The competitiveness of textile and garment industry in vietnam

國 立 雲 林 科 技 大 學 國 際 企 業 管 理 研 究 所 碩 士 班 碩 士 論 文 越南入世後紡織與成衣產業競爭力研究 The Competitiveness of Textile and Garment Industry in Vietnam After Vietnam’s Accession to the WTO 研 究 生：李萬堂 指導教授 : 鍾從定 博士 中華民國 101 年 月 越 南 入 世 後 紡 織 與 成 衣 產 業 競 爭 力 研 究 The Competitiveness of Textile and Garment Industry In Vietnam after Vietnam’s Accession to the WTO 研 究 生：李萬堂 Le Van Dung 指導教授 : 鍾從定博士 Chung, Tsungting Ph.D 國立雲林科技大學 國際企業管理研究所碩士班 碩士論文 A Thesis Submitted to Institution of International Business Administration National Yunlin University of Science & Technology in Partial Fulfillment of the Requirements for the Degree of Master of Management In International Business Administration June 2012 Douliu, Yunlin, Taiwan, Republic of China 中華民國 101 年 月 The Competitiveness of Textile and Garment Industry in Vietnam After Vietnam’s Accession to the WTO Student: Le Van Dung Advisor: Chung, Tsungting Ph.D National Yunlin University of Science and Technology Department of International Business Administration Master’s Thesis Abstract This thesis concentrates on the competitiveness of Vietnam’s textile and garment industry after Vietnam’s accession to the WTO The research tries to find out the factors affect competitiveness of textile and garment industry in Vietnam, the strengths and weaknesses of the industry, providing both textile and garment management, and government as policy-makers the best alternative resolutions to strengthen the competitiveness of textile and garment industry in the future The literature review framework about competitiveness and its assessment is based on different theories such as Porter’s diamond model and Kaplan and Norton’s Balanced Scorecard concept The case is analyzed by both primary and secondary data Primary data includes of questionnaires that distributed to companies and agencies in Vietnam (most of them in Northern Vietnam) Last but not least, the thesis concludes that the Vietnam’s textile and garment industry has competitiveness on three levels consist of nation environment, industry environment, and firm environment Nonetheless, the data of thesis is based on past document and the process of static analysis is subjective, so the results of this case may not be valuable to all extent of the industry in Vietnam Key words: Competitiveness, textile and garment industry, WTO, Vietnam Acknowledgement First of all, I would like to give my sincerely grateful thanks to my advisor, Prof Chung Tsungting for his support, encouragement, enthusiasm and time He often helps and provides opportunities to his student During two years in Taiwan, I learned many things from his knowledge as well as his experience From the beginning to the end, he always gives me a hand in critical moment Second, I would like to say thank to my relative who helped me to send questionnaires to enterprises and agencies After that he also collected questionnaires and static data from those Next, I am thankful to all professors, lectures, friends and members of my family who help me, encourage me during my studying time They always support and make me feel that I am not alone I also would like to thank the Thanh Hoa‘s Overseas Scholarship Program and Hong Duc University in their financial support so that I could complete master program and had a good chance to discover the different culture in Taiwan Finally I would like to show my thankfulness to those who participated in this study./ Le Van Dung June 2012 Table of Contents Abstract………………………………………………………………………………… i Acknowledge…………………………………………………………………………… ii Table of Contents…………………………………………………………… …………iii List of Appendix………………………………………………………………………….v List of Tables…………………………………………………………………………… vi List of Figures………………………………………………………………………… vii Glossary of Acronyms ………………………………………………………………….viii List of Appendix Appendix - Industrial zones of Vietnam …………………………………… 64 Appendix – Questionnaires…………………………………………………….65 List of Tables 10 References Belussi, F., 1997), “Dwarfs and Giants Maintaining the Competitive edge: the Italian and Textile Clothing Industry in the 1990s”, in Taplin I & Winterton, J (eds), Rethinking Global Production, Ashgate, Aldershot CIEM, 2005, “Đẩy mạnh công nghiệp hóa, đại hóa Việt Nam” (In Vietnamese) (To Stimulate the Industrialization and Modernization Process in Vietnam), CIEM-Center for Information and Documentation Special Subject 4, 2005, http://www wnep.org.vn.Retrieved on 13th October, 2011 Country Intelligence, “Report”, HIS Global Inc, pp 4-7 Dickerson, K., 1995, “Textiles and Apparel in the Global Economy”, New Jersey: Prentice Hall General Statistics Office (GSO), 2011, “Statistical Yearbook of Vietnam 2010”, Hanoi: Statistical Publishing House Green book, 2011, “Report on Vietnam”, European Union Economic and Commercial Counselors, pp 15-18 Hitt, M A.; Ireland, R.D.; Robert, E H., 2008, “Strategic Management: Competitiveness and Globalization : Concepts & Cases”, South-Western Cengage Learning 5191 Natorp Boulevard Mason, OH 45040 USA Hofer, C.W.; Schendel, D.E., 1978, “Strategy Formulation: Analytical Concept”, St Paul: West Publishing Kaplan, R.S., 1996, “The Strategy-focused Organization: How balance Scorecard companies Thrive in the New Business Environment”, Massachusetts: Harvard Business Scholl Press 80 10 Kaplan, R.S.; Norton, D.P., 1996, “The Balance Scorecard: Translating Strategy into Action”, Massachusetts Harvard Business Scholl Press 11 Klaus S., 2011, “The Global Competitiveness Report 2010–2011” World Economic Forum, Geneva, Switzerland 2010 12 Lundequist, P., 2002, “Spatial Clustering and Industrial Competitiveness”, Sweden, Uppsala: Department of Social and Economic Geography 13 Markusen, J.R., 1992, “Productivity, Competitiveness, Trade Performance of Supply and Service”, Library of Congress Cataloging in – Publication Data 14 McCulloh, R., 1988, “International Competition in Service”, Chicago: University of Chicago Press for National bureau for Economic Research 15 Mekong Capital, 2003, “WTO Agreement on Textiles and Clothing (ATC), Impact on Garment Manufacturing in Cambodia, Laos and Vietnam”, Ho Chi Minh City, December 2003 16 Mutrap II, 2007, “Accession of Vietnam to the WTO”, Ministry of Industry and Trade in partnership with the European Commission 17 Naumann, E., 2006, “The Multifibre Agreement – WTO Agreement on Textile and Clothing”, Westview Press, pp 5-8 18 Nghia, Ng.T., 2007, “Cải thiện khả cạnh tranh doanh nghiệp Việt Nam bối cảnh hội nhập kinh tế quốc tế” (In Vietnamese) (Improving Vietnamese Enterprises’ Competitiveness Ability in the Context of International Economic Integration) Available at http://thongtinphapluatdansu.wordpress.com (accessed January 4, 2012) 19 Olve; Nils-Goran; Roy, J.; Magnus, W., 1999, “Performance Driver: at Practical Guide to Using Balanced Scorecard West Sussex”, John Wiley& Sons Ltd 20 Pearce; John, A.II.; Robinson; Rechard, B.Jr, 1997, “Formulation, Implementation, and Control of Competitive Strategy”, 6th Edition, USA: McGraw-Hill 21 Political Risk Service, 2011, “Vietnam Country Forecast” The PRS Group, Inc, pp 81 2-12 22 Political Risk Services, 2011, “Vietnam Country Conditions Climate for Investment & Trade”, The PRS Group, Inc, p 5-12 23 Porter, M E., 1985, “Competitive Advantage: Creating and Sustaining Superior Performance”, New York: The Free Press 24 Porter, M E., 1990, “The Competitive Advantage of Nations”, New York: The Free Press 25 Saunders, M.; Lewis, P.; Thornhill, A., 2003, “Research Methods for Business Students”, 3rd ed English: Prentice Hall 26 Singleton, J., 199, “World Textile Industry”, London, Routledge 27 Vonortas, S., 2002, “Assessing Industrial Performance”, Centre for International Science and Technology Policy & Department of Economics, The George Washington University 28 World Trade Organization, 2012, “Annual Report 2011 WTO”, Centre William Rappard Rue de Lausanne 154 CH-1211 Geneva 21 Switzerland Official and other Documents Development Plan for Vietnam’s Industrial Zones to 2015 and Direction to 2020 Decision approved by Prime Minister number 1107/QD-TTg dated 21/6/2006 Development Plan for Supporting Industry to 2010 and Vision to 2020, Decision number 30/2007/QĐ-BCN dated July 31, 2007 Development Strategy for Vietnam’s Textile and Garment Industry to 2015 and Direction to 2020 Decision approved by Prime Minister number 36/2008/QDTTg dated on March 14, 2008 82 Websites http://www.state.gov/ http://www.tradingeconomics.com/interest-rates-list-by-country http://www.freepatentsonline.com/ http://www.photius.com/rankings/ http://www.business-in-vietnam.net/vietnam/exporttextile.html http://trungtamwto.vn/wto/ http://tutor2u.net/business/strategy/balanced-scorecard-perspectives.html http://www.tradingeconomics.com/vietnam/interest-rate http://www.scribd.com/doc http://www.managementstudyguide.com/swot-analysis.htm http://www.slideshare.net/nusantara99/balanced-scorecard-52138 http://www.balancedscorecard.org 83 Appendix - Industrial zones of Vietnam 84 85 Appendix - Questionnaires “The competitiveness of Textile and Garment industry in Vietnam” Thank you very much for spending your time and effort to fill this form Your support will help give valuable information in completing my thesis entitle “Competitiveness of textile and garment industry in Vietnam after Vietnam’s accession to the WTO” All of these following questions are only related to Textile and Garment industry in Vietnam All of your information is intended for academic purpose only Part I The size of authorized capital of your company: Please make your choice a stick ✓ for the questions Less than (including) billion VND ……………… ( ) Between billion VND and billion VND …… …… ( ) More than (including) billion VND ……………… ( ) 86 Part II Please think over carefully and answer each below item There are two kinds of score for each one First, the score of IMPORTANCE level of each item is ranged from to (1 is for NOT important at all and VERY important) Second, the score of FAVORABALITY level of the each item is gave by (X) signal within the determined range (-3 most unfavorable, average and most favorable) Please pay attention to that all factors (items) are related to the whole Vietnam’s textile and garment industry, not a certain enterprise! No A Nation Environment Factors Example GDP growth rate Interest rate spread Inflation rate Technological change Environment issues Stable political regime Important Most unfavorable Level -3 -2 -1 Most favorable x 87 88 No B Industry Environment Factors I Resources Natural resources Labor force resources availability Geographic condition II Infrastructures Transportation infrastructure Market infrastructure Communication infrastructure Trade association Business environment Perfection of related laws/ rules R&D institution Vocational training III Important Most unfavorable Level -3 -2 -1 Markets Domestic market share 89 Most favorable Domestic market potential Characteristics of foreign and user Export and trade barriers Foreign market relationship International market share IV Suppliers and related and supporting Industries Raw material availability The service level of suppliers The development level of related industries V Enterprise Structure, Strategy and Rivalry Number of competitors Country and brand image as textile and garment producers Part III Firm Environment Factors In this part, process of answer questions is the same as part II 90 No A Financial Perspectives Important Level Most unfavorable -3 EXAMPLE -2 -1 Most favorable x Total sales Share price Revenue growth Profit from operation Return on investment Cost of long term investment Capital investment No B Customer Perspectives Important Level Most unfavorable -3 Total sales Share price Revenue growth 91 -2 -1 Most favorable Profit from operation Return on investment Cost of long term investment Capital investment 92 No C Internal Business Perspectives Important Level Most unfavorable -3 -2 -1 Most favorable Managerial skill Production equipment Product quality Capability utilization Worker & production motivation Efficiency improvement No D Learning and growth Perspectives Important Level Employee productivity Employee retention Employee motivation Investment development Human Resource 93 Most unfavorable -3 -2 -1 Most favorable development Employee productivity Employee retention Thank for your time and kind cooperation! 94 [...]... factors The problem is whether finding the main factors influencing the competitiveness of the textile and garment industry from existing theories and materials, and whether finding or establishing an appropriate strategy for use to evaluate the field of the Vietnam s textile and garment industry Will the result develop in the thesis have useful suggestion on the whole textile and garment industry. .. or whole system of government in Vietnam? 14 1.3 Purpose The purpose of the thesis is to find which factors impact to the competitiveness of the textile and garment industry in Vietnam by using and applying the appropriate existing theories to analyze its competitiveness Therefore, after analyzing the theories, the factors affect to competitiveness of the textile and garment firms in Vietnam will be... petroleum industry) in 13 my country, is an appropriate research subject aiming at investigating the level of the competitiveness, strengths and weaknesses by analyzing factors affect to the development of textile and garment industry in Vietnam The competitiveness of Vietnam s textile and garment industry is analyzed by using and applying existing model and theory to point out competitive terms and valuate... textile and garment industry in Vietnam? 3 What are the main SWOT analysis of the Vietnam s textile and garment industry? 4 How do the textile and garment firms do to improve their competitiveness and policy of government to support the industry in the future? 15 1.5 Organization of the Study This thesis is structured in five chapters The first chapter describes about the background and statement of problems,... weaknesses and strengths After searching and consulting relative references, there are two theories include Diamond model of Porter (1985) and The Balance Scorecard translating Strategy into Action of Kaplan and Norton (1996) are used to interpret the competitiveness of an industry and firms In Vietnam, the textile and garment industry is one of the most important mainstay industries (the second largest industry. .. questions and organization of this study The second chapter reviews the underpinning and underlying the theories from the relevant literature include overviews of Vietnam textile and garment industry and the role of garment industry The third chapter focuses on the explanation of the content of conceptual framework, hypothesis, and the research methodology The fourth chapter targets the results of analyses... such as Dwarfs and Giants Maintaining the Competitive edge: the Italian and Textile Clothing Industry in 1990s of Bulussi, F (1997); Textile and Apparel in the Global Economy of Dickerson, K (1995); Spatial Clustering and Industrial Competitiveness of Lundequist, P (2002) make sure and gain comparative advantage at different levels of firm, industry and nation In Vietnam, the concept of competitiveness. .. valuate them by meaning of scoring the factors through testing in a quantitative method, it is innovative and interesting Many research articles and papers related to competitiveness and the textile and garment industry, which will be useful to my research 1.2 Statement of the Problems The competitiveness notion in three levels of nation, industry and firm is different, but the definitions of competitiveness. .. the thesis will put forward several inferences about how to maintain strong points and improve the unfavorable aspects in order that the Vietnam s textile and garment industry will develop sustainably and long-term in the future 1.4 Research Questions 1 What are the relevant factors should be considered as competitiveness of textile and garment industry? 2 How to analyze the competitiveness of the textile. .. largest textile supplier to the EU textile market Vietnam s garment and textile exports to Japan amounted to US$ 1.2 billion in 2010, an increase of 20% compared to 2009 Currently, Vietnam accounts for 2.5% of the total global garment market share and is the fifth largest garment and textile supplier in the world According to Vinatex, Vietnam s textile and garment industry targets export earnings of US$