1.3.1. External factor
1.3.1.1. Economic environment
a) Analysis the effects of economic growth:
GDP growth impact on business operations of the business. GDP growth will strongly impact to the demand of the goods and services, creating more business opportunities for enterprises.
According to the General Statistics Office and the Ministry of Labor, War Invalids and Social Affairs, Viet Nam's GDP growth rate in recent years as follows:
Table 1.1. Vietnam’s GDP growth rate in the period of 2008-2011
Year 2008 2009 2010 2011
Growth rate (%) 6.2 5.3 6.5 5.8
GDP growth rate is more volatile in recent years, causing bad impaction on the development of all sectors including textile industry.
b. Analysis the effects of inflation
Although Vietnam's economy in recently years has some progress, however go along with economic development is the increase of inflation. Currently, Vietnam is a country that has the highest inflation rates in the East Asian countries.
Table 1.2. Inflation rate of Vietnam in the period of 2008-2011
Year 2008 2009 2010 2011
Inflation rate (%) 22 6.9 11.75 18.13
(Source: Department of Statistics and the Ministry of Labor, War Invalids and Social Affairs)
The high inflation led to the input material prices, labor costs are volatile, increasing, making the difficulties to Gatexco to reduce product prices, stable production. On the other hand, inflation is high so the progress of implementation of investment projects of Gatexco is also slowed down due to the investment cost is increased beyond the budget. In addition, Gatexco also encountered the difficulties in accessing the loans funded by the Government of Vietnam as the credit tightening policy
c. Analysis of the impact of interest rate and exchange rate
In the market economy, the changes of exchange rate and interest rate have a huge impact on the business activities of the textile industry because all most enterprises in the textile industry are medium or small scale businesses with the finance resources are mostly borrowed from the bank. Besides it, a lot of input materials of the textile companies are still imported from abroad
In recent years, many enterprises have encountered the difficulties in accessing the fund because interest rates are too high. High interest rate means that payable borrowing costs of capital of the enterprise will be higher, increasing the cost of production, reducing the competitiveness of the enterprise and making it difficult to invest for expanding the production.
Thus, we can see that the volatile of the exchange rate in recent years has caused the difficulties to businesses. Enterprises that import raw materials from abroad have to double influence, especially in the middle of 2010, raw material price increased and inflation of VND.
d. Analysis the influence of other factors
The skill and qualification of the labor force are still weak and low. Mainly the labor is unskilled and have untrained. Besides it, the supply is not stable with seasonal
nature makes the difficulties to businesses for ensuring the productivity, product quality as well as production plan.
The quality of infrastructure is poor and un synchronization
Labor cost is relatively cheap in comparison to other countries in the region 1.3.1.2. Analysis of the influence of political, legal, and policy:
Vietnam’s politics is quite stable. The changes in laws and policies have a certain impact on operations of the business. It can create growth opportunities as well as the risk and difficult to business.
Besides the above-mentioned disadvantages, the Vietnamese textile and garment enterprises have difficulties in input costs that arer increasing as the adjustmwent of the Government to price of electricity, gas, oil, transportation freight, salaries, insurance ...
increased from 5 to 15% over the same period last year
Thefore, the change of policy, the law has both favorable conditions and development opportunities to businesses and also make the difficult for the textile industry in the production and business activities.
1.3.1.3. Analysis the influence of the socio-natural conditions
Population structure and human resources: Today, Vietnam is a country with 58 million people in the working age (from 15 to 64 year olds), is called the period of
"golden population”. This is a huge advantage of Vietnam by the feature of the textile industry is required for intensive and young labor force especially.
Qualifications of employees: Most people in the working age are graduating high school and training programs as well as vocational training programs but qualified and skillful management labor force are still shortage.
The grown of services, distribution and retail system of the companies, has covered the provincial and district markets throughout to facilitate consumer can shop easily and easy update the latest information on the style and quality of products.
1.3.1.4. The socio-cultural environment
As people's income and educational level are increasing so it requires enterprises have to study and capture the demand of the market to supply with appropriate products
in the short term and long term plan.The population of Vietnam in 2011 is over 86 million people, including high percentage of young population, so that the consumption is also increasing. On the other hand people's life is increasing demand for increased consumption. These factors are favorable conditions to the development of textile industry.
1.3.2. The factors belonging to the inside enterprise 1.3.2.1. Analysis of production capacity
Gatexco 20 is a state-owned enterprise, with large scale production capacity and advance production technology, one of the leading companies in the textile and garment industry of Vietnam. Products that are produced by Gatexco have met 50% of the demand for military costumes with its strong brand has been confirmed. Moreover, Gatexco has the key items of particular strengths in economic and export markets such as motor racing jacket, and many other kinds of jacket .
With the existing advantages of large production plant, annual abundant investment fund, Gatexco are still keeping and upgrading the workshop system, procurement of modern technological equipment for the large-scale, self-contained production. Gatexco has a modern system and advanced technology production line, are about to serve well the production and business activities
1.3.2.2. Analysis of research, development, marketing activities
Currently, research and development activities of Gatexco are still very weak due to the limited qualification of the design staff. Gatexco 20 has not set up a research center for designing a new products and samples. Gatexco 20 has not set up division specialized in marketing and have just a few part-time staffs to be in charge of some simple marketing tasks so far
1.3.2.3. Analysis about human resource quality
Gatexco has abundant human resources with nearly 3,200 officials and employees with average income of VND 3.2 million / month. Most of the staff and office managers have a university degree and graduate education. Besides it, the management board is also very interested in the training, retraining and improving professional qualifications
of officials and employees. Every year, Gatexco 20 implement the wage increasing to workers and new employees are trained before and during the work.
However, Gatexco is under the management of military officer so he has not really focused on promoting marketing activities and develops professional marketing staff. Therefore the marketing activities of Gatexco is still fragmented, not promotion full strength of Gatexco.
1.3.2.4. Analysis of financial resources
Comparison with other large companies of the textile sector, Gatexco 20 has a relatively big equity capital just the after Thanh Cong Textile Garment Joint Stock Company. The proportion of debt on Gatexco's equity is relatively low, just only about 52%. In recent years, Gatexco 20 has conducted the equalization to be com joint stock Company and have more chance to attract investment resources from within and outside Gatexco. Besides it, Gatexco also enlisted the support of Ministry of Defense to approach the preferential loans. Every year, Gatexco 20 has set aside an amount of 30 to 50 billion for basic construction investment
1.3.2.5. Analysis of corporate culture
As Gatexco 20 is military garment company so they have a tradition of solidarity, mutual support and help. Every year they always conduct and held the visit to senior officers, retired officers. Gatexco 20 always pays attention to care for the life and welfare of the employees, uphold the spirit of solidarity, well-organized movement.
Implement the slogan "Discipline is the strength of the Army"