The SKF representative office in Ho Chi Minh City is small. The staff of 10 is headed by Schwindling, the only expatriate, who is also the general manager of the Hanoi branch office. The Hanoi office reports to the Ho Chi Minh City office. Exhibit CS 11.4 shows the SKF Vietnam organizational chart. Until recently the Vietnamese authorities imposed strict limits on the number of staff a representative office could employ, arguing that since companies were not allowed to conduct business through representative offices they had no need for many employees. Current regulations allow the hiring of an unrestricted number of Vietnamese nationals but severely restrict the number of expatriates employed.
The four service engineers based in Ho Chi Minh City, led by Nguyen Phuong Dong, are responsible for identifying and meeting potential customers of SKF products, discovering their needs and developing the relationship. They are very important for the success of SKF in Vietnam'. Each engineer has a separate geographical area to cover as well as responsibilit) industry segment Mr Dong, for example covers Ho Chi Minh City and northwards as far coastal city of Nha Trang, in addition to the big end-user customers wherever they r based. Another engineer covers the big OEM customers as well as a geographical regie three engineers in Hanoi work on the same principle, but face a different set of probl tackling the customer base.
By 1995 SKF Vietnam expected sales of several million dollars, from zero four years
Growth in 1993 was 40% and in 1994 was 20%. In 1995 sales growth was conser estimated at 29%, compared with Vietnamese industrial growth of 15 - 20%. Three-fifths i Vietnam's sales are made in the south, and two-fifths in the north of the country. The c industry is its largest customer, accounting for nearly 15% of tumover steel accounts for afi 8 - 10%, and the paper and sugar industries for 5 - 10% each. The cement and steel industri expected to increase capacity substantially in the coming years, through local and fc investment, to supply the construction industry.
SKF Vietnam reports directly to SKF Asean Bearing Division, the company's regional headqu in Hong Kong, but supplies are normally imported through the large warehousing operati Singapore. Technical support is also provided via Singapore. SKF Vietnam may also co, specialists worldwide for additional technical assistance.
In the first phase of activity, SKF Vietnam devoted its efforts to contacting big end-users in aftemiarket. This meant building links with the cement plants, steel mills, paper mills and a industrial customers. In the second phase, the challenge has been to create a nation' industrial distribution network through which SKE products can be channelled. A third p much further down the line, will be to develop access to small customers who currently I after themselves. Exhibit CS 11.5 shows this pyramid of customers.
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