nâng cao năng lực cạnh tranh của các doanh nghiệp sản xuất sản phẩm chè đen tại tỉnh thái nguyên

Factors affecting the competitiveness of black tea producing enterprises in Thai Nguyen province .... The efficiency of production and business of black tea producing enterprises in Tha

IM PROVING THE COMPETITIVENESS 0F BLACK TEA PRODUCING ENTERPRISES IN THAI NGUYEN PROVINCE

A Dissertation Presented to the Faculty of Graduate School of Southern Luzon State University, Philippines and Thai Nguyen University, S.R Vietnam

THAI NGUYEN UNIVERSITY

Socialist Republic of Vietnam

SOUTHERN LUZON STATE

UNIVERSITY Republic of the Philippines

IMPROVING THE COMPETITIVENESS OF BLACK TEA PRODUCING ENTERPRISES IN THAI NGUYEN

PROVINCE

Name of Student : TRẦN THỊ HUYỀN

Thai Nguyen, May 2013

WITH THAI NGUYEN UNIVERSITY

In Partial Fulfillment of the Requirement for the Degree of Doctor in Business

Administration

TRAN THI HUYEN- 2013

ACKNOWLEDGMENT

To complete the thesis, I have received the help of Thai Nguyen University, International Training Center-ITC, University of Southern Luzon - PHILIPPINES, Thai Nguyen College of Economics and Finance, the teachers, scientists, Provincial People's Committee of Thai Nguyen, Department of Agriculture and Rural Development of Phu Tho Province, Department of Agriculture and Rural Development of Tuyen Quang Province, Thai Nguyen Department of Technology, Department of Planning and Investment of Thai Nguyen, The small and medium tea enterprises in the provinces of Thai Nguyen, Phu Tho, Tuyen Quang and the help of instructors I would like to express my sincere thanks to the organizations and the individuals who helped me during this research

In particular, I would like to sincerely thank Dr Nguyen Khanh Doanh has dedicatedly helped me to complete this thesis

I am deeply and forever indebted to my family for their love, support and encouragement throughout my entire life I would like to thank my husband Duong The Cao, who has provided a tremendous amount of love and support during my research On the final note with love is for my children

So much for objective and subjective reasons, the thesis has a lot of shortcomings; I look forward to receiving the construction ideas from scientists, teachers and colleagues

Sincerely

Thai Nguyen,……… The thesis‟s author

Mary

ABSTRACT

CHAPTER I: THE PROBLEM AND ITS SETTING 1

Introduction 1

Background of the study 2

Statement of the problem 4

Research Questions 5

Objectives of the study 5

The overall objectives 5

Specific Objectives 6

Hypotheses of the study 6

Significance of the study 7

Scope and limitations of the study 7

Definition of terms 8

CHAPTER II: REVIEW OF RELATED LITERATURE AND STUDIES 10

2.1 The conceptS of competition 10

2.2 The conceptS of competitiveness 12

2.3 System of criteria for assessing the competitiveness of enterprises 15

2.4 The basic contents when researching the competitiveness of enterprises 17

2.4.1 Competitiveness of products 17

2.4.2 The market share of the enterprise 17

2.4.3 Business performance 17

2.4.4 The productivity of production factors 17

2.4.5 The ability to link and cooperate of enterprises 18

2.4.6 The ability to attract the resources 18

2.5 The factors affecting the competitiveness of enterprises 18

2.5.1 Economy 18

2.5.2 Interest rate on loans 18

2.5.3 Science and technology 18

2.5.4 The subplier 19

2.5.5 Threat of substitute products or services 19

2.5.6 Threat of new entrants 19

2.5.7 Level of organization and human resources 20

2.5.8 Financial capacity of enterprise 20

2.5.9 Marketing capacity of enterprise 20

2.6 Related literatures and studies 20

2.7 Conceptual framework 23

CHAPTER III: RESEARCH METHODOLOGY 25

3.1 Study area selection 25

3.2 Approach methods 25

3.3 Methods of data processing 27

3.4 Other methods 27

3.4.1 The descriptive statistical methods 27

3.4.2 Comparative method 27

3.4.3 Method of experts 28

3.4.4 Method of SWOT analysis 28

CHPATER IV: PRESENTATION ANALYSIS AND INTERPRETATION OF DATA 29

4.1 Status of competitiveness of black tea producing enterprises in Thai Nguyen province 29

4.1.1 Competitiveness of black tea products in Thai Nguyen‟s tea enterprises 29

4.1.2 The efficiency of production and business of black tea producing enterprises in Thai Nguyen 40

4.1.3 The productivity of the factors 42

4.1.4 The capacity to attract financial resources of enterprises producing black tea in Thai

Nguyen 45

4.1.5 Ability to cooperate and work of black tea businesses in Thai Nguyen 46

4.2 Factors affecting the competitiveness of black tea producing enterprises in Thai Nguyen province 46

4.2.1 Economy factors 46

4.2.2 Interest on loans 47

4.2.3 Political factors and legal 48

4.2.4 Elements of science and technology 48

4.2.5 The threat of substitute products and services 48

4.2.6 Industry competitors 49

4.2.7 The organizational level and management of human resources 50

4.2.8 Facilities and technology in the business of black tea in Thai Nguyen 52

4.2.9 Marketing Capacity 52

4.2.10 Financial resources 53

4.3 The strengths, weaknesses, opportunities and threats of black tea producing enterprises in Thai Nguyen 53

4.3.1 The strengths 53

4.3.2 The weaknesses 54

4.3.3 The opportunities 54

4.3.4 Threats 55

CHAPTER V: CONCLUSION AND THE PROPOSED SOLUTION 56

5.1 Conclusions 56

5.1.1 Through the study we draw the following conclusions 56 5.1.2 Capacity assessment and competitive factors affecting the competitiveness of

enterprises producing black tea in Thai Nguyen we found: 57

5.2 Some solutions to improve the competitiveness of balck tea producing enterprises in Thai Nguyen province 58

5.2.1 Viewpoints 58

5.2.2 Orientation 59

5.2.3 Some solutions to enhance competitiveness for enterprises producing black tea 59

5.2.4 Solutions for state policy 64

5.3 Recommendations 64

5.3.1 For State 64

5.3.2 For agencies, Thai Nguyen provincial government 64

5.3.3 For processing business, the business of black tea 65

BIBLIOGRAPHY 66

APPENDIX 1 69

APPENDIX 2 82

LIST OF TABLES

Table 3.1: The number of sample divided by form of ownership 26 Table 3.2: The number of sample divided by capital scale 26 Table 4.1 Customers‟ reviews of black tea products‟ quality of in Thai

Nguyen‟s tea enterprises 32 Table 4.2 Customer reviews on the form of black tea products‟ packaging 33 Table 4.3 Some product categories in the black tea producing enterprises 34 Table 4.4 Products‟ brand in black tea producing enterprises in Thai Nguyen 34 Table 4.5 Production costs and profits of black tea producing enterprises in

Thai Nguyen according to the forms of ownership 35 Table 4.6 Production costs and profits of black tea producing enterprises in

Thai Nguyen according to the capital scale 36 Table 4.7 The forms of advertising that black tea producing enterprises

applied in 2012 38 Table 4.8 The forms of advertising that black tea producing enterprises applied 39 Table 4.9 The efficiency of production and business of black tea producing

enterprises in Thai Nguyen according to the capital ownership 40 Table 4.10 The efficiency of production and business of black tea producing

enterprises in Thai Nguyen according to the capital scale 41 Table 4.11 Margin / revenue of black tea producing enterprises in Thai Nguyen

compared to black tea producing enterprises in Phu Tho and Tuyen Quang according to the forms of ownership in 2012 42

Table 4.12 The productivity of capital and assets of the black tea

producing enterprises in Thai Nguyen 43 Table 4.13 Capital turnover ratio of black tea producing enterprises in

some provinces and the forms of ownership 44 Table 4.14 Income affects consumption of black tea products in 2012 47 Table 4.15: Qualifications of Enterprise leaders in the production of black

tea in Thai Nguyen 50 Table 4.16 Qualifications of workers in enterprise producing black tea in

Thai Nguyen Province 51

CHAPTER I THE PROBLEM AND ITS SETTING Introduction

Tea is the perennial plant that has an important role in our social economy, Drinking tea has long become a necessity in everyday life, and a habit brought the culture of Vietnam Tea is also an important export of our agriculture Currently, 39 countries all over the world have grown and processed tea, Vietnam has been ranked fifth in area and eighth in production

For years, tea tree has held an important position in the socio-economic development strategy of Thai Nguyen province Tea tree is the key to poverty reduction in agriculture, rural development With an area of 20 thousand hectares under tea business, farmers' average annual harvest was 100 thousand tons, over 300 billion Besides, there are more than 75 businesses, factories, tea processing facilities with a capacity of 10-50 tones of fresh buds/day, dealing with the employment problem for thousands of agricultural workers Tea productions in recent years have contributed significantly to poverty reduction and elevate the poor countryside That is something one can hardly deny

Thai Nguyen Province is known as the "capital" of the tea, where there are hundreds

of years old tea areas Thai Nguyen Tea with the biological characteristics is superior to the other varieties: The ability to grow, thriving, high quality tea, fragrance, the flowing nutrient

Thai Nguyen tea plants produce high-quality tea leaves Annual income from tea plants accounts for over 60% of total income from farming activities The activities of production, processing, consumption create a lot of jobs; contribute to raising incomes and living standards for the people

In recent years, the market has appeared much more tea products with designs and beautiful packaging, rich category, high quality Consumer tastes are shifting sharply to the high-

quality products, products meet food safety Thus, to survive and grow, black tea products also need to shift and develop according to the trend of the times

Therefore, studies to evaluate the situation, identify the factors that influence it, finding solutions to improve the competitiveness of black tea in small and medium enterprises in Thai Nguyen province is an urgent requirement that have scientific and practical significance Because of those reasons, I chose the thesis: “IMPROVING THE COMPETITIVENESS OF BLACK TEA PRODUCING ENTERPRISES IN THAI NGUYEN PROVINCE”.

Background of the study

Competition has a great and important role for the development of the economy in general, and each small and medium enterprise in particular Any economy needs to maintain the competition From the point of view of social benefits, competition is one of the forms that the State used to be antitrust, create opportunities for consumers to choose the products with good quality and cheap price From the standpoint of enterprises, competition will be favorable conditions in order for each enterprise to assert its position in the market Competition forces enterprises to produce and supply the products, goods and services that the market needs to meet the increasingly diverse demands of customers

Currently, in the economy of Thai Nguyen Province, small and medium enterprises account for over 70% of the total number of registered enterprises, generate about 50% of GDP and over 80% jobs for workers However, small and medium enterprises are facing a lot of problems affecting the efficiency, competitiveness, such as small capital, weak access

to capital, backward equipment and technology, quality of human resources, the weak management Due to small size, small and medium enterprises are facing difficulties and challenges in competition both inside and outside the country, especially in the context of international integration and global markets controlled by multinational companies and transnational companies

In the context of the general difficulties of the economy, the small and medium tea enterprises in Thai Nguyen Province is considered to be the most affected The enhancement

of competitiveness becomes a vital question of the enterprises Over the years, Tea tree has always been identified as a key economic crop for tea growing districts Producing and exporting tea increasingly play an important role and become one of the key economic sectors of the province, with 80% of the province's tea production for export Earnings from tea exports have contributed to socio-economic development of the province

However, the fact that the province's tea exports have not really had prestige, low quality compared to other countries in the region and the world, even in the country The underlying cause of this problem lies right in the beginning stages of the production process, from the building the material region, breeding, processing technology Most processing enterprises and exporters of tea are difficult to input source, fluctuation of prices, fragmentary production, even facing the risk of market loss Although the majority of produced tea of the province is for export but mainly in the form of raw materials, the tea‟s brand has not been positioned, therefore the income of tea growers and producers are not high Producing and exporting tea has not promoted the potentials and strengths to be confirmed as the key economic sectors of the province The domestic market is fiercely competed by the famous tea companies in the world such as Lipton, Dilmah, and Qualitea The market share of tea industry is shrunk Numerous companies are on the brink of bankruptcy Therefore, at this time, there should be an overview of the investment in the development process of the tea industry, but first of all is the investment in the development process of raw tea Analyze the causes of these problems so that put forward the solutions to have the most effective investment in order for the tea industry to overcome the crisis Enhancing the competitiveness for tea products like a prediction problem to look back and analyze those data in the past then give the solutions for future Assessing the competitive

situation of tea products, recognize the strengths and weaknesses the give the right directions

in the future

Statement of the problem

In the face of requirements of economic development, particularly in the process of international economic integration today, to survive and grow strongly, tea industry must have the appropriate solutions In recent years, the black tea producing enterprises in Thai Nguyen province encounter a lot of difficulties, black tea products of the province faced 3 problems as: Export markets to countries in the Middle East were disrupted by political instability The Russian market is affected by imports from other teas Unfavorable weather affects tea production From 3 reasons leading to earnings from tea reduced, some plants temporarily closed Before this situation, how to help the black tea producing enterprises in Thai Nguyen province have good development to ensure requirements: quantity, quality, competitive price, packaging, market share, revenue, profit So the research aims to improve the competitiveness of the black tea producing enterprises in Thai Nguyen province as observed by businesses and customers Specifically, it seeks answers to the following questions:

- The position of the black tea producing enterprises in Thai Nguyen province in the markets today?

- What‟re the factors affecting the implementation of competitive advantage?

- The solutions can be introduced to improve the competitiveness of the black tea producing enterprises in Thai Nguyen province to meet consumer demand?

Objectives of the study

The overall objectives

Based on studying the real situation, factors affecting the competitiveness of black tea producing enterprises, and then propose the direction and solutions to improve the competitiveness of black tea producing enterprises in Thai Nguyen province.

Specific Objectives

Systemize the theoretical and practical basis for improving competitiveness of enterprises in general, and particularly for black tea producing enterprises in Thai Nguyen province

Assess the situation; analyze the causes and factors affecting the competitiveness

of black tea producing enterprises in Thai Nguyen province

Propose strategies and solutions to enhance the competitiveness of black tea producing enterprises in Thai Nguyen province

Hypotheses of the study

Based on the theory discussed in Chapter 2 and the research objectives of the thesis, the following hypotheses were tested in the study:

- There are no significant differences in the observation of the enterprises that have different competitive advantage of black tea:

+ Prices of products

+ Product innovation

+Products‟ quality

+ Packaging and designs of products

+ Services for products

- There are no significant differences between the observation of enterprise and the employees about the competitive advantages of black tea product:

+ Prices of products

+ Product innovation

+Products‟ quality

+ Packaging and designs of products

+ Services for products

Significance of the study

This study will help small and medium tea enterprises in Thai Nguyen assess aspects

of competition to determine the strengths and weaknesses to enhance their competitiveness Furthermore, this study will help tea enterprises improve their competitiveness such as: market expansion, brand building and maximizing profits

- For tea industry: This study will help the tea industry to develop its products, from increasing the area to the production and consumption, thereby increasing the state budget, creating more jobs for local people and sustainable development

- For labor: This study will help the labor to increase their income, have stable life and many jobs

- For customers: This study will help the customers gain access the products conveniently and satisfy the demand

- For the researcher: This study will help to complete the DBA thesis, In addition, there is a document for the teaching of the author

- For community: When enterprises do business effectively, they will contribute to the state budget and social welfare

- The thesis assessed the current situation of black tea products in small and medium enterprises, determine its position in the export market Determine how to have efficiency in competition of the black tea products in small and medium enterprises Introduce a new competitive method for tea enterprises to improve their competitive advantages in the market

Scope and limitations of the study

* Time: From 2010 to 2012

* Space: Gather information about the black tea producing enterprises in Thai Nguyen Province and some black tea producing enterprises in the two provinces of Phu Tho and Tuyen Quang

* Content: Study the basics:

- Focusing on a number of issues about the competitiveness of black tea producing enterprises

- The study analyzes the situation of the competitiveness of black tea producing enterprises in Thai Nguyen province

- Propose the solutions to improve the competitiveness for black tea producing enterprises

Definition of terms

Competitiveness: is the ability to gain market share against competitors in the

market, including the ability to regain one or the entire market share of competitors

Competitive factors: are the ones related to the competitiveness of products and

businesses when they compete with rivals

Competition index is the index used to assess the competitive position of the

business compared with rivals

The decisive factor is the factor affecting the decision of the competitiveness of tea

products

Need: is the demand for products in the market

The relevant factors are the ones that affect the performance of tea products such as

input, support activities

Customer is a person or an organization or an enterprise willing to buy products to

satisfy those needs

Workers are those perform work regularly according to administrator‟s orders They

receive salaries and benefits according to the labor contract

Small and Medium Enterprises are the ones that have small-scale in capital and

labor, revenue or including 3 above factors

Geographical location is the place where the enterprises or customers stay

Sales area is the one where the tea products are on display, distributed

Substitute products and services are the ones offered by the enterprises to satisfy

the customer's needs

CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES

2.1 The conceptS of competition

In the development of market economy in Vietnam today, the concepts related to competitiveness are very different

In Marx‟s opinion: "Competition is the bitter struggle and rivalry among capitalists

to grab the favorable conditions of production and consumption for the excess profits"

The other point of view: "Competition is the striving for quality of products and

services of your business that is better than other businesses" (according to the authors of

the book "Enhancing competitiveness and protection of domestic producers")

According to the economic politics: "Competition is the mutual annexation among

opponents to win the market and customers for their business"

According to the Vietnam Encyclopedia: "Competition is the rivalry among goods

producers, traders, the businessmen in the market economy, driven by supply-demand relationship, to gain the conditions of production, consumption and most profitable market"

In the opinion of Marketing, competition is defined: "The competition is making tactics and strategies in line with business potential, good handling strategies, tactics of opponents, win advantages in trade in goods and services to maximize of profits” (Dr Nguyen Nguyen Cu, Agricultural Marketing syllabus)

In The Vietnamese dictionary editted by Nguyen Như Y (Page 61) in 1998:

"Competition is the competition between individuals and collectives that have the same function to win a victory” This is true for various activities in society, the individual or

group with the same function no matter what position, the competition are to do a better job, effective and better quality If there is a rivalry, the enterprises will develop better and offer better ways to meet customer‟s needs

In The Vietnamese dictionary editted by National Assembly in 1995 (page 36):

“Competition is the competition among the producers of goods, merchants, traders in the

market economy driven by supply and demand relationship in order to gain the conditions

of production, consumption and most profitable market" According to this definition, the

competition among enterprises, countries became more equal

To understand the most general, we can express as follows:

Competion is one of the characteristics basic of market economy, the development capacity

of market economy Competition is the survival of enterprises Competition can also be the rivalry among businesses for a factor or customers to improve their position in the market, to achieve specific goals: profit, sales or market share…

Michael Porter's model of five competitive forces

In the market economy, any business that operates in the market must be under a certain competitive pressure that depends on five basic competitive forces, represented by the following model:

Figure 1: Model of five competitive forces

Michael Porter's model of five competitive forces is a model by many analysts use to assess

the competitiveness of a business or an industry

2.2 The conceptS of competitiveness

Since the 1980s, the term "competitiveness" was widely used by researchers and businessmen Some researchers suggested that, those terms are used the same at different levels of competition and and interchangeably Some other researchers argued that, those terms are not identical but different and each researcher offered a different perspective on them Therefore, to give a correct and unique definition, reflecting each term is difficult to implement, with the agreement of the researchers absolutely (page 60) During the study, the authors found some of the following concepts:

Competitiveness is one of the concepts that have not had the agreement When talking about the competitiveness, we have to mention the subject of competition, so there is

no concept of competitiveness in general, that the concept of competitiveness is applied to both levels: Macro level (competitiveness of a country or region) and micro level (competitiveness of enterprises and the competitiveness of the product)

At the micro level, there have a concept: “The enterprises with competitiveness are

those which achieve the progress higher than the average of quality of goods and services, or

have the ability to cut down relative costs to allow them to increase profits and market share” (Michael Dunford, Helen Louri, 1998)

The author Michael Porter also acknowledged, there can not give an absolute concept

of competitiveness In his opinion, “To compete successfully, the enterprises must have competitive advantages in the form of either low production costs or product differentiation” (Michael Porter, 1990)

* National competitiveness

According to World Economic Forum, competitiveness of a country is the ability to achieve and maintain high growth rates on the basis of policies, institutions and other economic characteristics

According to the U.S Board of Industrial Competitiveness (page 28), “Competition for a country is the level at which under the market conditions of freedom and fairness, can produce the goods and services to meet the demands of the international market, simultaneously maintain and raise the real incomes of its people"

Global Competitiveness Report gave the definition of national competition: “The

ability of that country achieves rapid and sustainable results of living standards That is to achieve the high rate of economic growth calculated d by the change of gross domestic product per capita over time” With this definition, a nation's competitiveness is determined

on the basis of stable and better living standards, higher earnings of people

Some other economists suggested the concept of competitiveness of countries based

on labor productivity, Porter said that: “The most meaningful concept of national

competitiveness is labor productivity” (Michael Porter, 1990, page 79) Porter's theory was

to enhance the role of enterprises in national competition A country with high competitiveness when enterprises in that country have competitive strength and that power is higher labor productivity In his opinion, the basic elements such as: infrastructure, skilled workers, competitive pressure, law, technology These factors have a major role to create the competitive environment; the competitive environment increases the labor productivity of the enterprises.

Fagerberg defines competitiveness of a country is “the ability of a country to realize the purpose of centralized economic policy, especially for the growth of income and employment

without meeting the difficulties in balance of payments” (Nguyen Vinh Thanh, 2005)”

* Competitiveness of Enterprises

In 1998, UK‟s Ministry of Trade and Industry defined: “For enterprises,

competitiveness is the ability to produce the right product, determine the right price at the right time” (Nguyen Huu Thang, 2008)

In Aldington Report‟s opinion (1985): “The enterprise has competitiveness when it can produce products and services with unsurpassed quality and lower prices than competitors in the domestic and international Competitiveness means to achieve long-term interests of the enterprises and the ability to guarantee income for workers and enterprise‟s owners"

In view of M.Porter, in the market economy, any industries and enterprises are under competitive pressure during operation The competitiveness of enterprises depends on 5 factors: Bargaining power of suppliers; threat of new entrants; threat of substitute products and services; the bargaining power of buyers; industry competitors

There are a lot of concepts of competitiveness of enterprises, as follows:

- Competitiveness of enterprises is the ability to maintain and expand market share, the profitability of the enterprises According to this concept, competitiveness is the ability

to consume goods and services compared to the competitors and the profitability of the enterprises These concepts can be found in the work of Mehra (1998), Ramasamy (1995), Bruckley (1991), Schealbach (1989) or in the country as a research result of CIEM (2003), National Committee for International Economic Cooperation (2003) This concept did not cover the methods and the elements to maintain and improve competitiveness

- Competitiveness of enterprises is the ability to resist the attack from other enterprises, for example: Policy Council of the American Competitiveness defined: Competitiveness is the economic capacity of goods and services of the production background; can overcome challenges in global markets National Committee for International Cooperation has cited the concept of competitiveness in Glossary of trade policy (1997) Accordingly, competitiveness is the ability of an enterprise that is not trounced the economic capacity by other enterprise This concept is qualititive It is difficult

to quantify

- Competitiveness is synonymous with productivity According to the Organization for Economic Cooperation and Development (OECD), competitiveness of enterprises is

productivity and relatively high income based on the use of production elements effectively; makes the enterprises develop sustainably in terms of international competitiveness (Bach Thu Cuong, 2002) The concept is not associated with the implementation of the objectives and tasks of the enterprises

- Competitiveness means to maintain and improve competitive advantage For example, the author Vu Trong Lam (Vu Trong Lam, 2006) said that: "The competitiveness

of enterprises is the ability to create, maintain, use and and newly create the competitive advantage of enterprises” The author Tran Suu (Tran Suu, 2005) also has a similar opinion: competitiveness of enterprises is the ability to create competitive advantage; productivity and quality higher than competitors; control the large markets; bring high income and develop sustainably

In addition, when showing the concept of competitiveness of enterprises, we should note the following issues: Firstly, concept of competitiveness should be appropriate to the conditions and context, and the level of development of each period Secondly, competitiveness should be the ability to compete among enterprises not only the ability to attract, use the factors of production and consume goods but also the ability to expand the living space of the products and create new products Thirdly, competitiveness of enterprises needs to demonstrate appropriate methods of competition, including the traditional and modern methods, not only based on comparative advantage but also based on competitive advantage and regulations

From the analysis above, competitiveness of enterprises can be defined as follows:

Competitiveness of enterprises is the ability to maintain and improve competitive advantage

in consuming products, expanding sales network; attract and use effectively the production factors in order to achieve high and sustainable economic benefits

2.3 System of criteria for assessing the competitiveness of enterprises

To assess the status of the competitiveness of black tea producing enterprises in the market, we use the following criteria:

- The market share of the product: The market share is calculated as a percentage of

sales of the enterprise compared to the total revenue of all the enterprises of the same type of business in a market and in a certain time Each type of goods accounts for certain market segments; the market segments are number of customers that consume enterprises‟ products The market share reflects accurately the power of enterprises and the competitiveness of enterprises in the market

- Product Quality: Quality products are reviewed in terms of quality compared to

other products as: Designs, colors, standards of environmental quality to increase the attractiveness of the product to the customer and be the factors confirm the competitiveness

of products Product quality must show the basic technical characteristics of the product in the design as: strength, dexterity, precision, consumption of fuel, raw materials, length, width Goods‟ quality is deciding factor to the competitiveness of enterprises

- Packaging and label of products: This criterion creates competitiveness for tea

products, because it brought the peculiarities of this product compared to other products In modern life, the packaging requirements of customers tend to increase, because the packaging shows the aesthetic value, the value of beauty, personality The label creates the important differences in order for customers to distinguish the goods of this enterprise from those of that enterprise, thereby simplify the purchasing decisions

- Price of products: The various price of the product increases customer choice, the

price differentials make customers give the different decisions when purchasing Normally, customers will choose the same products, the same quality but be cheaper This is one of the important elements in improving the competitiveness of enterprises

- Product category: is a group of products that are closely related to each other,

because they are the same functions, or within a price range, or sell them to the same group

of customers

- Distribution system: is the transfer of goods from the place of production to the

consumers to achieve the highest results The enterprises always try to have distribution systems that create the most favorable conditions for consumers when buying products

- Productivity: This index is higher, the stronger competitiveness is and vice versa

- Output: This index is higher, the stronger competitiveness is

- Efficiency of production and business: Reflects the results of the business compared

with the costs This index is higher, the stronger competitiveness is and vice versa

- The ability to link and cooperate of the enterprise: This index is higher, the stronger

competitiveness is and vice versa

2.4 The basic contents when researching the competitiveness of enterprises

2.4.1 Competitiveness of products

This reflects the business performance of enterprises Because the most fundamental tasks of the enterprise is the production and trading So, the products of enterprises without competitive capacity will also affect the competitiveness of enterprises

2.4.2 The market share of the enterprise

This represents the competitive position of the enterprises in the market, the larger the market share of enterprises is, the higher competitiveness of enterprises is So, in order to compete, the enterprises must occupy the market

2.4.3 Business performance

Business performance is reflected by the following indicators:

- The ratio of corporate profits: as a general indicator is calculated as the absolute or relative value

- Unit cost: reflects the competitive advantage of the enterprise If the cost of products is low, it will improve the competitiveness of enterprises

2.4.4 The productivity of production factors

- Labor productivity: reflects the level of production and business, the capacity to use the factors of production, technology Labor productivity is measured as the ratio between

net sales and the average number of employees during the period The higher this indicator

is, the larger the competitiveness of enterprises is

- Performance on the use of capital: is the ratio between the net sales and operating capital

- Yields on the use of all assets: is the ratio of net revenues per total assets or total investment capital of enterprises

2.4.5 The ability to link and cooperate of enterprises

In this context, competition is not mutual destruction; the competition can help enterprise develop more The ability to link and co-operate is seen as a precondition for effective business activities This criterion is qualitative This criterion expressed by the quantity and quality of relationships with customers and business partners

2.4.6 The ability to attract the resources

The resources attraction is an indicator to show the competitiveness of enterprises The attraction of the input with high quality such as: skilled labor, capital and materials can produce high quality products with competitiveness

2.5 The factors affecting the competitiveness of enterprises

2.5.1 Economy

The economy has a great impact to the enterprises If the economy is stable, it will be

a prerequisite for economic growth, increasing income for the people as well as the ability to pay for the customer's needs The enterprises want to survive and assert their position in the market; they must keep up with the growth of the economy

2.5.2 Interest rate on loans

This is one of the factors affecting the competitiveness of enterprises If the enterprises are initiative in capital, they will be active in the business and vice versa

2.5.3 Science and technology

The competitiveness of enterprises is dominated by science and technology If the science and technology of the enterprise are modern, the enterprise will create products with high scientific content and have the ability to compete with other products

2.5.4 The subplier

Supplier can threaten to producers by the importance of the product supplied, due to the highly differentiation of suppliers and producers, due to changes in the cost of products that manufacturers have to accept and carry out, and due to the links of suppliers

In International Trade, suppliers have a role as exporters of raw materials When enterprises can not exploit local raw materials, the international suppliers have increasingly important position Although there may be competition among suppliers and the enterprises can select the best suppliers, bargaining power of suppliers is limited In order to ensure the competitiveness of products, the enterprises have to turn the power of suppliers‟ negotiations

to their power

2.5.5 Threat of substitute products or services

When the price of current products, services increases, customers tend to use substitute products and services These factors threaten the loss of market of businesses The competitors put on the market substitute products that highly differentiate from products of enterprise or create preferential conditions of service or financial conditions

If the substitute products are more similar to the products of enterprise, the larger threat to the enterprise This will limit price, sales volume and affect the profitability of the enterprise If there are a few substitute products similar to the products of enterprise, the enterprise will now have the opportunity to raise prices and increase profits

2.5.6 Threat of new entrants

The emergence of new enterprises to participate in market creates more risks to reduce revenue, dominate the market of other businesses… to limit this threat, managers often created barriers such as:

- To expand production volume of business to reduce costs

- Product Differentiation

- To innovate technology and distribution system

- Development of additional services

In addition, choosing the appropriate location in order to exploit the Government's support and having the correct choice of materials market, product market

2.5.7 Level of organization and human resources

Management capacity of leaders is one of the factors likely to affect the competitiveness of enterprises Organizational capacity expressed in management level, preparing the plan, building strategies This has great significance in improving the

efficiency of business operations

Level of workers is the most important factor for any business activities of enterprises This factor covers all activities and be crucial to the success or failure of the enterprises It is the element that constitutes labor costs; it determines the cost of labor in production and business activities

2.5.8 Financial capacity of enterprise

Capital is the decisive factor to production capacity of the enterprise The enterprises have a strong financial capacity; they will have long-term business strategy, equip with modern technological lines, and invest in market research to ensure the creation

of high quality products, low cost thus, helps enterprises have high competitiveness

2.5.9 Marketing capacity of enterprise

This is a very important group of factors that strongly influences on the competitiveness of enterprises, because marketing capability directly impacts on production and consumption; meets customer needs, contributes to higher profits for enterprises, increases the market share; improves the competitive position of the enterprise

2.6 Related literatures and studies

In Vietnam there have a lot of studies on competitiveness of products such as coffee,

rice, tea, fruits, and agricultural products on a national scale, region or province Regarding the tea plant has many topics: report on the real situation and solutions to develop tea industry, conservating and developing some types of tea in in some localities

A number of scientific studies such as: Ministerial scientific research TN0602 “To enhance the production and consumption of tea in the direction of sustainable development” of Ta Thanh Huyen concluded: In the coming years, Thai Nguyen province need to conduct restructuring of tea varieties; introduce the valuable new varieties with high yield in production; change the technology and processing equipment to produce quality products, to meet diverse demands of market, improve the purchasing system, innovate delivery system and diversify the buying and selling methods, build good relationships between enterprises and farmers that produce raw materials Construct and develop Thai Nguyen‟s tea brand to create stable tea market both at home and abroad

2006-According to research by Tran Quang Huy of solutions to develop economic cooperation in the production and consumption of tea in the key tea regions of Thai Nguyen

province – Tran Quang Huy concluded: Production and consumption of tea in Thai Nguyen

Province is not commensurate with the tradition and reputation of Thai Nguyen’s tea The

subjective and objective shortcomings block the growth of tea plants as old varieties, low productivity, backward technology, poor facilities, uneven product quality… Besides, the mechanism and policy of management is still inadequate; level and awareness of workers are still low, in particular, the issue of cooperation in the production and consumption of products

These theses focused on issues such as: market‟s supply and demand of Thai Nguyen tea products, competitiveness of tea products of non-state enterprises, production and consumption of tea in the direction of sustainable development, solutions to develop economic cooperation in the production and consumption of tea in Thai Nguyen

According to research by Nguyen Thi Thanh Thuy on some key measures to improve the efficiency of consumption for the tea regions of Thai Nguyen city, the author has studied the theoretical and practical problems of tea consumption, the real situation of tea consumption and a number of measures to improve the efficiency of tea consumption The author concluded: Consumption of tea in Thai Nguyen meets a lot of difficulties, mainly consumes at home and in local markets, not pays attention to forms such as: advertising, marketing, price, design, and packaging There„s no close cooperation between enterprises and producers

According to studies of Pham Viet Ha on the real situation and solutions primarily to develop tea production in Thai Nguyen, 2007, the author concluded: Tea production in Thai Nguyen is still slow, low levels of investment because the tea growers have not properly recognize the role of investment in intensive cultivation; so economic efficiency is not high still

The research work related to the thesis as: The report by researchers at Information Center for Agriculture and Rural Development (ICARD), Tea Research Institute of Vietnam (VTRI), Research Institute of vegetables and fruits in Vietnam (IIFFAV)… This report presented the results of the study: Participation of the poor in agricultural value chain - Research for the tea industry (2004) Improving the market performance of the poor through research activities, network development and trade promotion policy were implemented in two Provinces - Thai Nguyen and Phu Tho, accepted in 2004 by the authors: Tran Cong Thang, Emma Samman, Karl Rich, Pham Quang Dieu, Nguyen Van Thanh and Dang Van Thu The report pointed out the value chain of tea industry including: producers, processors, wholesalers, local retailers, and exporters and others, clarify the influence of the tea production on the poor tea growers and make recommendations to the tea industry as: diversification of tea export markets; enhance the effectiveness of relationships in the value chain; improve the environment for the actors involved in the value chain, especially access

to credit, improve the efficiency of the policy, technical training and market information

According to research by Do Thi Bac, market research of Thai Nguyen‟s Tea (2008) concluded: Developing markets for Thai Nguyen‟s tea plays an important role; Thai Nguyen‟s tea market has thrived but also been inconsistent, slow growth rate, allocating resources for the tea market is irrational In order to develop the tea markets, Thai Nguyen Province should: focus on research, select and expand tea export markets, establish information system of market and consumption of Thai Nguyen province, improve product value, ensure uniform quality from producing, processing and consuming tea

Some research works are related to the thesis such as: The main measures to improve the competitiveness of Thai Nguyen‟s tea products "by Nguyen Huy Thai-2000 The author concluded: Thai Nguyen‟s green tea leaves have competitive advantages in the domestic market, especially the Northern provinces; Thai Nguyen‟s tea has monopoly position, be preferred by consumers and they are willing to accept the price higher than the green tea leaves of the tea regions in the country

The scientific research works cited above only mentioned the economic aspects and production, consumption and processing of tea of Thai Nguyen province and a number of specific districts Regarding the competitiveness of black tea products, there is no access in Thai Nguyen province No one has studied the subject

2.7 Conceptual framework

Figure 2.1 Analytical framework of competitiveness of black tea producing enterprises

in Thai Nguyen Province

COMPETITIVENESS

OF BLACK TEA PRODUCING ENTERPRISES

IN THAI NGUYE

N PROVINCE

Competitiveness of black tea products in the enterprises

Efficiency of production and business

The market share of black tea producing enterprises

The productivity of the factors

The capacity

to attract financial resources

The ability to link and cooperate among black tea producing enterprises

Interest rate

Economic Environment

Political and legal

Environment

Natural - Cultural

and SocialEnvironment

Scientific and Technological Envirriment

Suppliers of raw materials

Financial Capability

The capacity for research and development Substitute products

CHAPTER III RESEARCH METHODOLOGY 3.1 Study area selection

Thai Nguyen province has 17,661 hectares of tea, ranked second in the country with

39 tea producers, of which there are 7 black tea producing enterprises

To assess the competitiveness of black tea producing enterprises in Thai Nguyen Province, we surveyed 7 enterprises in Thai Nguyen Province In addion, we conducted a survey

of black tea producing enterprises in Phu Tho and Tuyen Quang provinces to compare

In Thai Nguyen province, the black tea producing enterprises meet a lot of difficulties in producing, processing and trading of tea products Particularly, the competitiveness of the enterprises is weak, not to promote the advantages of tea products The difficult problem now is to improve the competitiveness of black tea producing enterprises in Thai Nguyen province

3.2 Approach methods

To achieve the objectives given, the thesis used the approache system in the research This means considering the competitiveness of enterprises not only use some single criterion but also use the system of criteria, referring to different aspects of the enterprise such as: position in the market and the appropriate response to the external impact of the business environment Competitiveness of enterprises can be represented through the indicators reflecting the internal force of enterprise as: human resources, material and technical basis, financial capacity

Methods of collecting information

* Secondary information

The secondary information was collected from sources such as: books, newspapers, magazines, websites, and the final reports and from the workshops of departments, economic

institutions and research agencies, related scientific works Thereby, carry ut the analysis and overview on the production, processing and consumption of black tea products and the competitiveness of black tea producing enterprises in Thai Nguyen province

* Primary information

The primary information is conducted by means of surveying the black tea producing enterprises There is a questionnaire ((Appendix 1)

Details are as follows:

Table 3.1:The number of sample divided by form of ownership

Source: results of enterprises survey

Table 3.2:The number of sample divided by capital scale

Unit: Enterprise

ON

1 Enterprises have capital from 6 to 8 billion 2

2 Enterprises have capital from 2 to 6 billion 2

3 Enterprises have capital under 2 billion 3

Source: Survey results

To assess the factors those are associated with black tea products as: tea quality, packaging, product categories We surveyed 100 customers in Thai Nguyen and Hanoi (Appendix 2)

3.3 Methods of data processing

The materials after collecting will be selective and systematic to calculate the appropriate criteria for analysis Using disaggregated statistical methods to systematize and synthesize the materials The calculation tools and techniques are handled on Excel This software tool is combined with descriptive statistical methods to reflect the state of competitiveness of black tea producing enterprises in Thai Nguyen through the absolute, the relative and the average, expressed through tables of data

3.4 Other methods

3.4.1 The descriptive statistical methods

This method is very important when conducting the research This method is used to analyze data and is often combined with the comparative method to clarify the issues:

+ The fluctuation of the factors affecting the competitiveness of black tea products over the time

+ The level of the factors

+ The relationship among these factors

All expressed through indicators of the absolute, relative, average From that, make conclusions based on science

3.4.2 Comparative method

This method is used to compare indicators of price, quality, design, and competitive strategy to consume the black tea products of Thai Nguyen compared to other types of tea to see more clearly the strengths, weaknesses, opportunities and challenges Thus, proposing measures to improve the competitiveness of black tea in the small and medium businesses in

Thai Nguyen province

3.4.3 Method of experts

Based on the evaluation of the agent in the field of research such as the staves from the enterprises, sectors in the field of manufacturing and trading of black tea products, those who understand the tea market at home and abroad So they can make comments and overall assessment of research problems, make research more accurate and correct

3.4.4 Method of SWOT analysis

A method of analyzing the strengths, weaknesses, opportunities and challenges for determining the strategies, appropriate direction for the agents of production, processing and trading

of black tea to promote the strengths, take advantage of the opportunities and limit the weaknesses, avoid the challenges to enhance the competitiveness of black tea products in the market

CHPATER IV PRESENTATION ANALYSIS AND INTERPRETATION OF DATA 4.1 Status of competitiveness of black tea producing enterprises in Thai Nguyen province

4.1.1 Competitiveness of black tea products in Thai Nguyen’s tea enterprises

Competitiveness of tea products is a basic indicator of competitiveness in the tea

enterprises Producing products with high competitiveness is both intermediate goals of the enterprises and just a means in order for the enterprises to control the market

Competitiveness of products is represented by quality, packaging, category, and brand, price

of products, materials supply, and materials of the tea enterprises

a Market share of black tea products

Thai Nguyen province has major tea growing area in the northern mountainous provinces with over 17,661 hectares, average yield reaches 106.53 kilogram of tea leaves /

ha Among them, the area of black tea accounts for 20% of the province's tea The development objective of Thai Nguyen‟s tea from 2007 to 2011 is to exploit the potential effectiveness of tea tree; processing and consumption of tea are associated with advanced techniques in order for Thai Nguyen‟s tea to win market share at home and abroad However, Thai Nguyen‟s black tea has faced many difficulties because of fluctuation of price In previous years, exporting tea of the enterprises was relatively high from 7500 to

8500 tons / year, but by the end of 2010, exported 5,780 tons only, accounted for 4.2% of export tea production of the whole country

Today, the black tea of Thai Nguyen went to many countries around the world However, it is noteworthy that can customers realize Thai Nguyen‟s tea or not? While the majority of enterprises export in the form of raw materials, especially Thai Nguyen‟s black tea hasn‟t had brand positioning A number of enterprises said that, in 2009 purchasing power reduced in most markets, tea export situation met a lot of difficulties Even the head