Mối quan hệ giữa hoạt động phát triển nhà cung cấp và lợi thế cạnh tranh của doanh nghiệp mua trường hợp các doanh nghiệp sản xuất chế tạo tại thành phố hồ chí minh TT TIENG ANH

MINISTRY OF EDUCATION –TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY NGUYEN PHI HOANG THE RELATIONSHIP BETWEEN SUPPLIER DEVELOPMENT ACTIVIES AND BUYING FIRM’S COMPETITIVE ADVANTAGE: THE CASE OF MANUFACTURING FIRMS IN HO CHI MINH CITY Major: Business Admistration Code: 93.40.101 SUMMARY OF Ph.D DISERTATION HO CHI MINH CITY – 2021 DISCLOSURE OF RESEARCH RESULTS RELATED TO THE THESIS Article published in the International Confernace Nguyen Phi Hoang (2017) Buiding firm’s competitive advantages through supplier development The 12th International Conference of KODISA Ho Chi Minh city, Viet Nam, 171-173 Articles published in Academic journals 2.1 Nguyen Phi Hoang (2020) The relationship between supplier development activities and buying firm’s competitive advantage Journal of Economic Studies, Vol 4, April, 41 – 48 2.2 Nguyen Phi Hoang (2020) Supplier development: Literature review and directions for future studies Journal of Vietnam Trade and Industry Review, Vol 5, March, 63 -67 Chapter INTRODUCTION 1.1 Essensials of the study With fierce competition pressure as well as rapid technological changes and product life cycle tends to be shorter, the firms today tend to return to focus on their core business instead of expanding to multi-industry as before (Krause et al., 2000; Routroy and Pradhan, 2013) This leads to the phenomenon that firms begin to increase their buying volume from suppliers to serve their daily activities, in some industries, the proportion of external purchases may up to 60-70% (Chapman et al., 1997; Heberling et al., 1992) This phenomenon is supported by a variety of factors such as globalization, intelligence Technology, transportation, so it becomes more and more popular in most industries recent time The increase in buying volume from supplier gradually pushes these firms to become increasingly dependent on a supplier system from price, product quality, stability and flexibility (Prahinski, 2001) As a result, the firm’s competitive advantage is increasingly is influenced by the performance of its supplier system (Wagner, 2006b) From above facts, these firms recognize the urgent need to find and establish qualified suppliers to create and maintain a competitive advantage in the market (Routroy and Pradhan, 2013) One of the methods to reach such above objective is supplier development This method is by which enterprise builds an effective supplier system by assisting the supplier system to carry out some activities to improve their performance (Wagner, 2006a; Wagner, 2006b; Wagner, 2010) Successful implementation of supplier development activities will help to improve the efficiency of delivery services, product quality, product innovation and production costs for such supplier The above mentioned improvements will contribute to increase buying firm’s competitive advantage as supplier’s customers (Golden, 1999; MacDuffie and Helper, 1997; Dyer and Nobeoka, 2000; Sako, 1999; Liker and Choi, 2004; Stuart et al., 2004; Dyer and Hatch, 2006) The studies of Humphreys et al (2004), Manzoor et al (2019), Li (2001), Rotich et al (2014) and Al - Abdallah et al (2014) on the relationship between supplier development activities and buying firm’s competitive advantage have shown the positive effects of supplier development activities on buying firm’s competitive advantage However, these studies have not fully studied the supplier development activities which buying firms can to improve the competitive advantage These studies have also not yet answered the question of why to select such appropriate supplier development activities among many supplier development activities to implement and have not yet identified the impact of each supplier development activities to buying firm’s competitive advantage In the context of Vietnam, with a starting point from a country with low level of technology and industrialization, the size of enterprises is mainly small and micro, leading to the fact that Vietnamese enterprises cannot lead any supply chains, still heavily dependent on foreign countries, has not yet occupied a firm position in the supply chain and lacks of basic foundation for independent development (GSO, 2021), especially manufacturing enterprises in Ho Chi Minh City, while Resolution No 23NQ/TW dated March 22, 2018 of the Politburo stresses manufacturing as the main growth momentum for the national industry The situation of Covid -19 over the past time has shown that Vietnamese firms depend too much on foreign supply from textiles, footwear to electronics industry (Nguyen Long, 2020) Research on supplier development in relation to buying fimr’s competitive advantage, especially for firms in the manufacturing industry in Vietnam, will be essentially necessary and meaningful in promoting FDI enterprises, usually enterprises with a strong technical and financial, carry out supplier development activities in Vietnam to gradually reduce the import from foreign suppliers This will bring great benefits to the Vietnamese economy in general and FDI enterprises operating in Vietnam in particular in reducing dependence on foreign supplies, cutting costs and shortening delivery time and play an important role in building a network of Vietnamese enterprises in the manufacturing sector which can replace foreign suppliers and actively participate in global supply chains with high value added products These Vietnamese enterprises, after receiving the supplier development activities from the buying firm, will in turn try to build up an efficient supplier system for them as a result is the appreance of some supply chain with majority of members operating in Vietnam Because of the abovementioned importance of developing suppliers to the buying firm’s competitive advantage, especially for firms in the manufacturing industry of Ho Chi Minh city, "The relationship between the supplier developing activities and buying firm’s competitive advantage: The case of manufacturing firms in Ho Chi Minh city ” was selected as the subject of this thesis 1.2 Research aims and research questions: 1.2.1 Research aims i Examining the relationship between indirect supplier development activities and buying firm’s competitive advantage in the manufacturing industry in Ho Chi Minh city, ii Examining the relationship between direct supplier development activities and buying firm’s competitive advantage in the manufacturing industry in Ho Chi Minh city, iii Proposing managment implications for buying firms operating in manufacturing industry of Ho Chi Minh City to increase thier competitive advantage through developing suppliers 1.2.2 i Research question How indirect supplier development activitives affect buying firm’s competitive advantage in the manufacturing industry of Ho Chi Minh City? And how the impact level for individual activity? ii How direct supplier development activitives affect buying firm’s competitive advantage in the manufacturing industry of Ho Chi Minh City? And how the impact level for individual activity? iii What management implications buying firm in the manufacturing industry of Ho Chi Minh city can to improve thier competitive advantage through supplier development activities? 1.3 Research object and scope The research object of this thesis is the relationship between the supplier developing activities and buying firm’s competitive advantage and the scope of thesis focus on the relationship between the supplier developing activities and buying firm’s competitive advantage in the contect of manufacturing firms in Ho Chi Minh city Thesis’s interviewer consists of managers working in manufacturing industry in HCM city in charge of purchasing, logistics, planning, materials supply, marketing and production 1.4 The research methodology: Consist of two stages 1.4.1 1st stage: Qualitative approach  Study the general theory related to supplier development activities  Interview method to explore, confirm the scale, variables for each construcs in research model 1.4.2 2nd stage: Quantitative approach This stage used some techniques as Cronbach’s Alpha to assess the reliability of scale, exploratory factor analysis method (EFA) to assess the scale value, confirmatory factor analysis method (CFA) to test the scale in the official quantitative research step, SEM analysis method to test theoretical model with hypotheses and Bootstrap analysis method to reestimate the theoretical model 1.5 Thesis’s meaning This thesis is conducted to supplement theoretically in the field of supplier development when still existing some controversial issues such as whether direct and indirect supplier development activities affect buying firm’s competitive advantage or not In addition, this study will also aims to build a full system of supplier development activities along with a scale system for each supplier development activity In practical aspect, this research provides to managers of firms in the manufacturing industry of Ho Chi Minh city the meanings and benefits of supplier development activities as well as the mechanism and degree of impact of each supplier development activity on firm;s competitive advantage This will help firm managers to be braver in implementing supplier development programs as well as having a scientific knowledge in selecting to conduct supplier development activities that really impact on firm’s competitive advantage As a result, this will help to build an efficient supplier system for buying firm Moreover, from a macro perspective, this research is also meaningful in promoting the development of supporting industries for Vietnam through promoting or encouraging technology transfer from manufacturing enterprises, especially FDI enterprises to the domestic suppliers through supplier development activities 1.6 New contribution of the thesis On the theorectical aspect, This study has fully synthesized the supplier development activities from the previous studies, including supplement some new scales and on that basis conducted a re-test of the relationship between supplier development activities and buying firm’s competitive advantage in a transition market as Vietnam The results of the study have shown that there is a positive relationship between a number of activities belong to indirect and direct supplier development activities affects buying firm’s competitive advantage in manufacturing industry of Ho Chi Minh city On the practical aspect, this study provides enterprise managers a complete set of supplier development activities as well as the impact of each activity so that they can consider implementing to increase or improve their competitive advantage In addition, the research results also show the positive impact of technology transfer from buying firm to supplier on the competitive advantage of buying firms This result will motivate such firms with possess high technology resources such as FDI enterprises to transfer technology to domestic suppliers and this action will have a positive impact on Vietnam when create a chance to build the supporting industries successfully and facilitate more Vietnamese firms to participate in high value-added stages in global supply chains 14 3.2 Scales of research constructs 3.2.1 Scales for indirect supplier development activities Table 3.1 Scales and scale source for indirect supplier development activities Constructs Variables Code Creation of We buy from two suppliers for the CTCC1 competition same product in order to create among suppliers Source competition among suppliers We buy from three suppliers for the CTCC2 Krause (1995) same product in order to create competition among suppliers We buy from four suppliers and more CTCC3 for the same product in order to create competition among suppliers Supplier evaluation We evaluate supplier ad hoc DGCC1 Krause We evaluate supplier periodly with DGCC2 (1995) DGCC3 Li (2001) PHKQ1 Krause plan We have standardized evaluation procedures Feedback of supplier We verbally feedback to suppliers regarding supplier evaluation results evaluation We feedback to suppliers regarding results supplier evaluation results by formal (1995) PHKQ2 documents We feedback to suppliers regarding PHKQ3 supplier evaluation results by verbal Expert interview and formal documents We verbally requests suppliers to Raise increase their responsiveness DHHQ1 Krause 15 performance We requests suppliers to increase expectations their to supplier responsiveness by DHHQ2 (1995) DHHQ3 Li (2001) DHHQ4 Expert official documents We set out expectation to supplier regarding to supplier’s effeciency Increasingly request suppliers to submit certificate of safety,fro staffs interview working in supplier factory Promise of We promise to increase buying current and volum from supplier presently future benefits We promise to increase cooperation with a with supplier in future supplier We sign long term contracts with HHLI1 Krause (1995) HHLI2 HHLI3 Li (2001) VTCC1 Krause supplier We periodically visit our suppliers to help them improve their performance We organize special visits without Site visit prior advice to the (1995) VTCC2 Li (2001) VTCC3 Expert supplier's production site to help them improve its performance We both visit supplier’s site suddenly and with prior advice to help them interview improve its performance We have supplier certification CNCC1 programme Supplier We undertake supplier certification of certfication production process to ensure the al (2013) CNCC2 quality of products from suppliers We undertake supplier certification Asare et Krause CNCC3 (1995) 16 on product quality to minimize the time it takes to inspect products from suppliers We perform supplier recognition Supplier TTCC1 activities Krause (1995) recognition We recognize and award best TTCC2 Li (2001) TTCC3 Expert suppliers Awards and recognition activities for suppliers ware conducted regularly interview Source: Systhesized by Author 3.2.2 Scales for indirect supplier development activities Table 3.2 Scales and scale source for direct supplier development activities Constructs Variables Code We provide training courses for DTHL1 Source supplier’s production staffs Training and We provide training courses for education for supplier’s managerial staffs supplier We sponsor training courses for DTHL2 Car et al (2008) DTHL3 supplier’s staff We disseminate documents on safety DTHL4 and environmental regulations to Expert interview suplier’s staff We carry out on-site consulting TVTC1 programs to improve our suppliers production processes On-site We carry out on-site consulting consultation programs to improve our suppliers TVTC2 Wagner (2010) 17 to suppliers product quality managment We carry out on-site consulting TVTC3 programs for machinery installation for our supplier We design on site consultating TVTC4 programme to our supplier interview We invite supplier’s staff to visit our Exchange of Expert TDNV1 facility so they have full awareness of personel how their product will be used between We send our staff to the supplier's buying firm production facility to learn about the and supplier supplier's production processes and Krause (1995) TDNV2 problems Li (2001) Personel exchange was conducted TDNV3 periodly We invest directly in selected DTTT1 suppliers to help improve supplier’s capabilities Direct investment in suppliers We invest directly in select suppliers DTTT2 Li (2001) to improve our flexibility We provide supplier equipments to DTTT3 help improve supplier’s operation processes We invest finance in suppliers DTTT4 We transfer supplier technology to CGKT1 Knowledge supplier to improve thier capabilities transfer We provide technology support to help suppliers improve operational productivity Wagner (2006a) CGKT2 Asare et al (2013) 18 We provide technology support to CGKT3 Wagner help suppliers improve product and quality Krause (2009) Source: Synthesized from Author 3.2.3 Scales of buyging firm’s competitive advantage Table 3.3 Scale and scale source for buying firm’s competitive advanatge Constructs Variables Code Source We can offer products at competitive GBSP1 Li et al prices Price We can offer product prices equal to or (2004) GBSP2 lower than our competitors We can keep production costs low Li et al (2004) GBSP3 Chi et al (2009) We can compete based on product CLSP1 quality We can offer high quality products to Product customers quality We can offer durable products to CLSP2 Li et al (2004) CLSP3 customers We can offer products with high CLSP4 reliability to customers We have the ability to deliver goods as Delivery HQGH1 the requirements from our customers Li et al We have the ability to deliver products on HQGH2 (2004) time Our delivery capabilities are reliable HQGH3 We are capable of supplying products CTSP1 19 Product according to the requirements of our Et innovation customers (2004) We respond quickly and suitable to al CTSP2 customer requests regarding to new product features We can change the offer to match the CTSP3 customer's requirements We are likely to be the first to launch a Lead time TGTT1 new product to the market Li et al We launch products to market quickly TGTT2 Our product launch times are faster TGTT3 (2004) than the industry average Source: Synthesized from Author 3.3 Prelimilary study The preliminary quantitative study with a sample size of 75 firms in the manufacturing industry in Ho Chi Minh City and respondents were managers of firms in the areas of purchasing, logistics, planning, materials supply, marketing, supply and production with email questionnaire survey methods Preliminary quantitative research program results show that all scales essentially achieve the required reliability as well as show that there is a suitable clustering of groups for indirect supplier development activities, groups for direct supplier development activities and groups for buying firm’s competitive advantage buying 20 Chapter ANALYSIS OF RESULTS AND TESTING THE RESEARCH MODEL 4.1 Design of official study programme This study obtained 386 appropriate votes after sending emails to all manufacturing enterprises in Ho Chi Minh City with interviewers coming from whom are in charged of fields of purchasing, marketing, logistics, supply chain, planning, materials supply and production in the manufacturing industry ofn Ho Chi Minh City 4.2 Assessment of scale reliability and scale value By using Cronbach alpha technique to analyze scale reliability for the three constructs consist of indirect supplier development activities, direct supplier developing activities and buying firm’s competitive advantage, one observed veriable, DTTT4 (we invest finance in suppliers) was excluded because the total correlation coefficient is less than 0.3 4.3 4.3.1 Explore factor analysis for official quantative study Explore factor analysis for indirect supplier development activities The EFA results show that the observed variable PHKQ1 was excluded due to the factor loading = 490