Technological strategies at thai tuan textile ltd

Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C EXECUTIVE SUMMARY With the “Doi moi” policy, the Vietnamese socio-economic situation has been changed fundamentally to move from a central planned economy to a market regulated one Many companies have been established to fulfill the higher social requirements day by day Besides the state-owned companies, a lot of private ones have been set up in all of the sectors which Vietnamese government has allowed to In the light industry, textile sector has an important role not only for the satisfaction of basic needs but also the sense of job solution due to its labor-intensified characteristic Therefore, Vietnamese government has provided many conditions to stimulate the establishment of textile companies, especially the private ones that are estimated to have a lot of potential and opportunity to develop Thai Tuan Textile is a private company, established in December 1993, to produce some kinds of textile product such as embroidery silk, satin, sateen etc for female customers Although located in Ho Chi Minh City, its products are distributed throughout Vietnam and exported to other countries for overseas Vietnamese people through the intermediaries In recent years, Thai Tuan Textile emerges as a successful typical of private Vietnamese company in the textile industry The company has gained some achievements in introducing diversified and high quality products, developing new markets Its main products are chosen as the first rank of textile products of Top Ten of Vietnamese high quality products Thus, there is a necessary need for studying its market success in terms of technology strategies, which could help company exploit its competitive advantages to cope with the other bigger competitors and be the successful leader in the textile market PROBLEM STATEMENT Private sector has proved the effective and efficient contributions to the Vietnamese economic development It has showed its dynamic when giving new products and services to satisfy the higher customer requirements day by day There are numerous researches to study its role and contributions to the economic development However, very little has been done to look into its competitive advantages because of technology transfer and renovation In the textile industry, some researches just concern the needs of technology as the prerequisite of existence in the fierce competition of globalization Most of them consider BUSINESS RESEARCH METHOD Page 1/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C the state-owned companies Therefore, it is necessary to study the role of technological strategy in the private company, especially in the textile industry where the speed of technology innovation is considered one of the highest sectors This research can give some experiments of implementing technological strategy to apply for the other private textile companies RESEARCH OBJECTIVES  To analyze business position of Thai Tuan Textile Ltd in the Textile Industry;  To analyze some major textile market factors affecting to its Business Strategies;  To analyze Technological Strategies of Thai Tuan Textile Ltd in terms of relationship to business strategies to exploit and create its competitive advantages in textile markets by giving continuously new products to satisfy customer requirements;  To find some experiments of implementing technological strategies to apply for the other textile companies;  To give Technology Strategy suggestions LITERATE REVIEW 4.1 Definition of Technology The first step in understanding the Technology Strategy will start with a proper definition of technology The most comprehensive definition, however, has been attributed to Sharif (1987) who considers technology as a combination of four basic components, all of which together accomplish any transformation operation These components are:  Production tools and facilities, referred to as object-embodied technology or technoware This includes all physical facilities required for the transformation operation such as instruments, equipment, machinery, devices, structures, etc  Production skills and experiences referred to as person-embodied technology or humanware This embraces all acquired abilities necessary for the transformation operation such as expertise, proficiencies, dexterity, creativity, diligence, and ingenuity  Production facts and information referred to as document-embodied technology or inforware This includes all accumulated facts and figures required for the BUSINESS RESEARCH METHOD Page 2/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C transformation activity such as designs, accounts, manuals, specifications, observations, regulations, equations, charts, theories  Production arrangements and linkages referred to as institution-embodied technology or orgaware This includes all necessary arrangements for the transformation operation such as groupings, allocations, systematization, organizations, networks, management, and marketing 4.2 Factors Affecting to the Technological Strategies 4.2.1 Business Strategy Managing technology is not only an operational issue, but also a major strategic issue Unless business strategy includes the impact of technology, a major portion of the business is being ignored (Gerard H Gaynor, 1991) Technological strategy should be formulated within the larger context of business planning, since technology is the only one component of the business system As long as marketing strategy, technological strategy concretizes the business goals to real actions Technological strategies must be properly integrated into overall business strategies of an enterprise and followed the product/technology life cycle (Sharif, 1991)  Technology leader strategy through generation of state-of-the-art technologies  Technology follower strategy through the adaptation of advanced technologies  Technology exploiter strategy through the exploitation of standardized technologies in a growing market  Technology extender strategy through the extension of the salvage value of obsolete technologies Within the current and future scope of the business, technological strategy is also a cross functional integrated framework for consideration and assessment of technologies available to the firm (Wilson, 1986)  Product development, the glamour side of technology on which most attention is devoted  Process development, the shadow side of technology, too often neglected or given short shrift, and including manufacturing technology, material handling, packaging, inventory control  Information system and office automation BUSINESS RESEARCH METHOD Page 3/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C When considering the relationship between technological strategy and business strategy, Noori (1990) highlighted three important points:  Technological strategy must be developed collectively with manufacturing, marketing, and other functional strategies because technology decisions can have major impact on each of these areas, and vice versa  Technological strategy must be formed in conjunction with the firm’s business strategy because a right choice of technology provides key competencies  Technological strategy must support any future revision of the firm’s business strategy and its competitive advantage The basic role of technological strategy in business planning is to help ask the questions of in what businesses the corporation plans to be and how positioned (Frederick Bestz, 1987) It identifies the potential impact of technological change on any part of the value chain (Porter, 1985) 4.2.2 Organizational Context Organizational context has the important role to the selection of technological strategy It allows the firm to substitute internal selection for external selection The effectiveness of the firm’s internal selection environment affects its capacity to deal with major strategic management challenges (Bulgelman, Mandique and Wheelwright, 1996):  The ability to exploit opportunities associated with the current strategy (induced process)  The ability to take advantage of opportunities that emerge spontaneously outside the scope of the current strategy (autonomous process)  The ability to balance these challenges at different times in the firm’s development Organizational context reflects the firm’s administrative approaches and dominant culture It is impacted by the background and management approaches of the firm’s founders This expresses in the selection of technological strategy: leader or follower and technology innovation: insourcing or outsourcing It also has a close relationship to technology capabilities in terms of deciding technological strategy (Bulgelman, Mandique and Wheelwright, 1996) In the firm, organizational capabilities must accompany technological ones (Lall, 1987) These can be reflected through some or all of the following: BUSINESS RESEARCH METHOD Page 4/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C  Separation of the different technological functions (into different units) in the organizational structure with the growth of the firm  Giving greater autonomy and financial control to technological functions (like R&D), as these gain prominence, without letting them lose touch with day-to-day commercial needs  Facilitation of technological information transfers across different departments and from the shop floor, and response to consumers’ feedback  Development of technology-sensing services (technical library, patent data, data on world technological trends, etc.)  Formal documentation (in manuals, technical papers, data banks, design libraries and so on) of technical knowledge accumulated  Link-up with technology suppliers, laboratories, industry associations, universities and drawing on in-house training programs and external programs 4.2.3 Technological Capability Technological strategy can be conceptualized as an evolutionary organizational learning process, which links between technical competencies and capabilities, technological strategy, and experience Technological strategy is a function of the quantity and quality of technical capabilities that feed into it The experience that results from enacting technological strategy similarly feeds back into technical capabilities and technological strategy, thus continuing the cycle as seen in figure 1: Technological Capabilities Technological Strategy Experience Figure 1: A capabilities-based organizational learning framework of technological strategy Technological capability is the ability to use effectively technological knowledge It is the primary attribute of human knowledge and the know-how, which effectively combines human skills and physical capital to meet human needs Some following elements to define technological capability had been suggested (Bell and Hill, 1978):  Executing major and/or minor innovative activity BUSINESS RESEARCH METHOD Page 5/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C  Effecting necessary adjustments through the production system from the point of introduction of innovation  Deciding for technical change  Effecting technical change  Optimizing operation The application of technological knowledge has been broken down by Dahlman and Westphal (1982) into the following activities:  Production engineering that related to the operation of existing plants  Project execution that pertains to the establishment of new production capacity  Capital manufactured goods that consist of the embodiment of technological knowledge in physical facilities and equipment  Research and Development activities to generate new technological knowledge Technological capability can be defined as a combination of three kinds of independent capabilities includes independent technology learning capability (ITLC), independent technology creating capability (ITCC), and independent world technology reconnaissance capability (IWTRC) (Dore, 1984) On the other hand, Fransman (1984) identified the elements of technological capability as follow:  Capability to search for and select appropriate, alternative technology  Capability to master imported technology and successfully use it for the transformation of inputs and outputs  Capability to adapt technology to suit local conditions of production  Capability to make incremental innovations resulted from further improvement in adopted technology  Capability to institutionalize search for breakthroughs and innovation through local R&D facilities  Capability to carry out basic research for furthers upgrading the technology The technological capability development efforts in India proved that technological capability is shown by the ability for purchasing technology, the ability for plant operation, the ability for duplication and expansion and the ability for innovation (Ashok Desai, 1984) BUSINESS RESEARCH METHOD Page 6/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C Four types of technological capability were proposed by The Thailand Development Research Institute (TDRI, 1989) based on the revision of World Bank study They include  Acquisitive capability relates to the capability to search for, assess, negotiate, procure, and transfer technology and installation/ start-up  Operative capability integrates the abilities for operation and control, maintenance, training and management  Adaptive capability includes knowledge acquisition, technology digestion, minor product and/or process modification  Innovative capability embodies research and development capabilities, and radical product and/or process modification 4.2.4 Government Policies There is a wide range of government policies that affect the efforts of firms in any industry to accumulate technological capabilities As a result, they also influence the technological strategy of the firm These policies include trade policies (policies towards import of technologies), investment incentives, fiscal and monetary policies, tariff regulations, etc Government legislation can create a demand driven pressures of competition or even foreclose entry into industrial sectors with controls by licensing arrangements, raw materials and capital access Government goes by to create direct social benefits but the secondary consequences are a creation of entry barriers (Porter, 1985) Therefore, it can make the transformation of industrial structure, which affects directly to the technological strategies of firms in this industry Government can facilitate technological capability development of industrial firms through providing:  Testing services to qualify products to meet local and international standards  Information centers to provide information related to technology alternatives  Institutions for education, training and R&D Besides, government policies for the certain industry can affect to the other related industries due to the mutual relationship among industries in terms of providing input and consuming output BUSINESS RESEARCH METHOD Page 7/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 4.2.5 Technology Forecasting Using technology as a competitive factor must begin with anticipating technological change Technology forecasting uses techniques for the business organization to systematically anticipate relevant technological changes Technological changes influence the Technological Capabilities as well as Technological Components The general impact of technological changes is to make some of the Technological Components obsolete and alter the relative importance of the Technological Capabilities These changes make the influences to the Product Market The dynamics of the Product Market due to technological changes are described by two phenomena (Corbett and Wassenhove, 1993):  Qualifying Criteria becomes tougher: the minimum performance levels, which must be met in order to prevent the loss of market share become higher One must constantly improve in absolute terms simply to prevent being wiped out of market  Order Winning Criteria become Qualifying Criteria: what one time is considered by customers to be a valuable extra feature can, as they become used to it and technological changes, become a standard minimum requirement Forecasts are important inputs to the process of strategy formulation and planning They have been used to gain a better understanding of the threats and opportunities likely to be faced by established products and markets and, consequently, of the nature and magnitude of the changes needed (Bulgelman, Mandique and Wheelwright, 1996) The usefulness of technology forecasting techniques is not only in the prediction, but also in their value to business planning for systematically searching out potential and relevant technical change The next step after technology forecasting is formulating technological strategy which is set up what will be done to use technology as the effective and efficient to get the competitive advantage (Frederick Bestz, 1993) 4.2.6 Technology Content Addition In rapidly changing environments, it is essential to sense the need to reconfigure the asset structure and accomplish the necessary internal and external transformation This reconfiguration and transformation has to be done such that the Value Addition and the process of Technology Content Addition are aligned to each other The technology Atlas Team (1987) defined the Technology Content Addition of a transformation activity in BUSINESS RESEARCH METHOD Page 8/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C terms of the four technology components, which are used in the transformation facility The four technology components are considered to be equivalent to the factors of production used in the calculation of a production function 4.3 Data collection Data for this research includes primary and secondary and will be collected as follows: 4.3.1 Secondary Data  Annual Statistical reports on the social, economic aspects from The General Department of Statistics to get general information on the macro environment  Textile Industry’s Reports to get information on the industry’s structure  Thai Tuan Textile Ltd Annual report, and documents and Phuoc Long Documents  Some magazines: such as Saigon Times Magazine, Saigon Marketing Magazine, Science and Technology Magazine, Magazine of Ministry of Light Industry and others  From the Internet 4.3.2 Primary Data  In-depth interview and discussion with top manager of Thai Tuan Textile Co Ltd.: Mr Thai Tuan Dung, Vice General Director of Permanent to obtain information related to company strategies  In-depth interview and discussion with experts of Thai Tuan Textile Co Ltd.: Mr Vo Van Quyen, Director of Administration Department, Mr Vo Van Sang, Vice General Director of Technology-Production and Mrs Vo Thi Quy, consultant to know clearly production process and relevant technical and financial problems JUSTIFICATION This study will focus on the way of implementing of Technological Strategy of Thai Tuan Textile Ltd to gain the competitive advantage and be the leader of Vietnamese textile market in terms of textile products for female customers Because the technological strategy is rather a wide concept for not only Thai Tuan Textile Co Ltd but Vietnamese companies generally, the managers just said what they did relating to the strategy and production rather than giving systematic steps they had taken to achieve and implement technology Some information was not available due to the business confidentiality BUSINESS RESEARCH METHOD Page 9/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C RESEARCH DESIGN The design for the research is presented as the following figure: COMPANY’S MISSION AND GOALS INTERNAL ANALYSIS EXTERNAL ANALYSIS BUSINESS STRATEGY TECHNOLOGICAL STRATEGY FORMULATION PROCESS TECHNOLOGICAL STRATEGY IMPLEMENTATION PROCESS EVALUATION 6.1 Company Background 6.1.1 Company History Established on 20th December 1993, Thai Tuan Textile Co Ltd was initially a private company acting mostly in the trading activities with its former name as Thai Tuan Producing and Trading Co Ltd Besides the subcontracting of making sub-products of fabrics, it still traded kinds of fabric and raw materials of textile industry such as threads and kinds of chemical By the year 1995, the demand of fabric was high day by day and the domestic market was overwhelmed with the foreign fabrics Realizing that this was the opportunity and there was enough capability, company carried out construction of departments, importation of equipment, materials and recruiting staff to produce the fabrics which have high quality as the import ones In May 1996, the weaving factory was established and produced officially in October 1996 In this period, the main company product was the rough fabric, which was dyed by the other companies and consumed mainly in the HCM City and Mekong Delta In January 1997, company went on doing the construction of dyeing factory to complete their products, step by step in their production process and cut off transportation cost In November 1997, the dyeing factory began to start its business activities BUSINESS RESEARCH METHOD Page 10/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 6.4.2 Products When the living standard is raised, the consume tendency of Vietnamese people begin to shift to use the high product quality Thai Tuan Textile Co Ltd is known as the Textile Company which provides the fashion fabrics to make the Vietnamese dress as well as the fashion cloths for ladies At present, company produces some textile products:  Kinds of embroidery silk make up 52% of consumed output in which: - Roughen embroidery silk makes up 39% of consumed output - Sleeked embroidery silk makes up 7% of consumed output - Grained embroidery silk makes up 3% of consumed output - Elasticized embroidery silk makes up 3% of consumed output  Kinds of sateen (shiny sateen, grained sateen, smoothen sateen) makes up 38% of consumed output  Silk makes up 7% of consumed output  Satin makes up 3% of consumed output Silk 7% Satin 3% Sateen 38% Embroidery Silk 52% Figure 2: Structure of ThaiTuan Textile Products Source: Thai Tuan’s Documents Today, Thai Tuan textile products have been consumed all over the country in which HCM City and the Mekong Delta considered the biggest markets They also have been exported to U.S, France, Canada, Germany and many other countries through the intermediaries BUSINESS RESEARCH METHOD Page 16/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 6.4.3 Production Process The company process technology to produce fabrics is a closed process, which contains five main sub-processes (fig 3) They are (1) spinning, (2) weaving, (3) dyeing and finishing, (4) classifying and (5) packaging Each of them, however, includes several other steps to eventually produce their respective final products, that is, warp and filling yarns in the spinning process; gray cloth in weaving; dyed cloth in dyeing and finishing; up-to-standard fabric in the classifying and fabric roll in the packaging process 6.4.4 Current Technology Current Technology in the Thai Tuan Textile Co Ltd is considered in terms of four technological components: technoware, humanware, inforware and orgaware 6.4.4.1 Technoware Textile technology is generally considered based on the generations of machinery and equipment, which is an essential competitive advantage for a textile company The quality of fabric as well as production cost depends so much on the generations of machinery used There are two main spinning systems used in the world: ring spinning and open-end rotor spinning Ring spinning is much less productive than rotor spinning system Ringspinning system is used in Thai Tuan Textile Co Ltd Although being ring spinning system, all of spinning machinery are the brand-new ones with manufacturing year is 1995 They assure to provide the necessary quantity of yarns to the weaving looms In the other hand, fibers used are synthetic ones, which are standardized Along with new machinery, this makes the high quality warp yarns and filling yarns produced in the spinning process In Vietnam, there are two main types of weaving technology Traditionally, looms with shuttles are used This technology has slow production rate and requires higher skills of technicians and weavers Most of Vietnamese textile companies are using shuttle looms in their factories The second type is the weaving technology with shuttleless looms They allow broadening the width of fabric produced They can produce high standard fabrics and the rate of substandard product is low In addition, the high quality of company products are achieved and maintained through the computerized dyeing equipment, which few of textile companies have at this time BUSINESS RESEARCH METHOD Page 17/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 6.4.4.2 Humanware “Our people are our greatest resource” is one of the statements most commonly found in reports of many companies Without the right people in the right positions, no strategy, however, well formulated in other respects, is likely to succeed The objective of strategic human resource management is to develop manpower plan that matches people with a company’s strategic requirements, both in the short run and the long run Realizing this importance, from the establishment to the present time, human resource management is always the concentration of setting company strategies in Thai Tuan Textile Co Ltd Related to the human resource, the number of company staff is 1415, which contain 181 managers (12.8 %), and 1234 workers (87.2 %) Before being accepted to the company, all of workers must pass the skill examination to make sure they can use effectively machinery and equipment in the production process The recruitment is done by the Administrative Department based on the company development and expansion plans of production process All of them come from the family, which has the tradition of working in textile industry or shift from the other textile companies For the managers, all of them have the engineer/ bachelor degrees (for officers) or high skill and experience degrees (for foremen) For directors, beside the educational degree, they also have working experiences and good relationship with textile industry and government agencies thanks to the long-term working process in the other textile companies All of company consultants have master degree and come from well-known institutes such as Asian Institute of Technology and Polytechnic Institute 6.4.4.3 Inforware Company has promulgated documents of company working regulation in which stipulates the roles and responsibilities of each department and factory Because most of machinery is the new ones, company has sufficient documents in terms of specifications, operation and maintenance manuals so that they can plan the maintenance plans to maximize the machine performance The machine maintenance is done regularly by the technical groups This helps company producing continuously without serious problems Every three years, all of machinery are overhauled and replaced defective components BUSINESS RESEARCH METHOD Page 18/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C However, these documents (specifications and maintenance manuals) have been yet disseminated widely to workers who just know how to operate machines and equipment and overcome some small common problems appearing in the production process This limits the employee’s operative capability and huddles their supportive capability Employees cannot take full advantage of machinery they use as well as create improvements when they not know clearly their specifications This is being overcome thanks to the implementation of Total Quality Management (TQM) process to get the ISO 9000 Certificate in the company To select alternative technologies and choosing the appropriate ones, company has a database, which is build from the different data sources There are two kinds of them:  Primary sources include information coming from trade fairs of textile industry, which is often organized annually Although company cannot take part regularly due to the capital limitation, they may get this information from the Vietnamese commercial representatives in the opening country Another source comes from the database of National Science and Technology Information Center that stores almost patents and inventions of all of industries all over the world  Secondary sources are formed through the textile magazines, technical information of newspapers, reports of consumer surveys etc It must be concerned the important role of information coming from the relatives, friends as well as competitors Most of the cases, this information is similar as orientation of searching information process 6.4.4.4 Orgaware Company has the empower policy which allows directors decide all the problems related to their responsible area Thai Tuan Textile Co Ltd has a good staffing policy Recruiting managers based on the require experiences and skills is done through interviewing carefully from to times depend on the importance of recruit positions Furthermore, the company set up a good relationship with universities and vocational institutes in HCM City Therefore, it has opportunities to attract graduates to work for the company Generally, company has put right person on right position to exploit the abilities of each person BUSINESS RESEARCH METHOD Page 19/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 6.5 Strategy Formulation Process 6.5.1 Forecasting Market and Technology Based on the analyses of customers and textile products as well as technology information which company has, company forecasts the tendencies of market and technology in the future 6.5.1.1 Market Fabric product market will become more diversified with the anticipation of many kinds from foreign and domestic textile companies Because of increasing income, urban customer tendency will shift from price concentration to value-orientation Fabric products made of natural materials and getting high requirements of pattern, color and surface characteristics will be liked In addition, the development of fashion clothes along with their high requirements of coordinating pattern and color will make the use of wider width size fabric products 6.5.1.2 Technology Today's yarn and fabric production speeds are many times what they were only a few years ago And quality levels have reached the point that some manufacturers find it is in some cases an unnecessary expense to even inspect finished fabrics The development of synthetic fibers led to the production of new types of durable and easily cared-for fabrics In Vietnam, some of textile mills are beginning to use shuttleless looms due to the notice of advantages related to high productivity and less noise making Meanwhile, the popular use shuttleless looms in many modern textile companies leads to the increase of quantity of fabrics made of the shuttleless looms in the world Computer-based systems for optimizing dyeing time-temperature and improved color matching are common results of these years of technology development since they were developed in the early 1970’s By monitoring and regulating the temperature and dye-bath strength, for example, they are able to improve the color consistency of different pieces of cloth More recent advances in color physics combined with microelectronics have led to the use of computer-based spectrophotometer, which can define shades numerically, allowing colors to be repeated accurately, and also scan a piece of cloth for color consistency They are being used primarily by manufacturers supplying high-quality fashions, for whom any color mismatching can lead to large financial losses BUSINESS RESEARCH METHOD Page 20/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C In addition, because of demanding world of fashion, surface finishing of fabrics has become more important than ever And the precision of modern machines is critical to successful textile operations What people want today is softer fabrics They want to feel the softness, not just see it 6.5.2 Technological Strategy of Thai Tuan Textile Co Ltd 6.5.2.1 Product Technology Along with physical characteristics such as softness, smoothness etc., color and pattern in the fabric are the most important factors affecting directly to the customer purchasing decisions They decide the diversification of fabric products and make the competitive advantage to company Customer often remembers company based on their successes when launching products in the market In the case of Thai Tuan Textile Co Ltd., because of avoiding risk, company should research foreign fabric products and recruit talented people to learn product technology Beside the high skilled employees, the equipment of suitable software will help process of designing new products more powerful 6.5.2.2 Process Technology Diversification of pattern and color will be meaningless without assuring product quality and stability of production process Therefore, the important thing which company defined is how to invest to machinery to achieve the highest effectiveness and efficiency In order to that, company should research to find the main factors affecting to the fabric quality and try to concentrate on investing to them Because there are many sub-processes in the production process of textile industry, the quality of finished product will be affected by each sub-process in this process However, fabric quality is decided mostly in the two steps: spinning and dyeing and finishing The object of spinning and of the processes that precede it is to transform the single fibers into a cohesive and workable continuous-length yarn This transformation process makes require characteristics of yarns such as strength, stiffness, elasticity, and ease of dyeing and coloring In addition, yarns are also treated by high temperature steam to protect the shrinkage of fabric product Higher quality yarns lead to the higher productivity in weaving and higher fabric quality product due to the lower number of BUSINESS RESEARCH METHOD Page 21/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C broken yarns in the production process Thus, the equipment of new brand machinery for this process seems reasonable to get the high efficiency of production process Color characteristic and its stability are achieved through dyeing and finishing process The assurance of color uniqueness for different batches is one of requirements of garment industry For the individual customer, in some cases, color and softness, as well as smoothness have the important role of purchasing behavior Realizing decide characteristic of this process, company had invested nearly USD million (US$ 910,000), a big sum of their ability, to equip computerized-dyeing system in order to get the assurance of uniqueness and stability of product quality Not only did concentrate on investing new and modern machinery, but also company concerned the employee’s role in terms of exploiting the capability of this machinery Through the recruitment and training processes, high skill and experience employees operate them Besides, company noticed that it is necessary to replace the 0.8m width weaving looms to 1.2m width ones to increase the ability of producing new fabric products and to suit the customer requirements in the present and future Because of capital limitation of company, the equipped with weaving looms are second-hand ones but still assure the require specifications for making product quality Related to market, according to Mandique (1988), company has shown to implement “fast follower” strategy expressing through the entry in the early growth stage of the life cycle with the quick imitation of innovations developed by a competitor This strategy allows company using total R&D spending for applied research The successful imitation of exist fabric products (Vietnamese traditional embroidery silk and foreign ones) in the early growth stage of product life cycle proved the right strategic selection of company 6.6 Strategy Implementation Process 6.6.1 Searching Technology Information Strategy implementation process involves the searching process to find technology sources, and the selection process to choose appropriate technology and embodying it The implementation of descriptive technology strategy requires the great managers’ efforts and abilities due to the abundance and confidentiality of technology information BUSINESS RESEARCH METHOD Page 22/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 6.6.2 Decision-making Process Decision-making is daily activity of managers Beside the abilities of analysis and synthesis, it requires them having other skills such as intuition and resolution Though having many methods, decision-making is often classified to two kinds of methods: quantitative and qualitative 6.6.2.1 Quantitative Method The calculation in this process is based on Discount Cash Flow (DCF) Method expressing through Net Present Value (NPV) and Internal Rate of Return (IRR) In this method, cash inflow will be estimated based on the future income with the discount rate This income comes from the future consume quantity which is based on market data and forecasts of company 6.6.2.2 Qualitative Method The financial calculations are just the base of assessment and not the final decision Selection of any kind of machinery is also considered to the other criteria such as the ability of repair and upgrade, as well as supplier’s reputation and conditions related to technical supports such as warranty, training and supplying spare parts etc 6.7 Evaluation of Technological Strategy of Thai Tuan Textile Co Ltd So far, technological strategy of Thai Tuan Textile Co Ltd has proved its effectiveness to make competitive advantage for company Company is considered as the leader role of launching new fabric products for female customers The effectiveness of technology strategy is expressed through some aspects: 6.7.1 Production The investment of new machinery will help company increasing productivity Though many products of other textile companies have been consumed hardly, Thai Tuan fabric products will get the strong support of consumers As a result, all of machinery will run at full capacity because the supply cannot satisfy the demand 6.7.2 Product Today, in the market, Thai Tuan Textile Co Ltd produces fabric products with different kinds of pattern and color Approximately, there are four fashion colors for each pattern and customer can chose about four patterns for each kind of fabric products In BUSINESS RESEARCH METHOD Page 23/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C addition, most of them are broad width size (1.4m or 1.6m) ones, which makes the advantage for customer in terms of tailoring fashion clothes Product characteristics are also the strength of Thai Tuan fabric products Customers can distinguish the difference of softness, smoothness, and shininess of Thai Tuan products and other Vietnamese competitors’ ones This can explain why customer chose Thai Tuan products though their price is 20% higher than the others’ ones 6.7.3 Market The tendency of coming back to the traditional fabric products and admiration of natural fiber fabric ones pushed the huge consume of embroidery silk High price due to the complexity of production process and the limitation of silkworm makes it becoming the untouchable fabric product of major customers Company has taken the leader role in terms of going ahead new products to market Their success and reputation create many imitators and me-too fabric products appearing in the market day by day It has been formed the trend of producing products based on Thai Tuan ones which hit market Due to the increasing competitive level, the time gap is shrinking: from two to three months to one month now 6.8 Conclusion In this time period, Thai Tuan Textile Co Ltd has asserted itself and achieved significant improvements in Vietnamese textile industry It shows the ability of Vietnamese Textile Companies in terms of producing fabric products which quality is similar to the foreign ones with the reasonable price Along with other Vietnamese high product quality, kinds of embroidery silk made in Thai Tuan Textile Co Ltd have created customer belief and scrambled market from the foreign fabric products As a result, it is formed the trend of using domestic high quality goods in Vietnam Before setting business strategy, company should implement forecasting the trends of market and technology which most of companies forget or not care Experience and observation will help in terms of finding what market needs for fabric products and what kind of necessary technological characteristics to assure the product quality Company will not get to the pitfall as other Vietnamese companies in terms of defining market segment and customer They often want to serve everybody or cannot define clearly who their customers are In contrary, because of limitation of resources, company BUSINESS RESEARCH METHOD Page 24/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C should decide to focus on its target market (Ho Chi Minh City) with target customers are middle classes in which female customers are chosen due to their high purchase capability of fabric products So far, Thai Tuan fabric products are only for these customers Along with right forecasting, the right orientation should be considered as guideline for company in order to deploy what they must in the implementation process of technological strategy Besides having right forecasting, company should also research carefully which resources they have as well as the determine factors of production process related to quality product This information is very precious to help company have the necessary concentrate investments related to machinery and human resource Therefore, this will make company be able to produce new high quality fabric products in the conditions of limitation resources A well-planned technological strategy will not be feasible unless it is done correctly in the implementation process In Thai Tuan, the right implementation of descriptive technological strategy is expressed through the great efforts of company related to searching information process and promulgating human resource policies such as staffing, recruiting and training These policies have contributed greatly to the effective using technology in company and created strong brand image of Thai Tuan Textile Co Ltd in the Vietnamese textile market The competitive advantage that Thai Tuan Textile Co Ltd gains is just temporary due to the increase number of competitors producing similar fabric products as Thai Tuan’s Competitive pressure comes from not only private companies but also state-owned ones, which have the strength of capital Therefore, it is necessary to have the suitable strategic changes to help company maintain their competitive advantage in the fierce competition 6.9 Recommendations for Further Study This study mainly focuses on finding the basements of forming the technology strategy in the relationship with business strategies in Thai Tuan Textile Co Ltd and the ways of implementing it in case of capital limitation- one of the most hard-solving problems of Vietnamese present businesses In order to clarify the role of an effective technology strategy to the competitive advantage of business, it is necessary to have further detailed research on other primary and supporting areas They are: BUSINESS RESEARCH METHOD Page 25/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C  Assessment Technological Capability between small and medium private companies and state-owned enterprises in Vietnamese textile industry  Technological Strategy of state-owned enterprises in Vietnamese textile industry  Role of Human Resource and Organization related to deciding Technological Strategy and deploying effectively technology  Models of calculating the economic effects of using technology with the market variables such as customer, competitors, labor cost etc BUDGET Total estimated expenses for this proposed research are 10 million VND These funds will be used to cover direct out-of-pocket expenses associated with the study, including questionnaire production, printing, and distribution, participant incentives, and funding for research assistance ACTIVITY PLAN I plan to finish this paper in total of weeks starting on September rd It is possible that some tasks will be performed in parallel In addition to the main research, I have put in the estimates I have made for writing paper The tentative time plan can be found in the table below Project Name Research Proposal Introduction Literature review Research methodology Data collection Analysis First draft Final draft Days 2 3 BUSINESS RESEARCH METHOD Start 03/09 04/09 06/09 08/09 10/09 15/09 18/09 21/09 End 03/09 05/09 07/09 08/09 14/09 17/09 20/09 28/09 Page 26/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C REFERENCES Albridge and Swamidass, “ Cross-functional Management of Technology “, Irwin, 1996 A V., Desai, “ Achievemments and Limitations of India’s Technological Capability”, in Technological Capability in the Third World, Fransman, M., and King, K (eds.), The Macmillan Press Ltd., London, 1984 Bulgelman, Mandique and Wheelwright, “ Strategic Management of Technology and Innovation “, 2nd Edition, Irwin, Chicago 1996 C K Prahalad and G Hamel, “ The Core Competence of the Corporation “, Harvard Business Review, May-June 1990 D Ford and C Ryan, “ Taking Technology to Market “, Harvard Business Review, March-April 1981 D Ford, “Develop Your Technology Strategy”, Long Range Planning, 1988 ESCAP, “ Training manual on the acquisition of foreign technologies and negotiation and execution of contracts “, 1992 Frederick Bestz, “ Managing Technology “, Prentice Hall, 1987 Frederick Bestz, “Strategic Technology Management “, McGraw- Hill, 1993 10 Gerard H Gaynor, “ Achieving the Competitive Edge through Integrated Technology Management “, McGraw- Hill, 1991 11 Lall, Sanjaya, “ Technological Learning in the Third World: Some Implications of Technology Exports”, in Frances Stewart and Jeffrey James (ed.), The Economics of New Technology in Developing Countries, Westview Press, Boulder Colorado, 1982 12 M E Porter, “ Competitive Advantage “, New York: Free Press, 1985 13 M E Porter, “ Competitive Strategy “, New York: Free Press, 1980 14 M E Porter, “ The Technological Dimension of Competitive Strategy “, Research on Technological Innovation, Management and Policy 1, 1983 15 M E Porter, “ Competitive Advantage Creating and Sustaining Superior Performance”, Collier MacMillan Publishers, London, 1985 16 M.N., Sharif, “Workshop on Science and Technology Management Information System for Industrial Productivity”, LIPI, Jakarta 1-4 October 2011 BUSINESS RESEARCH METHOD Page 27/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C 17 Nguoi Lao Dong, 11/02/2010 18 Nguyen Danh Bang, “ Hopeful Future of doi moi (innovation) in Vietnam “, Vietnam Investment Review, January 1999 19 Noori, Hamid, “Management The Dynamic of New Technology”, Prentice Hall, 1990 20 R A Burgelman and R S Rosenbloom, “ Technology Strategy: An Evolutionary Process Perspective “, Research on Technological Innovation, Management and Policy 4, 1989 21 R.E, Miles and C.C., Snow, “Organizational Strategy, Structure and Process”, McGraw-Hill, New York, 1978 22 Tran Mong Lam, “ Cac bai hoc cua phat trien nganh det tren The gioi”, 1995 23 The Saigon Times Daily, February 2012 24 The Saigon Times Daily, March 2012 25 Thoi bao Kinh Te Saigon, “ Loi the ve gia nhan cong dang mat dan”, 26/8/1999 26 Thoi bao Kinh Te Saigon, 30/12/2012 27 Vietnamese General Statistics Office, “Statistic Year Book 2012 “ 28 Vietnam Economic Times, January 2013 29 Vietnam National Textile Garment Corporation, HCM City Committee of ScienceTechnology and Environment, “Vietnam Textile- Garment Industry: The Present and Future 1997- 2010” 30 Wilson, Ian, “The Strategic Management of Technology: Corporate Fad or Strategic Necessity”, Long Range Planning, 21-22, April 1986 BUSINESS RESEARCH METHOD Page 28/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C APPENDIX GUIDELINES FOR THE INTERVIEW AND DISCUSSION This is a guideline that would be used to interview and discuss to Vice General Director and Managers of Thai Tuan Textile Co Ltd I Overall company’s current situation Company History Company Mission and Objectives Main products and main markets of company Company Performance  Market Share of each kind of products  Sales volume and Turnover II External Environment What are the external factors affecting to company when company shifted from trading to manufacturing company? Who were company competitors in that period? And in the present time?  Main competitors (domestic and foreign ones)  Potential competitors How government policies affect to the company activities? What does company think about the market and consumers?  Market segmentation  Market size  Target consumers  Purchasing behaviours What are opportunities and threats for company? Which one is the most important? III Internal Resource and Capability Kind of organizational structure? Is it appropriate? Why? Roles of each component? Production process of company? Which problems happen in the production process? And the whole company? Ages and types of equipment? The generation of each type of equipment? Sources of materials and components? Skills and Educational level of staff? BUSINESS RESEARCH METHOD Page 29/30 Name: Nguyen Ngoc Sy ID: 2448471 Class: MBAOUM0512-2C IV Technological Strategy The difficulties company got when changing from trading company to manufacturing ones?  Human resource  Financial aspect  Organizational structure  Machinery Which things company did to define market and customers? What are bases of defining product characteristics? Selection of equipping machinery? Role of information in selecting technology? Methods using to select technology? Role of departments in selecting technology? BUSINESS RESEARCH METHOD Page 30/30 ... textile market factors affecting to its Business Strategies;  To analyze Technological Strategies of Thai Tuan Textile Ltd in terms of relationship to business strategies to exploit and create... Primary Data  In-depth interview and discussion with top manager of Thai Tuan Textile Co Ltd. : Mr Thai Tuan Dung, Vice General Director of Permanent to obtain information related to company strategies. .. contributed greatly to the effective using technology in company and created strong brand image of Thai Tuan Textile Co Ltd in the Vietnamese textile market The competitive advantage that Thai Tuan Textile