Comparison of Vietnam and The Philippines

The countries selected – the Philippines and Vietnam have a big population that is literate. Most of the citizens in the countries have formal education and are conversant with technological advancement. The countries also have industries that require the services provided by saleforce.com. The Philippines has about 13 industries that include fuel, construction, transport, telecommunications, to name a few. Vietnam has industries that deal in coal mining, steel, food processing, shoes etc. These wide ranges of industries provide a broad market for Saleforce.com to exploit.

Industry Level Structural Advantages in Country

Both Vietnam and the Philippines are welcome to international investors. The policies provide a friendly environment for Salesforce to establish their business in both countries. Like mentioned earlier, both nations have a population that is literate and the country policies embrace technological advancement. The Philippines is investing in information technology and the expenditure is estimated to reach 6.6 billion dollars by 2020 (Philippines: Country Commercial Guide, 2017). Vietnam is not left behind in embracing technology and also presents an advantage for Saleforce.com.

Opportunity Support Factors

Both nations have a calm political environment which presents an amble business platform. There is a good business climate since there are a number of industries present in both countries as well. The income tax in the Philippines is similar for both local and foreign countries and this is a fair policy for foreign investors. Also, the country has put in place piracy laws that protect intellectual property. Both countries have policies aimed at sustaining a reliable secure network due to the high cases of piracy and duplication of intellectual property.

Threats for Both Countries

Industry Level Threats in Country

In both countries, the company faces competition from other companies that provide the CRM software. Most of these companies provide services that are hybrid where they can deploy CRM both at the premise or use the cloud services. There are new entrants that provide free applications of the cloud-based services. Some of the competitors in the Philippines include Sugar CRM, Pipedrive, Microsoft Dynamics CRM as international competitors (Datanyze, 2018a) while local competition is from DevTac Asia, Cambria and DevTac Asia. In Vietnam, the competitors are ZOHO CRM, Freshsales, Vietnam Infusionsoft Agile CRM and ItviecIn locally (Datanyze, 2018b).

Threats

The president of the Republic of the Philippines is considered temperamental, and this is a threat to the business environment. However, most Filipinos like him and this may be an opportunity. Vietnam is a communist country and a one party state. This situation is likely to change since there have been threats of Chinese interference. This is likely to affect the business environment in a negative way.

Reasons for Recommending the Philippines

Both countries offer lucrative opportunities for Salesforce to establish a data center. The Philippines, however, has the necessary resources that the company needs to operate effectively and efficiently. In terms of GDP, it has a total of 825M USD with a 7% AGR. This is approximately 600M USD more than Vietnam which is 223M USD with an AGR of 6.5 by the year 2020 (The World Bank, 2018). According to ASEAN, the Philippines comes fifth on the list of the largest economy with Vietnam coming sixth.

The country has various threats that will face Salesforce when establishing their center. The president, Rodrigo Duterte is focused on improving information technology but has been said to be temperamental according to other leaders. In terms of legal threats, Salesforce faces the piracy and intellectual laws. They have huge penalties when breached in the country and the probability of the threat is medium. Salesforce can mitigate this threat by advocating to the government to add additional policies because the county has had rampant cases of breach of these laws. The country also faces an environmental threat due to the fast growing economy. The company can mitigate this by embracing green energy in most of its operations to enhance a sustainable environment.

Target Market size in Recommended Country

Target Segment in the Philippines

The Philippines is a country that is adapting the use of information technology in its industries. This is proven by the efforts of the president and the amount of national resources directed towards this. The citizens are literate and have acquired formal education. Most of the people that are employed are conversant with technology and use the internet. Nearly 92% of the people have access to technology inform of internet (Philippines – Information and Communications Technology, 2017). The industries are embracing customer relationship management through cloud software. There is already a technological culture and this is the most important pillar in establishing the services of Salesforce. The Philippines economy is driven by the electronics assembly and semiconductors. The Philippines Business Registry (2018) recorded there were over 400,000 companies that were registered with over 56,000 other companies renewing their registry.

Estimate Target Market(s) in Dollars or Units or Buyers

Salesforce has many service enterprises willing to use their cloud software services to build and maintain customer relationships. There are 11447 service enterprises coming up annually which translate to an annual subscription rate of 22849 (Salesforce.com coverage, n.d.) . This is by virtue of an enterprise subscribing twice annually. The estimated target market would be; the number of subscriptions 22849 by the amount of subscription per month (150). When multiplied by the number of months in a year (12) the market size is estimated at $41,209,200 US dollars. If the estimated growth rate of the company has to be established in a period of 3 years: the number of service enterprises will be estimated to double in the second year (11447 by 2= 22849) and triple in the third (11447 by 3 =34,341).

First Year 22,894 by 150 by 12 months = $41,209,200 US dollars.

Second Year 45,698 by 150 by 12 months = 82,256,400 US dollar

Third Year 68,682 by 150 by 12 months = 123,627,600

Total = 247,093,200 US Dollars

References

Datanyze. (2018a). Salesforce market share in Philippines and competitor report. Retrieved from https://www.datanyze.com/market-share/customer-relationship-management/Philippines/salesforce-market-share

Datanyze. (2018b). Salesforce market share in Vietnam and competitor report. Retrieved from https://www.datanyze.com/market-share/customer-relationship-management/Vietnam/salesforce-market-share

Philippines – Information and Communications Technology. (2017, July 13). Retrieved from https://www.export.gov/article?id=Philippines-Information-and-Communications-Technology

Philippines Business Registry. (2018). Year-to-date business name registration statistical report, January – August 2018. Retrieved fromhttps://www.business.gov.ph/web/guest/business-statistics

Philippines: Country Commercial Guide. (2017 July 13). Retrieved from https://www.export.gov/article?id=Philippines-Information-and-Communications-Technology

Salesforce.com coverage. (n.d.). CRM search. Retrieved from http://www.crmsearch.com/salesforce-products.php

The World Bank. (2018, June 14). Vietnam’s economic prospects improve further, with GDP projected to expand by 6.8 percent in 2018. Retrieved from https://www.worldbank.org/en/news/press-release/2018/06/14/vietnams-economic-prospect-improves-further-with-gdp-projected-to-expand-by-68-percent-in-2018