EM – As society develops, the production level is constantly increasing and creating similar products and services in each field and industry. Therefore, the ultimate “weapon” of enterprises to compete must be culture.
The role of culture in national and corporate competitive strategies
Human history has proven that the prosperity of the nation must be created, not inherited. Such prosperity does not grow from the availability of natural resources, labor resources, interest rates, or the value of a country’s currency, as classical economic theory claims. It must come from innovation, continuous upgrades and creation of a distinct competitive advantage of businesses in it.
In the past, technological know-how, production capacity, capital, etc… were considered as the competitive strength of the country and of enterprises. Those who own such resources will gain the upper hand in determining how the market functions by favorable decisions, both economically and politically.
For example, Taiwan’s semiconductor industry, when it dominated more than 60% of the global market and just one “sneeze” of this country and TSMC corporation was sufficient to distort the world order.
However, in flat world, these advantages will lessen in their impact due to the behavior of countries alongside businesses. Large countries are forced to share technology with other countries.
The biggest concern of businesses is to focus on maximizing profits,. To maximize profits, it is essential that businesses connect – form a joint venture, hence extending their scope of operation abroad to take advantage of cheaper labor costs, raw materials, etc. Gradually, technological transfer, or even partial exchange of core technology, will become imperative. Countries and businesses, with the aim of increasing the localization rate of their production, will face the need to undertake such policy roadmap. Countries with enterprises at the receiving end of technological transfer will quickly grasp the technology and improve their management and production capacity. Then, similar technologies, similar products will emerge. Then, owning technology will no longer be a vital competitive factor.
Culture is the brand of the business
With the saturation of the market for products and services, it is close to impossible to choose the best product, but only the most suitable one. At that time, the competitive strategy to make a difference for businesses or, more broadly, for countries is culture.
It can be said that culture is what is missing when we have everything, what is left when all is lost! This fact also goes for businesses and countries!
Culture strengthens nations, connect business
The cultural industry in Vietnam is still an incomplete concept, still on paper with spontaneous attempts of businesses, independent producers. However, spontaneity fails to cultivate popularity, and overall development of the industry. (who are always ready to see and seize opportunities regardless of opinion or the overall development of the industry). Meanwhile, across the continents, a new multipolar world order is being established with “soft power”(*) being their primary tool for power. Consider Thailand, our neighbor, who has invested in its culture as an industry, contributing to GDP growth and strengthening the nation.
This small Southeast Asian country stands at the crossroads of some of the world’s most influential cultural industries – where English is the second most popular language, only after Thai. Despite sharing borders with China and lying within the reach of both Hallyu as well as Cool Japan, Thailand has chosen to be independent,in their thinking and action, thus, becoming the second largest exporter of cultural products in ASEAN after Singapore, and the only country in the region. The sector has maintained a higher share of exports than imports of cultural products for more than 10 years.
It is based on bold ideas such as the Creative City initiative that has attracted talent and cultural industry enterprises locally and abroad. Policies to support small and medium-sized enterprises in the creative industry have been implemented in many forms: investment, lending, tax incentives, tax refunds, government guarantees for international loans, etc.
Thailand sets a target that the cultural industry will contribute 10% to their GDP in many forms
From the corporate perspective, corporate culture is also particularly important, directly affecting the sustainable development of the organization. Consider these factors: No smuggling, tax evasion; no producing hazardous goods; no owing salary and social insurance of employees; no cheating,… besides acting as legal provisions, these are the cultural characteristics of an upright business. By doing so, corporations can win the trust of the market, customers and even employees in the business.
According to a global survey by the ILO, workers always have a mindset: They want to belong somewhere to contribute and create value for the organization and themselves. But which organization is suitable? An upright one.
This matching factor showcases that the fundamental aim of organizations, such as attracting and engaging members, must rely on corporate culture. If the corporate culture is weak, each department, each personnel will aimlessly operate as a lost electron, which becomes vulnerable to disintegration as soon as work pressure is apparent . Contradictions, unattainable consensus might even begin to emerge in the coordination process between departments and individuals. A strong corporate culture will motivate employees to consider it as their second home that they canto strive and build together
Culture makes customers become more loyal to the business
For any business, customer loyalty is paramount. Customer loyalty is not only reflected in their choice to consume in the past or present, but also in the future. Therefore, customers’ trust needs to be treated as a long-term investment and valuable assets for each business. To develop sustainably, businesses cannot survive without this group of loyal customers.
It has been proven that 20% of existing customers can generate 80% of profits for the business. Many businesses focus on attracting new customers to increase their income, however, in reality, statistical data shows that revenue mainly comes from existing customers. Existing customers can pay up to 67% more than a new customer.
But we must ask the question: How to gain loyalty?
This question is not easy to answer but surely customer loyalty must be accumulated from positive experiences in product quality, service, and customer-centric corporate culture.
Positive experience in quality and corporate culture creates customer loyalty
For businesses that want to stay ahead, it is very important to create a customer-centric culture. Research by Deloitte shows that customer-oriented businesses are 60% more profitable than those without a customer-oriented strategy.
Customer orientation creates a loyal customer community, which brings more revenue to the business in the long run. A survey by Temkin also shows that loyal customers are 5 times more likely to buy, 7 times more likely to buy new products and 4 times more likely to recommend your company to friends or family. This is a very valuable reference.
A customer-centric culture is not only profitable, but also beneficial to the company’s employees. A survey by SurveyMonkey found that employees who work in a customer-centric company feel valued. When they feel that their leaders value their customers, their level of commitment to the organization increases for at least 2 years.
Besides, when the products of enterprises have similarity, which product will customers choose? How much will your business sell for or have to reduce the price before it goes bankrupt?
At that time, corporate culture will be one of the main factors determining the degree of customer loyalty to your brand. Therefore, culture is the ultimate advantage among the global competitive weapon between countries or businesses today.
The role and importance of corporate culture in sustainable economic development have been closely concerned and directed by Government. Our Party has identified a number of new tasks to build culture in politics and economy; develop cultural industries and perfect the cultural market. The 12th Politburo issued Conclusion No. 76-KL/TW on continuing to implement Resolution No. 33-NQ/TW of the 11th Party Central Committee on building and developing Vietnamese culture and people meets the requirements of sustainable development of the country.
On December 3, 2022, the second National Forum “Culture with Business” in 2022 with the theme “Cultural revival – the foundation for sustainable economic recovery and development” was solemnly held which confirm the more urgent requirements for corporate culture.
The forum is an opportunity to review the implementation of the Vietnamese business culture criteria set by the Prime Minister directing the Vietnam Corporate Culture Development Association.
Gama Vietnam is the only company in the elevator industry to be honored “Enterprise meeting Vietnamese business culture standards” in 2022.
Gama Vietnam is one of 24 enterprises honored at the Forum
