The paper "Environmental Scanning of Vitasoy" is a great example of a management case study. Vietnam which is officially referred to as the Socialist Republic of Vietnam is the easternmost country on the Indochina Peninsula. Some of the countries bordering it include China, Laos, Cambodia and Malaysia. When compared to the countries near it, Vietnam seems to be a more probable place for the company to base its operations. A major aspect that makes it a probable place is the high population in the country in that, it is rated as the 14th most populous country globally (Taylor 2013) and it is also the 18th most populous country in Asia.
This means that, even though a great number of the people in the country may not take up the brand, a considerable number of them are likely to purchase the products from Vitasoy thus making it profitable in the country as opposed to when the company is operating other countries. Additionally, the soft drink industry in Vietnam seems to be expanding rapidly over the last decades. The expansion in the industry tends to benefit from the higher living standards of the population in Vietnam which results from the rapid economic development due to the open-door policy that was implemented in the country.
As a matter of fact, Vietnam also seems to be the most probable market based on the fact that it has a very young generation in the country and these groups of individuals are likely to adapt to modern lifestyles and enjoy the economic development that is taking place in the country. This means that the young population is likely to make more purchases of the soft drinks in the country thus making the industry competitive and profitable for the various players (Ireland, Hoskisson & Hitt 2008).
The young generation is more likely to make purchases of the soft drink based on the notion that they engage in activities that calls for soft drinks for refreshment. The young population is likely to consume soft drinks after engaging in sports activities, during their leisure times and also during hiking activities. Additionally, these groups are not that health-conscious and they may make purchases even on a daily basis. When viewed on the basis of the various sectors of the economy in the country, the soft drink sector in Vietnam tends to account for a significant proportion of the beverage industry.
At the same time, it is termed as being the most efficient sectors in Vietnam. Also when viewed on the basis of the largest enterprises, the food and drink sector in Vietnam seems to be doing fine in terms of revenue, average ROA (return on assets) as well as in terms of the average ROE (return on equity) (Chuc n. d).
By basing their operations in Vietnam, Vitasoy can benefit in that, it may over time have a considerable share of the market provided it offers high-quality products and advertise their products through the right channels to their target customers. Another aspect that makes Vietnam a probable and the best destination for Vitasoy to base their operation is the One, Belt, One Road policy which has been implemented in China. The policy is a development strategy that was formulated and started by the Chinese government back in 2013.
It refers to the New Silk Road Economic Belt that linked Europe through the Central and Western Asia as well as the 21st Century Marine Silk Road connection to China and the Southeast Asian countries, Europe and Africa. Based on the fact that Vietnam had close ties with China on matters related to investment and trade, there will be a deepening god the cooperation in terms of infrastructure and other key development projects (Caixin Online 2014). Vietnam will benefit in that there has been a lot of criticism on the policy over time with a great number of people arguing that the policy was poorly voted for and at the same time it was viewed as being an unsustainable idea.
This makes the Chinese market less favorable when compared to Vietnam. This means that, based on the fact that the policy is unsustainable, there is a financial black hole in China. This means that the people of China will have a lesser purchasing power of luxury products such as soft drinks. In respect to these, Vitasoy needs to consider these aspects and base their operations in Vietnam since they are likely to benefit more than when they base their operations in China and other neighboring countries.