MỤC LỤC
- Business strategy helps determine basic objectives and business orientation of the enterprise in each period;. - Business strategy ensures the optimal combination of exploiting and using resources of enterprise at present and in the future; promoting strengths and gasping opportunities to gain competitive advantages;.
To analyze macro-environment, people often use PEST model in which macro- environment is defined by some macro factors like: economic, political-legal, socio- cultural, environment, demographic, technological factors that may affect the enterprise. b) Micro-environment (industry environment) analysis. On the basis of general environment analysis and industry environment analysis, point out opportunities and threats of the enterprise. - Step 1: Listing factors (from 10 t0 20 factors) having decisive role to the success of the enterprise, recognized in the process of checking external factors.
The rating will show the corresponding importance of the factor to the success in doing business of the enterprise. - Step 3: Assign a rating from 1 to 4 for each factor to show the method that the current strategy of the enterprise responses to the factor: the response is poor. The weighted score has implication in rating the suitability of the current strategy employed by the enterprise to opportunities and threats from the environment.
Internal factors of an enterprise can be classified into strengths (S), weaknesses (W); and external factors can be classified into opportunities (O) and threats (T). This is a very important tool, helping use to understand the problem or make decision in organizing, managing as well as doing business.
In this part, point out the objective that the enterprise wants to reach as well as its vision.
T strategies
After Da Nang became a centrally-controlled municipality with the determination of Hoa Tho Textile & Garment Joint – Stock Corporation along with non-stop efforts of its cadres and staffs over periods, to date, Hoa Tho Textile &. Over the past 40 years, from a yarn – textile manufacturing plant with backward machinery system, Hoa Tho Textile & Garment Joint – Stock Corporation has developed its scale significantly with over 10 member plants and enterprises. With not really strong economic potentials, garment and textile enterprises cannot invest in modern and advanced technologies as well as manufacture products with high differentiation and high quality to gain competitive advantages in the world market.
Backward technology not only affects competition in export market, but also makes Vietnam’s garment and textile products lose advantages right in domestic market compared to Chinese products. Via the above chart, it can be seen that garment and textile industry of Vietnam has a relatively high growth rate (17% per year on average) and tends to be sustained and increased in the five coming years. Vietnam garment and textile industry with current major products does not require big production scale, modern and complicated technologies; therefore, the industry’s entry barrier is quite low.
In reality, according to the survey conducted by Vietnam Textile & Apparel Association (VITAS), garment and textile manufacturing scales of enterprises in the industry are quite diverse from small manufacturing factories to companies with hundreds of laborers to large-scale corporations with thousands of laborers. Moreover, Vietnam’s garment and textile industry also receives protection from the Government’s policies like towards automobile, electricity, oil and gas production; therefore, it can be considered as an open market for all foreign manufacturers with their existing potentials to enter Vietnam’s garment and textile market. At present, input materials serving production of Vietnam’s garment and textile industry are still imported. It is clearly shown via the rate of domesticalization of the industry at approximately 40%. Materials such as fiber, yarn and cloth are mainly imported from China, Pakistan and South Korea, in which China is always the leading cloth supplier accounting for nearly 30% of cloth import value. It is obvious that the overdependence on imported materials has reduced the strengths of Vietnam’s garment and textile companies and the bargaining power belongs to suppliers. Vietnam’s garment and textile enterprises, at present, mainly outsource products for customers from the U.S., EU and Japan, accounting for as much as 80% of the industry’s products. In 2010 alone, the market shares of major markets were: the U.S. With the above structure of customers, advantages currently belong to buyers while disadvantages belong to Vietnam’s garment and textile enterprises. Although garment and textile products are essential goods for human’s life, they are quite common, simple and easy to be substituted. Vietnam also has not been able to built big fashion brands like Italy, France, etc.; as a result, the threat from products of the same types from other countries such as China, Pakistan, Bangladesh, etc.) is very high. Large manufacturing scale helps reduce production coast; accordingly, products of Chinese manufacturers are always attractive and create significant competitive advantages, causing pressure on Vietnam’s garment and textile enterprises. In contrast, Vietnam enterprises, due to limited capital capacity, cannot make too high investment on technology, resulting in low productivity, poor product quality, high production cost and low competitive price.
The group of Chinese textile & garment enterprises has high competitiveness in the markets and tends to be more outstanding compared to the group of Vietnamese textile & garment enterprises in general and Hoa Tho Textile &. Meanwhile, as analyzed above, the competitive advantages of Vietnamese enterprises are mainly ample labor forces, low labor cost along with the shift in manufacturing textile and garment products from other countries to Vietnam. The second group of competitors are big garment and textile corporations of Vietnam (Phong Phu Corporation, Nha Be Garment Corporation, Nam Dinh Textile and Garment Joint Stock Corporation, etc.).
Over the past five years, these enterprises have developed quite well and gradually affirmed their prestige and brand I the market and occupied a significant market share in yarn – textile – garment market. After many years facing pessimistic economic situation owing to backward technology, weak production management, poor quality of human resources and limited financial capacity, competitiveness of the remaining competitor – Nam Dinh Textile and Garment Joint Stock Corporation is quite low although it used to be a leading enterprise in Vietnam’s garment and textile industry. Based on above analysis, we can conclude that Vietnam’s garment and textile industry is not attractive because: (1) Entry barriers are few, (2) both suppliers and buyers have bargaining power, (3) threat of substitute products is very high, (4) competitive rivalry is very high and comes from both domestic and foreign enterprises.
The participation in ASEAN Free Trade Area (AFTA) has created favorable condition for attracting invested capital, taking advantages of cheap labor with high content of grey matter to boost exports of Vietnam’s goods to other countries in the region; and helped Vietnam enjoy preferential tariff system of developed countries, especially of the U.S. Vietnam’s garment and textile industry has low starting point; supporting industries have not been developed; about 70% of materials for the group of garment products are imported from foreign countries; competitive capacity remained low; and Vietnam bears fierce competition from the world’s garment and textile manufacturing countries like China, India, Bangladesh, etc.