - 5 years' time.

IV. Cultural differences.

Since CapitaLand is a Singapore-based group, it definitely has some differences in culture in doing business with Vietnam.

The first difference in culture lies in the difference in language between the two countries. Vietnam's native speakers speak Vietnamese, as opposed to Singaporeans who speak Mandarin Chinese and English as their mother language. Therefore, there will be a slight obstacle lying between the communication, especially when someone wants to convey one particular idea or concept directly to another person in charge.

Secondly, propriety and courtesy play an important role in doing business with the Vietnamese, peculiarly in personal-relationship matters. They tend to be very interpersonally formal at first to decrease the uncertainty about their contacts. Foreign businessmen can expect to find little actual business to be done in the initial meeting with Vietnamese



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