Goodyear Fdi In Asian Essay

2494 words - 10 pages

Cheng Vang

Global Finance
Argosy University

Assignment M8A1

This research paper is focus on Goodyear Tire and Rubber Company (Goodyear). The objective of this research paper is to determine if Goodyear should expand to Vietnam as a Foreign Direct Investment (FDI) or not. The research will focus on these areas:

1) Goodyear Financial
2) History of Goodyear
3) Principal of Business
4) The Country Vietnam
a. History
b. Economy
d. Trade and Balance of Payments
g. Intellectual property rights
h. Work forces
i. Currency exchange rate
5) Conclusion

Goodyear is a US based company, which is ...view middle of the document...

Recently, Goodyear financially has had a net operating loss in the past three years due to the recession but in the first quarter of this year; Goodyear has a profitable sale. The sale was four times higher than what Wall Street estimate for its home market (North America). Globally, sales also are up about 22% which contribute to a $5.40 billion in net sale for the first quarter of this year. Goodyear has a good current ratio, quick ratio, receivable turnover, Inventory turnover, and asset turnover. The long-term debt to equity was high due to large debt accumulated by the new plant in Dalian, China. In addition, rising fuel price, natural rubber prices, supply, and significant increase in other key commodities are also potential concerns.
In 1959, Goodyear expanded to the Asian Market when the company built a new plant in Delhi, India. As a multi-national corporation, Goodyear divided the global market into five regions: North America, Europe, Middle East/Africa, Latin America, and Asia Pacific. The Asia Pacific market consists of China, India, Indonesia, Japan, Malaysia, Singapore, and Thailand. This research paper will focus on the Asia Pacific market and whether Vietnam would be a good market for Goodyear to expand into.
Historically, Vietnam is a tributary state of China and has been wrought by struggle for much of its history. In the 19th century, France colonized Vietnam. Vietnam was part of French Indochina until 1945 when Japan ousted the French administration and set up the Empire of Vietnam. The Empire of Vietnam is only lasted for a few months due to the Japanese surrendered to the Allies at the end of World War II. As the Empire of Vietnam diminishing, a group of Viet Minh rise to seize power and British try establishing control over Vietnam too, when they landed troops on October 1945. The French also try to re-establish in the following year but was unsuccessful. The Viet Minh grew in power with the aid of China, the French finally surrendered in 1954. After the French surrender, instead the country gain peace, it was split into North and South Vietnam. The country then entered the Vietnam War era which struggle for 21 years. The North was control by the Communist Party regime of Viet Minh and the South was established itself as the Republic of Vietnam. The North Communist regime was aid of the China and Soviet Union. The South was aid of the U.S government. The Vietnam War was finally end on April 1975 with Fall of Saigon to the North Communist Regime.
Vietnam is roughly about 127,243 square miles which equivalent to the size Ohio, Kentucky, and Tennessee combined. It also contains a rich landscape, with a long coastline that stretches from the Gulf of Tonkin in the north to the Gulf of Thailand in the southwest. Vietnam is border on the west by the countries Cambodia and Laos, north by China, east and south by the South China Sea. The population of Vietnam is about 90 million with the majority of the...

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