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Capacities of competition that constitutes competition strategy, the impact of competition strategy on business performance and factors affecting the quality of products of Vietnamese food enterprises.
INTRODUCTON Rationale of the topic research Current economy globalization has led to more intense competition among enterprises in all business fields Changes in business environment have forced enterprises to have more analysis on competitive behavior according to strategies of different competitors in the market This may explains the differences in business performance when businesses apply different types of competitive strategies, thereby deciding the most effective competition method Discussing the role of competitive strategy, economists all support the view that enterprises applying competitive strategy tend to bring higher business efficiency than those without competitive strategy According to Thompson and Strickland (2010), competitive strategy includes all actions that enterprises are implementing to attract buyers, withstand competitive pressure and improve their competitive position in the market Lester (2009) argues that competitive strategy allows enterprises to identify business field as well as market to exploit and seek for future profit In Porter's view (1985), competitive strategy determines the position of enterprises in a business whether its profit is higher or lower than the industry average Jegak, Haslinda & Alimin (2009) continue to assert that a company that does something special and hard to imitate has a competitive advantage will be more profitable than its competitors Selecting competitive strategy is the decision of business level and is able to affect business performance of enterprises in the long term, so the determination of competitive strategy based on which competitiveness is the central issue for enterprises Food industry is one of the important industries that always make up a high proportion and make a significant contribution to industry sector in particular and Vietnam's economy in general Vietnamese food enterprises are aiming at development strategy based on the use of advanced and modern technology, maximizing the use of domestic raw material, creating diversified satisfying food hygiene and safety according to Vietnamese and international standards and highly competitive to form a strong economic sector, firmly integrate with the region and the world, and promote economic development It is necessary for Vietnamese food enterprises to select and implement appropriate competitive strategies, to improve their competitiveness and thereby improve business performance An overview of international studies has shown that no research has yet to comprehensively examine competencies that constitute competitive strategy, the impact of competitive strategy on business performance and factors affecting the quality of competitive strategy, especially Vietnamese food enterprises The studies have mainly focused on a certain aspect of competitive strategy such as completing the competitive strategy planning process In addition, the absence of in-depth studies on competitive strategy of Vietnamese food industry enterprises also shows the research gap on this issue Domestic researches have only mainly solved the problem of selecting competitive strategy in specific businesses but not to completely, comprehensively and update research about competitive strategy towards improving competitiveness and improving business performance of businesses in general and food business enterprises in particular Derived from the above arguments, the PhD student decided to research the thesis topic "Competitive strategy of Vietnamese food enterprises " Research purpose and mission Purpose of the thesis is to propose solutions to complete competitive strategy in the direction of increase competitive capacity in order to improve business performance of Vietnamese food enterprises The research missions include: (1) Synthesizing, analyzing and systematizing the theoretical basis about competitive strategy and the impact of competitive strategy on business performance of enterprises; (2) Assessing situation of competitive strategy and analyzing the impact of competitive strategy on business performance of Vietnamese food enterprises; (3) Proposing views and some solutions to complete competitive strategy in order to improve capacity of competition and business performance of Vietnamese food enterprises in the period to 2025 and vision to 2030 Research subjects and scope Subjects of research: Capacities of competition that constitutes competition strategy, the impact of competition strategy on business performance and factors affecting the quality of products of Vietnamese food enterprises Content of research: (1) The thesis uses the approach viewpoint on competition strategy of M.Porter (1985) including low-cost competition strategy; differentiated competition strategy and centralized competition strategy (2) The thesis approaches to study the contents of competition strategy of Vietnamese food trading enterprises according to the capacities of competition; (3) The thesis approaches to study the business performance of Vietnamese food trading enterprises based on financial performance indicators such as ROA, ROE, revenue growth and profit growth Object of research: The research objects of the thesis are Vietnamese food trading enterprises, which are enterprises that continuously implement one, some or all stages of the process from investment, production to consumption of product on the market aimed at profitability Market space: The thesis selects research space is the entire market of Vietnam and food business activities of food enterprise in domestic market Timing: The thesis research on competition strategy of Vietnamese food trading enterprises through data collected in the period of 2012 – 2017, and proposes solutions for the period to 2025, vision to 2030 Scientific and practical significance + Regarding theoretical: On basis of the overview and inheriting from domestic and foreign research works, the thesis studies some theoretical issues about competition strategy based on competition capacity and builds research model and scale of the impact of competitive strategy on business performance according to the groups of low-cost, differentiated and centralized competition strategy + Regarding practical: Applying appropriate research methods including descriptive statistics, exploratory factor analysis and regression analysis to measure the impact of each type of competition strategy on business performance of Vietnam food enterprises The results show that research scales meet requirements and reliability and the types of competition strategy have a positive impact on the business performance of Vietnamese food trading enterprises, in which differentiation strategy have the biggest impact, followed by the centralized and low cost strategies, are likely to help businesses improve business efficiency + Regarding the purpose: Through research results, managers in Vietnamese food enterprises have more comprehensive view on the role and importance of competition strategy for competition activities as well as the enterprise business performance Structure of the thesis Beside parts of introduction, conclusion and references, the thesis content is structured into five chapters: Chapter 1: Overview of research situation; Chapter 2: Some theoretical issues and practical experience on competitive strategy and the impact of competitive strategies on business performance of enterprises; Chapter 3: Research methods; Chapter 4: Situation of competitive strategy and the impact of competitive strategy on business performance of Vietnamese food enterprises; Chapter 5: Development orientation, viewpoints and solutions to complete the competitive strategy to improve business performance of Vietnamese food trading enterprises CHAPTER 1: OVERVIEW OF RESEARCH SITUATION 1.1 Studies on competitive strategy and business performance of enterprises Competitive strategy is one of the important research topics for businesses However, there are many different views and approaches about competitive strategy, in which the views, definitions and classification of competitive strategy are presented Overview of some typical research projects in the world and Vietnam such as: "Competitive strategy" by M Porter (1980); "Ocean Blue Strategy" by Chan Kim et al (2004); Sanchez (2004) with the study of "Understanding competence-based management: Identifying and managing five modes of competence"; Ngo Kim Thanh (2012), Nguyen Hoang Viet & Nguyen Hoang Long (2015) with the curriculum "Strategic Management" and some other authors such as Gibert & Strerbel (1987,1989), Treacy & Wiersema (1995) , Hax & Wilde (2001), etc However, almost all of the viewpoints have similarities in terms of idea with M Porter's point of view 1.1.2 Studies on business performance of enterprises Discussing business performance of enterprises, there have been several scientific projects in the world studying business performance of enterprises in different business fields such as production, service, banking, textiles, etc Specifically, Hiap and partners (2006) with the topic "A balanced scorecard approach to measure industry performance"; Pham Thi Thanh Huong (2016) with the topic "Effect of diversification on business performance of Vietnamese enterprises"; "Solutions to improve business performance at Vietnam Post Corporation" by Pham Anh Tuan (2017) and some studies by Kaplan & Norton (1992); Neely (1995); Waal & Coevert (2007); Consuegra (2008) and Laihonen (2014), etc Studies have proposed a system of criteria for measuring business performance of enterprises in specific business sectors 1.2 Studies on the impact of competitive strategy on business performance of enterprises Studies on the impact of competitive strategy on business performance of enterprises are mainly foreign studies In which, the impact assessment model mainly focuses on considering the impact of competitive strategy from the perspective of M.Porter (1980) with the research "Competitive strategy: techniques for analyzing industries and competitors"; Reitsperger and partners (1993) with research on "Product quality and cost leadership: compatible strategies"; Wright (1987) in the study "Research notes and communication of Porter's strategies"; Jennings (2003), "Strategy-performance relationships in service firms: A test for equifinality"; "Competitive strategy and measurement performance in the Malaysian context: An exploratory study" by author Jusoh and Parnell (2008); Richard S Allen, Marilyn M Helms (2013) with the study of "Linking Strategic Practices and Organizational Performance to Porter's Generic Strategies", etc These studies all point to the general competitive strategy of M.Porter which were proven and widely accepted in the reality of enterprises, and assess the influence and different impacts of each type of competitive strategy on business performance of enterprises 1.3 Studies on production and business activities of food enterprises The studies on food business enterprises are mostly associated with each country and the main related content is proposal associated with the context, conditions and reality of each locality Specifically in the studies: "Food processing industry in Vietnam" by Ngo Dinh Giao (1998); Le Thi Thu Thuy (2007) with the study "Building an international development strategy for food processing enterprises", Düriye Canbaz (2009) with the study of "Competitive Strategies of Ethnic Food Companies in Sweden "; JICA Japan (2012) in "Summary report on attracting foreign investment in Vietnam's food processing industry in the period of 2008 - 2012" , etc assessed that the Vietnamese food industry is an industry with great potential for development in the future will bring good investment opportunities for both domestic and international enterprises However, there has not been any research on the quality of knowledge and the impact of competitive strategy on the business performance of Vietnamese food trading enterprises 1.4 Research gaps and questions Research gap: (1) studying competitive strategy based on competitive capacity of enterprises to develop some core competitive capacity for each type of competitive strategy; (2) building research model, scale as competitive capacities which constitute competitive strategy and the impact of competitive strategy on business performance of food businesses (3) determine the factors affecting competitive capacity of food businesses The thesis raises some research questions as follows: (1) Competitive strategy of Vietnamese food enterprises is constituted by which competitive capacity?; (2) What factors affect the competitive strategy of Vietnamese food enterprises?; (3) Which types of competitive strategy are Vietnamese food trading enterprises deploying and how are their impact on business performance of the enterprises?; (4) Which competitive capacity does Vietnamese food enterprises need to select and focus on creating to improve business efficiency? CHAPTER 2: THEORETICAL ISSUES AND PRACTICAL EXPERIENCE ON COMPETITIVE STRATEGY AND THE IMPACT OF COMPETITIVE STRATEGY ON BUSINESS PERFORMANCE OF ENTERPRISE 2.1 Some basic concepts 2.1.1 Strategy and strategic levels in enterprises 2.1.1.1 Enterprise strategy There are many different views on the strategy of enterprise, however, in this thesis; the strategic approach of enterprise includes goals to be achieved in the long term, guarantees of resources to achieve these goals and at the same time, the ways and processes of action while using resources A good, effectively implemented strategy will help managers and employees at all levels of management to clearly define their goals, identify the direction of action, and contribute to the success of the enterprise 2.1.1.2 Strategic levels in enterprises In general, the views on strategic level in enterprises have many similarities between authors In which, the highest level is enterprise level, showing the decisions of senior managers in orienting the development of enterprises in the long term, and at the same time identifying the tasks, objectives and business fields Next is the business level associated with strategic business units (SBU) and indicates the main mode of competition for each of these units Finally, the functional level strategy includes decisions associated with specific operational activities of enterprises In this thesis, competitive strategy of enterprises is approached in the business-level strategy to show how enterprises compete in the industry in the most effective way to enhance the competitive position and business efficiency 2.1.2 Competitive capacity of enterprise So far, there are several different viewpoints about competitive capacity of enterprise In this thesis, competitive capacity of enterprise is understood as the ability to use and combine resources and capabilities of the enterprise to maintain and create a competitive advantage to achieve higher business results than competitors and adapt to changes in the business environment 2.1.3 Competitive strategy of enterprise 2.1.3.1 Concept and nature of competitive strategy of enterprise Competitive strategy is a category that attracts many researchers' attention because of its role and importance for business performance in general and competitive efficiency in particular There are many different perspectives on competitive strategy of enterprises, depending on the characteristics of the business sector, the development stage, the specific business context and situation, which have different interpretations In this thesis, competitive strategy of enterprises is understood as a set of competencies, tools, solutions and resources to establish the competitive position of enterprises in the target market and at the same time improve business performance of the enterprise Competitive strategy is effort of enterprises to attract customers, improve their competitive position in the market and is a strategy to supply products and services of enterprises, therefore, competitive strategy of food businesses is a strategy associated with the output products of these enterprises Competitive strategy of enterprises needs to provide accurate positioning of products with good competitiveness as well as targeted market segments of enterprise 2.1.3.2 Role of competitive strategy in enterprises Competitive strategy plays an important role with the existence and development of enterprises Competitive strategy which is planned and developed in the right way will orient long-term activities as a solid basis for business activities of enterprise, ensuring the success and sustainable development of enterprise Competitive strategy demonstrates consistency and high concentration in business lines of enterprises, avoiding the cost of resources in non-focused activities Competitive strategy is a tool to help businesses to capture market opportunities and create competitive advantages in the market by applying the limited resources of enterprises with high efficiency to achieve the set objectives and help businesses identify the development and competition strategies in the new business context 2.1.4 Business performance of enterprise This thesis uses the concept of Kaplan & Norton (1992) in combination with the concept of Waal & Coevert (2007) because it meets the systematic and comprehensive in measuring business performance of domestic enterprises in dynamic environment Specifically, business performance of enterprises is understood as a comparison between the results obtained and the costs spent to achieve those results, while demonstrating the level and ability to use resources and capabilities in business activity, and is expressed through a number of financial and operational criteria including: revenue growth, profit, ROA and ROE of enterprises 2.2 Some theories about competitive strategy of enterprise Table 2.1 Summary of theories on competitive strategy of enterprise Author Porter Mintzberg Gilbert &Strebel Competitive strategy Differentiation competitive strategy Low cost competitive strategy Centralized competitive strategy Positioning strategy Positioning strategy Construction strategy Expansion strategy Growth strategy Excellent management strategy Product leadership strategy Similar theory Theory of industry analysis (Porter, 1986) Competitive strategy theory of Porter (1986) Growth strategy of Ansoff(1965) Competitive strategy theory of Porter (1986) Cost leadership strategy of Porter (1986) Differentiation competitive strategy 4.Treacy a& Wiersema Porter (1986) Customer- friendly strategy Centralized competitive strategy Porter (1986) Best product strategy Competitive strategy theory of Porter (1986) Customer strategy Centralized competitive strategy Porter (1986) Hax and Wilde Sharing, cooperation and successful Combination strategy of Gibert & Strebel strategy (1987) Blue ocean strategy Combination strategy of Gibert & Strebel Chan Kim (1987) Wernefelt (1984), Sanchez Competitive strategy based on Growth strategy of Ansoff(1965) & Heene (2010) competitive capacity Source: Compiled by the PhD student 2.3 Study the competitive strategy and the impact of competitive strategy on business performance of enterprise 2.3.1 General competitive strategy and competitive capacities constitute the competitive strategy of enterprise Table 2.2: Summary of competitive capacities constitute the competitive strategy Low-cost strategy Enterprises apply modern management methods (such as supply chain management, lean management, quality management, strategic management, knowledge management, etc.) to reduce costs Enterprises apply low and flexible product pricing methods (Pricing based on demand, competitors, milk scum pricing, etc.) Enterprises are always proactive in supplying and transporting materials and inputs for production to achieve optimal costs Enterprises have extensive sales distribution systems (online sales, exclusive distribution, etc.) Enterprises apply modern production technology to increase productivity and reduce costs Enterprises have healthy financial activities, sufficient capital to operate and ensure solvency Enterprises have large production scale and ability to meet the number of products according to customer needs Enterprises have standardized products Dess & Davis (1984) Porter (1981), Dess & Davis (1984) Dess & Davis (1984) Porter (1981) Porter (1981), Dess & Davis (1984) Porter (1981), Wright (1987) Porter (1981) Madara M.Ogot (2014) Differentiation strategy Enterprises often create and innovate products to best Porter (1981), Dess & Davis (1984) satisfy customers' needs Enterprises often create differences in customer service Dess & Davis (1984) compared to competitors Enterprises are capable of developing internal supply Porter (1981) chains and participating in the supply chain of the industry Human resources of enterprises ensure professional Porter (1981), Dess & Davis (1984) skills and skills DN thường xuyên sáng tạo đổi Enterprises have good customer management capacity sản phẩm nhằm thỏa mãn tốt nhu cầu khách hàng DN nghiệp thường xuyên tạo khác biệt dịch vụ khách hàng so với đối thủ cạnh tranh The brand of enterprises is well known Enterprises often apply quality management system and DN có đủ lực phát triển chuỗi food safety management system as well as environmental cung ứng nội tham gia chuỗi cung ứng ngành management system Enterprises often innovates communication technology Nguồn nhân lực DN đảm bảo chuyên môn, nghiệp vụ, kỹ of product marketing Low-cost strategy Enterprises ensure benefits of customers, employees and DN có lực quản trị quan hệ khách hàng tốt have a sense of environmental protection 10 Enterprises often innovate and update and apply new Thương hiệu DN nhiều người biết đến technologies to production and business activities Centralized strategy Enterprises often conduct market research to understand customer needs as well as shape suitable products for each market segment Products of enterprises are able to meet the specific needs of customer Enterprises are able to supply products in high-price market segments Porter (1981) Porter (1981), Wright (1987) Porter (1981), Dess & Davis (1984), Wright (1987) The development strategy of different marketing Porter (1981), Wright (1987) activities of enterprise always promotes efficiency in each market area Dess & Davis (1984) Enterprises often expand and develop new markets Enterprises often diversify product to meet the need of Dess & Davis (1984) different market segments Business performance Revenue growth rate Dess & Davis (1984) Net profit margin on asset (ROA) Porter (1981), Dess & Davis (1984), Wright (1987) Profit growth rate Porter (1981) Net profit to equity ratio (ROE) Porter (1981), Dess & Davis (1984) Overall business performance Wright (1987) Source: Compiled by the PhD student 2.3.2 Impact of competitive strategy on business performance of enterprise 2.3.2.1 Some research models on impact of competitive strategy on business performance of enterprise The influence of competitive strategy on business performance of enterprises has been analyzed in some studies According to Porter (1980), enterprises have clear competitive strategy will easily overcome enterprises without strategy This argument is the basis for enterprises to proactively build their own quality of knowledge Strategic documents have clearly defined that one of the necessary conditions for the success of an enterprise as a competitive position to help businesses in the first place as well as financial efficiency Porter also argued that general competitive strategies include lowcost, differentiation and centralized strategies, which are strategic options that businesses can apply to compete successfully, but rarely many businesses apply different types of competitive strategies at the same time Dess and Davis (1984) believe that competitive strategy at least helps businesses achieve higher business efficiency than other enterprises Karnani (1984) assessed the difference in cost or the difference in competitive position to help businesses get higher profits White (1987) identifies strategic business units of enterprises that are able to achieve higher return on investment (ROI) when applying low-cost competitive strategy while differentiating competitive strategy helps businesses increase sales thanks to the coordination between important functional parts within the enterprise Wright (1991) argues that businesses applying both differentiated competitive strategy and low-cost competitive strategy all bring the highest business efficiency Bush and Sinclair (1992) conducted practical research and said that successful enterprises in the market are enterprises that combine flexibility and success between low-cost competitive strategy and differentiated competitive strategy Yamin (1999) examines the relationship between competitive strategy, competitive advantages and business efficiency, thereby assessing business performance of enterprises through profit targets 2.3.3.2 Model to study the impact of competitive strategy on business performance of food business enterprises From the results of theoretical research on the impact of competitive strategy on business performance of enterprises of M Porter (1981), Dess & Davis (1984) and Madara M Ogot (2014), the PhD student developed research models and research hypotheses as follows: Low-cost competitive strategy Differentiation competition strategy Centralized competition strategy H1 Business performance of Vietnamese food enterprises H2 H3 Figure 2.1: Model to study the impact of competitive strategy on business performance of food business enterprises Source: Compiled and developed by the PhD student The research hypotheses include: Hypothesis H1: Low cost competitive strategy has a positive impact on the business performance of Vietnamese food enterprises Hypothesis H2: Differentiation competitive strategy has a positive impact on business performance of Vietnamese food trading enterprises Hypothesis H3: Centralized competitive strategy has a positive impact on business performance of Vietnamese food trading companies 2.3.3 Factors affecting the competitive strategy of businesses + Macro environment: Macro environment is a complex set of factors, conditions and forces that can affect the competitive strategy and competitive efficiency of enterprises The analysis of the macro environment through the PEST model includes the following elements: (1) Economic factor; (2) Political - law factor; (3) Socio-cultural factor; (4) Technology factor 10 + Industry environment: The analysis of the business and market is conducted through the forces model of M.Porter (1986) Specifically include: (1) Existing competitor; (2) Potential competitor from enterprises have been wishing to join a new business; (3) Supplier; (4) Substitute product (5) Customer + Internal environment of enterprise: consists of two groups of activities: basic operations and supporting activities In which, the basic activities show the activities from the supply of input materials, production and assembly of products, reception of distribution products, marketing promotion of products and after-sales services The complementary activities are not directly related to the creation of value for the product, but they are involved in the process of creating and increasing the value and supporting basic activities such as purchasing management, human resource management, etc 2.4 Competitive strategy of some food enterprises in the world and lessons for Vietnamese enterprises Based on the collected data, the thesis focuses on analyzing the experience of competitive strategy, capabilities that constitute the competitive capacity and impact of competitive strategies on business performance of some Enterprises in the world include: (1) JBS Company - Brazil, Safal - India, Tianyun - China and Dole Food America In which, there are both successful enterprises and those who failed to choose to implement competitive strategy From there, draw some lessons for Vietnamese enterprises as follows: (1) Businesses operating in the market always need to build and implement competitive strategy and must build specific competitive advantages in the context of fierce competition of the industry (2) Each food trading company must always establish suitable quality of products for each SBU of enterprises on the basis of promoting core competencies and competitiveness to determine the competitive position in the industry; (3) The success of food businesses also requires businesses to diversify types of competitive strategy according to strategic groups (low cost or differentiation or concentration); (4) Most of the food business enterprises are now aiming at sustainable growth, this is reflected through business performance; (5) Enterprises pursuing different competitive strategy need to constantly develop new products, improve quality, improve new technologies and strictly control production processes to ensure food safety (6) Safal's experience also emphasizes that enterprises implementing low-cost competitive strategy need to invest in building the value chain of enterprises, constantly improving production technology to meet production needs and product quality to serve customer needs 11 CHAPTER 3: RESEARCH METHODS 3.1 Research design 3.1.1 Research process In order to implement the research task, the research process is divided into two phases as follows: (1) After determining the research objectives and objectives of the topic and conducting theoretical research to build research model, building scale system After designing and conducting a preliminary investigation, the scale system is calibrated to form the official measuring bar system and design the official survey form; (2) After conducting an official investigation, the survey results are included in the identification and verification of reliability of the scale, assessment of the scale value through analysis of the EFA discovery factor, finally is regression analysis, testing the appropriateness of theoretical models and research hypotheses as well as making conclusions and solutions to research problems 3.1.2 Research sample The thesis uses convenient sampling method through taking the list and address of food enterprises in the major provinces in the country Thanks to the assistance of the Institute of Productivity, Vietnam Chamber of Commerce and Industry, Department of Industry and Trade and Food Hygiene and Safety Bureau of some provinces and cities, the PhD student conducted a direct investigation of food businesses or via email Number of issued survey forms: 200, Number of collected survey forms: 141, valid survey forms: 130 (List of surveyed enterprises - Appendix 09; Structure of survey samples - Appendix 05) 3.1.3 Research scale Table 3.1: Summary of research scale Low-cost competitive strategy (Code LC1 – LC8) (1) Enterprise management capacity; (2) Valuation capacity of enterprise; (3) Proactive capacity of input materials of enterprise; (4) Distribution capacity of enterprise; (5) Capacity of applying modern production technology of enterprise; (6) Financial capacity of enterprise; (7) Large-scale production capacity of enterprise; (8) Product standardization capacity of enterprise Differentiation competitive strategy (Code DS1-DS10) (1) Capacity of product innovation of enterprise compared to competitors; (2) Capacity of differentiation in customer service compared to competitors; (3) Capacity to develop internal supply chain and join industry supply chain of enterprise; (4) Capacity of organizational innovation; (5) Capacity of customer relationship management; (6) Brand capacity of enterprise; (7) Capacity of product quality and safety management of enterprises; (8) Capacity of product PR and marketing of enterprises; (9) Corporate social responsibility capacity; (10) Capacity to innovate and create new technology processes in business production of enterprise Centralized competitive strategy (Code FS1-FS7) (1) Capacity of market research and product positioning; (2) Product supply capacity in highpriced product segment (or low prices); (3) Marketing capacity is differentiated for each market segment of the enterprise; (4) Ability to meet the specific needs of customer; (5) New market development capacity of enterprise; (6) Product diversification capacity of enterprise Enterprise business performance (Code PB1-PB6) (1) Revenue growth rate; (2) Net profit margin on asset (ROA); (3) Profit growth rate; (4) Net profit to equity ratio (ROE); (5) Overall business performance Source: Compiled by the PhD student 12 3.1.4 Questionnaire development The questionnaire is divided into main parts: General information; business environment analysis; industry environment analysis; assess the competitive capacity of enterprises to constitute competitive strategy; reality of implementing competitive strategy and assessing business performance of enterprises The questions are evaluated on a scale of levels in which - Completely disagree to - Completely agree 3.2 Qualitative research In-depth interview method: To determine the components of competitive strategy of Vietnamese food trading enterprises, thereby developing into observed variables in research and thereby assessing the suitability, reliability and science study of research scale The thesis uses in-depth interview with expert opinion collected through meetings, exchanges and also through direct comments on the research contents The study has interviewed a total of 16 experts with comments and suggestions that have been synthesized by the researcher and no longer found new ideas about the scale of the elements in the research Case method: The development of typical situations to serve as a practical basis to reinforce the theory of competitive strategy has approached above Through interviews with managers of some enterprises, it is possible to assess the competitive strategy platforms of each enterprise object as well as the contents of competitive strategy based on the competitiveness of such enterprises 3.3 Quantitative research 3.3.1 Preliminary study Preliminary study result Preliminary quantitative research of the project was conducted on 70 survey forms The objects of investigation are leader of food businesses The results obtained 58 responses (reaching the response rate of 82.86%), there were 12 invalid votes for having the same answer above 65% or leaving more than 30% blank The preliminary investigation process was carried out from October 2016 to December 2016 In which: (1) The results of reliability assessment of low-cost competitive strategy scale show that Cronbach Alpha coefficient reaches 0.823> 0.6 and total correlation coefficient of observed variables varies from 0.456 to 0.703 and > 0.3 Thus, this scale achieves the necessary reliability; (2) The results of reliability assessment of differentiation competitive strategy scale show that Cronbach Alpha coefficient reaches 0.914 which is greater than 0.60, ensuring the necessary reliability and total correlation coefficient of observed variables variation from 0.529 to 0,800, which is greater than 0.30; (3) The evaluation results of reliability show that centralized competitive strategy scale with Cronbach Alpha coefficient = 0.877 which is greater than 0.60 is to ensure necessary reliability However, the correlation coefficient of the total variable of FS2 = 0.286 which is less than 3.30, so this observed variable is not satisfied, thus remove this variable; (4) The results of evaluating the reliability of business performance scale show that Cronbach Alpha coefficient is 0.839, greater than 0.60, is to ensure necessary reliability However, correlation coefficient of total variable PB6 = 0.274, less than 3.30 so this observed variable is not satisfied, thus eliminating this variable 13 3.3.2 Official research After conducting the survey, collected survey forms were checked for validity, cleaned data, entered data on SPSS 20.0 software and is included in the analysis according to the following steps: (1) Descriptive statistics on the factors affecting competitive strategy; (2) Statistics of the description of the competitive capacity constituting competitive strategy of enterprises; (3) Exploratory factor analysis (EFA) and regression analysis Regression model is as follows: Y (HQKD) = β0+ β1LC+ β2DS + β3 FS + εi In which: Y (HQKD): Dependent variable, business performance of Vietnamese food trading enterprises; LC: Low cost competitive strategy; DS: Differentiation competitive strategy; FS: Centralized competitive strategy; β0: Coefficient of overall regression Y when the independent variables are 0, representing impact level of factors other than the factors defined in the model; εi: Error 14 CHAPTER 4: SITUATION OF COMPETITIVE STRATEGY AND IMPACT OF COMPETITIVE STRATEGY ON BUSINESS PERFORMANCE OF VIETNAMESE FOOD ENTERPRISES 4.1 Overview of food industry and Vietnamese food enterprises 4.1.1 Overview of Vietnamese food industry Food industry is an important contributor to Vietnam's economy, which has achieved rapid growth during the past decade thanks to technological improvements and private sector participation Vietnam has become an important supplier of products: rice, seafood, fresh food, and processed foods The food industry is oriented to serve domestic and export needs so far Vietnam has become a large-scale business with the participation of over 7000 businesses with hundreds of thousands of employees of which 84% are small and medium enterprises with the number of employees under 50, the average growth rate of the food industry in the past 10 years reached an average of 10% and contributed 15% of the gross domestic product (GDP) for Vietnam economy 4.1.2 Overview of Vietnamese food enterprises According to the Ministry of Industry and Trade (2017), food enterprises account for a significant proportion of the total number of enterprises in the country Specifically, after more than 20 years of construction and development, food enterprise accounts for approximately 2% of total number of enterprises in the country and constantly grows over the years In 2012, there were 5,644 enterprises operating in the whole country, up to 7,173 in 2017 The average annual increase of each year is about 300 enterprises The increase in the number of food enterprises has partly contributed to meeting the production needs to serve the increasingly strong consumption of food by the people 4.2 Competitive strategy of some Vietnamese food enterprises Through researching competitive strategy and business performance of some typical Vietnamese food companies include: Vietnam Animal Industry Joint Stock Company, Vinamit Joint Stock Company, Ha Long Canned Food Joint Stock Company, it showed some basic issues as follows: (1) Selected enterprises typically developed competitive strategy and have clearly defined the competitive advantage of enterprises in the target market, associated with products which it is providing; (2) The application and implementation of quality control in food enterprises allow them to improve business situation and business performance remarkably However, the level of improvement in business performance of enterprises when pursuing different competitive strategy is different In particular, the enterprises implementing differentiated competitive strategy have the ability to improve the best business performance among the three types of competitive strategy, which are being widely applied by enterprises; (3) In order to effectively implement different competitive strategy in the market, food business enterprises tend to focus on certain competitiveness; (4) When applying specific competitive strategy and setting up appropriate strategic tools, it helps the food business enterprises to identify the competitive position in the food industry market, and at the same time create different differences in products to attract customers and constantly improve and improve business efficiency 15 4.3 Situation of competitive strategy and business performance of Vietnamese food enterprises 4.3.1 Situation of competitive capacity constitutes competitive strategy of Vietnamese food enterprises 4.3.1.1 Low-cost competitive strategy The reality of low-cost competitive strategy of Vietnamese food enterprises is as follows: (1) Among competitive capacities that constitute low-cost competitive strategy of Vietnamese food trading enterprises, enterprises have basically verified define basic contents of distribution capacity, product standardization capacity, large-scale production capacity, low and flexible product pricing capacity and the ability to apply modern management methods into the production and business process of enterprises; (2) There are still some capabilities that the food business enterprises currently not really care about and include in the low-cost competitive strategy content, including: Capability of application of production technology and the ability to take initiative in supply and transport of materials and inputs for product production and financial capacity of enterprises These are weaknesses in capacity for enterprises pursuing low-cost competitive strategy, which need to focus on improving business efficiency of enterprises 4.3.1.2 Differentiation competitive strategy The situation of competitive capacity constitutes a differentiation strategy as follows: (1) In the 10 differentiating capacity of competitive strategy, it is included in the evaluation that there are capacity elements that are well evaluated by enterprises including: the ability to offer products different from competitors, differentiated capabilities of customer service, human capacity, marketing communication capacity and product innovation capacity; (2) Four competency factors are assessed with below average scores including: new process and technology innovation capacity, no stable brand, product quality management capacity and social responsibility 4.2.1.3 Centralized competitive strategy Statistics on the average value of the centralized competitive strategy scale show some issues as follows: (1) Avantages of Vietnamese food trading enterprises applying centralized competitive strategy are good implementation of some capabilities Mainly as: Market research capacity to understand customer needs and shape new products, Different marketing capabilities for each market segment of the enterprise, ability to supply products in niche market segments and ability to meet individual needs of customers; (2) The weakness of enterprises applying competitive strategy is the capacity of product diversification and market development capacity This shows that the application of centralized quality of products makes the current food business enterprises fall into a stuck situation; it is difficult to identify the low-quality or highquality enterprises' products and services, leading to a lack of information customers' ideas when consuming their products 4.3.2 Impact of competitive strategy on business performance of Vietnamese food enterprises 4.3.2.1 The impact of strategic planning and implementation methods on business performance of Vietnamese food trading enterprises The survey results show that 58.34% of Vietnamese food businesses are planning and implementing competitive strategy responsively and 41.66% of enterprises apply 16 proactively This also has an important impact on performance of Vietnamese food enterprise The results show that overall business efficiency tends to increase and increase for 52.38% of enterprises (42.86% and 9.52%), applying active competitive strategy, and having 33.33% to this thanks to the application of competitive strategy painting reaction Meanwhile, 9.52% of enterprises have reduced their overall business efficiency due to active application of competitive strategy and up to 19.97% of enterprises using competitive strategy have fallen into this situation Thus, there is an impact relationship between competitive strategy and overall business performance of enterprises 4.3.2.2 Research results of the impact of competitive strategy on business performance of Vietnamese food enterprises (1) Testing the reliability of official scale The results of running Cronbach’s Alpha show that all factors achieve reliability For each factor in the model, there is Cronbach’s Alpha coefficient greater than 0.6; if any of the observed variables in this factor are removed, the Alpha coefficients are reduced, and the correlation coefficients are greater than 0.3 so all observations are kept (2) Analysis of EFA discovery factors + Analytical result of EFA discovery factor of competitive strategy show that there are factors extracted from 24 variables that measure attributes in the group of competitive strategy factors These three factors extract 70.61%> 50%, the scale is accepted KMO coefficient = 0.931 is wihin the range of 0.5