According to the eclectic theory, the international advantage includes the level that to control the management. Theoretically, the company is able to have international advantage when it investment capital in company of new market region, such as equity base. The company should have high control level to the market management legally as it is the owner of the new foreign company. However, in the case of hotel industry, the owner and the operator of hotel industry is usually separated as most of them had used the management contract, especially in the large international hotel chain (Dunning, J.H. and McQueen, M., 1981).
Recommendation of entry mode
It is recommended to use management contract based on the brand to enter the new region, Vietnam. According to Eyster (1988), management contract is an agreement between the owner of a hotel and an operator. The operator is assigned take the place of operating and managing the hotel with receiving a management fee in return. Generally, the management contract is the formed of the local property developers and the investors who are interested to involved in the new market region. The owners can be able provide appropriate management expertise and established reputation (Adams, 2000).
By using the entry mode of management contract, Four Seasons Hotels and Resorts can have a high level of control as management contract is one of the equity based of entry mode. The high level of control mode can prevent the company get lose when the locals making and enforcing contract, low standard of quality of service, or the risk of dissipation of knowledge.
Fortunately, after Vietnam has joined the World Trade Organization, it has a complete open-door to welcome the MNEs. The MNEs can enter this new region relatively easy with the limited economy control by the government. Furthermore, Vietnams who has higher education can speak in at least three languages fluently, including the local language, English, and French. This can help the company a lot as the management team can select the staffs with a higher standard rather than wasting time to train the language level to reach its luxury standard of service. Though there may be some cultural difference between Canada and Vietnam, such as the Vietnamese staff may refuse to spread out their opinions due to the hierarchical structure in the local firms, these are some minor problems that can be able to improve by having more communication and training programmes. Overall, Four Seasons Hotels and Resorts has got a high ownership and location advantage for entering Vietnam.