Competition among localities for FDI attraction, if not guided by a national strategy, can turn into a race to the bottom - lowering taxes and increasing incentives to "buy" foreign investment at an unsustainably high cost, ultimately harming both provinces and the country.

VietnamNet continues its conversation with Professor John Quelch, former Vice Dean of Harvard Business School, on the subject of local branding and investment attraction following Vietnam's large-scale provincial mergers.

Vietnam has undertaken a significant administrative reform, reducing its 63 provinces to 34. Many familiar names like Ha Tay, Ninh Thuan, and Hau Giang have vanished from the administrative map. From your perspective, when a province loses its name, should its regional brand also be erased? Or can these legacy names be retained as "heritage brands" for trade, tourism, and investment promotion?

Professor John Quelch: I believe that, fundamentally, merging provinces in Vietnam is a sound idea. The United States is a much larger economy with only 50 states. By contrast, Vietnam, with a much smaller economy, had over 60 provinces. So, I see consolidation as a reasonable move.

Administrative unification doesn't mean the disappearance of local culture. However, people in villages, towns, or provinces whose names have been removed from the official map will likely need to make greater efforts to preserve and strengthen their cultural identity. While some might feel a sense of loss not seeing their province’s name on a map, I don’t think anyone will be "shocked" simply because of a name change.

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Ho Chi Minh City Party Secretary Nguyen Van Nen and Professor John Quelch met to discuss development strategies following recent administrative mergers.

Many local Vietnamese brands are closely tied to regional products such as "Doan Hung pomelo," "Bat Trang pottery," "Ninh Thuan grapes," and "Hau Giang shrimp." With administrative mergers and name changes, will this affect the brand value in the minds of international consumers? Do you have any recommendations for protecting these intangible assets?

I understand. Many global brands are linked to specific locations, right? Take Idaho potatoes in the U.S. - everyone associates them with premium quality. Or Wisconsin cheese - well-known across America. In France, you have Champagne - not a province, but a region. Only sparkling wine produced from grapes grown and processed there can officially be called Champagne. Others must be labeled sparkling wine. The people of Champagne are serious about enforcing brand protection and have even pursued legal action against misuses of the name.

So, in situations like the one you describe, producers - say, the grape growers - will need to work even harder to reinforce their brand identity. They’ll be compelled to ensure that their brand, such as “Ninh Thuan grapes,” does not fade away. Therefore, administrative changes could serve as positive motivation for local communities to step up efforts to preserve their heritage value and product branding.

Globally, countries like Germany, Japan, and Canada have merged administrative units while maintaining regional identities through cultural, tourism, or economic branding. Could you share any international lessons in preserving and repositioning local brands after administrative names are removed?

That’s a difficult question, but let me use Spain as an example. Madrid is the capital, but everyone knows Barcelona, the capital of Catalonia. Barcelona is not just a city - it’s a cultural symbol, and the Catalan people are very proud of their identity. Barcelona is also famous for its football club, which rivals Madrid’s, helping to foster a strong regional identity and a sense of positive energy.

I think similar dynamics can unfold in Vietnam. Hanoi’s culture is very different from that of Ho Chi Minh City. Healthy competition among cities and regions can drive national progress. On the other hand, an overly centralized system - like Paris in France - can overshadow other localities. So yes, I believe regional competition is good, and every locality should maintain its identity after merging.

Many Vietnamese provinces are now looking to build “regional brands” as a pillar for attracting FDI, developing tourism, and enhancing competitiveness. In your view, what role can regional branding play in the overall economic development strategy post-reform?

I think competition among provinces for FDI is a good thing. However, the central government needs to provide overarching strategic direction to ensure that provinces don’t compete in harmful ways - like racing to cut taxes and offer unsustainable incentives to secure foreign investment. In some cases, a province may agree to a deal it should have declined, simply to meet FDI targets.

That’s why we need a national FDI strategy - not to micromanage provinces, but to offer guidance. For example, if a European automaker wants to build a factory in Vietnam with a capacity of 5,000 to 10,000 vehicles a year, the central government should help coordinate instead of allowing provinces to fight over it, potentially resulting in a deal that’s bad for the whole country.

You’ve said that national branding doesn’t belong solely to the central government - it’s also built on strong local identities, products, and stories. For newly merged provinces in Vietnam, what do you suggest for building a “multi-center” brand that retains old legacies while creating new identities?

Vietnam has a rich history and many UNESCO-recognized heritage sites. Some provinces are strong in historical value, others have beautiful coastlines, while some inland provinces remain underdeveloped for tourism. Yet these very provinces could offer great potential for eco-tourism targeting high-end international travelers. And wealthy international tourists often become future investors.

What provinces need to do is audit their assets and capabilities and fully leverage them. Additionally, neighboring inland provinces with similar climates and geographies could form alliances to jointly attract large investments and share benefits. One province might host one part of the project, another province a different part. Nothing prevents provinces with shared characteristics from working together to scale up and appeal to major investors.

From a communications and international marketing perspective, does renaming localities create barriers for foreign market engagement, especially for small businesses? Do you have suggestions for transitioning from old administrative brands to new identities without disrupting brand image?

If you're a business, the biggest disruption isn’t the name change - it’s new regulations. For instance, food companies must undergo factory safety inspections. If your factory suddenly belongs to a new province, do safety regulations change? Will you need to spend time and money adjusting operations? Mergers may lighten the load for regulators, but they can be a hassle for small businesses.

Therefore, there must be a transition period. For example, new regulations should only take effect a year later, giving companies time to adapt. Don’t implement new rules starting “next Monday.” That’s not feasible for small businesses.

Professor John Quelch is a leading expert in international marketing, national and local branding, FDI strategy, and global healthcare. He previously served as Vice Dean of top global business schools including Harvard Business School, London Business School, and China Europe International Business School (CEIBS).

He is currently a professor at the Miami Herbert Business School, University of Miami, where he also served as Vice Dean and Dean of the School of Public Health and International Studies. Outside academia, he has served on the boards of major corporations and advised governments and international firms on branding strategy.

Lan Anh