Business Environment

| Plan( command) economy| Market economy| Mixed economy| Economic in Transition| Features| . Have strong Government control. .In the command economies, Goverment own most of industrial and company. In this, good and service were made for basic need. .These Goverment give the decision for what and how much goods( service) distributed.. Profit is not the goals| . It is economy that has little Goverment control.. In this, good and service were decided by customer. Profit is the main motive of all businesses. The price was set by supply and demand..

Government can interfere on economy by invisible hand . Consumers are free to choice| . Resources are owned both by the government as well as private individuals. . Market are closely monitored by the government| . It is an economy which is changing from Plan(command) economy to market economy. | Advantages| . Everything belong to basic need are provided by government.. The govt has decision which good are produced.. Equity Social | . The market produce everything which consumer need.. A good competition environment..

Wide Variety of goods and services| . Social cost of business may be paid.. There is less inequality of income.. Private company take responsibility for welfare of society| | Disadvantages| . Everything is allocated according to a planning process, consumers have no choice.. Goods lack of diversity . Allocate and product are not effective. (Because lack of competition)| . Ignore Social cost. Have gap between the rich and the poor. consumption of harmful goods| . bureaucratic nature is prevalent in mixed economy..

The mixed economy suffers from Government. | | 2. Main failures of planned economy * Unlike the “market economy” where prices of goods and services are set by the forces or supply and demand. The government set and allocate resources on their priorities. As a result, Customers are often very dissatisfied with the government’s actions. * Planned economy can not adapt to changing environment. So that, this inability to adapt can be their downfall . * Items desired by consumers are often scarce. 3. Strong points of Market economy:

* freedom of choice among the producers and consumers, competition which in turn improve production process, reduces the burden to the government like making decisions about what to produce for the well being of the citizens * It stimulates invention of new technologies for the sake of maximizing production and improving the quality of the products, it contributes to the increase of national income since private sectors are supposed to pay taxes to the government 4. Vn in 1986 up to present (stage of economy transition): The economy of Vietnam from 1986 up to present had a lot of changing on policies.

It influenced strongly the economic development . In which Doi Moi is a critical point marks the shift of Vietnamese economy from planned economy to market economy. we could say integration in to the international market help impact of consumption, investment and export through it to improvement of GDP. 5. Allocate resources Allocation of resources, apportionment of productive assets among different uses. Resource allocation arises as an issue because the resources of a society are in limited supply, whereas human wants are usually unlimited, and because any given resource can have many alternative uses.

Plan economy| Market economy| Mixed economy| In planned economies and in the public sectors of mixed economies, the decisions regarding resource distribution are political. | In free-enterprise systems, the price system is the primary mechanism through which resources are distributed among the uses most desired by consumers. | Resource allocation could be undertaken exclusively through markets or exclusively through governments. Markets allocate resources through voluntary choices made by supply and demand of customer.

Governments force allocation through involuntary taxes, laws, restrictions, and regulations. | 6. Related with VN I. Land and natural resources: Viet Nam has abundant natural resources but it is becoming depleted because of strict control policy. Evaluation and reassess of resources are very important to give value of the resource (include social cost). From that have planned to maintain, improve and store resources. I. Human resources: Vietnam’s labor force is very large but it is somewhat low skill employees. The reason is the education system has not keep up with the world.

So that, nation must investment and control to training a source of high-quality of human resource. It is the most important. II. Technology: Today, Vietnam had become a member of WTO since 2007, so Vietnam will has more advantages in accession of modern technology from developed countries” It will make nation have more advantages in access technology from country oversea. However, National need to capture and use it as a resource for the study and develop new technology is the right choice to keep up with the world.