developing domestic suppliers of electronics in vietnam the case study of canon vietnam’s strategy

0 DISSERTATION ABSTRACT DEVELOPING DOMESTIC SUPPLIERS OF ELECTRONICS IN VIETNAM: THE CASE STUDY OF CANON VIETNAM’S STRATEGY DOCTOR OF BUSINESS ADMINISTRATION BY DBA Candidate: TRAN XUANNGOC (RONALDO) Scientific Adviser: Dr EDUARDO T.BAGTANG November, 2013 PREFACE The general objective of this research is to find out the theoretical reasons and practical evidence proving that the subsidiaries company (Canon Vietnam) can influence on the development of local suppliers’ capacity in order to promote the competitive advantages and expand production This study focuses on the following specific contents: Profile of the subsidiaries; Autonomy of the Subsidiaries; Knowledge transfer strategies; Competitive advantages of the subsidiaries in Vietnam that can help develop local suppliers; Government policies towards developing local or domestic suppliers’ capabilities CHAPTER I: INTRODUCTION 1.1 Background of the Study In the manufacturing industry, Electronics industry is highly representative for a developing country with a large population as Vietnam On the domestic market, the supply businesses in Vietnam are of much weaker position than firms with foreign capital investment In terms of the value chain, the electronics industry of Vietnam mainly assembles consumer products, focusing on the stages with low added value Very few companies produce detailed parts and accessories in electronics The assembling phase is mainly toward cheap labor, but this is not possible advantage to gain a long-term health In the context of a group of electronics manufacturers closed their plants in Vietnam, Canon Vietnam is a different case For over 10 years, Canon Vietnam has been continuously expanded their production, especially effectively building a network of local suppliers developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy The topic of "Developing Domestic Suppliers of Electronics in Vietnam: The case study of Canon Vietnam’s strategy" is meaningful and useful for managers of multi-national companies in electronic field when considering invest or now operating in Vietnam, the firms who are now providing electronic domestic products the Vietnam Policymakers 1.2 Statement of the Problem The recent state of electronics industry in Vietnam revealed problems of competition of local suppliers with foreign suppliers Local suppliers of Vietnam are much weaker when compared to the foreign suppliers Foreign investors import most of the components of the electronic products; hence, the local suppliers can no longer compete with them even with their cheap labor This situation limits the development of electronic industry in Vietnam 1.3 Objectives of the Study The overall objective of the study is to determine factors that can help develop the capabilities of local or domestic suppliers in Vietnam 1.4 Significance of the Study Basically, multinational companies competing on the international market have to deal with the changes of the local environment Building an efficient network of domestic suppliers by transferring technology, developing existing relationships, helping these suppliers involve in the value chain, improving the key elements of local environment will help multinational companies promote their developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy strength This is important for leaders to review and adjust the orientation of the company At the national level, this study has an important meaning for policy makers to understand the behavior of multinational companies when they invest in the host country In fact, the industrial development policies of Vietnam government are usually considered in a wide range of various types of electronic companies The role of multinational ones is underestimated Focusing on Canon Vietnam, this study will explore the role of a large company in accelerating the development of domestic suppliers The results of this study will help domestic suppliers determine needs of multinational companies, adjust their operation strategy, improve capacity and competitiveness This study will be the important reference source for local supporting industries Students and researchers can use this study as reference for future studies CHAPTER II: REVIEW OF RELATED LITERATURE AND STUDIES 2.1 Subsidiary in local environment A multinational enterprise, or multinational corporation, is defined as an enterprise that owns and control activities in different countries, or as a major vehicle for the transfer of mobile resources (technology, capital, management skills) to areas with immobile complementary inputs (markets, raw materials, labor) (Buckley and Casson, 1976; 1985) Market imperfections are factors explaining the existence of multinational firms Thus, the unique characteristic of the developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy multinational corporation is that it is engaged in multi-activities and in the internal transfer of intermediate products outside its national boundaries To cope with the inherent volatility of the international business environment, corporations need to adopt their strategies to remain competitive and to develop simultaneously efficiency, responsiveness and learning as strengths for success Although the static relationship between the subsidiary and its local environment has been studied (Ghoshal and Nohria, 1989; Rosenzweig and Nohria, 1995), and there have been empirical researches on subsidiary expansion (Birkinshaw, 1998; Chang and Rosenzweig, 1998), there has little consideration of the dynamic question, say, the relationship between local environment changes and subsidiary’s capability development So far studies on local environment-driven subsidiary evolution is still rather limited (Birkinshaw and Hood, 1998a) One of theoretical frameworks to identify the interaction of the MNC and the host country is the diamond of competitive advantage of nations (Porter, 1990) It is based on four country-specific determinants and two external variables that are chance and government The four determinants are factor condition, consumer demand, suppliers, and firm strategy and structure and nature of domestic rivalry The four determinants and the two external forces interact in the diamond, with the nature of a country’s international competitiveness depending on the type and quality of these interactions 2.2 Local Suppliers of Electronics With policies of reforming and calling for foreign investment, Vietnam’s electronics industry has changed as many foreign companies developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy invested in component production for export and for foreign companies operating in Vietnam Products are like passive components, metal cluster details, tubes, plastic, and parts of printers, computers The annual growth rate of the industry is 20-30% per year Factor affecting the electronics supporting industry in Vietnam are summarized in the following table: Strengths - An abundant and fast-learning workforce and rather good electronics staff - Relatively-low labor costs - A potential domestic market with a big population - Good resources of materials to develop the electronic materials technology Weaknesses - Limited production capacity - Dependence on external materials providers - Low competitiveness of products - Lack of information on the world market Opportunities - A favorable position in the arc of East Asia, where to develop electronic products of the world - A completing law system in accordance with international practices Threats - Stiff competition from China and ASEAN countries which have a developed electronics industry - Other competitors’ domination of the domestic market developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 21 For Canon For Local Electronic Suppliers Mean Description Government Policies Mean Descriptio n Protection of domestic production (import tax…) 3.61 Agree 3.77 Agree Priority to electronics industry (incentives, production tax…) 3.40 Confused 4.14 Agree Central Management Unit 3.49 Confused 3.78 Agree Set up standards of quality and components 3.56 Agree 4.24 Agree Reducing the gap between policies and implementation 3.63 Agree 4.24 Agree Table 18 – Assessment of the Government Policies by the Canon Vietnam Employees and the Local Electronic Suppliers’ Employees Table 18 indicates how the staff of Canon and domestic suppliers evaluate the way government policies effect the development of local electronics suppliers According to the results, in comparison with managers, employees of Canon and local supply businesses reckon that these factors have lower impacts Employees of local suppliers agree that Protection of Domestic production factors (import tax ), Priority to electronics industry (Incentives, production tax ); Central developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 22 Management Unit; Set up standards of quality and components; Reducing the gap between policies and Implementation have impacts on the development of local suppliers with ratings from 3.77 to 4:24 whereas Canon employees are puzzled about how Priority (Incentives, production tax ) influences the electronics industry at 3:40, Central Management Unit factor at 3:49 The other factors are agreed with ratings from 3:56 to 3.63 4.6 Analysis and interpretation of data Model 4: The capacity development of local suppliers (DCLS) is influenced by the variables Competitive Advantages (CA), Knowledge Transfer (KT), Autonomy of Company (AC) and Government Policies (GP) Adjusted R Square is adjusted 0.521 that shows the variables in the model explain only 52.1% F test and t-test both have significance < 0.05, so the model is statistically significant However, in the four models above, Model has Adjusted R Square of 0.521, the highest among all models, VIF standards are less than 10, multicollinearity phenomenon of the variables in the model, although exists, is at a low level Therefore, Model is selected The model reflecting the capacity development of the local suppliers in electronics industry is as follows: DCLS = 0.984 + 0.302 * (KT) + 0.282 * (CA) + 0.130 * (AC) + 0.1 * (GP) + ε In the four factors affecting the capacity development of the local suppliers in electronics industry, Knowledge Transfer (KT) has developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 23 the most influence by the regression coefficient of 0.302 The factor that has the second influence is Competitive Advantages (CA) with the regression coefficient of 0.282 The third-ranked factor is Autonomy Company (AC) with the regression coefficient of 0.130 And the forthranked factor is Government Policies (GP) with the regression coefficient of 0.1 CHAPTER V: SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 5.1 Summary In this study Canon Vietnam and the local electronic suppliers are the main subjects In the first chapter the authors has claimed the research hypothesis based on the context and objectives of the study Chapter is a collection of external and internal research papers related to the research model Research methodology and data sources are presented in Chapter Case study with interviews and questionnaires were used Results are calculated, processed and tested by SPSS statistical software Chapter shows the evaluation and discussion results The affecting factors and the level of impact on the development capacity of local providers have been identified and demonstrated 5.2 Conclusions Canon Vietnam has been adjusting their local development strategy, especially has built a network of local suppliers developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 24 The network of local suppliers of Canon is considered strong and sustainable with long-term business commitment in Vietnam made by Canon Subsidiary of Canon plays a significant role in the development of these local suppliers and vice versa, that is the improvement of local supplier network helps Canon Vietnam to increase competitiveness against its rivals 5.3 Recommendations 5.3.1 Recommendations for Businesses 5.3.1.1 Changing perception of the managers and staff of local suppliers - Producing under the direction of specialization - Compliance international standards as follows: +/ IEEE: Criteria of Institute of Electrical and Electronics Engineers +/ EIA: Electronic Industries Alliance - Be active in product selection and market searching 5.3.1.2 Initiative in selecting and creating linkages with other enterprises General trend of the world today is the more detailed international labor division Therefore, only when diversifying joint ventures, investment cooperation that the new Vietnamese firms became a link in the global production chain So far we only focus on joint venture through capital contributions, processing simple products It is the time for us to seriously consider ventures of strategic partnerships, satellite companies, copyright transference and trademark developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 25 5.3.1.3 Training and improving the quality of human resources These companies need to pay attention in training skilled workforce and fostering professional qualifications for staff, technical experts to enhance brain levels of products, promoting links between schools and businesses 5.3.1.4 Establishing association of local electronic supply The association will operate for the benefit of the companies, be a bridge between the companies, interacting and supporting each other to improve the ability of production technology Government is not the organizers in this association, but only supports the lifting of regulations or barriers to the formation and operation of these businesses associations If there really is an association of companies established themselves, the association will collect information; organize activities for the benefit of members Such a new association like this could closely grasp the actual situation; understand the problems and help businesses make recommendations to relevant authorities 5.3.2 Recommendations about the management agency 5.3.2.1 Establish a focal point for the management and development of SI All the countries mentioned above, in the first phase of SI has quickly developed formed the focal point, to plan, implement and manage the development of SI Vietnam currently lacks of a coordinating organization for bureaucracy management related to SI Therefore the information on the capacity of supporting industries is not updated; the development assistance activities are not focused and developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 26 unified We still have not mobilized the overall strength of the country in this field 5.3.2.2 Determining the electronic SI fields as the priority Clearly determining the priority in electronic SI fields Japan, Taiwan and South Korea are very successful in focusing on some SI priorities Vietnam also needs those obvious priorities to mobilize resources and orientation to develop SI in electronic field According to the experience of Taiwan and South Korea, in the context nowadays we can encourage domestic accessary purchasing, reduce tax for assembly businesses whose domestic purchasing ratio are high, support FDI businesses manufacturing accessary which has not been produced in Vietnam, carrying out the policy on land, facility, tax and tariff to attract satellite companies working in Vietnam 5.3.2.3 Building quality products and electronic components country According to the experience of Japan, Vietnam should soon institutionalized pursuant to the provisions relating to the link between the supply business and contractors and the standards relating to product quality components, creating preconditions for business to be easy join in link producing system With economic integration, the State can not directly support the companies that have adopted the association to carry out programs to promote TM program supports research, development, In Vietnam, the way businesses engage in the policy process also needs to be strengthened developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy developing.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategydeveloping.domestic.suppliers.of.electronics.in.vietnam.the.case.study.of.canon.vietnam’s.strategy 27 5.3.2.4.Reinforcing the involvement of the business community to improve the development of industrial support policy The Government could not directly support enterprises but through associations to implement trading promotion, research supporting program In Vietnam, we should also reinforce the way enterprises involving in policy-making phases Vietnam needs the participation of businesses in the process of finalizing policy, especially private sector These businesses should be regularly invited to meetings for policy comments and recommendations held by the Ministry of Industry and Trade and other ministries The enterprises in different manufacturing phases have different expectation to the Government policy Of course, the Government cannot meet all of that demand To solve this issue, the industrial associations play a very important role The associations will be the representative of businesses, assisting Government in planning and carrying out policy in order to improve SI The Government should be more strong and active in encouraging the role of associations by ordering solution for problems on all the members, get the recommendations as well as publicize the information The associations chairman must be the one with high reputation to Government and businesses, experience in that field and willing to travel regularly to listen directly to the opinions from different managers and businesses 5.3.2.5 Erase the gap between policy and policy implementation From the lessons of countries such as Indonesia or Thailand, it is necessary to take action and launch the severe sanctions on the wrong 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