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Market development strategy of renewable energy industry in Vietnam

Article in International Journal of Business and Globalisation · March 2023

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Int. J. Business and Globalisation, Vol. X, No. Y, xxxx 1

Market development strategy of renewable energy

industry in Vietnam

Tran Thi Ngoc Lan

Ho Chi Minh City University of Food Industry,
140 Le Trong Tan, Tan Phu District, Ho Chi Minh City, Vietnam
Email: [email protected]

Le Doan Minh Duc

University of Economics Ho Chi Minh City,
59C Nguyen Dinh Chieu, District 3, Ho Chi Minh City, Vietnam
Email: [email protected]

Nguyen Hoang Tien and Do Huu Hai*

Ho Chi Minh City University of Food Industry,
140 Le Trong Tan, Tan Phu district, Ho Chi Minh City, Vietnam
Email: [email protected]
Email: [email protected]
*Corresponding author

Nguyen Van Nhung

LG Electronics Vietnam Ltd., Vietnam
Email: [email protected]

Le Ngoc Thong
National Economics University in Hanoi,
207 Giai Phong, Hai Ba Trung District, Hanoi, Vietnam
Email: [email protected]

Abstract: This article analyses the market development strategies of renewable

energy enterprises in Vietnam. Using primary and secondary research data, the
article pointed out the shortcomings in the strategic stages of market
development of enterprises. From there, the article proposes some solutions to
complete the market development strategy to improve operational efficiency of
the renewable energy business. In addition, a number of macro-level policies are
also proposed to improve the general situation of the industry so that enterprises
thereof can implement their own development direction in accordance with their
own actual situation.

Keywords: market development; business strategy; sustainability; renewable

energy; natural resource; cleaner production; Vietnam.

Copyright © 20XX Inderscience Enterprises Ltd.

2 T.T.N. Lan et al.

Reference to this paper should be made as follows: Lan, T.T.N., Duc, L.D.M.,
Tien, N.H., Hai, D.H., Nhung, N.V. and Thong, L.N. (xxxx) ‘Market
development strategy of renewable energy industry in Vietnam’, Int. J. Business
and Globalisation, Vol. X, No. Y, pp.xxx–xxx.

Biographical notes: Tran Thi Ngoc Lan is a Lecturer and the Head of
Management Department of the Faculty of Business Administration, Ho Chi
Minh City University of Food Industry, specialising in business management.

Le Doan Minh Duc is a Lecturer at University of Economics Ho Chi Minh City,

specialising in accounting and financial management.

Nguyen Hoang Tien is a Lecturer at the Faculty of Business Administration, Ho

Chi Minh City University of Food Industry, specialising in business
management.

Do Huu Hai is a Lecturer at the Faculty of Business Administration, Ho Chi

Minh City University of Food Industry, specialising in business management.

Nguyen Van Nhung is a Middle Manager at the LG Electronics Vietnam, Ltd.

Le Ngoc Thong is a Lecturer at the National Economics University in Hanoi,

specialising in business management.

1 Introduction

A market development strategy is a business growth strategy that focuses on introducing

the products or services a company currently produces and offers to the new markets.
Companies often use a market development strategy to identify and develop new
opportunities to sell their products and services in previously unexplored markets.
After many constant fluctuations of the global economy, mostly due to COVID-19
related constraints, Vietnam’s economy is showing many positive signs of growth. In
recent years in particular, all national economic indicators s how that commercial markets
are gradually warming up, and consumers are having gradually abandoned the habit of
tightening up their spending. This is a good opportunity for all companies doing business
in Vietnam.
With a nascent economy like Vietnam, taking shortcuts has become extremely urgent.
In addition, the trend of international trade is gradually becoming inevitable for the
economy in order to create an abundance of goods to serve consumers’ demand and to
boost domestic production through imports and foreign currency collection through
exports. Regional and world integration within the framework of CPTPP agreement makes
Vietnam’s economy face many opportunities in international trade in the future.
Vietnam is facing many opportunities but also many difficulties and challenges in
ensuring national and corporate energy security, green and sustainable development
(Dana, 1994; Dana and Dana, 2003). Accordingly, the issue of restructuring the electricity
and energy sectors was strongly directed along with the promotion of restructuring and
improving the efficiency of state-owned enterprises, continuing toequities and divest state
capital in the state-owned enterprises, building the electricity market according to the
approved roadmap, enhancing its effectiveness, implementing the
 Market development strategy of renewable energy industry in Vietnam 3

wholesale electricity market, preparing for the competitive retail market phase after 2022.
Besides, Vietnam is set to continue the implementation of the national program on
economical and efficient use of energy.
Energy transition is not only an internal issue of the energy within an industry, but also
an important part of transforming the economy from an energy-intensive model to an
energy-efficient one. Vietnam is a dynamic economy with a lot of potential for the
renewable energy industry. If a specific roadmap is set, it is possible to achieve the targets
on reducing greenhouse gas emissions. Also in 2020, the Prime Minister approved
Vietnam’s level of such contribution determined by each country in the world.
Accordingly, with domestic resources, by 2030 Vietnam will reduce its total greenhouse
gas emissions by 9% compared to the normal development scenario and can increase its
contribution up to 27% when receiving international support through bilateral and
multilateral cooperation and implementation of new mechanisms under the Paris
Agreement on climate change.
We can see the potential as well as the intensity of competition among renewable
energy companies and the pressure they are under is still very high. With the current fierce
competition in the industry, it is still quite difficult to develop markets and find new
commercial markets for them.
The increasingly fierce competition in Vietnam’s market forces companies to have new
directions to help both affirm their extant position and develop further. An urgent problem
for those companies is how to develop their market, affirm their position and build
corporate image for customers. In fact, with the orientation of expanding commercial
markets, sectorial companies have been developing business strategies towards market
development, however the effectiveness of these strategies is still unsatisfactory.
The article systematises the basic theories of market development strategies. The
authors research, analyse and present in a systematic way the current issues of renewable
energy and the related market development strategy. The article fully and in detail
evaluates the effectiveness of corporate market development strategies, analyses and
assesses their impact on renewable energy usage efficiency. From there, the authors
compare and draw useful lessons for market development strategies of enterprises in the
field of renewable energy. Also on that basis, the authors propose solutions to complete
the market development strategy and to put forward conditions for their successful
implementation to ensure the goal of national and corporate stability of development.

2 Theoretical issues and research overview

2.1 Some basic concepts

2.1.1 The concept of strategy
Strategy is a term derived from the field of military science. In Greek language, it means
‘strategos’ and it is used to refer to the planning and deployment of forces with the goal of
defeating the enemy. According to the military theorist C. Clausewitz, also the strategist
of the 19th century, strategy is the planning of war and the planning of combat campaigns.
4 T.T.N. Lan et al.

In Vietnamese dictionaries, strategies are long-term plans devised to win on one or

more fronts. In general, strategies are tactics and schemes devised by military commanders
to win the battle and conquer the enemy.
From the ‘60s of the 20th century, people also used this term in business rivalry and
market competition, called business strategy. Since then, there have been many different
approaches and studies on business strategy.
In 1962, Chandler defined strategy as the determination of the basic long-term goals
and objectives of an enterprise and the application of a series of actions as well as the
allocation of resources necessary to achieve those goals.
In the 1980s, Quinn gave a more general definition of strategy as a pattern or a plan
that rigorously integrates key objectives, policies, and action sequences into a coherent
entirety.
Later, Johnson and Scholes (1999) redefined strategy in a rapidly changing
environment. Strategy is the direction and scope of an organisation over the long-term to
gain competitive advantage via configuring its resources in a changing environment to
meet market needs and satisfy customer expectations.
The new approach is to align strategy with what the company has in its both external
and internal business environment. Andrew (1987) was the first to put forth the idea
prominently in his work called ‘The concept of corporate strategy’ and considers strategy
to be what an organisation must do based on its strengths and weaknesses and also in the
context of opportunities and threats from the business environment.
Bruce Henderson, strategist and founder of Boston Consulting Group (BCG), believes
that strategy is the deliberate search for a plan of action to develop and combine all
organisation’s competitive advantages. Porter also agrees with Henderson’s statement and
asserts that competitive strategy involves differentiation. It is the careful selection of a
different set of actions to create a unique set of values compared to the competition (Huan,
1996).

2.1.2 Concept of market development strategy

Market development strategy must be understood as a long-term scope-oriented strategy
to bring current products and services to sell in new markets through the enterprise’s
resources (Gioi et al., 2011).
Market development strategy is also understood as seeking growth by entering new
markets to distribute products currently manufactured by the enterprise. This strategic
orientation requires enterprises to have a dynamic and effective distribution system,
especially to have adequate resources to promote this activity such as capital, human
resources, and also the operational and production capacity to meet the needs of new
markets (Son, 2001; Tam, 2000).
This is also the strategy of not only a given functional department which plays an
important role in the good implementation of the corporate business strategy. The proper
implementation of a market development strategy including pricing, sales promotion,
advertising and distribution strategies will help the company to maintain its market
position compared to its competitors.
To conclude in the most general way, a market development strategy is a strategy based
on figuring out how to sell the company’s current products in new markets.
 Market development strategy of renewable energy industry in Vietnam 5

2.2 Research panorama on market development strategy and renewable energy

2.2.1 Research panorama on market development strategy
Research on market development strategies has long been a topic that many scholars and
business practitioners around the world have delved into. Many studies have become
influential manuals of general knowledge for future generations of business researchers.
Among those studies, the following most famous are:
 David (2006): This book presents a system of strategic issues, including market
expansion strategy, in order to give an overview of the strategy.
 Kotler (2006): This book focuses on key decisions made by top management and
management board regarding marketing activities, including corporate market
development.
 Aaker (1998): This is a classic book on market management strategy. The book with
16 chapters has provided a full range of basic research contents on market
management strategy. In which, important contents are: market analysis, business
environment, competitors’ analysis; strategies for building and managing businesses,
branding, competition and growth.
 Drucker (2012): The book gives an in-depth and detailed insight into the problems of
managers facing fluctuations in both domestic and foreign markets.
 Moore (2013): By identifying ‘modernists’ and ‘backwards’, and the group in
between these two extremes, the book plots a roadmap for developing new markets.
Although the focus is on marketing in the high-tech sector, the lessons and examples
given here can be applied to many other industries and sectors.

2.2.2 Research panorama on renewable energy

The world is adding renewable energy production and development to expand and nurture
natural resources. The various elements of the renewable energy development strategy are
always related with the restriction or economical use of natural resources in order to bring
about the sustainability of energy exploitation. Bayale et al. (2021) assessed that the
increased use of renewable energy has been and is a reflection of its importance to nature.
It is found that the support for the production and use of renewable energy will be
increasingly high in parallel with the reduction of the use of natural resources. Meanwhile,
Karimi et al. (2018) studied association between renewable energy production and natural
resource usage in developed countries. A variety of models and theories have been applied
to confirm the relationship between them. Their findings show that the production and use
of renewable energy provides multiple benefits to the economy compared to the
exploration of natural resources. These models show the importance of renewable energy
production and consumption as emerging energy sources in order to promote sustainability
while offloading the use of finite natural resources. Hossain (2017) explained the
importance of renewable energy and the role of application of adequate technologies in its
production. These technologies also propose efficient and well-balanced use of natural
resources. The results thus confirmed a critical association of the sustainability of natural
resources with the active promotion of renewable energy research and development.
Okada and Samreth (2017) have investigated the association
6 T.T.N. Lan et al.

of natural resources use and renewable energy production with diverse factors typical for
the developed world. Oil is considered as a specific component of natural resources with
a wide variety of degrees of influence. The results show that the increased production of
renewable energy helps keep and push forward the sustainability of natural resources. Al-
Marhubi (2021) investigated the role of renewable energy in reducing labour cost in
manufacturing in order to understand its importance as an alternative for natural resources.
The results show that there is a strong impact of renewable energy production on
controlling the effective use of natural resources. In addition, the renewable energy in its
variety of forms increases the efficient use of natural resources. Qi and Li (2017) have
examined the effects of renewable energy consumption on natural resources in various
economic growth conditions and stages of energy transition. The analysis is done to verify
the relationship between a number of important factors and the results show that renewable
energy helps reduce spending of both economy and businesses by the increase of efficient
use of natural resources. Güney (2021) studied the association of the sustainability of
natural resources with the renewable energy development in highly industrialised nations.
Various factors affecting renewable energy development are considered to confirm its
positive impact on natural resources. Pegkas (2020) has investigated the association
between the natural resources consumption and the renewable energy development in
Greece. Renewable energy development includes behaviours in multiple time horizons to
save the natural resources in out planet. The research results support an increase in the
renewable energy development leading to an extension of the source and an increase of
efficient use of natural resources. Atienza (2019) has explained the association of positive
socio-economic development with adequate natural resources policy. The results show that
the renewable energy development was behind both the importance and the efficiency of
natural resources use. Similarly, Crespi et al. (2018) hypothesised that the role of
renewable energy is more critical due to its great contribution to maintain the natural
resources. The results indicated a positive impact of renewable energy development on the
increase of value and sustainability of natural resources.
Economic growth and the sustainability of natural resources are interrelated and
inversely proportional to the revenue due to natural resources intensive exploration. Al-
Moulani and Alexiou (2017) have examined the economic growth across diverse industries
with strong links with natural resources use in different world’s economies. The results
obtained show that strong economic growth can offer various advantages for sustainable
development and enhancement of the value of natural resources. Saadaoui and Jbir (2021)
have studied the relationship between economic growth and oil resources exploration. They
found that high economic growth also reduces the cost of natural resources usage through
adequate financial and technology investment. They confirm a strong association of natural
resources with economic growth. A study conducted by Khan et al. (2020) reiterated the
link between economic growth and natural resources usage in different developing
economies. They put forward a hypothesis that the economic growth involving colossal
energy need is an imperative for effective natural resources management. Shen et al. (2021)
have also investigated the nexus between natural resources and green financial investment
in penting up energy greediness. The findings have showed positive effects of economic
growth spurred by green financial investment on the ability to sustain natural resources.
Sasaki (2021) also has studied the tie between economic sustainability and natural
resources in a relation with population growth. The results show that the improvement of
population growth rate increases the
 Market development strategy of renewable energy industry in Vietnam 7

value and usability of natural resources. Brauner-Otto and Axinn (2017) in their research
also have come to the conclusion that that population growth is a critical element as it has
a directly positive impact on the sustainability of natural resources of out planet.

3 Research methods

3.1 Research process

The research process started from identifying the research problem, establishing research
goals (and objectives) on the basis of research questions. In order to solve the research
problem and reach the research goals (and objectives) or in other words answer the
research questions, the authors conduct a literature overview on the theoretical basis related
to the research problem along with designing specific methods for empirical research. The
research methods start from collecting data and then processing them. Having processed
data, the authors conduct analysis in order to obtain findings for discussions and
conclusions about the problem being researched. Combined with the theoretical basis, the
authors put forward several suggestions and solutions for the stated research problem.

3.2 Research methods

3.2.1 Data collection methods
3.2.1.1 Primary data collection method using multiple choice questionnaires
To implement this data collection method, the authors have setup a multiple choice
questionnaire system. These multiple-choice questions revolve around such issues as
assessing the resources of companies, identifying the external and internal business
environment, and studying the actual situation of implementing market development
strategies of companies. After setting up the questionnaire system, the authors print them
out and distribute them to the board of directors, heads of departments, sales staff,
marketing staff, suppliers’ representatives, customers’ representatives and companies’
representatives. The final results obtained from these questionnaires were synthesised as
a primary data source for the research process.
 Purpose of use: The survey method through questionnaires is used to collect in a
general way evaluating opinions of companies’ staff on the actual situation of their
market development strategy implementation as well as both the opportunities and
challenges derived from the external environment and their internal strengths and
weaknesses.
 Procedure: We design and build a questionnaire with 15 questions. The total number
of questionnaires issued was 30 and 30/30 valid were collected. The questionnaires
were distributed to individuals in the company with different ranks and job
characteristics. The company’s related information was collected, synthesised,
commented and generally assessed on issues related to the market development
strategy implementation. The method of conducting the survey is based on the form
of questionnaires distributed to each of companies’ employees so that they could
8 T.T.N. Lan et al.

fully answer all the questions in the questionnaire. We had plenty of time to conduct
the investigation – two days, from 22 June 2022 to 23 June 2022.

3.2.1.2 Secondary data collection method

 Internal data sources: We collected reports on business results, reports on the
companies’ market situation, market share in the renewable energy industry in the
North as well as in the South of Vietnam. In addition, we also collect data on the
companies’ capacity profile, organisational structure, human resources, facilities and
financial situation. We also were interested in reports on the import of renewable
energy from companies; annual reports on evaluation of marketing activities.
Minutes of marketing department’s briefings related to the orientation and actual
implementation of the market development strategy were also included in the
analysis.
 External data sources: We collected information on the renewable energy market,
business environment, information related to the field of renewable energy
production and distribution and energy trading companies, especially when it comes
to renewable energy via journals and books on the field, electronic newspapers and
related scientific papers. Information on renewable energy market fluctuations, tax
policy changes are also monitored by the authors. In addition, we also collect
information related to the industry’s competitors and the export of renewable energy,
the companies’ partners in the world such as from Chile, France, Australia, USA,
and South Africa.

3.2.2 Data processing method

 Statistical method: From the secondary data obtained from companies’ both internal
and external sources authors review all the information and then evaluates its
importance for the study. From that important information, the author makes
statistical summary and presents it in Word documents for future research.
 Comparative method: Based on companies’ market share data on renewable energy
related activities, by comparison, the authors were able to see their positions in the
industry market and maps of their distribution of renewable energy products. From
these data, the authors were able to identify their main competitors to carry out
adequate analysis to find for them appropriate market development strategies. In
addition, the authors also compare the companies’ revenue and market share from
the period 2017 to 2021 to see if the market development strategies that the
companies have implemented were effective and to what extent.
 Analytical and synthetic method: This method is used in the entire process of
research to analyse and synthesise the assessment of the actual situation of
implementing market development strategies of companies in the period 2017–2021.
During the analysis process, based on the qualitative method, authors clarified
theoretically and practically companies’ market development strategies, thereby
showing the achieved and unattained results. On that basis authors combined with
environment related factors to make recommendations to improve the implemented
market development strategies.
 Market development strategy of renewable energy industry in Vietnam 9

4 Strategy of market development

4.1 General assessment of market development strategy

4.1.1 Achievements acquired
Vietnam is a tropical coastal country, so its natural advantages create all favourable
conditions for the production and use of renewable energy towards greenhouse effect
reduction and sustainable green growth. Among the renewable energy sources that can be
inexhaustible are solar, ocean wave and wind energy sources. The analysis of geographical
features of regions shows that in this respect the Southern provinces (from Da Nang
southwards) have many advantages over the Northern provinces. Especially, the Southern
Central Coastal provinces are all together an ideal strip of land to develop, use and provide
a large source of renewable energy for the whole country. Therefore, up to now, the South
Central Coast provinces, specifically Da Nang, Khanh Hoa, Ninh Thuan and Binh Thuan
are the four provinces that have so fare focused on many renewable energy projects,
accounting for more than half of all related national projects in both size and quantity.
Contrary to that development trend, companies are focusing on developing renewable
energy for the northern regions, taking Hanoi as the centre to reach out to the provinces of
the Red River Delta with Hai Phong as the focal point. This is an encouraging achievement
and it can be said that the companies have developed new markets according to the blue
ocean strategy, avoiding competition against the bigplayers in the industry in concentrated
competitive markets such as the South Central Coast provinces. This may also be the
reason why companies have been successful so far and develop sustainably despite
difficulties caused by the COVID-19 pandemic over the past two years. However, in order
to reach out and dominate the nationwide market, the companies have gradually shown
their presence in the Central region (Da Nang) and the South (Ho Chi Minh City and the
South-Western provinces) and gradually covered the whole country. This confirms the
correctness of the market development strategy in terms of breadth (market extension) over
recent years.

4.1.2 Cause of success

4.1.2.1 Objective reasons
For companies doing business in the renewable energy industry, just like other industries,
when the economy grows, it will increase the living standards and life quality of consumers
and the demand for energy, amongst others, the electricity will increase. Energy needs in
people’s daily life and in manufacturing and service activities are increasing day by day.
Moreover, the awareness of environmental protection towards a clean, beautiful and green
living environment is also to be enhanced. In addition, renewable energy products are
gradually popularised and become more competitive in prices.
In terms of population growth, Vietnam with a large population of over 100 million
people as of 2022, and with such a rapid population growth rate, the middle class and small
and medium enterprises are increasing in size and quantity, their demand for renewable
energy products will increase to supplement traditional energy sources which are limited,
cost-ineffective and expected to be exhausted in the coming decades. This is a potential
market and opportunity for Vietnamese renewable energies companies to aim
10 T.T.N. Lan et al.

for. If there is no specific strategy to develop renewable energy sources right now, in the
future Vietnam will have to import energy from abroad to serve its economic growth just
like China and India do today.

4.1.2.2 Subjective reasons

In the process of developing renewable energy sources and renewable energy markets over
time, one of the core success factors is the will and unyielding entrepreneurial spirit of
companies’ leaders at all management levels and key employees. Moreover, it is the
commitment to training, spreading inspiration and aspiration in business to lead and foster
the current generations to make the miraculous development today.
With characteristics of the industry to orient towards a healthy living style of
individuals and safe and prosperous environment for the society and all business entities,
and green economic growth following the trend of harmonious and sustainable
development of the international community. The most precious thing that has been created
every day, through each of its activities, is to sow the seeds of environmental protection
awareness, develop and effectively use renewable energy sources and limit the
consumption of natural resources instead of relying on ‘golden forest and silver sea’ for
each individual, collective, community and society as a whole.
In addition, companies have contributed to help share and spread new knowledge about
renewable energy to the community and especially the young consumers. It is possible for
the model of renewable energy development – production – distribution – consumption to
be replicated and developed throughout the country.
Finally, all companies have focused on investing heavily in training and developing
high-quality human resources in order to constantly improve the professional
qualifications, work skills and practical experience related to business and high technology
in the field to be able to meet the strictest requirements in terms of quality, output, time,
cost as well as the work efficiency set by business partners and customers.

4.1.3 Problems raised

In addition to the successes in the market development strategies mentioned above, we
also need to review a number of limitations (with subjective reasons) and challenges (with
objective reasons) for companies that have not reached their full potential to reach out to
further markets both in breadth and in depth, in terms of forward and backward integration.
Firstly, in addition to the limited potential, the intensity of competition on the
renewable energy market in Vietnam and the pressure that business entities in the industry
are facing is extremely high. Competition among enterprises is fierce, although this
industry is still quite young compared to other industries. Currently, the renewable energy
market in Vietnam fluctuates and changes a lot when more competitive foreign business
entities easily penetrate the market and offer their own products. Trade barriers are
gradually removed, becoming an advantage for these foreign enterprises, and at the same
time, it becomes difficulties especially for the local small and medium ones with limited
resources, capacity, finance and technology.
Due to many subjective (internal) and objective (external) reasons, apart from the
general statements, the companies still do not have a specific roadmap to develop the
 Market development strategy of renewable energy industry in Vietnam 11

renewable energy outbound market for neighbouring countries in Indochina such as Laos,
Cambodia and Myanmar as committed in their action strategy.

4.1.4 The cause of the limitations

The technology factors are not only related to the speed of change and development of its
application in the field of renewable energy but also the professional qualifications of
companies’ staff and technical infrastructure. These also directly affect the quality of the
product (e.g., production, storage, distribution, and conservation). In fact, for the market
development goals of the companies, product quality is a pioneering and essential
requirement to compete with others in the same industry or market. Therefore, the
technology factors also significantly affect the completion of the market development
strategies based on marketing tools such as manufacturing, storage and distribution,
promotion and communication.
To implement the market development strategies in the right directi on, the companies
need to conduct continuous analysis of the business environment at all levels to identify
opportunities and challenges; cooperation and association with partners; focus strongly
on marketing research, market segmentation, surveying of consumption trends of the two
main customer groups (B2B and B2C) for renewable energy product lines. From there, we
can deploy the right marketing tools to drive sales both in breadth and depth. However, in
reality, due to the limited resources or time constraints companies’ marketing solutions do
not always to bring about desired effects. Analysis of current situation shows that the
allocation of human and financial resources properly and sufficiently for the
implementation of the market development strategies of the companies has not really been
secured by all levels of management.

5 Solutions for market development strategy

5.1 Market development orientation in the period of 2022–2030

5.1.1 Forecast of renewable energy development in Vietnam market
In order to forecast the renewable energy market in Vietnam, first of all, it is necessary to
clarify and understand the nature of this industry, the benefits it will bring to the
community around the world and our planet in general. From there, we can propose overall
and market development orientations that are best suited to the ongoing and future
developments of the open and integrated renewable energy market as of Vietnam today.
Firstly, the various key success factors of the renewable energy development strategy
are always associated with the limitation or economical use of natural resources to ensure
energy autonomy and to bring about sustainable energy exploitation of all countries,
including Vietnam.
Second, society and the international community have always expressed support for
the increased production and use of renewable energy and this support will increase
overtime and proportionally with the reduction of the use of finite natural resources.
Third, the importance of increasing production of renewable energy and the related
technologies is always emphasised. For the production of renewable energy, these
technologies also suggest limiting and/or developing efficient use of natural resources.
12 T.T.N. Lan et al.

Fourth, the increased production of renewable energy sources contributes a significant

proportion to maintaining the sustainability of natural resources. Renewable energy leads
to savings in the economy’s spending, which also increases the efficiency of natural
resources use. The role of renewable energy becomes more important due to its
contribution to the maintenance of natural resources.
Fifth, the consumption of renewable energy includes long-term and short-term
behaviours that help protect and expand natural resources. Substantial consumption of
renewable energy sources increases the importance and efficiency of the use of natural
resources. The production and consumption of renewable energy will increase the overall
value of natural resources.
Sixth, strong economic as well as population growth can establish various advantages
for the active development of renewable energy sources and increase the value of natural
resources. So, we have found a positive relationship between economic growth and the
ability to maintain the sustainability of natural resources.
From the above statements, we can make some forecasts for the market situation and
the situation of renewable energy industry in Vietnam. In the roadmap to reduce emissions
according to the commitments that Vietnam must comply with, renewable energy plays a
very important role. Renewable energy as described above are forms of energy obtained
from the natural environment or from sources that can be replenished naturally. Vietnam
has the advantage of being one of the countries in the distribution of sunlight with the most
sunlight per year on the radiation map provided by the world, and at the same time, a
coastline of over 3,600 km with thousands of islands already inhabited where the national
power grid cannot get there. Therefore, using solar energy in Vietnam as an on-site
alternative energy source for traditional power production to meet the needs of the
population ensures socio-economic and national security. Moreover, solar batteries are
cheap, saving electricity resources for the national electricity sources. Solar energy helps
reduce greenhouse gases, contributes to climate regulation, does not cause dust, toxic,
noise, and is very friendly to the environment. The above geographical and natural
conditions of Vietnam show that among renewable energy sources, solar energy may have
the highest potential for development, especially in the Central and Southern provinces,
where the weather is hot and sunny all year round. Therefore, developing solar energy is a
way for Vietnam to carry out the revolution of renewable and green energy, and this is a
good way to reduce the exploitation of natural resources, protecting the national ecological
environment.

5.1.2 Market development orientation in the period of 2022–2030

From the forecasts of market trends and renewable energy industrial context of Vietnam
mentioned above, our researched companies have some market development orientations
in period of 2022–2030 as follows:

5.1.2.1 Market development in depth

Implement marketing and communication campaigns to the masses to raise awareness of
environmental protection and encourage businesses and households to continue promoting
the use of renewable energy sources, gradually switching from traditional electric, coal
and gas energy sources to electricity obtained from renewable sources such as solar cells.
 Market development strategy of renewable energy industry in Vietnam 13

Collaborate with other business partners in the same industry to lobby, build
relationships with local authorities, policy makers to come up with favourable mechanisms
and policies for the use of renewable energy such as sun powered battery in the process of
manufacturing production, business operation, service delivery and personal consumption
of Vietnamese households.

5.1.2.2 Market development in terms of breadth

Expand the distribution network of solar battery products to remote, mountainous areas
and Sea Islands of Vietnam where the national power grid has not yet been able to deploy,
so that all villages and communes have access to solar power.
Strengthen large-scale production of large-capacity solar panels and put them into use
in areas with year-round sunshine in order to accumulate and store large amounts of
electricity to supply to other regions of the world. There is a nationwide strong and rising
demand for renewable electricity from this energy source.

5.1.2.3 Forward integration link

Integration with solar power distributors to eliminate intermediaries to bring this
renewable energy infrastructure and power sources directly to users in a help to reduce
costs, encourage use and conversion to this energy source.

5.1.2.4 Backward integration link

Integration with distributors of solar battery equipment to be able to buy directly from the
source with the largest quantity and at the lowest price, in addition to investing in research
and development to manufacture products themselves with best quality, largest capacity
and the most suitable price for domestic markets first and serve the needs of exporting to
neighbouring Indochina markets in the future.

5.1.2.5 Entering the international market

After the domestic market development strategies has been implemented fully to exploit
the domestic potential and the domestic market in the provinces, the next step is to
penetrate the markets of Indochina countries in the region to serve as a launching p ad to
reach out to other developing countries in the region and internationally. In foreign markets
such as Laos, Cambodia or Myanmar, it is necessary to analyse the specific market
situation and to ensure the success and feasibility of the strategy, companies will consider
cooperation and association with competitors in the same industry to step together to
entering such foreign markets, to supplement their capacity to compete with enterprises
from other parts of the world.

5.2 Some solutions to perfect the market development strategy

5.2.1 Some measures to develop the market
The results of the survey consisted of questionnaires and interviews showed that the
business environment including the external and the internal environment of the companies
have a great influence on the direction of business activities in general and
14 T.T.N. Lan et al.

their implementation of the market development strategies in particular. In fact, companies

have implemented diversified market development strategies in both directions of
expanding in breadth and developing the market in depth to the right direction. Implement
the broad market development strategy that the companies conduct by expanding the
geographical markets and extending the target groups of consumers for its products.
Implementation of the in-depth market development strategy that the company carries out
by penetrating more deeply into the current market by product diversification, forward and
backward integration. A prerequisite for implementing in- depth market development
strategy is that the companies must conduct meticulous and detailed market research and
then deploy appropriate marketing tools to achieve the set goals. However, in reality, both
the market research and marketing solutions that they have implemented have not been
effective so far. In this section, we refer to solutions to promote market research and
exploration, thereby getting the right orientations for the market development process. In
the next section, we will discuss how marketing tools are put in use in order to gradually
achieve the desired market goals.

5.2.1.1 Business environment analysis problem

The process of analysing business environment follows a classic three-stage process. Stage
1 is an analysis of the five segments of the macro environment. The second stage is to
analyse five groups of competitive pressures according to Porter’s model. The third stage
is the analysis of functional and non-functional activities within. However, because
companies have been operating in the field of clean, green and renewable energy, in
addition to general analysis, we need to furtherly analyse some following highlights to get
more precise research results. Concretely, we need to focus on the following aspects of the
analysis process:
 The domestic and foreign technological environment that promotes R&D solutions
to put into production and consumption of renewable energy.
 The legal framework for the application of technology in the production, distribution
and use of renewable energy that is specific to each country, including Vietnam.

5.2.1.2 Market analysis problem

In addition to the analysis according to Porter’s five forces model, we need to identify
strategic groups in an industry’s competitive environment that have the same size, market
share, and common market development orientation. Companies will compete directly
with each other within these strategic groups instead of competing with all competitors
within the same renewable industry.

5.2.1.3 The problem of surveying consumer trends

The technology used in renewable energy production is also changing rapidly as
companies in this industry are investing heavily in R&D to come up with new technologies
to help generate renewable energy sources that are cleaner, more cost-effective (cheaper)
and with higher capacity. Therefore, customers have increasingly more choices and can
give up the supply of one company and find a better alternative.
 Market development strategy of renewable energy industry in Vietnam 15

Technological development trends of renewable energy companies and consumption

trends of customer groups are parallel with a two-way causal relationship.

5.2.2 Enhance marketing activities

5.2.2.1 Product policy
Although the main products of the companies are electric batteries using solar energy, they
also diversify product lines with diverse capacity, shape, and model to suit customers’
usage goals regardless whether they are end-consumers or business and service customers.
Besides, warranty, maintenance, exchange and repair services are also proposed to best care
and serve customers nationwide. The companies also consult new product lines on foreign
markets to see if they can invest in research, self-manufacturing or importing to boost the
level of diversification of product lines to serve domestic customers.

5.2.2.2 Price policy

Companies always offer flexible pricing policies with different discount, instalment, and
post-paid rates depending on the target customers in the direction of increasing mass
consumption in order to promote the role of renewable energy in the society and economy
to orient to gradually replace traditional energy sources partly to protect the environment
towards a green consumption society, and partly to maximise the market expansion in order
to compete with other competitors in the industry.

5.2.2.3 Distribution policy

The companies always want their products to reach customers (and consumers) in the
fastest and most direct possible way and through as few intermediaries as possible.
Therefore, the companies always focus on expanding the distribution network, delivering
and installing quickly with as much as possible showrooms and customer care centres
stretching across the provinces and regions nationwide.

5.2.2.4 Brand development policy

From the beginning, companies have focused on investing in brand development through
building a complete brand identity and brand promotion activities based on the quality and
reputation of products and services. The company’s brand development strategy is based
on values related to its responsibility to society, the community and the surrounding
environment. Because the nature of the products and the accompanying services say it all,
and the studies presented in the theoretical basis have also shown the same. Therefore, this
is a very favourable platform and opportunity for PR and brand development activities for
products and services that are already very fashionable and popular in the market due to
adverse climate change and other negative global phenomena that each individual,
business or national government must commit to take specific actions.
16 T.T.N. Lan et al.

5.2.2.5 Sales policy

Companies develop a strong and professional sales team well-trained in product features
as well as in communication skills to bring maximum customer satisfaction and revenue.
The companies have rewarding policies for good and experienced sales staff, encouraging
the transfer of experience and mutual learning among teams to achieve the common goal
of sales and success in terms of customer satisfaction with green, clean and
environmentally friendly values brought to the society and the community.

5.2.2.6 Promotion communication policy

Companies apply both traditional and multimedia communication methods to convey
important mission and messages to customers, markets, communities, society, the
environment and the rest of stakeholders. PR activities, product or trade promotion are
carried out methodically, synchronously, and linked together to create a synergistic effect
that makes stakeholders feel clearly about the issues. The benefits and values beyond time
that the companies wish to provide to the market is worth and worthy of continual business
operation and devotion for the benefit of the community and the environment.

5.2.3 Develop resources to execute market development strategy

In addition to the problems related to the market analysis and effectiveness of the
application of the above marketing tools in the orientation and implementation of the
market development strategy, the issues related to the organisation and allocation of human
and financial resources have not been really under sufficient consideration for many
subjective and objective reasons. On the side of the first group of reasons, the research
points out the lack of consensus among leaders at all management levels with many
conflicting views and visions related to the reasons, scope, agenda of using resources and
the need to solve problems with payments before, during or after use. Regarding the
objective group of reasons, it is because the resources of the companies are still limited, but
the ambitions of the leaders are overwhelming and there is no resonance in the common
use and sharing of resources between functional departments.
On the human resource side, the market research staff with extensive practical
experience will help identify target groups, user (consumer) behaviour for renewable
energy products, discover new business opportunities, identify geographical limits of each
region to propose appropriate market development strategies.
Finally, the survey results and interviews with a number of key leaders of the
companies all lead to the conclusion that the research to find solutions boosting the market
development strategy in the coming period is very necessary and must be carried out
continuously because the market is constantly changing. No market development strategy
is perfect as it risks losing its feasibility and/or being unable to obtain stakeholders
consensus and resources at any time to be implemented to the final stage.

5.3 Solutions proposed

5.3.1 Recommendations to the government, ministries, central committees
The renewable energy industry is a new one, although it is already very developed in highly
industrialised countries in the world. However, in Vietnam, it is still in the
 Market development strategy of renewable energy industry in Vietnam 17

fragmentation (nascent) stage along with facing huge competitive pressure at home and
from abroad. Therefore, enterprises in this industry need to enjoy the protection of the
government for a certain period of time in order to gradually grow and stand on their own
in the fiercely competitive market.
Due to the important nature of the renewable energy sector for the sustainable
development of the society and economy, state, government and ministries and sectorial
representatives need to have common development orientations for the whole industry and
the whole market to follow, keep up with the general trend in the world instead of letting
businesses self orient in a random and spontaneous way. Central and ministerial-level
agencies need to be involved to a certain extent to correct development directions,
including market development in a synchronous manner for the common interests of the
whole society, community and related stakeholders.
It is necessary to establish a national venture fund for development to support
companies in the renewable energy industry that are struggling to get in and stay so that
many of them of diverse sizes and scales could come together to enter the market that is
both promising and risky. The state can even acquire companies operating in the renewable
energy sector that are on the verge of bankruptcy to reinvest and thereby put them on a
new development trajectory.

5.3.2 Recommendations to Vietnam Clean Energy Association

Vietnam Clean Energy Association (VCEA) needs to clearly define what its role is in the
development of the renewable energy industry and how they can actively support each
company in its orientation and on the way of development path. A very specific
recommendation is to link a number of small and medium renewable energy companies
together to become a counterweight for companies in the same industry with larger scale
and potential. Since then, a joint venture map in the field of clean energy and renewable
energy in Vietnam will be formed and this map will be under the control of the clean energy
association VCEA. Such joint ventures will have greater bargaining power and influence
due to synergies and sharing of resources, and can better plan their own and each member’s
market development path.

Acknowledgements

This work has been funded by: National Economic University, Hanoi; University of
Economics Ho Chi Minh City; Ho Chi Minh City University of Food Industry under
Contract No. 149/HD-DCT.

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