Success factors influencing vietnams textile garment export capabilities to japan

SUCCESS FACTORS INFLUENCING VIETNAM’S TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION Majoring in International Business by Ms. Nguyen Thi Trong Nghia ID: MBA06019 International University - Vietnam National University HCMC August 2014 SUCCESS FACTORS INFLUENCING VIETNAM’S TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN Approved by: ---------------------------------------------Advisor ---------------------------------------Chairman ---------------------------------------------- ---------------------------------------- Committee member ---------------------------------------------Committee member Committee member ---------------------------------------Committee member Acknowledgment First and foremost, I would like to express my deepest thanks to my advisor – Dr. Ho Thi Bich Van for her valuable suggestions and dedicated instructions during the time that I conducted the thesis. New knowledge and ideas gained from my advisor play a crucial part in the thesis as well as in my future life. Especially in the final stage, her tutorials and recommendations helped me a lot to solve difficulties in statistical analysis. Without my advisor’s guidance and support, this thesis will not be completed. Secondly, I would like to send my sincere appreciation to all professors and lecturers in Master course – International University for teaching and training me during 2 years which provided to me a lot of precious knowledge. I am indebted to my family for strong support during the last two years. Last but not least, I also want to thank all people who were willing to participate in my survey. I am grateful to their valuable suggestions that I can use in writing in this thesis. i- Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions. I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Ho Chi Minh City. ii - - Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent. © Nguyen Thi Trong Nghia / MBA06019 / 2012-2014 - iii - Table of content Acknowledgment ............................................................................................................ i Plagiarism statements..................................................................................................... ii Copyright statement ......................................................................................................iii List of tables ..................................................................................................................vi List of figures ...............................................................................................................vii Abstract .......................................................................................................................viii Chapter one – Introduction .............................................................................................1 1.1. Background .............................................................................................................1 1.2 Rationale for the study ............................................................................................ 11 1.3 Research questions.................................................................................................. 11 1.4 Research objectives ................................................................................................ 12 1.5 Research scope........................................................................................................ 12 Chapter two - Overview of garment industry ............................................................... 13 2.1. Global textile and garment industry ...................................................................... 13 2.2. Overview of textile and garment sector in Vietnam .............................................. 14 2.3. Overview of Japan’s textile and garment market .................................................. 18 Chapter Three - Literature review ................................................................................ 22 3.1. Mercantilist theory ................................................................................................. 22 3.2. The comparative advantage theory ........................................................................ 23 3.3. Michel. Porter’s (1980) on Competitive Advantages ............................................ 23 3.4 The commercialization theory based on the "differentiated product" .................... 25 Chapter Four - Research Methodology......................................................................... 27 4.1. Previous studies ..................................................................................................... 27 4.2. Research model ...................................................................................................... 29 4.3. Research conceptual framework ............................................................................ 29 4.3.1. Pricing .............................................................................................................. 30 4.3.2. Product quality ................................................................................................. 31 4.3.3. Design capabilities ........................................................................................... 32 4.3.4. Time delivery and Material sources ................................................................. 34 4.3.5. C/O requirement............................................................................................... 35 4.3.6. Business partners ............................................................................................. 36 4.4. Research Design .................................................................................................... 37 4.4.1 Qualitative study ............................................................................................... 37 4.4.2 Quantitative study ............................................................................................. 38 4.4.3 Questionnaire design ......................................................................................... 38 4.4.4 Sampling Method .............................................................................................. 39 4.4.5 Pilot test ............................................................................................................ 39 4.4.6. Data collection ................................................................................................. 40 4.4.7 Data analysis ..................................................................................................... 41 - iv - Chapter Five - Data Analysis ........................................................................................ 42 5.1. Frequencies Analysis ............................................................................................. 42 5.2 Descriptive Statistics .............................................................................................. 45 5.3 Reliability Test........................................................................................................ 46 5.4 Factor Analysis ....................................................................................................... 52 5.5 Correlation Testing ................................................................................................. 56 5.6 Regression Analysis................................................................................................ 57 5.7 Revision of Hypotheses and Model ........................................................................ 60 5.8. One-way ANOVA ................................................................................................. 61 Chapter six - Conclusions and Recommendations ....................................................... 64 6.1. Discussions ............................................................................................................ 64 6.2. Recommendations.................................................................................................. 65 6.2.1. For Government ............................................................................................... 65 6.2.2 For Vietnam textile and Apparel Association (VITAS) ................................... 72 6.2.3. For enterprise ................................................................................................... 73 6.3. Limitation and recommendation for further research ............................................ 76 6.4. Conclusion ............................................................................................................. 77 REFERENCES ............................................................................................................. 78 APPENDIX A............................................................................................................... 81 APPENDIX B ............................................................................................................... 85 APPENDIX C ............................................................................................................... 89 -v- List of Tables Table 5.1 : Company type ...........................................................................................35 Table 5.2 : Company size ............................................................................................36 Table 5.3 : Export market ............................................................................................36 Table 5.4 : Working department ..................................................................................37 Table 5.5: Descriptive Statistics ..................................................................................38 Table 5.6 : Pricing reliability .......................................................................................39 Table 5.7 : Quality reliability ......................................................................................40 Table 5.8 : Design reliability 1 ....................................................................................41 Table 5.9 : Design reliability 2 ....................................................................................41 Table 5.10 : Delivery and material reliability .............................................................42 Table 5.11 : CO reliability ...........................................................................................42 Table 5.12 : Business partner reliability ......................................................................43 Table 5.13 : Export capacity reliability.........................................................................44 Table 5.14: Independent variables ................................................................................45 Table 5.15: Dependent variables...................................................................................48 Table 5.16 : Correlation testing ...................................................................................49 Table 5.17: Regression Analysis ..................................................................................50 Table 5.18: Results of hypotheses testing ...................................................................52 Table 5.19: One-way ANOVA .....................................................................................54 - vi - List of Figures Figure 2.1: Vietnamese Textile and Garment Export Revenue during 2008-2013 ......8 Figure 3.1: Three Generic Strategies ..........................................................................18 Figure 4.1: Research Model ........................................................................................23 Figure 5.1: Final model result of the research ............................................................ 54 -7- - Abstract There have been a large number of studies on Vietnamese textile and garment industry due to the fact that this is one of the largest export industries of the economy. However, only few studies have been found on the topic of exporting to Japanese market as Japan has been just the third largest export market for Vietnam’s textile and garment. Therefore, this thesis is an attempt to determine factors which can affect export capabilities in order to recommend solutions to improve the competitiveness of Vietnamese textile and garment export to Japan. Firstly, based on the literature review, the research identifies 6 dimensions which can effects on export capabilities. Next, the hypotheses are developed to test quantitatively. The primary data if this study is collected by the survey using a questionnaire developed based on literature review and verified by pilot test with experts’ comments and recommendations. The survey is conducted with the sample size of 319 and analyzed by using SPSS software with frequency analysis, descriptive statistic, reliability test, factor analysis, correlation testing, regression analysis and one-way ANOVA. Based on the findings, products quality is the most important factor whereas pricing is the least important. This can be explained by the unique characteristics of Japanese market. Relevant recommendations for Vietnamese textile and garment companies to maintain sustainable exports to Japanese market are made in the final chapter. -8- Chapter One – Introduction 1.1. Background Textile and garment is one of the most key industries in Vietnam. There is widely regarded as the key manufacturing sector with strong growth potential. In the recent years, Vietnam's apparel exports develop with impressive speed, and now are ranked the fifth position of the world textile and garment exports. Currently, the textile and garment industry is holding an important role in national economy with nearly 6000 companies, attracted nearly 2.5 million workers. Total export turnover of textile fibers and garment in 2013 reached USD 20.096 billion, up 18% compared with 2012, revenue reach to USD 20 billion, accounting for 15% of GDP and become the leading sector of exports, accounting for over 18% of total exports, bringing Vietnam into the top 5 largest textile exporter in the world. Until now, export textile and garment products of Vietnam was in 180 countries and territories around the world, conquered the difficult markets like the U.S., Europe, Japan, South Korea. In which the best difficult import market is Japanese market. Japan is a developing economy country, and the third largest export markets of Vietnam about textiles and garment. However, in recent years, Japan is a saturated market and the relative complexity about textile and garment products. The difficulties of economy has led to Japanese consumers are increasingly more careful with their spending. However, this market continues further development although influenced by the global financial crisis. Japanese consumers and customers are very high conscious and demand for the design and quality issue. They are interested in every detail of the product. The -9- textile and garment products which produced in developing countries have attracted the attention of Japanese consumers, especially Vietnam. In addition, our country is in the process of integration into the powerful world economy and has become an official member of the Association of South East Asian Nations (ASEAN) since July 1995, Member of the Forum of Asia-Pacific Economic Cooperation (APEC) from November 1998, a member of the World Trade Organization (WTO) from November 2006. When joining organizations that forced us to make the commitment to joining, particularly as we are implementing tariff reduction schedule under the Common Effective Preferential Tariff Scheme (CEPT) of the Free Trade Area AFTA. All of them create advantage condition for expanding export of Vietnam textile and garment industry. Moreover, Japanese importers are interested in markets which provide cheap price such as India, Bangladesh and Vietnam and reduced imports from China. In this competition, Vietnam has certain advantages because the identified relationship between Japan and Vietnam, that is strategic partnership relationship, that creates multifaceted cooperation environment between the two countries, including cooperation in the textile and garment industry and benefit from the agreement : ASEANJapan Comprehensive Economic Partnership Agreement (AJCEP) in December 2008 and Vietnam-Japan Economic Partnership Agreements (VJEPA) in January 2009 for textile and garment products originating from Vietnam and ASEAN into Japan. And especially, TPP agreement - Trans Pacific Partnership, commercial agreement of 21st century (end of 2014) with joining of 12 member countries that bring many big opportunities for textile and garment industry of Vietnam when exporting into big markets, especially into potential market like Japan. Winning Japanese market in this moment and next period, that is an unsolved problem. - 10 - For garment enterprises in specific and Vietnam garment industry in general. To continue strengthen exporting and occupy a large slice of the market share in Japan, Vietnam garment enterprises and Vietnam garment industry need to identify success factors influencing Vietnam garment exports to Japan. That is also the topic author choose for author’s research. This topic is significantly important to both theory and practice in the field of author’s work. 1.2 Rationale for the study With a large potential market and regulatory and economic environment more increasingly favorable, Vietnamese enterprises can find export opportunities to the Japanese market, contributing to a comprehensive economic cooperation between two countries. However, the strict requirements about price, design and quality products and increasingly fierce competition from other still and will be a big challenge for textile enterprises Vietnam when exporting to this market. Vietnam textile and garment exports grow rapidly, reaching to the top of the export goods of our country. However, Vietnam textile and garment exports to Japan only account a modest proportion of the imports total of Japan. Under that situation, the textile and garment exports to the Japanese market need to promote. It's just a matter of urgent and strategic issues because Japan is still the largest trade partner of Vietnam. 1.3 Research questions To help Vietnamese enterprises strengthen the exports of textile and garment products to Japan, answering the following questions below is necessary: - 11 - ● Why is the performance of Vietnam textile and garment exports to Japan not so good as compared to the U.S and EU markets? ● How can Vietnam’s enterprises improve export capabilities to Japan? ● What are Japanese customer distinct requirements about garment products? ● What are success factors influencing Vietnam textile and garment exports to Japan? 1.4 Research objectives To answer the above research questions, three research objectives are developed as follows, ● Describing current status of Vietnam textile and garment exports to Japan. ● Identifying and measuring success factors for textile and garment export enterprises to Japan. ● Proposing solutions to expand sustainably textile and garment exports to Japan 1.5 Research scope The research is based on analysis and evaluation of export situation of Vietnam textile and garment into Japan from 2008 to 2013 and of requirements of Japanese market about textile and garment products. The research focuses on garment enterprises in Ho Chi Minh city, Dong Nai province, Binh Duong province. - 12 - Chapter two - Overview of garment industry 2.1. Global textile and garment industry Apparel is one of the oldest and largest export industries in the world. It is also one of the most global industries because most nations produce for the international textile and apparel market. Apparel production is a springboard for national development, and often is the typical starter industry for countries engaged in export oriented industrialization due to its low fixed costs and emphasis on labor-intensive manufacturing (Adhikari & Weeratunge, 2006; Gereffi, 1999). Although the global apparel industry has been expanding at a rapid rate since the early 1970s and providing employment to tens of millions of workers in some of the leastdeveloped countries in the world, the industry has experienced two major crises in the past five years. The first crisis is regulatory. The Multi-Fiber Arrangement (MFA), which established quotas and preferential tariffs on apparel and textile items imported by the United States, Canada, and many European nations since the early 1970s, was phased out by the World Trade Organization (WTO) between 1995 and 2005 via its Agreement on Textiles and Clothing. The concern of many poor and small developing economies that relied on apparel exports was that they would be pushed out of the global trading system by much larger, low-cost rivals, such as China, India, and Bangladesh. The second crisis is economic. The recent global recession, which was sparked by the banking meltdown in the United States in 2008 and quickly spread to most of the major industrialized and developing economies, brought the world to the brink of the most severe economic crisis since the Great Depression of the 1930s. Plant closures and worker - 13 - layoffs in the industrialized nations led to slumping consumer demand, which resulted in fewer orders and shrinking markets for export-oriented economies in the developing world. The recession hit the apparel industry especially hard, leading to factory shutdowns, sharp increases in unemployment, and growing concerns over social unrest as displaced workers sought new jobs. Consumption in the global apparel industry is highly concentrated in three main regions: the United States, the European Union, and Japan. In 2008, the European Union (EU-27, including intra-EU-27 trade) accounted for nearly half (47.3%) of total world apparel imports of US$ 376 billion, while the United States accounted for 22%, Japan for 6.9%, and the Russian Federation for 5.7% (see Table 1). Together, the United States, the EU-27, and Japan represented over three-quarters of world apparel imports in 2008, which is down from the 82.4% they accounted for in 1995. Particularly notable is the steady decline in the U.S. share of global apparel imports, which fell from a peak of 32.1% in 2000 to 22% in 2008, and Japan’s drop from 11.5% in 1995 to 6.9% in 2008. At the onset of the current recession, global apparel imports increased by nearly 7% ($22.3 billion) between 2007 and 2008. U.S. imports declined during this period, but those of 4 the EU-27, Japan, and the Russian Federation grew. Thus, the negative impact of the economic recession was not yet apparent in the annual import statistics for 2008. 2.2. Overview of textile and garment sector in Vietnam Over the last many years, Vietnam textile and garment industry has witnessed strong development. Products made in Vietnam have penetrated to the world market, thus it was contributing to the economic development of the country. The export values increased rapidly, and this sector is one of the industries that for many consecutive years - 14 - has ranked very high in terms of key export products. Over many years, the industry continuously invested and changed equipment and technology to meet the market demand and to improve its competitiveness. In general there are two major factors which contribute to Vietnam’s remarkable performance. The first is the transition of central planning to an open market system and the second is the increasing integration between regions and countries by becoming a member of ASEAN, CEPT, AFTA, WTO. These 2 factors are strongly related to each other and help the Vietnamese textile and garment industry made significant achievements. The above mentioned factors and the political stability. The industry employs a large labor force, with low labor cost. Thanks to the open door policy, the government of Vietnam took bold reform measures to promote the economic development of the country, attract foreign investment. Now, Vietnam has 5,982 enterprises in textile and garment industry, with involvement of multiple economic sectors. Only 1% of companies are state owned and they are in the process of equalization, the mother holding company of Vinatex will also be equitized, about 60% of textile and garment export turnovers come from FDI companies. There are 30% companies located in Northern provinces, 8% in central and highland provinces, and 62% in southern provinces, attracted nearly 2.5 million workers in the country. During the economic integration process, Vietnam actively participated in all activities of the global economy and step by step integrated into the regional and global - 15 - value chains. That brings significant opportunities to the garment exporters to enter markets of all countries, step by step gaining market share in the global market. Textiles and garment products is one of the most important sectors for Vietnamese export and outsourcing of production. Vietnam’s apparel exports are increase over many years and get high performance in 2013. Figure 2.1: Vietnamese Textile and Garment Export Revenue during 2008-2013 Key markets are still markets with high purchasing power such as United State, EU, Japan, Korea, Canada, Australia and retail markets which play a role as shopping centers in the region. Besides the achievements, Vietnam has to cope with many difficulties: it is currently less developed in terms of machinery and equipment, technology, and labor - 16 - skills. Another difficulty is the high inflation (2007: 16%) compared to economic growth (2007: 8.5%). Besides this, labor costs are becoming more competitive. There are many workers in this sector, so companies compete with each other to get the best workers. On the other side, it could be possible that in future labor costs are getting less important when there is more demand for technical skills. In the future when participating in the TPP agreement, the Vietnam textile and garment enterprises will be opened up opportunities for export growth especially two large markets U.S. and Japanese, increase the added value of the product. However, there are not simple poses new challenges for businesses. Now, the biggest challenge for Vietnam's textile and garment enterprises is how to reach the market in the TPP countries while producing raw material exports of Vietnam mainly imported from TPP abroad. In addition, the companies will also face the risk of opening up the domestic market for the TPP member countries will into Vietnam. Intrinsic Vietnam textile and garment industry still limitations, is not really sustainable, not done their supply chain. This situation leads to the weakness of the sector. It is the cumulative proportion of the industry is not high, the major textile and garment companies to meet the demand for sewing (the stage of low investment, easy to move). Currently, materials of industry only get localization rate of about 50 %, remaining parts still dependent on foreign suppliers. In general, textile and garment plays a very important role in the economy of the country. To truly sustainable and development, the textile and garment enterprises should form the complete supply chain from design - materials - sewing- distribution and the link between the stages, commitment, responsible community for building the competitiveness of the chain with the goal of creating an important boost for - 17 - Vietnam's textile and garment sustainable growth. Furthermore, businesses should take advantage of opportunities for sustainable development, accumulation potential in all aspects to build competitiveness, should not rest on winning. 2.3. Overview of Japan’s textile and garment market The Japanese consumer market has remarkably high purchasing power for a country of its size. With a population of 127.5 million, Japan is the world’s 10th largest country. The Japanese economy, however, ranks as the world’s 3rd largest (behind the U.S. and China). The corresponding high level of per capita income gives consumers in Japan considerable purchasing power and offers an attractive market for retail investment. Currently Japanese is the third largest apparel market in the world after the U.S., E.U, Japanese has consumption level of garments annually to USD 3.7 billion, domestic production is only 5% of the remaining, 95% is imported. So, here is a fertile market for textile and garment exporters into Japan. Due to shortage of labor and high labor costs, many manufacturers of textile and garments in Japan moved production in abroad. Thus, producing of the domestic textile and garment goods in Japan has and will decrease, garment market mainly import. Chinese goods are the dominant textile and garment market imported from Japan, with a market share in 2013 was 71.08% market share. Most Japanese textile and garments are imported from China by Japanese companies or Japanese-Chinese joint ventures located in China and producing. Vietnam's textile and garment export to - 18 - Japan in 2013 accounted for 6.74% market share of total imports of the country compare to Indonesia 3.43%, Korea 1.42%, 1.18% of the United States. Now, Japan is importing a smaller percentage of clothing from China as Japanese manufacturers shift more production to lower-cost countries in Southeast Asia. Made-in-China products accounted for 75.6% of the total value of Japanese clothing imports in 2013, down 2.6 percentage points from the previous year, according to trade data released by the finance ministry. Shipments from members of the Association of Southeast Asian Nations, meanwhile, rose 2.2 points to 14.7%. Japan imported 3.15 trillion yen ($30.5 billion) worth of clothing in 2013, up 21.3% from 2012. Imports from Vietnam, Bangladesh and Myanmar posted especially sharp increases, spiking 37%, 42% and 43.9%, respectively. The total value of clothing imports from ASEAN members surged 42% to 462.4 billion yen, pushing up the region's share significantly. Today, Japanese consumption goods market is developing follow two trend. The first trend is consumers who looking for the not high price goods. Thus, Japan producers must divert to the ASEAN countries, especially China and Southeast Asia to processing with the low labor cost. The second trend is in the context of a series of domestic garment factory closed, then the successful research and development of high-value products such as shirts be worn immediately that should not iron after washing and drying it is an outlet for Japanese manufacturers. Beside the core interests of products, the Japanese consumer demanded new hobbies such as the suit can add moisture to escape, not wrinkled, crumpled by special fabric sewing. In terms of the quality of goods, Japan is one of the countries with the most demanding in the world. Defects in other countries that is not a problem as a minor - 19 - wound, unbalanced contour on a product, then the Japanese were considered damaged goods. Japanese consumer set out reliable and high quality goods standards for the industry goods and create require that different products but same type must follow. Different standards of color also exist in Japan, based on a combination of the traditional standards and influence of western. Elderly people often choose light and soothing colors fashion in the former, but now, everyone likes a different color groups depending on their tastes that do not depend on age. For young women's fashion, colors change depending on the seasons. Each sample of garments can have many different colors. The exporter should choose suitable color depends on the body type and personal tastes of the Japanese market. Today consumers about garments in Japan quite difficult, especially about the fashions. Businesses need to capture, predict fashion trends, must provide a timely trendy fashion products, especially for younger buyers - the garment hobbyists are changing fast. The Japanese suppliers usually do this better than foreign suppliers because they capture and predict better fashion trends and because they have a "rapid response" system to capture information from consumers through retailers. However, the Japanese have more conservative in that still accept the standard stylized items add details or new materials. For example, chum pants/skirt and vest/jacket are still selling. Japanese consumers are often attention to the smallest details like sewing stitch (even on the inside), stitching, buttons sewing way, folding way, etc. When business with Japanese partners, garment oversea suppliers should avoid mistakes as delivery no color standard, wrong size, not enough or slow delivery. The - 20 - Japanese importers will not accept these errors, so businesses suffer violations will harm to the two sides. Goods in the Japanese market must have the correct standards labels and labeling must reflect the origin of goods so that consumers are not confused between the Japanese products produced and products manufactured in overseas and they can quickly determine the origin of goods or prohibited imports vague branded products, counterfeit origin. Products are stamped JIS stamp (Japan Industry Standards - one of the quality stamps is used widely in Japan) can easily penetrate the Japanese market. Japan also have test law for household products containing toxic substances. This law requires that all household products must comply with the standards for permissible levels of hazardous substances to the skin. The garments have toxic levels higher than allowed level will be banned from sale in the Japanese market. One of the policies of Japanese market about garment, there is also Customs Tax Law. This law prohibited importation of products which counterfeit labels violate trademarks or patents. Policies of Japan on importing of garments is relatively strict, especially for developing countries because these countries less business based on their label, the quality product is not high, the localized rate products is low. Therefore, importers need to further strengthen the business on their own label, enhance the localization rate products using efficiently domestic materials to adapt to the Japanese books and won the competitors. - 21 - Chapter Three - Literature review A number of theories are reviewed in this chapter in order to highlight the issues of comparative and competitive advantages, which would help to find out the competitive advantages of Vietnam’s textile and garment export enterprises to Japanese market. 3.1. Mercantilist theory Mercantilist theory was born in Europe, the most powerful in the UK, France around the fifteenth century. According to mercantilist theory, the prosperity of the country is reflected in the volume of money which it holds, it is considered national assets. The only way to increase national wealth is to develop foreign trade and stressed that excess of imports over exports is the most effective measures in foreign trade activities. Trading profit is the result of no par value and fraud exchange. Economic benefits that a country is obtained from the resources of other countries. International trade is not only based on the potential of a country in which government plays an important role through trade protectionist policies. This theory has certain disadvantages because if Vietnam wants textile and garment industry sustainable development is not only to increase the number of export goods but also pay attention to the value of the textile and garment goods. Therefore, if creative apply in the present context, the theory remains highly effective for exporter enterprises in particular and textile and garment industry of Vietnam in general. - 22 - 3.2. The comparative advantage theory David Ricardo (1772 - 1823) is famous British economists. According to him, if each country specialized in producing and exporting their products which have comparative advantage and import those products that do not have a comparative advantage, all countries will benefit. However, comparative advantage here is based on the level of development of production elements of each nation. Comparative advantages depend on the time and level of development of each country or local. Besides, Paul R. Krugman. “International Economics Theory & Policy”. Pearson International Edition 8, pp.28-29. He was also defining about the comparative advantage: “Trade between two countries can benefit both countries if each country exports the goods in which it has a comparative advantage”. Applying this theory, to improve exporting textile and garment of Vietnam, we should take advantage of abundant labor, cheap cost in manufacturing textile and garment products to export. 3.3. Michel. Porter’s (1980) on Competitive Advantages Competitive advantage is at the heart of any strategy. A firm needs to make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain. Competitive advantage occurs when an organization acquires attributes that allows it to outperform its competitors. These attributes can include access to natural resources, highly trained and skilled personnel human resources, new technologies such as robotic sand information technology or as a competitive aid in the business - 23 - process (for example, better identification and understanding of customers). As a result, there are two types of competitive advantage an organization can achieve relative to its rivals: lower cost or differentiation. Cost leadership is applied when a firm competes based on cheaper prices, flexible prices, etc. The goal of Cost Leadership Strategy is to offer products or services at the lowest cost in the industry. The challenge of this strategy is to earn a suitable profit for the company, rather than operating at a loss and draining profitability from all market players. Products are to be created at the lowest cost in the industry. An example is to use space in stores for sales and not for storing excess product. Differentiation Strategy’s goal is to provide a variety of products, services, or features to consumers that competitors are not yet offering or are unable to offer. This gives a direct advantage to the company which is able to provide a unique product or service that none of its competitors is able to offer. An example is Dell which launched mass-customizations on computers to fit consumers' needs. This allows the company to make its first product to be the star of its sales. Main sources for differentiation include product features, product quality, product design, after-sale service, product delivery, firm reputation Beside the two generic strategies based on cost or differentiation mentioned above, other two strategies also based on cost or differentiation, but with narrower scope are as follows, Cost focus using cost focus strategy does not compete based on low costs for its whole product mix, but only for a specific product. - 24 - Differentiation focus is applied when a company using differentiation focus strategy does not differentiate its products from those of their direct competitors in many aspects/sources as mentioned above, but just differentiates for specific aspect. Competitive Scope Lower Cost Differentiation 1.Cost Leadership Broad target 2. Differentiation 3B.Differentiation Focus Narrow Target 3A. Cost Focus Figure 3.1: Three Generic Strategies 3.4 The commercialization theory based on the "differentiated product" Typically, in each country, each local, manufacturers only focus on doing these products serve to majority tastes. That will create gaps for minority tastes and it will be effectively satisfied through path of imports because imported products will be "different" than domestic products. Moreover, product differentiation and economies of scale have intimate contact each other. Fierce competition on the international market forcing each manufacturer in the countries focus produce some goods for a certain number of designs to take advantage of scale and the lowest cost of production per unit. - 25 - Applying this theory the author draws commented that to strengthen textile and garment exports, the exporters do accordance to business law, which is "selling what the customer needs." Problems of enterprises today is the textile and garment products of the Vietnam is only mass production, according to customers' designs which have not yet confirmed the brand as well as the characteristics of their products on the market of the world in general and Japan in particular. - 26 - Chapter Four - Research Methodology 4.1. Previous studies In Table 4.1, a number of previous studies on critical success factors influencing Vietnam’s textile and garment exports are reviewed. Table 4.1: Measurement of Success Factors Influencing Vietnam’s Textile and Garment Export Variables 1. Pricing Items - Competitive CMT price - Competitive FOB price - Flexible prices 2. Product quality - Overall quality Fabric Quality Sewing quality Labeling quality Containing no toxic chemicals 3. Designing capabilities - Modeling -Coloring - Sizing -Flexible materials 4. Time delivery & Material sources Timely controlled production - On time delivery Flexible materials Sources -Embassy of Denmark in Vietnam (2010) - Ho Thi Bich Van (2007) - Kenta Goto (2012) Khalid Nadvi, John Thoburn, Bui Tat Thang, Nguyen Thi Thanh Ha, Nguyen Thi Hoa and Dao Hong Le (2003) Ho Thi Bich Van (2007) SGS Hongkong limited (2012) Japan External Trade Organization (JETRO) (2011) Viettrade (2004) -Ho Thi Bich Van (2007) -Embassy of Denmark in Vietnam (2010) -Japan External Trade Organization (JETRO) (2011) - Japan External Trade rganization (JETRO) (2011) - Kenta Goto (2012) - Thomasson, S. C. - 27 - 5. C/O 6. Business partners 7. Export capabilities to Japan - Form VJ - Form AJ - Imported textile Developing business Relationship. Building trust among Japanese importers. Implement trade agreements Retaining and continous searching big clients. Different size. Flexible product mix. (2011) - Vietnam Textile & Apparel Association (2013) Jonathan Fee and BJ Shannon, Alston & Bird, LLC (2014) - VEN (2009) - Kenta Goto (2012) Khalid Nadvi, John Thoburn, Bui Tat Thang, Nguyen Thi Thanh Ha, Nguyen Thi Hoa and Dao Hong Le (2003) Vietnam Economic News (2014) - 28 - 4.2. Research model Dependent variable Independent variables 1. Pricing + H1 2. Product quality + H2 Export capabilities 3. Designing capabilities + H3 + H4 4. Time delivery & Material sources + H5 5. C/O requirement + H6 6. Business partners Figure 4.1: Research Model 4.3. Research conceptual framework In this section, research model, description for each variable, and hypotheses are developed. - 29 - 4.3.1. Pricing Overall, Vietnam's textile and garment products without the high price competitions. Due to many difficulties the problems which Vietnam companies face such as inputs for the production of textile and garment. Raw material of the garment industry in the country is produced that do not to meet enough demand in terms of quantity, quality, design led to the Vietnam textile and garment industry still has to import most raw materials from abroad leading to high input costs. Due to raw material sources must import, raw materials should not be proactive and take a lot of market volatility. In addition, markets fluctuate constantly. This greatly affects the cost of raw materials production textile and garment enterprises. Besides, low labor productivity, wasted consumption of raw materials, and the irrational labor organizations, not compact engine management yet that has contributed to increased production cost. Meanwhile textiles and garments of China, Thailand has high competitiveness. Especially stable raw material, raw material prices led to lower prices of Chinese textile and garment products are very low, making Chinese textile and garment have highly competitive prices. Vietnam is a crowed population country, labor in the textile and garment industry accounts a large proportion and has cheap price. This is attractive to investors when they choose Vietnam textile and garment companies to order processing. Beside, importers are very interested to producers can supply the products with multi price level depend on their orders. Pricing is one of the competition tools on Japanese market. So, to ensure suitable prices, Vietnam companies need to research price of input materials, transportation costs, warehousing cost, loading cost, CMP cost to decrease to lowest price level. And therefore, companies discount product - 30 - price and give suitable prices to meeting competitive price levels and price flexibilities with many kinds of products. H1: There is a positive impact of PRICING on EXPORT CAPABILITIES of Vietnam’s textile and garment 4.3.2. Product quality Customers buy garment product which is not only satisfied basic needs, but also more important is to satisfy beauty needs and social status and identify needs. So, to create reputation and firmly position in the Japanese market, product quality is always basic and durable thing in exporting garment of Vietnam garment industry. Quality standards sought in Japan are usually stricter than other countries, and this must be taken into consideration. The manufacturer is liable for damages if their product proves to be harmful to human life, body, or assets due to defects. While consumer’s demand is higher about garment, one of the first factors that pay attention is quality of commodity. This is an important factor to maintain and develop about export markets of trading business. Aware of the importance of this issue, Vietnam garment export companies should strive to improve quality goods through seeking the sourcing of high quality fabric. A fabric product is quality when ensure quality in weaving or knitting, dyeing and finishing stages. Besides, product quality is not only demonstrates fabric quality but also in sewing and cutting. Therefore, companies must pay attention and ensure quality through each stage to meet requirements of Japanese customers. Labelling legislation can be a major headache for textile and clothing companies. To affix a mandatory quality mark or a voluntary quality mark requires - 31 - prior product type approval and possibly factory inspections for quality control assessment. Regulated products must bear the appropriate mandatory mark when shipped to Japan in order to clear Japanese Customs. Regulations may apply not only to the product itself, but also to packaging, marking or labelling requirements, testing, transportation and storage, and installation. The Japanese rules on clothing labels were detailed for clothing manufacturers such as: Yarn that has not been finished, woven fabrics, knitted fabrics and lace only need to be labelled with the composition of the fibers included and to have the name of the maker and contact details, but finished clothing items - everything from jackets through skirts, cardigans, aprons and nightwear - require details on home washing and care. The home washing instructions must specify whether the item is suitable for chlorine bleaching, whether it needs to be dry cleaned, can be wring- dried or needs to be otherwise dried. Data on ironing must also be provided, including the maximum temperature the garment can withstand. In addition, chemicals used in printing required to ensure non-toxic. Often when printed T-shirts, very easy to stick to this error that returned goods are very expensive to reproduce and amortization expense. H2: There is a positive impact of PRODUCT QUALITY on EXPORT CAPABILITIES of Vietnam’s textile and garment 4.3.3. Designing capabilities Products of the textile and garment industry is consumer products, serve to all needs. Consumers are different each other about culture, customs, religion, geographical region, climate, gender, age ... so will have very different needs on clothing such - 32 - model, colors, sizes and materials. Therefore requires textile and garment products have diversity. The characteristics of the textile and garment product have life cycle is very short so design of textile and garment product plays a very important role. Fashion trends are constantly changing on the world requires multiple models to meet this trend. To be able to make new models that require a creative team is trained to be able to create unique designs, consistent with the trend of fashion. Because of characteristics Vietnam's textile and garment industry in the current period is mainly produced in the form of purchase of foreign partners. Vietnam businesses are only focus on the production form, it leads to low value in each product. Vietnam does not have a creative team is professionally trained, not to understand the world fashion trends and needs of the market. Up to 90 % of businesses said that the design team of them mainly sketches to the client's idea and not take the idea and sketch their designs for customers. When making goods exports to Japan, the design team will design base on customer require and provide a sketch of the specific technical parameters as well as the characteristics of the product, according to customer requirements and thus brought into production. Can see the design team of the enterprise as a whole exports and exports to the Japanese market in particular those like who re-inform for customer to information, it is not done designing. H3: There is a positive impact of DESIGNING CAPABILITIES on EXPORT CAPABILITY of Vietnam’s textile and garment - 33 - 4.3.4. Time delivery and Material sources 4.3.4.1. Time delivery Now, Japan is the third largest import of Vietnam about garments but paradoxically is Vietnam use very few domestic raw materials. Vietnam’s textile and garment enterprises face many difficult issues about material inputs to manufacture textiles and garment products. With the fast development of technology, many type of materials used for garments nascent, whereas technology produce new materials do not have. Besides, raw material of the garment industry in our country is not producing enough to meet demand in terms of quantity, quality and design, not get the standard of importers. In addition, although we export textile and garment products into the Japan under the FOB value, but raw material production to follow the instructions of the importer. From there we can see the reason for boosting export of Vietnam’s textile and garment industry decline compared to other competitors when not actively raw materials. One of the basic elements of Vietnam garment enterprises when exporting to Japan is reputation for on-time delivery. Japanese market has high requirements about transfer condition, delivery, geographical advantages, and preferential entry procedures. Vietnam enterprises need to keep advantages in delivery that is difficult and necessary duty because on time delivery is an important element, it must fit to seasonal and fashionable elements, especially in Japan. Japan enjoys fours season throughout the year. Since the climate and temperatures vary substantially between the four seasons, product in demand varies according to season. That is why precautions must be taken especially when importing seasonal and fashion products from remote places without season. Moreover, initial - 34 - Japan importers often require small quantity orders but short time production requirements and delivery on time. If do it, they will order larger contracts. 4.3.4.2. Material sourcing Now, Japan is the third largest import of Vietnam about garments but paradoxically is Vietnam use very few domestic raw materials. Vietnam’s textile and garment enterprises face many difficult issues about material inputs to manufacture textiles and garment products. With the fast development of technology, many type of materials used for garments nascent, whereas technology produce new materials do not have. Besides, raw material of the garment industry in our country is not producing enough to meet demand in terms of quantity, quality and design, not get the standard of importers. In addition, although we export textile and garment products into the Japan under the FOB value, but raw material production to follow the instructions of the importer. From there we can see the reason for boosting export of Vietnam’s textile and garment industry decline compared to other competitors when not actively raw materials. H4: There is a positive impact of TIMES DELIVERY & MATERIAL SOURCES on EXPORT CAPABILITIES of Vietnam’s textile and garment 4.3.5. C/O requirement Besides the high demands of the Japanese market, the enterprises of our country were in trouble again bringing technical factors: need to meet the - 35 - requirements of the Japanese on certificates of origin. Providing preferential Certificate of Origin attach with goods from exporters to importers is one of the most important factors to boost export Vietnam garment products to Japanese market After Vietnam participating in AJCEP and VJEPA, Vietnam's textile and garment into Japanese market enjoyed preferential tax rates of 0%. This is an opportunity for Vietnam textile enterprises to boost exports to the Japanese market. However, in order to enjoy 0% tax rate, the exporter must meet two requirements that goods must be produced, processed in Vietnam and the origin of main materials must from Vietnam, Japan, ASEAN. H5 : There is a positive impact of C/O REQUIREMENT on EXPORT CAPABILITIES of Vietnam’s textile and garment 4.3.6. Business partners For Japanese partners, creating credibility, strengthen relationships, trust building and implementation of trade commitments as determinants of success. To do that, enterprises should actively participate in international trade fairs in Japan or to open a representative office in Japan to introduce the product. When having a relationship, must maintain and develop, to ensure the credibility and to build the trust as well as do seriously the signed trade agreements to get the stability and orders more often. In addition, to keep steady growth in the Japanese market, the Vietnam textile and garment enterprises to build their own trust export images. To success in trust building, Vietnam businesses need to learn the needs, tastes of the Japanese people, grasp the fashion trend of Japanese consumers, and commodities have also shown the - 36 - specific style. Moreover, the implementation of social responsibility to ensure employees is one of the factors that increase brand image and attracting imports from Japan. H6: There is a positive impact of BUSINESS PARTNERS on EXPORT CAPABILITIES of Vietnam’s textile and garment 4.4. Research Design This study is conducted using both qualitative and quantitative methods. 4.4.1 Qualitative study According to Newman & Benz (1998), qualitative research is multi method in focus, involving an interpretive, naturalistic approach to its subject matter. This means that qualitative researchers study things in theirs natural settings, attempting to make sense of, or interpret, phenomena in terms of the meanings that people bring to them. Moreover, the goal of qualitative research is: “researcher immersion in the phenomenon to be studied, gathering data which provide a detailed description of events, situations and interaction between people and things, thus providing depth and detail”. In general, qualitative research answers the question how and why things happen as they do. Thus, qualitative method is needed in this research to find out effecting of factors to export of Vietnam textile and garment to Japan. Data from qualitative method is collected from publications, personal records, census or in similar researches. In this research, secondary data is collected from literature review, online articles and reports on Internet. - 37 - In this thesis, literature review is comprised of concepts and theoretical from other researchers to ensure academic and objective perspective. Competitive advantages suggested by M. Porter (1985). Besides, articles from websites on the world and other related articles on Internet also are used to gain understanding of overall market, the current situation and policies of the government and mainly, the current problem situation. 4.4.2 Quantitative study According to Creswell (2003), quantitative method is the way that the investigator primarily uses post positivist claims for developing knowledge (for example cause and effect thinking, reduction to specific variables and hypotheses and questions, use of instrument and observation and test of theories), employs strategies of inquiry such as experiments and surveys and collects data on predetermined instruments that yield statistic data. In this research, quantitative method is applied by asking experts to give opinions in questionnaire about effecting of Vietnam garment and textile companies to Japan to determine factors affect strengthen exporting. 4.4.3 Questionnaire design The questionnaire is comprised of two parts. The first part includes 6 questions about company information on location, type of business, operation fields, products, export market, number of workers. The second part is about the evaluation of factors constructed based on the research model. Each factor is evaluated based on 5-point Likert scale include: (1) Strongly Disagree, (2) Disagree, (3) Neutral, (4) Agree and (5) Strongly Agree. In fact, the Likert scale, developed by Rensis Likert, is the most - 38 - common method to the summated rating scale (Cooper, 2006). Besides, the questionnaire is designed for business people so the language must be clear, and easy to understand, the statements in the questionnaire are short and clear to avoid misunderstanding from business people. 4.4.4 Sampling Method In this thesis, the convenience sampling is applied due to the fact that this method can save budget, time and human resource to carry out the research. It based on convenience or ease of approach of the objects, where the investigators are more likely to meet the objects. Moreover, the population in this study is unknown, so convenience sampling is the most practical method to apply. According to Hair et al. (1998) – excerpts from Michele, 2005, the minimum sample size N >5*x (x is the total number of observed variables) and in multivariate regression analysis, the minimum sample size N is more than 50+8m (Michael, 2002) In this research, the minimum sample size is 319 which satisfy the two conditions above. 4.4.5 Pilot test Pilot test can be understood as a trial run of procedures, methods and tools that used in the research to find out weakness in research design and instrumentation. According to Flink (2003b in Sauders et al 2007), the minimum numbers of 10 people - 39 - is required for a pilot-test. Each of them was told the research purpose and received the questionnaire then they respond in anonymity. In this research, 10 people were asked to respond the questionnaire to test the clarity and meaningfulness of the questions. After the test, there was evidence showed that the questionnaire have good layout, easy to understand statements and logical order of items. Thus, the questionnaire can be considered qualified and next stage will be conducted. 4.4.6. Data collection In this research, the main source of data collection are gained directly from business people who do in textile and garment companies in Ho Chi Minh city, Dong Nai province, Binh Duong province. Around 250 business people are asked by author to answer the questionnaire. The second source of correspondents comes from mail survey with the link to the online spread sheet based on the questionnaire (https://docs.google.com/forms/d/1zNPGK5Z0jOaMvbXLsSprX5UQel3UA1MgW1M3 tYLUBQ/viewform).There are totally 50 mail addresses from the list supplied by textile and garment companies. The last way to collect data of this study is directly interview author’s relatives, friends and fellow doing in textile and garment companies. Around 50 questionnaires are collected by this way. - 40 - 4.4.7 Data analysis After collecting all the data from the questionnaire, the data will be summarized and arranged by some appropriate methods as follow: Frequencies analysis: this step will summary and presented data result in the first part of the questionnaire to have a overview about study’s target. Descriptive statistics is analyzed by the statistic tool SPSS to convert raw data to a form that provide frequencies, measures of central tendency and dispersion. Reliability test is conducted based on Cronbach’s alpha, defined by Cavana (2001) as a “reliability coefficient that indicates how well the items in a set are positively correlated to one another. Cronbach’s alpha is computed in terms of average inter correlations among the items measuring the concepts”. Bryman and Cramer (1990) accepted the value of 0.8 or higher but Nunnally (1978) only accepted the value of 0.6 or higher, especially for initial investigations. EFA (Exploratory Factor Analysis): According to Pontinga, 1989 and Sigh, 1995 – excerpts from Veloutsou et al, 2005) if a variable uploads on a factor and also uploads to another factor, it should be considered as unvalued. Thus, EFA was used to test above problem and it is widely accepted to inspect the value of the scale (Gebing & Anderson, 1998 – excerpts from Veloutsou et al 2005 In this study, this technique is used to identify factors which effect on export capacity to Japan. Regression analysis: is analyzed by SPSS software to verify the simultaneous effects of independent variables on a dependent variable. In this research, this is applied to demonstrate how much factors affect to export capabilities of Vietnam textile and garment to Japan. - 41 - Chapter Five - Data Analysis 5.1. Frequencies Analysis In this research, frequencies analysis is conducted based on four questions: company type and size, export market and working department of respondents. Table 5.1 : Company Type Cumulative Frequency Percent Valid Percent Percent Private 55 17.2 17.2 17.2 Joint venture 60 18.8 18.8 36.1 FDI 67 21.0 21.0 57.1 Joint stock 77 24.1 24.1 81.2 Others 60 18.8 18.8 319 100.0 100.0 Total 100.0 Begin with the first question, the most common type of company is joint-stock company with 24.1% in total, second is FDI company with 21%, third belongs to two types are joint-venture and others with 18.8% and the final is private company with 17.2%. Others company in this research can be understand as state-own companies in many forms while the other four types represent private sector in textile and garment industry. Based on this result, private sector hold main part of export with cumulative percent more than 80% whereas state-own company just hold 20%. - 42 - Table 5.2 : Company Size Frequency Percent Cumulative Percent Valid Percent Less than 200 workers 73 22.9 22.9 22.9 200 – 500 workers 85 26.6 26.6 49.5 500 – 1000 workers 80 25.1 25.1 74.6 More than 1000 workers 81 25.4 25.4 100.0 319 100.0 100.0 Total In the next question about company’s size, there is a balance between four options with around 25% each in total. The highest frequency (26.6%) belongs to company with 200-500 workers whereas the lowest (22.9%) is small companies have less than 200 workers. Therefore, it can say that Vietnam textile and garment company in exporting comprise of many sizes. Table 5.3 : Export Market Frequency Percent Valid Percent Cumulative Percent Japan 235 73.7 73.7 73.7 U.S 37 11.6 11.6 85.3 E.U 42 13.2 13.2 98.4 Others 5 1.6 1.6 100.0 319 100.0 100.0 Total - 43 - In general, the three main export markets of Vietnamese textile products in order are US, EU and Japan. However, the results in this research is opposite with 73.7% companies export to Japan, follow are US ( 11.6% ) and EU ( 13.2% ). It can be explained that main investigated companies in this research focus on Japan market while US, EU are just minor markets. Table 5.4 : Working Department Valid Percent Cumulative Frequency Percent Import - export 81 25.4 25.4 25.4 QA/QC 77 24.1 24.1 49.5 Sales/Merchandise 88 27.6 27.6 77.1 73 22.9 22.9 319 100.0 100.0 Others Total Percent 100.0 In the final question, there is also again a balance among asked people with around 25% divided in four departments: export-import, QA/QC, sales/Merchandises and others. Others people in this research are comprised of experts, manager, CEO. This can be explained because most of questionnaire is passed to persons working in export-import section, QA/QC, sales/merchandise in factories and managerial person as well. - 44 - 5.2 Descriptive Statistics Descriptive statistics which comprises of mean and standard deviation are considered as an overview and describe main features of data collected. The Mean estimated the central tendency of a distribution while standard deviation measures the dispersion. A low standard deviation indicates that the data is very close to the mean. On the other hand, it indicates that the data spreads out over a large range of values. Table 5.5: Descriptive Statistics N Minimum Maximum Mean Std. Deviation PRICING1 319 1 5 3.63 1.113 PRICING2 319 1 5 3.92 1.076 PRICING3 319 1 5 3.76 1.089 QUALITY1 319 2 5 3.62 .863 QUALITY2 319 2 5 3.16 .800 QUALITY3 319 2 5 3.24 .759 QUALITY4 319 2 5 3.37 .862 DESIGNING1 319 1 5 4.06 .895 DESIGNING2 319 1 5 3.69 .895 DESIGNING3 319 1 5 3.59 .852 DESIGNING4 319 1 5 3.56 .874 DELIVERY_MATERIALS1 319 2 5 3.03 .777 DELIVERY_MATERIALS2 2 2 5 5 3.14 DELIVERY_MATERIALS3 319 319 3.14 .866 .879 DELIVERY_MATERIALS4 319 2 5 3.06 .879 CO_REQUIREMENT1 319 1 5 3.28 1.320 CO_REQUIREMENT2 CO_REQUIREMENT3 319 319 1 1 5 5 3.67 3.60 1.224 1.188 BUSINESS_PARTNERS1 319 1 5 2.55 .845 BUSINESS_PARTNERS2 319 1 5 2.59 1.201 BUSINESS_PARTNERS3 319 1 5 2.65 .926 EXPORT_CAPA1 319 1 5 3.46 .927 EXPORT_CAPA2 319 1 5 3.16 .951 EXPORT_CAPA3 319 1 5 3.23 .832 Valid N (listwise) 319 - 45 - In general, the average mean of 24 items is 3.34 which can be say that most of companies agree with the author’s ideas about export capacity to Japan. However, the average mean of business partners dimension is pretty low (2.6) indicates that general ideas do not consider business partners is a crucial point in exporting to Japan. About standard deviation, the average mean is 0.95 below 1 can be considered as small so it can say that the data spreads out over a small range of values. On the other hand, there are two dimensions have standard deviation index larger than 1 are CO requirements (1.224) and pricing (1.093). Hence, pricing can be considered as a minor element when exporting products to Japan due to the fact that Japan market is very strict and requires high quality products. In addition, CO certification currently is not seriously considered by Vietnamese export companies and they don’t take advantage of priorities about trade agreement between ASEAN – Japan and Vietnam – Japan. 5.3 Reliability Test There are many methods to measure reliability of statistic but the most common way is Cronbach’s alpha. According to Nunnally (1978), a coefficient alpha of 0.6 or above is acceptable in the early stage of a research. However, Hair et al, 1995 announced that a Cronbach's alpha needs to be greater than 0.7 for social science research and the item has Item-total correlation lower than 0.3 should be eliminated to increase the reliability and validity of the statistic. Based on the fact that this study is an economic research so coefficient alpha of 0.6 or above will be accepted. - 46 - Table 5.6 : Pricing Reliability Cronbach's Alpha N of Items .864 3 Item-Total Statistics of Pricing Scale Mean if Item Deleted 7.69 PRICING1 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted 3.988 .724 .824 PRICING2 7.40 4.115 .727 .821 PRICING3 7.56 3.927 .772 .779 As shown above, the Cronbach’s Alpha is at 0.864 which is higher than 0.7 indicating that all three measurement items of this variable are well related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.864). Therefore, all 3 items of pricing are kept for further analysis. Table 5.7 : Quality Reliability Cronbach's Alpha N of Items .889 4 Item-Total Statistics of Quality Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted QUALITY1 9.76 4.778 .686 .885 QUALITY2 10.22 4.897 .727 .868 QUALITY3 10.15 4.927 .774 .852 QUALITY4 10.02 4.327 .849 .820 - 47 - As shown above, the Cronbach’s Alpha is at 0.889 which is higher than 0.7 indicating that all four measurement items of this variable are well related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.889). Therefore, all 4 items of quality are kept for further analysis. Table 5.8 : Designing Reliability 1 Cronbach's Alpha N of Items .713 4 Item-Total Statistics of Design Scale Mean if Scale Variance if Item Deleted Item Deleted DESIGNING1 10.84 DESIGNING2 Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .567 3.684 .627 11.21 3.812 .581 .598 DESIGNING3 11.30 4.110 .522 .637 DESIGNING4 11.34 4.771 .291 .768 Based on the results of data analyzed, Designing 4 with item-total correlation of 0.291 - below 0.3 will be deleted. On the other hand, the three remaining items are suitable for all requirements, so no more items are deleted. Deleting Designing 4, Cronbach’s Alpha of the variable will increase from 0.713 to 0.768 as in following tables. Table 5.9 : Designing Reliability 2 Cronbach's Alpha N of Items .768 3 - 48 - Item-Total Statistics of Designing Scale Mean if Item Deleted DESIGNING1 7.28 DESIGNING2 DESIGNING3 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .709 2.365 .582 7.65 2.241 .645 .636 7.74 2.493 .576 .715 Table 5.10 : Delivery and Material Reliability Cronbach's Alpha N of Items .839 4 Item-Total Statistics of Time Delivery and Material Sources Scale Mean if Item Deleted DELIVERY_MATERIALS1 9.34 DELIVERY_MATERIALS2 9.22 DELIVERY_MATERIALS3 DELIVERY_MATERIALS4 Scale Variance if Item Deleted 4.633 Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .774 .756 4.853 .582 .836 9.23 4.622 .642 .810 9.30 4.439 .705 .781 As shown above, the Cronbach’s Alpha is at 0.839 which is higher than 0.7 indicating that all four measurement items of this variable are well related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.839). Therefore, all 4 items of time delivery and material sources are kept for further analysis. - 49 - Table 5.11 : CO Reliability Cronbach's Alpha N of Items .827 3 Item-Total Statistics of C/O requirement Scale Mean if Corrected Item- Cronbach’s Total Alpha if Item Correlation Deleted Scale Variance if Item Deleted Item Deleted C/O_REQUIREMENT1 7.27 .625 C/O_REQUIREMENT2 6.87 4.752 .771 .673 C/O_REQUIREMENT3 6.95 5.308 .666 .779 4.952 .825 As shown above, the Cronbach’s Alpha is at 0.827 which is higher than 0.7 indicating that all four measurement items of this variable are well related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.827). Therefore, all 3 items of C/O requirement are kept for further analysis. Table 5.12 : Business Partner Reliability Cronbach's Alpha N of Items .663 3 Item-Total Statistics of Business Partners Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted BUSINESS_PARTNERS1 5.24 3.333 .441 .619 BUSINESS_PARTNERS2 5.19 1.950 .600 .387 BUSINESS_PARTNERS3 5.14 3.140 .429 .626 - 50 - As shown above, the Cronbach’s Alpha is at 0.663 which is higher than 0.6 that is accepted in this economic research. Three measurement items of this variable are related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.663). Therefore, all 3 items of business partners are kept for further analysis. Table 5.13 : Export Capabilities Reliability Cronbach's Alpha N of Items .810 3 Item-Total Statistics of Export Capabilities Scale Mean if Item Deleted EXPORT_CAPA1 6.39 EXPORT_CAPA2 EXPORT_CAPA3 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .746 2.547 .652 6.69 2.377 .701 .694 6.63 2.870 .629 .771 As shown above, the Cronbach’s Alpha is at 0.810 which is higher than 0.7 indicating that all three measurement items of this variable are well related and the data are reliable. Also, all items corrected item-total correlation values are greater than 0.3, and the Cronbach’s Alpha if item deleted are lower than the original Cronbach’s Alpha (0.810). Therefore, all 3 items of export capabilities are kept for further analysis. - 51 - 5.4 Factor Analysis In this research, EFA is applied based on the model of KMO (KaiserMeyerOlkin) in Varimax rotation which the KMO index from 0.6 to 1 and sig. < 0.05 (Bartlett’s test of Sphericity) will be considered appropriate. Moreover, according to Kaiser (1970, 1974), item that less than 0.5 and item that distributes in 2 or more components/factors with difference less than 0.3 will be eliminated. Table 5.14: Independent Variables KMO and Bartlett’s Test for Independent Variables Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett’s Test of Sphericity Approx. Chi-Square DEPENDENT VARIABLES Df .771 3083.637 190 Sig. .000 Total Variance Explained for Independent Variables Initial Eigenvalues Component 1 Total 5.439 % of Variance Extraction Sums of Squared Loadings Cumulative % Total 5.439 % of Variance Cumulative % 27.197 27.197 11.853 39.050 10.062 49.112 8.975 58.087 27.197 27.197 11.853 39.050 1.795 10.062 8.975 49.112 58.087 5 1.460 7.298 65.385 1.460 7.298 65.385 6 1.383 6.915 72.300 1.383 6.915 72.300 7 8 .805 .667 4.027 3.334 76.326 79.661 9 .574 2.872 82.533 10 .501 2.505 85.038 11 .453 2.263 87.301 12 .416 2.078 89.379 13 .375 1.874 91.252 14 .347 1.737 92.989 15 .305 1.523 94.512 16 .287 1.435 95.947 17 .250 1.249 97.195 2 3 4 2.371 2.012 2.371 2.012 1.795 - 52 - 18 .233 1.164 98.359 19 .168 .840 99.199 20 .160 .801 100.000 According to KMO and Bartlett's Test of independent variables, the KMO value is at 0.771 which is greater than 0.6 and significant level is smaller than 0.05 so the data is appropriate. With the total variance explained at 72.3%, 6 extracted components can explain 72.3% of total variance in the data variance. Component Matrixa for Independent Variables Component 1 2 3 4 5 6 QUALITY3 .715 QUALITY2 .686 -.316 QUALITY4 .673 -.323 QUALITY1 .646 -.317 PRICING3 .645 -.390 -.475 PRICING2 .623 -.464 -.342 CO_REQUIREMENT3 .614 PRICING1 .582 DELIVERY_MATERIALS1 .562 CO_REQUIREMENT2 .549 DELIVERY_MATERIALS3 .523 -.478 DELIVERY_MATERIALS2 .520 -.380 DELIVERY_MATERIALS4 .515 -.396 CO_REQUIREMENT1 .512 DESIGNING2 .423 .331 -.356 -.424 -.443 -.491 .397 -.307 .450 .326 .398 .339 -.308 -.348 .362 .699 .357 DESIGNING3 .651 .367 DESIGNING1 .626 BUSINESS_PARTNERS1 .430 .433 .473 BUSINESS_PARTNERS2 .360 .472 BUSINESS_PARTNERS3 .355 .358 -.372 -.381 -.400 .320 -.322 .417 - 53 - The component matrix table provides factor loadings of 20 measurement items into 6 extracted components. Those factor loadings are the basic for imputing labels to different factors. However, as unrotated matrix is hard to analyze, it usually displayed for instructional purpose only. Hence, the rotated matrix is required for further interpretation. Rotated Component Matrixa Component 1 2 QUALITY4 .907 QUALITY3 .824 QUALITY2 .809 QUALITY1 .786 3 DELIVERY_MATERIALS1 .867 DELIVERY_MATERIALS4 .843 DELIVERY_MATERIALS3 .771 DELIVERY_MATERIALS2 .726 4 PRICING1 .855 PRICING3 .846 PRICING2 .820 5 CO_REQUIREMENT2 .897 CO_REQUIREMENT1 .792 CO_REQUIREMENT3 .783 DESIGNNING2 DESIGNING3 DESIGNING1 6 .846 .813 .795 BUSINESS_PARTNERS2 .830 BUSINESS_PARTNERS1 .722 BUSINESS_PARTNERS3 .708 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations. - 54 - Based on the result of rotated component matrix above, there is no lowloading and cross-loading item, so no item is eliminated. The result also indicates that there are 20 items grouped into 6 independent variables, comprising of quality, time delivery and material sources, pricing, C/O requirement, design, and business partners. Table 5.15: Dependent Variables KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity .706 Approx. Chi-Square 320.432 Df 3 Sig. .000 With the KMO value of dependent variable of 0.706 which is greater than 0.6 and significant level lower than 0.05, the dependent variable can be tested with the EFA Total Variance Explained for Dependent Variable Initial Eigenvalues Component 1 2 Total % of Variance 2.176 .468 3 .357 Extraction Sums of Squared Loadings Cumulative % 72.520 15.590 72.520 88.110 11.890 100.000 Total 2.176 % of Variance Cumulative % 72.520 72.520 Extraction Method: Principal Component Analysis. Component Matrixa for Dependent Variable Component 1 EXPORT_CAPA2 .876 EXPORT_CAPA1 .846 EXPORT_CAPA3 .832 Extraction Method: Principal Component Analysis. - 55 - a. 1 components extracted. The total variance explained of 72.52%, which is greater than 50%, is excellent. As all three items of export capabilities with loading values higher than 0.5, the three items are remained the same for factor of export capabilities. 5.5 Correlation Testing In this step, Pearson Correlation (developed by Karl Pearson) is applied to inspect the relationship between two variables by two-tailed test at the level of 0.01 and the level of 0.05 to determine whether these variables are positively or negatively related. Based on below results, all of the r-values are positive number which means all dimension have correlate to each other. Thus, when one variable gets larger, the other gets larger and vice versa. Table 5.16 : Correlation Testing CO_RE DELIVERY_ PRICING QUALITY DESIGNING MATERIALS PRICING Pearson Correlation 1 Sig. (2tailed) N QUALITY Pearson Correlation Sig. (2tailed) N DESIGNI Pearson Correlation NG Sig. (2tailed) N DELIVER Pearson 319 .386** QUIREM ENT BUSINESS_ PARTNERS EXPORT _CAPA .386** .133* .264** .358** .264** .494** .000 .017 .000 .000 .000 .000 319 319 1 319 319 319 319 .309** .371** .172** .563** .026 .000 .000 .002 .125* .000 319 319 319 319 319 319 .133* .125* 1 -.035 -.021 .106 .528 .712 .059 319 319 319 .278** .237** .026 .017 319 319 .264** .309** 319 -.035 1 .000 319 .172** .002 319 .480** - 56 - Y_MATE Correlation RIALS .000 .000 .528 319 319 319 .358** .371** .000 .000 .000 Sig. (2tailed) N CO_REQ Pearson Correlation UIREMEN Sig. (2T tailed) 1 .712 .000 .000 319 319 319 319 319 .264** .172** .237** .149** .106 319 319 .149** .520** .008 319 .059 .000 .008 .000 319 319 319 319 319 319 .494** .563** .172** .480** .520** .465** .000 .000 .002 .000 .000 .000 319 319 319 319 319 319 N .000 319 .465** 1 .002 N EXPORT_ Pearson Correlation CAPA Sig. (2tailed) 319 .000 N BUSINES Pearson Correlation S_PARTN Sig. (2ERS tailed) -.021 319 .278** .000 319 1 319 5.6 Regression Analysis Table 5.17: Regression Analysis Model Summary Model 1 R R Square .786a .618 Adjusted R Std. Error of the Square Estimate .611 .480 Finally, the six dimensions are analyzed by linear regression to determine significance to the final equation. In the first table, the R Square is 0.618 which means that 61.8% of variance in the dependent variable can be explained by the six independent variables. - 57 - ANOVAb Model Sum of Squares 1 df Mean Square 116.593 6 19.432 72.004 312 .231 188.596 318 F 84.202 Sig. .000a Regression Residual Total Next, ANOVA table demonstrates the significant value of this research is lower than 0.05 so it can say that the model of the research has reached statistic significance. Coefficients Unstandardized Coefficients Model 1 B Std. Error (Constant) -.700 .211 PRICING .117 .032 QUALITY .303 .044 DESIGNING .108 .038 DELIVERY_MATERIALS .242 .042 C/O_REQUIREMENT .189 .028 BUSINESS_PARTNERS .274 .037 - 58 - Coefficients(cont.) Standardize d Collinearity Coefficients Statistics Model Beta t -3.321 Sig. Toleranc e VIF Beta Toleranc e .001 1.333 1(Constant) 1.334 .147 3.634 .000 .750 QUALITY .280 6.938 .000 .750 DESIGNING .102 2.843 .005 .953 1.277 DELIVERY_MATERIALS .220 5.732 .000 .830 1.121 CO_REQUIREMENT .263 6.652 .000 .783 BUSINESS_PARTNERS .276 7.440 .000 .892 PRICING 1.050 1.205 In the last table, the coefficients show the relative importance of each independent variable in predicting dependent variables. According to Pallant (2008), the Tolerance value should be over 0.1 which indicated that the multiple correlations with other variables is strong and VIF values should be less than 2 which do not violate the multicollinearity assumption. Moreover, the significant index also should be less than 0.05 to make sure the dimension has strong effect on export capabilities. In this case, the significant of designing dimension has the largest value and all 06 independent variables significantly influence on dependent variable – export capabilities. Therefore, the final linear equation will as following: EXP CAP = -0.7 + 0.117 * PRI + 0.303 * QUA + 0.108 * DES + 0.242 * DEL_MATER + 0.189 * CO + 0.274 * BUS - 59 - VIF 5.7 Revision of Hypotheses and Model After the test of reliability and validity for factors and dimensions presented in previous pats, there is one element is deleted from the beginning. Thus, there is no change in the hypotheses and research model. Results Hypotheses H1 There is a positive impact of Pricing on Export capabilities to Japan of Vietnamese Textile and Garment company Support H2 There is a positive impact of Product quality on Export capabilities to Japan of Vietnamese Textile and Garment company Support H3 There is a positive impact of Designing capabilities on Export capabilities to Japan of Vietnamese Textile and Garment company Support H4 There is a positive impact of Time Delivery and Material Sources on Export capabilities to Japan of Vietnamese Textile and Garment company Support H5 There is a positive impact of CO Requirement on Export capabilities to Japan of Vietnamese Textile and Garment company Support H6 There is a positive impact of Business Partners on Export capabilities to Japan of Vietnamese Textile and Garment company Support Table 5.18: Results of Hypotheses Testing - 60 - 1. Pricing + H1 2. Product quality + H2 3 . Designing capabilities Export capabilities + H3 + H4 4. Time delivery & Material sources + H5 5. C/O requirement + H6 6. Business partners Figure 5.1: Final model result of the research 5.8. One-way ANOVA According to Levene and Howard (1960), Levene's testis an inferential statistic used to assess the equality of variances for a variable calculated for two or more groups. This index should have significance greater than 0.05 in order to be the - 61 - crucial requirement to the next step. In ANOVA table, the conclusion will depends on the significant index. Table 5.19: One-way ANOVA ANOVA BY FIRM TYPE Test of Homogeneity of Variances EXPORT_CAPA Levene Statistic 2.977 df1 df2 4 Sig. 314 .020 ANOVA EXPORT_CAPA Sum of Squares Between Groups Within Groups Total df Mean Square 1.296 4 .324 187.301 314 .596 188.596 318 F Sig. .543 .704 In this research, one-way ANOVA is applied to test the relation between export capabilities and company’s type and size. Based on the result of the first question, the significance of Levene statistic is 0.02 < 0.05 so there is no evidence to conclude. - 62 - ANOVA BY FIRM SIZE Test of Homogeneity of Variances EXPORT_CAPA Levene Statistic 1.704 df1 df2 3 Sig. 315 .166 NOVA EXPORT_CAPA Sum of Squares Between Groups Within Groups Total df Mean Square 1.199 3 .400 187.397 315 .595 188.596 318 F Sig. .672 .570 Next, the significance is 0.166 for the second question, so ANOVA analysis is conducted. In ANOVA table, the significance is 0.570 greater than 0.05, so it can say that there is no significant difference in the export capabilities among different company sizes. - 63 - CHAPTER SIX - CONCLUSIONS AND RECOMMENDATIONS 6.1. Discussions During the data analysis in Chapter 5, only item of Design 4 (using flexible materials is important to increase the competitiveness of products) is deleted in the reliability test. In reality, it can be explained that this element is not important, because materials are important in the design stage, but for export garments to Japan, Vietnamese garment enterprises just make garments according to the designs provided by their Japanese partners (CMT form). The materials and sources are also appointed by the Japanese importers. In the regression analysis, the designing dimension with the lowest coefficient at 0.102 has the weakest influence on firm’s export capabilities. As mentioned above, garment exports to Japan have been only in the form of CMT (pure assembling); designing capabilities of Vietnamese subcontractors are not strongly required. However, the development of designing capabilities is very important for the transition from the current CMT into FOB (or OEM) and into OBM. Next to the designing capabilities, pricing dimension (beta of 0.147) takes the second least important influence on export capabilities of Vietnamese garment firms for Japanese market. In contrast, product quality (beta of 0.280) and development of business partners (0.276) are strongest dimensions influencing firms’ export capabilities. The above results from data processing in Chapter 5 are surprisingly consistent with the unique behaviors of Japanese importers (especially large Japanese trading companies like Toray) when sourcing garments from in Vietnamese garment firms, where Japanese people directly work in garment factories to control product quality consciously. They are not - 64 - only maintaining in-touch daily communications with Vietnamese partners, but also making very strong commitments to all factory workers about the amount of work (no overtime work), stable monthly salary level regardless the size of garment orders during different seasons of a year. The next two dimensions of C/O requirement (beta of 0.263) and of time delivery and material sources (beta of 0.220) also significantly influence on firm’s export capabilities. These two dimensions are also distinct characteristics of Japanese manufacturing management. Successful Vietnamese garment subcontractors have been becoming accustomed with their Japanese partners’ production management practices. 6.2. Recommendations Our textile and garment industry is having many opportunities to strengthen export to Japan, but it also suffering from a multitude of risks and challenges. To reduce risks and enlist the good opportunities, government and business need for appropriate policies to promote exporting Vietnam’s textile and garment to Japan. 6.2.1. For Government To promote export of textiles and garments to Japan reached the highest efficiency, companies need the support of the state in creating the industry environment and favorable policies. The state should support the business in directions below: 6.2.1.1. Political stability Exports commodities in general, exports textile and garment in particular, all of which should have a favorable business environment to boost export. A good business environment that help businesses can grow production and export of goods. One of the important elements of the business environment is political factor. This - 65 - factor deeply affected by the policy of the government. Innovation and opening policies, along with the political stability, safety and security of life environment is the underlying cause that amount of foreign direct investment capital in Vietnam, including Japan continue to increase. The political stability is also bringing the safety of the production plant, peace of mind for people who are working, safety for investors. Vietnam is known for a country with a stable political system, it attracts investors to Vietnam,. Therefore, to develop an economic and boost exporting textile and garment products, government need to more strengthen and sustain the political stability. 6.2.1.2. Development of the raw material area for the textile and garment industry A disadvantage for Vietnam textile and garment industry is not available raw materials sources. According to statistics, the annual Vietnam import about 70% raw materials to product the textile and garment goods to export. Due to huge amount of material imports, Vietnamese textile and garment products price is higher than about 20% to 30% compared to the same products from China. In addition, Vietnam textile and garment industry depends on foreign suppliers and has difficulty when making large orders. The reason for this caused by unbalance between sewing and textile industry. Currently sewing industry only supply 30% demand of textile products for export. Compared to other countries in the region, the labor productivity of the textile and garment Industry in Vietnam is only about 30-50%. Therefore, the government should have a strategy in developing region for domestic raw materials. The garment industry needs to associate with others agricultural sector to develop large area for cotton, jute, hemp ... in order to meet the needs of domestic - 66 - textile industry. To grow the cotton sector, it is crucial to stop small production which is not meets mass production, irrigation systems are not suitable, cotton’s price is not attractive, limits on mechanization and intensive investment to increase productivity, low productivity due to planting on poor nutrient area. One of the difficulties in developing cotton farms is lack of land and especially large capital. Thus the state, ministries, departments need to support companies who grow cotton in order to create stable raw materials for the textile industry. Moreover, the government should also support seeds, reduces fertilizer import tax, provides expert technical assistance for farmers, issues policies which encourage foreign and domestic investment in manufacturing artificial, high quality and new features fibers to serve the textile and garment industry, support VITAS in building garment industrial zone to enhance the industry by creating a closed supply chain from growing cotton, weaving yarn, weaving, dyeing, and garment design, create a network between firms operating at different stages, building centers in major cities to supply materials on time . By doing that, the textile industry in our country will be more proactive in meeting domestic demand, increase local rate, minimize price fluctuation of materials. 6.2.1.3. Technological development Technological development is a key step to develop textile and garment industry becomes modernization, efficiency and sustainability by converting from processing to purchase raw materials, sells finished products in order to improve quality assurance and diversification of export. Technological development improves productivity and product quality. In fact, Vietnam mainly receives technology transfer - 67 - and most of them are obsolete technology in developed countries. Therefore limitations of technology has affected the productivity and quality of textile and garment products. Hence, the government should have solutions to develop technologies for the textile and garment industry by increasing activities of technology assessment department. With the state's perspective, the evaluation of technology will have a broader vision generally. Technology assessment must determine what technology is suitable with the production level of the country and prevents outdated or technology that cannot be applied. Moreover, the government need to develop research and technology centers, supports application of new technologies for the textile and garment enterprise, encourage textile and garment enterprises to research and develop their own technologies, implements clean production programs, energy savings, increasing productivity and product quality, safety and consumer’s right ; apply soft-wares in design, production and quality management; using certification and international standards; supporting design section, breaks technical barriers of imported countries; upgrade testing centers; strengthen international cooperation to apply managerial experience and modern technology. 6.2.1.4. Training and developing the human resources Human resources for the textile and garment industry is weak and lacks both of highly qualified labor and production workforces. About highly qualified, textile and garment industry needs designers who capable of creating designs to meet customer needs, managerial staff, workers and people understand the Japanese market. - 68 - According to foreign experts, the ability to use garment devices of Vietnamese workers is only 70% efficiency, while countries in the region is 90%. In this case, the government should promote education, training, focuses on the design and management team as well as business’s staffs who know well about Japanese market, develop training plans in order to enhance strategic competitiveness of the whole industry, open garment majors in universities and colleges which can provide qualified workers for the industry. The state should further strengthen the links with Japanese in training managerial officers, sales promotion especially design team, retraining the existing workforce regularly. In addition, the government should also links garment companies in training workforce in order to reduce training cost, invest in training of garment workers to standardize operations and thereby improve labor productivity. 6.2.1.5. Solutions to environmental protection The government should create and implement schedule of technological innovation in the textile and garment industry such as "environmentally friendly", cleaner production, rational use, economical and effective use of chemicals, auxiliary, dye, gas, electricity, water. Moreover, government needs to strengthen scientific research in order to meet environmental requirements and technical barriers in international economic integration. - 69 - 6.2.1.6. Financial solution Capital is the limited resources of companies who want to expand business, especially small and medium enterprises. Therefore, the state should create conditions for business loans through the development of the banking system, credit in domestic and internationally to create a rich supply of capital; loosen regulations on loans as mortgage rates, deposit; provides preferential rates, attracts direct and indirect capital through foreign investment. Government should also encourage all economic sectors in both domestic and foreign investors to invest in textile and garment industry; encourage enterprises to participate in the stock market to increase capital. Moreover, the state should support funding from the budget for research, training and infrastructure investment to enhance the technical capacity of research institutes and training facilities in order to consist with international commitments that Vietnam has participated; create friendly conditions for investment projects such as ODA and the environmental fund. 6.2.1.7. Regarding trade promotion, product promotion and business support The state's support in this field is expressed through the promotion of trade. The ministry of Trade should regularly hold or support textile and garment enterprises to participate in trade fairs textiles, consumer goods trade fair in Japan. In addition, the ministry need to establish specialized agencies to analyze and forecast market in order to derive orientation export of textile and garment in future. Trade agency of Vietnam in Japanese has responsible for providing general information on the Japanese market such as the size, growth rates, consumer trends, buying power, pay level, product - 70 - characteristics, competitors, markets, distribution channels or more important is the information about Japanese importers. Government agencies will act as bridges between textile and garment export enterprises of Vietnam and Japanese imports. This will reduce costs in finding customers and provide accurate information about demand of Japanese importers. Moreover, trading agencies advice entrepreneurs how to investigate information effectively and develop trade centers to advertise products in Japan market. In the end, there are need to establish companies which directly distribute Vietnamese products to Japanese market. 6.2.1.8. About policies and infrastructure The state needs to continuously adjust policies to support the textile and garment industry, develop appropriate ways for financial institutions and banks in order to support textile and garment export to Japan. In current, it is crucial to establishment a special unit to study about international policies, especially policies of Japanese government in order to support Vietnamese companies when disputes occurred. It is need to reduce or skip tax for materials such as cotton, fabric, fiber in order to reduce production costs. In addition, the state should reduce VAT, export tax to lower product prices, complete the tax provisions for declare and pay taxes easily. Government need to reduce custom procedure to save time for companies. About infrastructure, it is need to complete system of transport such as ports, roads, railways, forming the hub at the key economic regions. - 71 - 6.2.2 For Vietnam textile and Apparel Association (VITAS) The association needs to quickly strengthen the entire structure in order to support enterprises to search new market, raw materials, links companies together to increase production capacity, represent to reflect the needs and requirements of the industry to the government. In addition, it is need to establish sectors in collecting and analyzing information about markets, competitors, policy change, demands especially the Japanese market in order to support enterprises in penetrating the market. Hence, companies have suitable plans for production and exporting. Moreover, VITAS should categorize companies to link and share managerial experience, technology, trade promotion, workforce training and develop markets. As a representative of Vietnamese textile and garment company, the association should in charge of contacting textile and garment association of other countries, main export markets of Vietnam in order to support companies in macro level, develop trade promotion, hold international fairs in Vietnam and other countries. VITAS should controls processing prices, product prices in all members to generate supply power, preventing fatal competition between domestic companies and price pressure from foreigner. About CEO of textile and garment industry, it is need to have a wide vision to increase local rate in products, competitive by improving technology, models, converting from pure processing to FOB. The association should also connect with international supplier to invest in Vietnam especially in high quality products. In the end, VITAS should encourage enterprises in applying modern manager technology in order to increase production capacity and achieve the second or third place of largest exporting countries in textile and garment industry. - 72 - 6.2.3. For enterprise In current, international competitions are not only in brands name but also about price and quality’s wars. Therefore, companies should know and maximize competitive advantages to dominant markets. Moreover, Vietnamese companies must keep trust when doing business in Japan by products in good quality, variable models, delivery on time and others demands in order to have sustainable grow in Japan market. 6.2.3.1. Market study Studying new market is a principle rule in any business development. In fact, Japanese market is flexible, active and is a strict market with more than 90% are middle-class with high demand about quality so Vietnamese companies should deep study about culture, demands, hobbies, payment to have right decisions. Therefore, Vietnamese companies should invest on market research by field study on supermarkets, trade centers in order to know exactly demands of Japanese market. 6.2.3.2. Update information Vietnamese companies have to regularly update market information from any source especially from trade agencies. Currently, worldwide information has huge development so enterprise should study about market information, support programs for export, export activities in Japan market in specific and international in general, update fashion trends and new design to have suitable adjustment. - 73 - 6.2.3.3. Diversify products and improve models Vietnamese companies should diversify products by maximize strengths and unique characteristic. In fact, hobby of customers is changing dramatically so regularly diversify products and models are necessary to survive in Japan market. Moreover, demand of fashion of Japanese people also is stricter compared to other markets. It is better for Vietnamese companies to have Japanese expert by support programs of JODC (Japan Oversea Develop Corporation) in improving models, quality control, reduce products price in order to meet Japanese requirements. Currently, 38% of Vietnamese textile company produce in FOB, just 2% produce in ODM and 60% produce in pure processing. As a result, most of designs are provided by foreigner’s partners and design capacity of Vietnamese company is very weak. Hence, Vietnamese company should improve training in design or send experts oversee to catch up with international trends. 6.2.3.4. Focus on marketing, brand images In order to achieve maximum efficient, Vietnamese textile and garment companies should cooperate with export agents in marketing and promotion by international fairs, internet, communication means. In fact, it is believed that text or image advertises on newspaper, magazines, cable television are quite useful and can hit target customers. Moreover, enterprise should open representative office in order to introduce products and establish business relationship. due to the fact that in global competition, it is easier for companies to meet customer need by direct contact. Currently, more and more Japanese tourist come to Vietnam and vice versa so it is appropriate to hold fashion show , commercial reference in order to market about out - 74 - textile and garment products. Moreover, textile and garment companies should also consider about trade mark, label on products because Japan market is seriously cares about credit in business as well as build trust and strictly follow of official trade agreements with Japanese partners. If trust is built, the cooperation will be permanent and there are always export contracts and brand name of exporter will be more popular. 6.2.3.5. Improving product quality In fact, the problem of Vietnamese textile and garment product is technical standards of Japan (JIS) because most of the standards are different from international standards while most of Vietnamese products follow global rules. Moreover, Japanese market requires strict rules about quality, loneliness, reliability and convince of a product so they are willing to pay more for their requirements. Therefore, small errors in producing or transporting can effects long term production. Hence, Vietnamese companies should focus on every step in production line from the beginning such as design, storing, logistics, quality control by regularly training workers to improve skills and experience. It is the only way to ensure high quality of products and gain trust of Japanese partners. 6.2.3.6. Ensure delivery time Produce on schedule and delivery on time are crucial points in textile and garment industry due to season factor and fashion trends, especially with Japan market. Therefore, this is one of the most important requirements to decide competitive of textile and garment product. Vietnamese companies should organize - 75 - and planning production precisely as well as construct a good logistics system from the beginning. 6.3 Limitation and recommendation for further research In this study, there are some limitations as mentioned before. Therefore, this part comes up with these limitations and suggestion for further research. Firstly, this study is conducted only garment enterprises in Ho Chi Minh city, Binh Duong province and Dong Nai province so the results may be not suitable in other provinces in the country. Thus, further research should be applied in more provinces in throughout Vietnam. Secondly, the analyzing methods and tools used in this research is mostly popular so it is necessary to apply new methods as well as modern tools in further researches. Thirdly, this research is conducted from May to August 2014 which is a short period of time. Therefore, the findings may be significantly affected by these dimensions so further research should be carried out in longer. Finally, due to the fact that author’s knowledge may be not enough and lack of experienced in textile and garment export field, there are may not all the dimension can affect export capabilities are mentioned as well as the recommendations and suggestions of this study are not suitable and enough. As a result, enterprises should base on experiences, skills and specific situation to conduct appropriate actions for Japan importers to boost export capacity. - 76 - 6.4 Conclusion In current, Vietnamese textile and garment industry plays a significant role in Japanese market. With increasing export volume each year, textile and garment industry contributes an important part in national treasury and provides a lot of jobs for society. The competitiveness of Vietnamese textile and garment is quite strong compared to other countries in ASEAN. Moreover, export capacity of the industry is increasing in international and Japan market. Therefore, Vietnamese textile and garment companies has built strong brand name internationally due to the fact that Japan customers even choose Vietnamese textile and garment products in the depression period of international economic. This is clearly seen by increasing export volume of textile and garment products to Japan. However, our industry still suffers many difficulties such as fluctuate material price from importers, global competitive, design capacity is weak and processing still takes a main part in general. Hence, Vietnamese textile and garment companies must improve export capacity from internal efforts with support from the government and VITAS. In the near future, the agreement TPP (Trans-Pacific Strategic Economic Partnership Agreement) will come to force, as a result, the two important markets as US and Japan will be widely open for our companies. To conclude, Vietnamese textile and garment companies should maximize competitive advantages, reduce weakness and risk from domestic and international markets, study and research Japanese cultures and customer behaviors, use benefits from the two governments as well as trade agreement. In addition, it is need to study about technical standards, products requirements in order to increase export capabilities and dominant Japanese market. - 77 - REFERENCES Bui Xuan Khu (2001) Development for Vietnam Textile and Garment Industry, seminar speech on 3 April in Hanoi by General Director of Vinatex (on Vinatex website www.vinatex.com ). CIE (1998), Vietnam’s Trade Policies 1998, Centre for International Economics, Canberra and Sydney, January. Embassy of Denmark in Vietnam (2010) Overview of the Textile & Garment Sector in Vietnam, The Business-to-Business Program, November 2010. Gereffi, G. (1999), ‘International trade and industrial upgrading in the apparel commodity chain ’, Journal of International Economics, 48, 37-70 Goto, K. (2002), Coordinating Risks and Creating Value: the Challenges for the Vietnamese Textile and Garment Industry: Hanoi: Japan International Cooperation Agency, mimeo. Goto, K.(2012), Is the Vietnamese Garment Industry at a Turning Point? Upgrading from the Export to the Domestic Market in Fukunishi (Editor) Dynamics of the Garment Industry in Low-income Countries: Experiences of Asia and Africa (Interim Report), Chousakenkyu Houkokusho, IDE-JETRO, 2012. Hill, H. (2000), ‘Export success against the odds: a Vietnamese case study’, World Development, 28:2, 283-300. Ho, Thi Bich Van( 2007) “Vietnamese Garment Firms and Challenges of the End of the Agreement on Textile and Clothing – Policies and Strategies”, Journal of Economics and Development, Volume 27, Hanoi: December 2007. - 78 - Japan External Trade Organization (JETRO) (2011) Guidebook for Export to Japan. KTDC Research (2012) Japan Industry Stipulates Voluntary AZO Dyes Standard for Textile and Leather Products, Hong Kong Trade Development Council. Levene, Howard (1960). Ingram Olkin,Harold Hotelling(ed. Contributions to Probability and Statistics : Essays in Honor of Harold Hotelling. Stanford University Press. pp. 278–292. Luu, Trong Tuan (2012), “Development Strategy for A Textile Firm”, Journal of Management and Subtainability, Vol 2, No. 2, 2012. Nadvi, K & Thoburn, J. (2004a) “Challenges to Vietnamese Firms in the World Garment and Textile Value Chain, and the Implications for Alleviating Poverty”, Journal of the Asian Pacific Economy 9(2). Nadvi, K and Thoburn, J. (2004), “Vietnam in the Global Garment and Textile Value Chain: Impacts on Firms and Workers”, Journal of International Development,16:111-123. Nguyen, T.H., Sutherland, K. and Thoburn, J.T. (2002), Globalisation and the Impact of Restructuring in the Textiles Sector on Households in Vietnam, Norwich: University of East Anglia. Nguyen, Thi Bich Ha (2011), “ Strategic Economic Partnership between Vietnam and Japan: Current State, Challenges and Measures to Promote Trade and Invesment Relations”, Economic Research Center, Graduate School of Economics, Nagoya University, July 2011. - 79 - Porter. M. E. (1980) Competitive Advantage – Creating and Sustaining Superior Performance, The Free Press. Sakai, J. ( 2010) Characteristics of the Japanese Market and How to Penetrate into Japanese Market, p. 36-43. The Japan Textile Importers Association (2012) The Japanese Apparel Market and Imports. Thomasson, S. C. (2011) Vietnam: A Textile Powerhouse, p.2-3 Vietnam Textile and Apparel Association (2013) TPP Negotiation - Opportunities and Challenges for Vietnam Textile and Apparel Industry, Hanoi: March 2013. Viettrade ( 2004) Question and Answer about Labeling Rules in Japan, vol.3, p. 20-28. Zakir Hossain, M. (2010) Report on Vietnam Textile & Garment industry, p.13-22. - 80 - APPENDIX A QUESTIONNAIRE DESIGN (ENGLISH VERSION) CRITICAL SUCCESS FACTORS INFLUENCING VIETNAM’S TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN Dear lady and gentleman, My name is Nguyen Thi Trong Nghia and I am a MBA student of International University – Vietnam National University in Ho Chi Minh City. Now I am conducting a thesis about Critical Success Factors Influencing Vietnam’s Textile & Garment Export Capabilities to Japan. In order to increase the capabilities of Vietnam’s textile and garment exports to Japan, I would like to ask for your cooperation in my survey on textile and garment products based on your working’s experiences. The information provided will be treated in complete confidence. Your company information will be masked, and my analysis will be based on an aggregation of the responses of all surveyed firms. I am looking forward for your cooperation. PART 1: INFORMATION ABOUT IMPORT-EXPORT ACTIVITIES OF YOUR COMPANY 1. Ownership type: Private Joint - venture FDI Joint - stock Others 2. Company's size : Less than 200 workers 200 - 500 workers - 81 - 500 - 1000 workers More than 1000 workers 3. Main export markets : Japan US EU Others (please state concretely): 4. Your working department: Import – Export QA/ QC Sales/merchandise Others PART 2: CRITICAL SUCCESS FACTORS INFLUENCING VIETNAM’s TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN Please cross (X) from 1 to 5 according to the scale below: 1.Totally disagree 2. Disagree 3. Neutral 4. Agree 5. Totally agree DIMENSION NO STATEMENT PRICING 1 Competitive CMT price is important to Japanese market Competitive FOB price is important to Japanese market Flexible prices are crucial toward Japan’s market Fabric and material quality strongly affects export textile & garment quality Sewing quality is crucial for the quality of textile & garment exports Meeting label requirements strongly affects textile & garment quality Non-toxic containing is a compulsory requirement of textile & garment products Design flexibility is very important to increase the competitiveness of products 2 PRODUCT QUALITY 3 4 5 6 7 DESIGNING CAPABILITY 8 SCALE 1 2 3 4 5 1 2 3 4 5 1 2 1 2 3 3 4 4 5 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 - 82 - 9 10 11 TIME DELIVERY & MATERIAL SOURCES 12 13 14 15 C/O 16 17 18 BUSINESS PARTNERS 19 20 21 EXPORT 22 CAPABILITIES 23 24 Color mix decides the competitiveness of textile & garment products Sizing technique is crucial to increase the competitiveness of products Using flexible materials is important to increase the competitiveness of products Producing on time is crucial to Japanese partners Delivery on time is crucial to Japanese partners Lack of local materials creates a lot of difficulties for domestic textile & garment industry Lack of local materials reduces the competitiveness of domestic textile & garment industry AJ C/O form is compulsory when exporting to Japan VJ C/O form is compulsory when exporting to Japan Imported textile from other countries (apart from Vietnam, Japan, ASEAN) with high tariff reduces profit significantly Building and developing wide business relationships with Japanese clients is crucial Building trust among Japanese importers is crucial Strict following of official trade agreements with Japanese partners is crucial Retaining and continuous searching for big clients are crucial Capabilities in serving orders of different sizes (both large and small) are significantly decisive for the exports to Japan’s market Capabilities in serving orders with flexible product mixes are significantly decisive for the exports to Japan’s market 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 1 2 1 2 3 3 3 4 4 4 5 5 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 *Your other opinions about how to increase the capabilities of Vietnamese textile and garment exports to Japan. ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… - 83 - ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… …………………………………………………………………… Thank you very much for your cooperation! - 84 - APPENDIX B QUESTIONNAIRE DESIGN (VIETNAMESE VERSION) Những yếu tố ảnh hưởng tới năng lực xuất khẩu hàng dệt may Việt Nam sang Nhật Bản Xin chào anh/chị! Tôi tên Nguyễn Thị Trọng Nghĩa, sinh viên cao học ngành quản trị kinh doanh, trường đại học Quốc Tế, TPHCM. Hiện tại tôi đang thực hiện đề tài nghiên cứu “Những yếu tố ảnh hưởng tới năng lực xuất khẩu hàng dệt may Việt Nam sang Nhật Bản”. Mong anh/chị dành chút thời gian để trả lời một số câu hỏi bên dưới. Những thông tin, ý kiến mà anh/chị cung cấp sẽ là nguồn tư liệu quý giá, giúp ích rất nhiều cho đề tài nghiên cứu này và là tiền đề nâng cao năng lực xuất khẩu sản phẩm dệt may Việt Nam sang Nhật Bản. Rất mong nhận được sự cộng tác chân tình của anh/chị. PHẦN 1 : THÔNG TIN VỀ HOẠT ĐỘNG XUẤT NHẬP KHẨU CỦA DOANH NGHIỆP 1. Loại hình của doanh nghiệp Công ty tư nhân (TNHH) Công ty liên doanh Công ty FDI Công ty cổ phần Các loại hình khác 2. Quy mô của doanh nghiệp Dưới 200 công nhân 200 – 500 công nhân 500 – 1000 công nhân Trên 1000 công nhân 3. Thị trường xuất khẩu chủ yếu Nhật Mỹ EU Thị trường khác - 85 - 4. Phòng ban anh/chị công tác : Xuất nhập khẩu Sales/Merchandise QA / QC Khác PHẦN 2 : CÁC YẾU TỐ ẢNH HƯỞNG ĐẾN NĂNG LỰC XUẤT KHẨU SẢN PHẨM DỆT MAY SANG NHẬT BẢN Anh/chị vui lòng gạch chéo (X) vào lựa chọn của mình tương ứng với các nhận định : (3) : TRUNG (4) : ĐỒNG Ý (1) : HOÀN (2) : KHÔNG (5) : HOÀN TOÀN TOÀN ĐỒNG LẬP ĐỒNG Ý KHÔNG Ý ĐỒNG Ý PHƯƠNG DIỆN GIÁ CẢ SỐ THỨ TỰ 1 2 3 CHẤT LƯỢNG HÀNG MAY MẶC 4 5 6 7 KHẢ NĂNG THIẾT KẾ 8 9 CÁC NHẬN ĐỊNH Giá CMT cạnh tranh là rất quan trọng đối với đối tác Nhật Bản Sản phẩm có giá FOB cạnh tranh là rất quan trọng đối với thị trường Nhật Bản Cung ứng được sản phẩm với đa mức giá khác nhau là rất quan trọng đối với thị trường Nhật Bản Chất lượng vải và nguyên phụ liệu ảnh hưởng lớn đến chất lượng hàng dệt may xuất khẩu sang Nhật Chất lượng may ảnh hưởng lớn đến chất lượng sản phẩm dệt may xuất khẩu sang Nhật Đáp ứng quy tắc nhãn mác ảnh hưởng lớn chất lượng sản phẩm dệt may xuất khẩu sang Nhật Không chứa hóa chất độc hại là một yêu cầu bắt buộc đối với sản phẩm dệt may xuất khẩu sang Nhật Kiểu dáng đa dạng là yếu tố rất quan trọng nhằm tăng khả năng cạnh tranh sản phẩm dệt may Kỹ thuật phối màu là yếu tố rất quan trọng nhằm tăng khả năng cạnh tranh sản phẩm dệt may MỨC ĐỘ ĐÁNH GIÁ 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 - 86 - 10 11 THỜI GIAN GIAO HÀNG & NGUỒN NGUYÊN LIỆU 12 13 14 15 C/O 16 17 18 ĐỐI TÁC KINH DOANH 19 20 21 NĂNG LỰC XUẤT KHẨU 22 23 24 Kỹ thuật nhảy cỡ (đa kích cỡ) là yếu tố rất quan trọng nhằm tăng khả năng cạnh tranh sản phẩm dệt may Chất liệu đa dạng là yếu tố rất quan trọng nhằm tăng khả năng cạnh tranh sản phẩm dệt may Sản xuất đúng tiến độ là bắt buộc đối với sản phẩm dệt may xuất sang Nhật Bản Giao hàng đúng thời hạn là bắt buộc đối với khách hàng Nhật Bản Việc thiếu nguồn cung nguyên phụ liệu trong nước dẫn đến thiếu sự chủ động trong xuất khẩu hàng dệt may Do phần lớn phải dựa vào nguyên phụ liệu nhập khẩu, ngành dệt may xuất khẩu sang thị trường Nhật Bản kém sức cạnh tranh 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 C/O form AJ là vô cùng cần thiết khi xuất khẩu sang Nhật C/O form VJ là vô cùng cần thiết khi xuất khẩu sang Nhật Vải nhập khẩu từ các nguồn khác (khác Việt Nam, Nhật Bản, Asean) với mức thuế cao làm giảm đáng kể đến lợi nhuận Xây dựng và phát triển mối quan hệ rộng rãi với khách hàng Nhật là vô cùng cần thiết Xây dựng lòng tin và uy tín là quan trọng hàng đầu đối với đối tác Nhật Bản Thực hiện nghiêm túc các cam kết thương mại đã ký có ý nghĩa rất quan trọng đối với đối tác Nhật Bản Duy trì và tìm kiếm các khách hàng lớn là rất quan trọng khi xuất khẩu sang Nhật Có thể đáp ứng các đơn hàng với quy mô khác nhau là rất quan trọng đối với việc xuất khẩu sang thị trường Nhật Bản Có thể đáp ứng các đơn hàng cho nhiều chủng loại sản phẩm khác nhau là rất quan trọng đối với việc xuất khẩu sang thị trường Nhật Bản 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 * Anh/chị có ý kiến bổ sung gì về nâng cao năng lực xuất khẩu hàng dệt may Việt Nam sang Nhật Bản : - 87 - ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… Xin chân thành cảm ơn sự hợp tác của anh/chi! - 88 - APPENDIX C 1. FREQUENCY TABLE TYPE Cumulative Frequency Valid Percent Valid Percent Percent 1 55 17.2 17.2 17.2 2 60 18.8 18.8 36.1 67 21.0 4 77 24.1 24.1 81.2 5 60 18.8 18.8 100.0 319 100.0 100.0 3 Total 21.0 57.1 SIZE Cumulative Frequency Valid Percent Valid Percent Percent 1 73 22.9 22.9 22.9 2 85 26.6 26.6 49.5 3 80 25.1 25.1 74.6 4 81 25.4 25.4 100.0 319 100.0 100.0 Total EXPORT_MARKET Cumulative Frequency Valid Percent Valid Percent Percent 1 235 73.7 73.7 73.7 2 37 11.6 11.6 85.3 3 42 13.2 13.2 98.4 4 5 1.6 1.6 100.0 319 100.0 100.0 Total - 89 - DEPARTMENT Cumulative Frequency Valid 1 2 Percent Valid Percent 81 25.4 77 24.1 88 27.6 25.4 25.4 Total 49.5 24.1 3 4 Percent 77.1 27.6 73 22.9 319 100.0 100.0 22.9 100.0 Descriptive Statistics N Minimum Maximum Mean Std. Deviation PRICING1 319 1 5 3.63 1.113 PRICING2 319 1 5 3.92 1.076 PRICING3 319 1 5 3.76 1.089 QUALITY1 319 2 5 3.62 .863 QUALITY2 319 2 5 3.16 .800 QUALITY3 2 2 5 5 3.24 QUALITY4 319 319 3.37 .759 .862 DESIGNING1 319 1 5 4.06 .895 DESIGNING2 319 1 5 3.69 .895 DESIGNING3 319 1 5 3.59 .852 DESIGNING4 319 1 5 3.56 .874 DELIVERY_MATERIALS1 319 2 5 3.03 .777 DELIVERY_MATERIALS2 319 2 5 3.14 .866 DELIVERY_MATERIALS3 319 2 5 3.14 .879 DELIVERY_MATERIALS4 319 2 5 3.06 .879 CO_REQUIREMENT1 319 1 5 3.28 1.320 CO_REQUIREMENT2 319 1 5 3.67 1.224 CO_REQUIREMENT3 319 1 5 3.60 1.188 BUSINESS_PARTNERS1 319 1 5 2.55 .845 BUSINESS_PARTNERS2 319 1 5 2.59 1.201 BUSINESS_PARTNERS3 319 1 5 2.65 .926 EXPORT_CAPA1 319 1 5 3.46 .927 EXPORT_CAPA2 319 1 5 3.16 .951 EXPORT_CAPA3 319 1 5 3.23 .832 Valid N (listwise) 319 - 90 - 2. RELIABILITY Reliability Statistics Cronbach's Alpha N of Items .864 3 Item-Total Statistics Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted PRICING1 7.69 3.988 .724 .824 PRICING2 7.40 4.115 .727 .821 3.927 .772 7.56 PRICING3 .779 Reliability Statistics Cronbach's Alpha N of Items .889 4 Item-Total Statistics Scale Mean if Item Deleted QUALITY1 9.76 QUALITY2 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .885 4.778 .686 10.22 4.897 .727 .868 QUALITY3 10.15 4.927 .774 .852 QUALITY4 10.02 4.327 .849 .820 - 91 - Cronbach's Alpha N of Items .713 4 Item-Total Statistics Scale Mean if Item Deleted DESIGNING1 10.84 DESIGNING2 11.21 DESIGNING3 DESIGNING4 11.30 11.34 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted 3.684 .627 3.812 .581 4.110 .522 4.771 .291 .567 .598 .637 .768 Reliability Statistics Cronbach's Alpha N of Items .768 3 Item-Total Statistics Scale Mean if Item Deleted DESIGNING1 7.28 DESIGNING2 DESIGNING3 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .709 2.365 .582 7.65 2.241 .645 .636 7.74 2.493 .576 .715 - 92 - Cronbach's Alpha N of Items .839 4 Item-Total Statistics Scale Mean if Scale Variance if Item Deleted Item Deleted DELIVERY_MATERIALS1 9.34 DELIVERY_MATERIALS2 9.22 DELIVERY_MATERIALS3 DELIVERY_MATERIALS4 Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .774 4.633 .756 4.853 .582 .836 9.23 4.622 .642 .810 9.30 4.439 .705 .781 Reliability Statistics Cronbach's Alpha N of Items .827 3 Item-Total Statistics Scale Mean if Item Deleted CO_REQUIREMENT1 7.27 CO_REQUIREMENT2 6.87 CO_REQUIREMENT3 6.95 Scale Variance if Item Deleted 4.952 Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .625 .825 4.752 .771 .673 5.308 .666 .779 Cronbach's Alpha N of Items .663 3 - 93 - Item-Total Statistics Corrected ItemScale Mean if Item Deleted BUSINESS_PARTNERS1 Scale Variance if Item Deleted 5.24 BUSINESS_PARTNERS2 5.19 BUSINESS_PARTNERS3 5.14 Total Cronbach's Alpha if Item Deleted Correlation .441 3.333 .619 1.950 .600 .387 3.140 .429 .626 Reliability Statistics Cronbach's Alpha N of Items .810 3 Item-Total Statistics Scale Mean if Item Deleted EXPORT_CAPA1 6.39 EXPORT_CAPA2 EXPORT_CAPA3 Scale Variance if Item Deleted Corrected Item- Cronbach's Total Alpha if Item Correlation Deleted .746 2.547 .652 6.69 2.377 .701 .694 6.63 2.870 .629 .771 4.FACTOR ANALYSIS KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square .771 3083.637 df 190 Sig. .000 - 94 - Total Variance Explained Initial Eigenvalues Component 1 2 3 4 Total 5.439 2.371 2.012 1.795 % of Variance 27.197 11.853 Extraction Sums of Squared Loadings Cumulative % 27.197 39.050 10.062 8.975 49.112 58.087 65.385 72.300 5 6 1.460 1.383 7.298 6.915 7 .805 4.027 76.326 8 .667 3.334 79.661 9 .574 2.872 82.533 10 .501 2.505 85.038 11 .453 2.263 87.301 12 .416 2.078 89.379 13 .375 1.874 91.252 14 .347 1.737 92.989 15 .305 1.523 94.512 1.435 95.947 1.249 97.195 1.164 98.359 .840 99.199 .801 100.000 Total 5.439 % of Variance 27.197 2.371 11.853 2.012 10.062 1.795 8.975 1.460 7.298 1.383 6.915 Cumulative % 27.197 39.050 49.112 58.087 65.385 72.300 .287 16 17 18 19 20 .250 .233 .168 .160 - 95 - Total Variance Explained Rotation Sums of Squared Loadings Component 1 Total 3.085 % of Variance 15.427 Cumulative % 15.427 2 2.770 13.850 29.277 3 2.370 11.850 41.127 4 2.241 11.207 52.334 5 2.102 10.512 62.846 1.891 9.454 72.300 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Extraction Method: Principal Component Analysis. - 96 - Component Matrixa Component 1 2 3 4 5 6 QUALITY3 .715 QUALITY2 .686 -.316 QUALITY4 .673 -.323 QUALITY1 .646 -.317 PRICING3 .645 -.390 -.475 PRICING2 .623 -.464 -.342 CO_REQUIREMENT3 .614 PRICING1 .582 DELIVERY_MATERIALS1 .562 CO_REQUIREMENT2 .549 DELIVERY_MATERIALS3 .523 DELIVERY_MATERIALS2 .520 DELIVERY_MATERIALS4 .515 CO_REQUIREMENT1 .512 .423 -.356 .331 -.424 -.443 .397 -.307 -.478 -.491 .450 .430 .326 -.380 -.396 .398 .339 -.308 -.348 .362 DESIGNING2 .699 .357 DESIGNING3 .651 .367 DESIGNING1 .626 BUSINESS_PARTNERS1 .433 .473 BUSINESS_PARTNERS2 .360 .472 BUSINESS_PARTNERS3 .355 .358 -.372 -.381 -.400 .320 -.322 .417 Extraction Method: Principal Component Analysis. a. 6 components extracted. - 97 - Rotated Component Matrixa Component 1 2 QUALITY4 .907 QUALITY3 .824 QUALITY2 .809 QUALITY1 .786 3 DELIVERY_MATERIALS1 .867 DELIVERY_MATERIALS4 .843 DELIVERY_MATERIALS3 .771 DELIVERY_MATERIALS2 .726 4 PRICING1 .855 PRICING3 .846 PRICING2 .820 5 CO_REQUIREMENT2 .897 CO_REQUIREMENT1 .792 CO_REQUIREMENT3 .783 DESIGNING2 DESIGNING3 DESIGNING1 6 .846 .813 .795 BUSINESS_PARTNERS2 .830 BUSINESS_PARTNERS1 .722 BUSINESS_PARTNERS3 .708 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations. - 98 - KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity .706 Approx. Chi-Square 320.432 df 3 Sig. .000 Total Variance Explained Initial Eigenvalues Component 1 Total % of Variance 2.176 2 .468 3 .357 Extraction Sums of Squared Loadings Cumulative % 72.520 72.520 15.590 88.110 11.890 100.000 Total 2.176 % of Variance Cumulative % 72.520 72.520 Extraction Method: Principal Component Analysis. Component Matrixa for Dependent Variable Component 1 EXPORT_CAPA2 .876 EXPORT_CAPA1 .846 EXPORT_CAPA3 .832 Extraction Method: Principal Component Analysis. a. 1 components extracted. - 99 - 5. CORRELATIONS Table 5.16 : Correlation testing CO_RE PRICING PRICING Pearson Correlation Sig. (2tailed) N QUALITY Pearson Correlation Sig. (2tailed) N DESIGNI Pearson Correlation NG Sig. (2tailed) N DELIVER Pearson Correlation Y_MATE Sig. (2RIALS tailed) N CO_REQ Pearson Correlation UIREMEN Sig. (2T tailed) N BUSINES Pearson Correlation S_PARTN Sig. (2ERS tailed) N EXPORT_ Pearson Correlation CAPA Sig. (2tailed) N 1 DESIGN DELIVERY_ QUALITY ING MATERIALS QUIREM ENT BUSINESS_ PARTNERS .386** .133* .264** .358** .264** .000 .017 .000 .000 .000 EXPORT _CAPA .494** .000 319 319 319 319 319 .309** .371** .172** .026 .000 .000 .002 .563** .000 319 319 319 319 319 319 .125* 1 -.035 -.021 .106 .528 .712 .059 .172** .002 319 319 319 319 .278** .237** .480** .000 .000 .000 1 .386** .000 319 319 .125* .133* .017 .026 319 319 .264** .309** .000 .000 .528 319 319 -.035 1 319 319 .358** .371** .000 .000 .712 .000 319 319 319 319 319 .237** .149** .172** -.021 .106 319 .278** 319 1 319 319 319 .149** .520** .008 .000 319 319 1 .264** .000 .002 .059 .000 .008 319 319 319 319 319 319 .494** .563** .172** .480** .520** .465** .000 .000 .002 .000 .000 .000 319 319 319 319 319 319 .465** .000 319 1 319 - 100 - 6. REGRESSION Model Summary Model R R Square .786a 1 Adjusted R Std. Error of the Square Estimate .618 .611 .480 a. Predictors: (Constant), BUSINESS_PARTNERS, DESIGNING, CO_REQUIREMENT, DELIVERY_MATERIALS, PRICING, QUALITY ANOVAb Model Sum of Squares 1 df Mean Square 116.593 6 19.432 72.004 312 .231 188.596 318 F 84.202 Sig. .000a Regression Residual Total a. Predictors: (Constant), BUSINESS_PARTNERS, DESIGNING, CO_REQUIREMENT, DELIVERY_MATERIALS, PRICING, QUALITY b. Dependent Variable: EXPORT_CAPA Coefficientsa Unstandardized Coefficients Model B 1 (Constant) PRICING Std. Error -.700 .211 .117 .032 .303 .044 .108 .038 .242 .042 .189 .028 .274 .037 QUALITY DESIGNING DELIVERY_MATERIALS CO_REQUIREMENT BUSINESS_PARTNERS - 101 - Coefficientsa Standardize Model d Collinearity Coefficients Statistics Beta t Sig. Toleranc e VIF -3.321 .001 .147 3.634 .000 .750 .280 6.938 .000 .750 1.050 .102 2.843 .005 .953 1.205 .220 5.732 .000 .830 .263 6.652 .000 .783 .276 7.440 .000 .892 Beta Toleranc e 1.333 1(Constant) PRICING QUALITY DESIGNING DELIVERY_MATERIALS 1.334 1.277 1.121 CO_REQUIREMENT BUSINESS_PARTNERS a. Dependent Variable: EXPORT_CAPA 7.ONEWAY ONEWAY EXPORT_CAPA BY TYPE Test of Homogeneity of Variances EXPORT_CAPA Levene Statistic 2.977 df1 df2 4 Sig. 314 .020 - 102 - VIF ANOVA EXPORT_CAPA Sum of Squares Between Groups Within Groups Total df Mean Square 1.296 187.301 4 314 188.596 318 F Sig. .543 .324 .596 .704 ONEWAY EXPORT_CAPA BY SIZE Test of Homogeneity of Variances EXPORT_CAPA Levene Statistic 1.704 df1 df2 3 Sig. 315 .166 ANOVA EXPORT_CAPA Sum of Squares Between Groups Within Groups Total df Mean Square 1.199 187.397 3 315 188.596 318 .400 .595 F Sig. .672 .570 - 103 - [...]... requirements about garment products? ● What are success factors influencing Vietnam textile and garment exports to Japan? 1.4 Research objectives To answer the above research questions, three research objectives are developed as follows, ● Describing current status of Vietnam textile and garment exports to Japan ● Identifying and measuring success factors for textile and garment export enterprises to Japan ●... when exporting to this market Vietnam textile and garment exports grow rapidly, reaching to the top of the export goods of our country However, Vietnam textile and garment exports to Japan only account a modest proportion of the imports total of Japan Under that situation, the textile and garment exports to the Japanese market need to promote It's just a matter of urgent and strategic issues because Japan. .. For garment enterprises in specific and Vietnam garment industry in general To continue strengthen exporting and occupy a large slice of the market share in Japan, Vietnam garment enterprises and Vietnam garment industry need to identify success factors influencing Vietnam garment exports to Japan That is also the topic author choose for author’s research This topic is significantly important to both... Research questions To help Vietnamese enterprises strengthen the exports of textile and garment products to Japan, answering the following questions below is necessary: - 11 - ● Why is the performance of Vietnam textile and garment exports to Japan not so good as compared to the U.S and EU markets? ● How can Vietnam’s enterprises improve export capabilities to Japan? ● What are Japanese customer distinct... nearly 2.5 million workers Total export turnover of textile fibers and garment in 2013 reached USD 20.096 billion, up 18% compared with 2012, revenue reach to USD 20 billion, accounting for 15% of GDP and become the leading sector of exports, accounting for over 18% of total exports, bringing Vietnam into the top 5 largest textile exporter in the world Until now, export textile and garment products of Vietnam... export enterprises to Japan ● Proposing solutions to expand sustainably textile and garment exports to Japan 1.5 Research scope The research is based on analysis and evaluation of export situation of Vietnam textile and garment into Japan from 2008 to 2013 and of requirements of Japanese market about textile and garment products The research focuses on garment enterprises in Ho Chi Minh city, Dong Nai... level of garments annually to USD 3.7 billion, domestic production is only 5% of the remaining, 95% is imported So, here is a fertile market for textile and garment exporters into Japan Due to shortage of labor and high labor costs, many manufacturers of textile and garments in Japan moved production in abroad Thus, producing of the domestic textile and garment goods in Japan has and will decrease, garment. .. the dominant textile and garment market imported from Japan, with a market share in 2013 was 71.08% market share Most Japanese textile and garments are imported from China by Japanese companies or Japanese-Chinese joint ventures located in China and producing Vietnam's textile and garment export to - 18 - Japan in 2013 accounted for 6.74% market share of total imports of the country compare to Indonesia... products on the market of the world in general and Japan in particular - 26 - Chapter Four - Research Methodology 4.1 Previous studies In Table 4.1, a number of previous studies on critical success factors influencing Vietnam’s textile and garment exports are reviewed Table 4.1: Measurement of Success Factors Influencing Vietnam’s Textile and Garment Export Variables 1 Pricing Items - Competitive CMT... although we export textile and garment products into the Japan under the FOB value, but raw material production to follow the instructions of the importer From there we can see the reason for boosting export of Vietnam’s textile and garment industry decline compared to other competitors when not actively raw materials One of the basic elements of Vietnam garment enterprises when exporting to Japan is ... Vietnam textile and garment exports to Japan ● Identifying and measuring success factors for textile and garment export enterprises to Japan ● Proposing solutions to expand sustainably textile and garment. .. textile and garment exports to Japan only account a modest proportion of the imports total of Japan Under that situation, the textile and garment exports to the Japanese market need to promote... Vietnam textile and garment exports to Japan not so good as compared to the U.S and EU markets? ● How can Vietnam’s enterprises improve export capabilities to Japan? ● What are Japanese customer