Business strategic planning for the industry of children's clothing bisiness of Hoang Vinh Quang garment embroidery pte till the year 2018

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT “BUSINESS STRATEGIC PLANNING FOR THE INDUSTRY OF CHILDREN’S CLOTHING BUSINESS OF HO

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

“BUSINESS STRATEGIC PLANNING FOR THE

INDUSTRY OF CHILDREN’S CLOTHING BUSINESS OF HOANG VINH QUANG GARMENT EMBROIDERY PTE

TILL THE YEAR 2018”

1 VO THI ANH DAO

2 HUYNH THI KIM XUAN

Table of Contents

INTRODUCTION 1

CHAPTER 1: OVERVIEW OF STRATEGIC MANAGEMENT 3

1.1 The Definition and Concept of Strategy and Strategic Management 3

1.1.1 Definition 3

1.1.2 The Concept of Strategic Management 3

1.2 Types of Strategy 4

1.2.1 Corporate Strategy 4

1.2.2 Strategic Business Unit (SBU) 4

1.2.3 Functional Strategy 4

1.3 Practical Business Strategies in Business Activities 4

1.3.1 Product Diversification Strategy 4

1.3.2 Strategy to Expand the Distribution Network 4

1.3.3 Strategy to Strengthen the Market Share 4

1.3.4 Focus Strategy 5

1.3.5 Integrated strategy along the front and rear 5

1.4 Strategic Management Process 5

1.4.1 Strategy Formulation Process 5

1.4.2 The Combined Stage 8

1.4.3 Strategic Choices Stage 9

1.4.4 Strategic Implementation Process 11

1.4.5 Strategic Assessment 11

CHAPTER 2: BUSINESS SITUATION OF HOANG VINH QUANG 14

GARMENT PRIVATE ENTERPRISES 14

2.1 Overview 14

2.1.1 Formation and development process 14

2.1.2 Main function and task 15

2.1.3 Organizational structure 16

2.2 Business activities 17

2.2.1 Business field 17

2.2.2 Production process 18

2.3 Size of company 19

2.4 Enterprise Market 19

2.5.Hoang Vinh Quang Brand 19

2.6 Analysis of external environment factors impact on business activities 20

2.6.1 Macro environment 20

2.6.2 The Micro Environment 26

2.6.3 Competitive matrix image of HVQ 30

2.6.4 External factor evaluating matrix (EFE) 32

2.7 Internal environment of HVQ 35

2.7.1 Manufacturing process technology 35

2.7.2 Financial factors of HVQ 36

2.7.3 Corporate Assets and Cash Flows 39

2.7.4 Cash Flows 40

2.7.5 Human resources 41

2.7.6 Raw Materials 45

2.7.7 Business Capacity 45

2.7.8 Marketing Activities 47

2.8 Identify Opportunities - Challenges - Strengths - Weaknesses of Hoang Vinh Quang Garment Embroidery PTE 50

2.8.1 Opportunities 50

2.8.2 Challenges 50

2.8.3 Strengths 51

2.8.4 Weaknesses 51

2.8.5 Internal Factors Environment Matrix of Hoang Vinh Quang 52

2.9 Summary of Chapter 2 54

CHAPTER 3:STRATEGIC PLANNING BUSINESS BUSINESS STRATEGIC PLANNING FOR THE INDUSTRY OF CHILDREN’S CLOTHING BUSINESS OF HOANG VINH QUANG GARMENT EMBROIDERY PTE TILL THE YEAR 2018 55

3.1 The purpose and mission of HVQ 55

3.2 Pursuant to 55

3.3 The strategic planning of HVQ to 2018 55

3.3.1 The objective of the main targets 55

3.3.2 The analysis of strategic planning 56

3.4 Main strategies and alternative strategies capable 57

3.5 Proposed route deployment 59

3.6 Propose solutions for strategic deployment 59

3.6.1 Solutions related to human resources 59

3.6.2 Solutions related to governance and organizational structure 60

3.6.3 Capital solutions 60

3.6.4 Technology Solutions 61

3.6.5 Source materials solutions for businesses 62

3.6.6 Management solutions for business 63

3.6.7 Expand solutions and market development 64

3.6.8.Branding solutions of HVQ 65

3.6.8 Marketing solutions 65

3.3 Recommendations to government 68

3.3.1 Create a healthy competitive environment 68

3.3.2 - Policies to support the development of textile materials 68

3.8 Summarize in Chapter 3 69

IN CONCLUSION 70

LIST OF REFERENCES 72

LIST OF MAP AND CHART

process diagram 1.1: Business Strategy Evaluation Process 16

Figure 2.6.1.3: GDP of Vietnam over years 31

Chart 2.6.1.4: Tower Vietnamese population 33

Diagram 2.6.2.1: Competition 40

Chart 2.7.5.1: Labour quantity and income of Hoang Vinh Quang 62

Chart 2.7.7.2: proportion of wholesale revenue 2012 67

LIST OF TABLE Table 2.5.1: Logo of Hoang Vinh Quang Garment Embroidery PTE 26

Table 2.6.1.3.1: GDP of Vietnam in recent years 32

Table 2.6.1.4.1: Distribution of population divided by sex and sex ratio distributed by age 25

Table 2.6.3: Competitive matrix image of HVQ 41

Table 2.6.4.1: EFE of Hoang Vinh Quang 43

Table 2.7.2:Activity indicators: 52

Table 2.7.5.1: Human Resources 59

Table 2.7.5.2: Statistics of labor and income of Hoang Vinh Quang 61

Table 2.7.7.1: Sales over the Years 65

Table 2.7.7.2 : proportion of wholesale revenue 66

Table 2.8.5: IFE of Hoang Vinh Quang 74

Table 3.3.1.1: The objective of the main targets 79

Table 3.3.2.2: Matrix Space of Hoang Vinh Quang 80

LIST OF APPENDIX

Appendix 1: organization structure Hoang Vinh Quang Pte 81

Appendix 2: Matrix SWOT 82

Appendix 3: Matrix QSPM (Strategy 1+ Strategy 2) 90

Appendix 4: Matrix QSPM (Strategy 2+ Strategy 3) 98

Appendix 5: Cash flow statement 2010 100

Appendix 6: Cash flow statement 2011 103

Appendix 7: cash flow statement 2012 106

Appendix 8: REPORT ON RESULT OF BUSINESS ACTIVITIES 2010 109

Appendix 9: REPORT ON RESULT OF BUSINESS ACTIVITIES 2011 111

Appendix 10: REPORT ON RESULT OF BUSINESS ACTIVITIES 2012 113

Appendix 11: BALANCE SHEET 2010 115

Appendix 12: BALANCE SHEET 2011 121

Appendix 13: Balance sheet 2012 127

LIST OF ABBREVIATIONS CPI: Consumer Price Index

EFE : External Factors Evaluation matrix

FDI : Foreign Direct Investment

GDP : Gross Domestic Product

IFE : Internal Factors Evaluation matrix

NPL : Nonperforming Loan

ODA: Official Development Assistance

SWOT : Strengths – Weaknesses – Opportunities – Threatens

S/O : Strategy to use Opportunities by using strengths

S/T : Strategy to use strengths to overcome Threats

W/O : Strategy to use opportunity to fix Weaknesses

W/T : Minimize weaknesses to avoid Threats

ROA : Return On Assets

ROE : Return On Equity

USD : United States Dollar

VND : Vietnam currency

WTO : World Trade Organization

HVQ: Hoang Vinh Quang

DNTN: Private Enterprise

INTRODUCTION

1 Reasons for Choosing the Topic

Vietnam has become a member of the World Trade Organization (WTO) The pressure of integration is becoming more clear and powerful for industries, services, etc For textiles, this is also an enormous challenge, because most businesses are not ready for the stage of a free global competition

In the context of continuous integration as at present, the competition issue has always been a big question for businesses Improving the competitiveness of a business is very essential It requires full awareness, authentic situational analysis, and the active edge when making timely solutions Hoang Vinh Quang Garment Embroidery PTE is one of the leading enterprises in the textile children‟s clothing The PTE has faced many competitive difficulties from rivals so its business effectiveness in manufacturing is not high From the impact of the internal and

CHILDREN’S CLOTHING BUSINESS OF HOANG VINH QUANG GARMENT EMBROIDERY PTE TILL THE YEAR 2018” is important and really essential

2 Research Targets

On the basis of putting the theory of competition and competitive strategy into practice as well as researching for the operational activities of Hoang Vinh Quang Garment Embroidery, from which to build a complete strategy to improve the company's competitiveness in the market

5 Research Methods

Using these basic research methods:

 Statistical Analysis Method

 Expert Method

 Aggregating and Comparing Data to Analyze Method

 Forecasting Method

6 The Structure of the Assignment

Besides the introduction and conclusion, the assignment includes three chapters:

 Chapter 1: Rationale of Competition and Competitive Strategy

 Chapter 2: The business state of Hoang Vinh Quang Garment Embroidery PTE

 Chapter 3: Business Strategic Planning for Hoang Vinh Quang Garment Embroidery till 2018

7 The Significance of the Research Topic

Textile Industry is identified as a key economic sector of Vietnam during the period of industrialization and modernization To fulfill the task, the whole industry

in general and businesses in particular should have strategies to improve the competitiveness and development in the context of globalization This topic can help Hoang Vinh Quang Garment Embroidery PTE complete and develop business activities and increasingly strengthen its reputation and competitiveness in the domestic market, and also provide a good example for business studies, drawing experiences to build its own solutions

CHAPTER 1: OVERVIEW OF STRATEGIC MANAGEMENT

1.1 The Definition and Concept of Strategy and Strategic Management

1.1.1 Definition

The market economy, the trend of business activity internationalization, and the increasingly fierce competitive environment are gradually pushed back the thinking forward luck in business Instead, success only comes to those who have wisdom, knowing how to apply professional knowledge, knowledge management, strategic planning and management in a proper way Understanding and applying effective strategies in practical production and business activities requires administrators and business owners to know there is a thorough study of traditional and modern concepts of strategic management

1.1.2 The Concept of Strategic Management

The concept of strategy: Strategic management has a lot of materials and is assessed by a variety of different angles In this assignment, our group only mentions about the most common and accessible concepts

1.1.2.1 The Concept of Strategy

According to Fred David, strategy is the means to reach long-term goals Business strategy may include: territorial development, diversification of activities, ownership of goods, product development, market penetration, cost reduction, liquidation and joint ventures

According to Michael Porter, strategy creates a unique and valuable position, including differentiation, the choice of exchange, in order to focus on resources, thus creating strengths for the firm

According to John Thompson, strategy is a combination of resources, the environment, and the values to be achieved

According to William J Glueck, strategy is a plan which is consistent, comprehensive, and coordinated, designed to ensure that the basic objectives of the business will be achieved

Group 6: Strategy is a system of identical and long-term measures and methods that a business tries to put into effect to get clear differences than competitors in order to achieve specific objectives set

1.1.2.2 The Concept of Strategic Management

According to Alfred Chandler, strategic management is the process of determining the basic long-term goals of the business, choosing ways or methods, and allocating of resources necessary to accomplish that those goals

According to John Pearce and Richard B Robinson, strategic management is

a system of decision-making activities, forming and implementing action plans to achieve corporate objectives

Group 6: Strategic management is a systematic process of developing, implementing, evaluating, and controlling strategies in order to achieve business objectives set

1.2 Types of Strategy

There are many types of strategies used in the production process, but generally, there are three most common types of strategies businesses are using today

1.2.1 Corporate Strategy

Corporate strategy is a long-term strategy related to the overall mission, objectives, and the size of the business in order to meet the expectations, and the will of the owner and the senior managers in the organization Long-term organizational strategy, with a panoramic vision, dominates all other strategies, such

as Business Strategies and Functional Strategies

1.2.2 Strategic Business Unit (SBU)

Business Strategy Unit (SBU) is related to how businesses can compete successfully in a particular market, related to the strategic decisions on the selection

of products to meet customer needs, looking for a competitive advantage over competitors, exploiting and creating new opportunities

1.2.3 Functional Strategy

Functional Strategy is an operational strategy related to how an organization will organize, implement, and evaluate to implement its business and corporate strategies Functional strategy addresses the problems of resources and implements specific strategies, such as: Product Strategy, Pricing Strategy, Distribution Strategy, Market Entry Strategy, Technology Strategy, etc

1.3 Practical Business Strategies in Business Activities

In the practical operation of the business, we are able to cover the following strategies:

1.3.1 Product Diversification Strategy

Product Diversification Strategy aims to diversify products in order to satisfy the needs of customers to develop the customer field and increase profits This strategy is often applied in the stage of high-growth business

1.3.2 Strategy to Expand the Distribution Network

Aims to diversify and expand the company's distribution channels to provide customers the most convenience when shopping for products and services This strategy is often applied in the stage of acceleration to compete

1.3.3 Strategy to Strengthen the Market Share

Aims to strengthen the position and image of the company by improving the managerial model, reviewing and completing the control system, and improving the quality of products This strategy is usually applied in a period of prestige crisis

1.3.4 Focus Strategy

Focus Strategy identifies market segments, products and services that the firm has strengths from which to focus all resources of the company to achieve growth and efficiency objectives This strategy determines and establishes the company's own products, distribution, pricing, promotion policies, to achieve business goals

1.3.5 Integrated strategy along the front and rear

Integrated strategy along the front and rear is a activity of the company's acquisition or investment or control increasingly on the input supply (eg raw materials for garment) And the firm of acquisition or invest or increase the control

on distributors / agents for its products

1.4 Strategic Management Process

1.4.1 Strategy Formulation Process

1.4.1.1 Define Vision - Mission - Organizational Goals

Defining vision and mission helps the firm determines what the organization

is, which position it will be in in the future, which position is desired in the future, what the long-term goals are, etc The determination of the mission and objectives has important implications in the formulation of strategies, helping planning to gather resources needed to be collected

1.4.1.2 Collection of Information

Collection of Information is the most important section as well as the first step of the construction process and strategic management, playing a big role determining the success or failure of the strategy

1.4.1.3 Data Collection and Information Processing

The collection and processing of information is the most important requirement in the strategic planning process If the collection of information is incorrectly, it will lead to a wrong strategy When the strategy is put into effect, it will not only be effective but also result to a negative impact on the business operations of the organization To collect information efficiently and to ensure accuracy, it is necessary to limit the scope of the information required for the formulation of strategies to figure out measures to collect information effectively and efficiently The information needed for strategic planning process includes:

Gathering Information about the External Environment: is the

collection of information outside the enterprise, yet affects the organization The external environment information to be collected includes:

The Political Environment in which the organization is currently

working or will work to understand the situation of political institutions, political parties, legal system, political risks, etc

The Economic Environment in which the organization is currently

working or will work to understand the economic situation in the market such as GDP per capita, wage policy, unemployment situation, insurance, etc

The Legal Environment in which the organization is working:

understanding the legal system to consider the appropriate possibility that the organization may accept when trading For example, the regulatory environment in Vietnam, with the policies and laws constantly changing, lacking of consistency, has made a lot of foreign investors reluctant to invest

in Vietnam

The Service and Infrastructure Environment in which the

organization is working to understand the situation of infrastructure, engineering, financial services at the place of business

The Cultural Environment in which the organization is working to

understand the cultural characteristics of the consumers in the market regarding the products and services that the company is offering

The Population Environment in which the organization is working to

have a thorough understanding of the population, age, marital status, ethnicity, thereby determining the size of the market

The Technological Environment in which the organization is

working to find the possibility of technology in the field where the organization is doing or will do its business

The Industrial Environment in which the organization is working:

How do they work? Do they support the business?

The Supplier Environment in which the organization is working to

understand supplier capabilities, reputation, resources, etc

The consumer trends to understand the consumption trends of customers

The competitors, the strategies and SWOT of the main competitors (if can be collected) in order to understand the main competitors, potential competitors, financial capacity, human resources, organizational structure, strengths, weaknesses, opportunities and challenges of the competitors; strategies that rivals will apply

Gathering information about the internal environment: is the collection of information within the enterprise, including:

The Structure and Governance Model of the Organization: to clearly

define the management structure of the business

Business Process and Internal Control: to understand regulations,

business processes and internal controls

Management Information Systems (MIS): to understand the

management information system of the business

Resources in Technology: to understand the technological

capabilities of the enterprise

Human Resources: the qualifications and skills of the staff and

employees of the business

Financial Resources: the financial capacity of the business

Strengths: the strengths of the business

Weaknesses: the weaknesses of the business

Opportunities: business opportunities

Challenges: current and future challenges

The collection of the information above is done in various forms such as reports and feedback from the departments, financial statements, from newspapers, from governmental management agencies, from counselors, from audit firms, from market survey companies, from associations, and from market surveys

1.4.1.4 Data Processing and Strategy Set

From the data collected, strategy makers will take steps to process, analyze, and propose strategies from which to choose one or a few of the most appropriate strategies to put into practice In the process of analyzing the data collected to form

a strategy, the following contents should be done:

1.4.1.5 The Input Stage of the Strategy Formulation Process

1.4.1.5.1 Analysis of the External Environment through the EFE Matrix

Through the External Factor Evaluation Matrix: the goal is to control the external factors and to develop a limited list of opportunities that the external environment can bring about threats of the environment in which the firm should avoid

There are five steps to build External Factor Evaluation Environment:

1 Make lists of factors that play decisive roles in the industries in which the organization is working

2 Classify the levels of importance from 0.0 (not important) to 1.0 (very important)

3 Classify the levels of importance from 1 to 4 for each determinant of success to see how the current strategy of the business responses to these factors In particular, 4 means good, 3 means fair, 2 means average, and 1 means less reactive

4 Evaluate the importance of each variable to determine the number of points

of importance

5 Plus the total score of the importance for each variable to determine the total number of points of importance for the organization The higher the score is, the better the organization responses to external factors

1.4.1.5.2 Competitive Image Matrix

Competitive Image Matrix is a tool to identify the advantages and disadvantages of the organization compared to the main competitors

Matrix evaluates external factors and image matrix can help strategists assess the environment However, these tools need to be accompanied with good intuitive judgment

1.4.1.5.3 Analysis of the Internal Environment through the IFE Matrix

Analysis of the internal factors through the Internal Factor Evaluation Matrix helps to understand the internal resources of the enterprise It assesses the strengths and weaknesses of the organization, such as Models, Organizational Structure and Management, Marketing, Finance, Accounting, Production/Business, Research and Development, Training Resources, Information Systems, etc No business is equally strong or weak in all aspects Internal strengths or weaknesses with the external opportunities or risks and clear mission the basic points to be concerned about when strategies are set

The common method used to analyze the IFE matrix is the analyzing techniques of the following steps:

gap-1 List the critical success factors as identified in the internal control process

2 Assign the level of importance by sorting from 0.0 (not important) to 1.0 (most important) for each factor The total score of these levels of importance must

1.4.2 The Combined Stage

This is a basic yet important stage of the strategy formation process This stage includes all the data collected, analyzed at the input stage, developed further through the establishment of more complex matrices

1.4.2.1 SWOT Matrix

Analysis and Assessment SWOT Matrix identify the Strengths and Weakness, Opportunities, and Threats from the effects of environmental regarding

enterprises in order to offer strategies and solutions to develop strengths, overcome weaknesses, taking advantages, constraints, and control challenges

SO Strategy: to use internal strengths to take advantages and exploit

business opportunities derived from the external environment

WO Strategy: to take advantages of opportunities from the external

environment to limit the weaknesses of the business

WT Strategy: to overcome internal weaknesses to limit the threats

from the external environment

ST Strategy: to take advantages and enhance the internal strength of

the business in order to overcome or reduce the impact of the threats from the external environment

1.4.3 Strategic Choices Stage

In this stage, based on the results analyzed from the input stage, strategists will deploy into practice some optimal strategies There are many methods and tools

to support the stage of strategic evaluation and selection However, Group 6 only mentions about one tool supporting the process of effective strategic selection, which is the QSPM matrix

1.4.3.1 BCG Matrix

BCG Matrix analysis of the overall enterprise products and services determines the market share of the business in relation to the overall growth of the market for products and services, thereby determining position of the products and services of the business in order to contribute to make decisions such as investment restrictions, investment promotions, market withdrawals, etc Specifically:

Dog: Products and services of the business are in a bad state, having

a low rate of market share in a low growth market In this state, wise decisions cannot be able to overcome the weaknesses of the business, or the business without strengths usually withdraws from the market

Cow: Products and services of the business have a high rate of

market share in a low growth market Enterprises can continue to do business, but they must continue to maintain and develop strengths

Question Mark: Products and services of the business have a low

rate of market share in a high growth market Businesses need to overcome the weaknesses, creating strengths to develop the market share

Star: Products and services of the business are in a great state,

having a high rate of market share in a high growth market Businesses need

to promote investment to increase business effectiveness

1.4.3.2 SPACE Matrix

Space Matrix is a useful tool to identify the determinants of the strategic position of the organization These factors include:

 Financial Strengths (FS)

 Competitive Advantage (CA)

 Environmental Stability (ES)

 Industry Strength (IS)

The Building Process of Space Matrix includes the following steps:

1 Choose variables to represent FS, CA, ES, and IS

2 Determine the value of FS and CA variables, whereas 1 means the worst and 6 means the best

3 Determine the value of ES and IS variables, whereas -1 means the best and -6 means the worst

4 Calculate the average score for FS, CA, ES, and IS

5 Plus the points on the horizontal axis and mark the results, plus the points

on the vertical axis and check the results

6 Draw a vector from the origin to these points

7 State the result is Aggressive, Defensive, Competitive, or Conservative Strategy

Aggressive Strategy: take advantage of strengths and opportunities,

overcome weaknesses and challenges, use the maximum of resources to promote growth

Defensive Strategy: focus and specialize resources to overcome

weaknesses, limit the impact of challenges

Competitive Strategy: promote growth of products and services

aiming to penetrate the market

Conservative Strategy: cautious growth, focus sufficient resources

to maintain proper growth

1.4.3.3 QSPM Matrix

QSPM Matrix is a tool of evaluating and analyzing the information that strategists have completed in the processes of EFE, IFE, SWOT, BCG matrices to review and determine the optimal strategy to deploy into practice

QSPM Matrix is built based on the following six basic steps:

1 List the strengths, weaknesses, opportunities, and challenges from the matrix, analyzing the internal and external factors

2 Classify and evaluate each element regarding to the matrix, analyzing the internal and external factors

3 Analyze and evaluate matrices set such as EFE, IFE, SWOT, BCG matrices

4 Establish the total score of attraction for each factor by the ascending method, on a rating scale from 1 to 4 l is not attractive, 2 is somewhat attractive, 3

is quite attractive, 4 is very attractive

5 Establish the total score of attraction according to rows by multiplying the number of points in step 2 with the score of AS fourth step

6 Select strategies on the basis of the higher the score of attraction is, the more the strategy is prioritized

In short, after having built up some basic strategies based on the analysis results from QSPM Matrix, the most appropriate will be selected

1.4.4 Strategic Implementation Process

Strategic Implementation Process is a very important deployment step in the whole process of strategic management Many companies set up good strategies, but the deployment is slow, time-consuming, inefficient, or even not able to be deployed Therefore, to have the Strategic Implementation Process well-organized and effective, organizations should perform the following tasks:

 Establish Annual Goals: from the overall strategy, organizations need to identify specific objectives to be achieved over the years

 Clearly and Thoroughly Disseminate Strategies to every level of management and staff, who directly implement the tasks of strategies The properly the strategy is implemented, the effectively the strategic implementation is put into effect

 Strategic Implementation Policies: have a clear policy in the distribution of resources in the strategic implementation development, clearly disseminating policies to use human resources, financial resources, technological resources to all levels, and resolutely implementing correctly

as identified

 Managing Conflict and Change: proactively plan and manage changes during the strategic implementation process The conflict between classes during the process of planning implementation needs to be promptly and decisively addressed

1.4.5 Strategic Assessment

Strategic assessment is conducted regularly and continuously during the process of strategic implementation in order to timely detect limitations, required and adjusted changes to take timely actions Strategic assessment can be performed through the following ways:

 Reviewing, evaluating and adjusting strategies

 Developing strategic evaluation information

 Planning for unexpected situations

 Using computer skills to evaluate strategies

 Audit and review of planned strategic objectives

 Considering the reaction of competitors, researching the ability to adjust the strategies of competitors

Process diagram 1.1: Business Strategy Evaluation Process

Activity One:

Considering the Basic Components of the Strategy IFE Matrix preparation

has been adjusted

EFE Matrix preparation has been adjusted IFE existing contrast Matrix comparison has been adjusted

No

Activity Three:

Adjusted activities

Activity Two:

Calculate the implementation process of the organization

Compare the actual and planned process

Do major differences occur?

No

Continue to implement following the

current direction

Yes

CHAPTER 2: BUSINESS SITUATION OF HOANG VINH QUANG

GARMENT PRIVATE ENTERPRISES

2.1 Overview

Name of company : HOANG VINH QUANG PRIVATE ENTERPRISES

International name : HOANG VINH QUANG Company

2.1.1 Formation and development process

The company has formed more than 10 years At first it was small garment workshop with rudimentary tools and machines and now Hoang Vinh Quang becomes a leading company in the field of children fashion with modern equipment Hoang Vinh Quang Company has been a trusted brand of many domestic and international customers

2.1.1.1 Formation process

Forerunner of Hoang Vinh Quang Company is garment workshop for dealers

at An Dong Trade Service Center in the 1990s After economy open and integrate, supermarket shopping cultural is formed through Cong Quynh market is established This is the first supermarket with popular price and quality products Hoang Vinh Quang is boned as a professional supplier of children fashion for the young market

2.1.1.2 Development process

In 2001, Hoang Vinh Quang is approved to be formed at 116 A Pham Phu Thu, Ward 3, District 6, HCMC At the first time, the company has 10 workers with rudimental machines and work manually About embroidering, the company hired another partner to do it according to their orders

In 2002, the company opened showroom at B24- B25 at An Dong Plaza to introduce products to customers and distribute directly by wholesale channel (traditional channel)

In 2003, Hoang Vinh Quang invested industrial embroidery equipment with 1 system of 7 needles 10 heads and 1 system of 9 needle 20 heads, meet sales requirement of children garment

Plaza to expand product introduction

In 2004, Hoang Vinh Quang expanded production capacity and modern sewing equipment is used to provide efficiency and reduce cost, improve competitiveness

In 2005, the company opened garment factory by investing of 3 machines of

9 needles 20 heads, total 5 machines operate 24/24 with 2 shifts

In 2007, the company continued to open more showrooms to improve sales

So far, Hoang Vinh Quang has closed production system to maximize profits and reduce cost and they have 3 showrooms at An Dong, professional workshop and technical room, build more satellite for processing to meet sales demand Although this is private enterprise, the company has been developed in modern model and gradually stands on children garment market in domestic market with strong competition

2.1.2 Main function and task

2.1.2.1 Function

Hoang Vinh Quang Company have main function is produce and sell garment such as: T-short for little girl, pant for little boy, jean paint for kid, jean T-shirt… and especially key products are Men‟shirt and Caro shirt for little boy

Business activity is conducted:

-Domestic production: the company does whole process from the beginning

to production, to consumption to meet domestic demand

2.1.2.2 Task, right of the company

*Task: in the current period, there are major tasks as below:

- To ensure effective business and fulfill obligations with Government

- Product diversification, promote development of key products, expand production capacity on the ability of business and market needs, continuously improve product quality and quality management systems

-Develop Hoang Vinh Quang into a children fashion garment enterprises of great stature in the country and in the region

- Improve domestic market share, stable and expand export markets

- Protect business, environment, preserve social order and safety in accordance with the law and the State

- Ensure stable jobs, continuous improvement and improve working conditions, improve employee‟s lives in the enterprise Implement rights for employees in accordance with law

- Comply with the laws and policies of the Government such as: audit, obligation to pay taxes…

 The company has right to use, capital management, land and other resources But this must be ensured that they are efficiently used, conserved and developed

 Enterprises have right to have office, branch in or out country according to Vinatex The company may also invest in joint ventures, associate with domestic and foreign institutions

 The company have right to expand business if they are consistent with objectives and tasks of the business

2.1.3 Organizational structure

2.1.3.1 Organizational structure of management

Management model of Hoang Vinh Quang is held on direct function, with two levels of management are enterprise and factory Functional departments which not make decision directly to under sections, they have mainly functioned as advisor for BOM (see the chart in next page)

*Management department function:

Board of management: is the most responsible agency and the

highest authority in the company

Director: is the highest leader of the company The director have

responsible of overall management of all activities of the functional departments, responsible to the Government, development strategy in short-term and long-term

Vice director: assistant to the director, is authorized on behalf of

director when he/she are absent, responsible to the director on his/her decisions

Head of sections: There are 3 heads: (1) head of environment field,

safety, health and admin management; (2) head of technical; (3) head of local factories, warehouses and training

*Functional department:

Planning department: to advise BOM to manage planning, import and

export, supply materials for production, business organizations (FOB)

Trading department: organize advertising, negotiate on contracts with

customers, order with planning, hold network on garment marketing and other goods in the domestic and overseas market in accordance with company rules in order to meet business requirements

Technical department: to advise BOM to manage technology, mechanical

and electrical engineering

Financial department: to advise BOM about financial issues

QA department: to assist on quality control system, maintain and ensure

the system run effectively

Logistic: to manage import and export raw materials, semi-products and

finished products, to manage transportation to sales channels such as shop, supermarket…

2.1.3.2 Structure of production department

Hoang Vinh Quang is a strong company on manufacturing so the factory is structured and arranged various functions and tasks:

Electro mechanic section: have function to supply power, maintenance,

repair equipment, manufacture tools, new equipment and other issues related to the production process and other activities of company

Embroidery – printing- washing - ironing section: do steps: embroidery,

printing, washing and implementing activities woven labels, product labels

Sewing section and finished products: manufacturing and product

Girl fashion

In that, boy T-shirts and girl & boy T-shirt, girl kaki T-shirt, jean pants are key products, providing a large of revenue yearly Products of Hoang Vinh Quang are well-known of quality, various designs, especially men's shirts products for a long time Each product has more label types, representing quality, in accordance with predilection for consumers

2.2.2 Production process

To create a finished product, there are many different steps in a vertical line

in combination with fish bone Every stage, products are tested If the step does not meet the requirements, the products will not be taken further to the next stage The advantage of this manufacturing technology is continuous, highly specialized, bringing high productivity, product quality assurance But if production is not well organized, it will lead to congestion in the line, causing delays in production

2.3 Size of company

Production scale of company in recent years has been constantly expanded as above described We can withdraw some comments about the scale of production of Hoang Vinh Quang in the last four years (from 2008 to 2012) as follows:

In 2010, compared to 2009, the production size increased by 25.97% (corresponding to an increase of 7.360 million): this is the global financial crisis but the net growth value increased despite the crisis

In 2011, compared to 2010, increased 22.63% (equivalent to 8.034 million)

In 2012 compared to 2011, increased 21.88% (eq to 7.614 million)

On the number of products: increased in the last four years

In 2010, increased 12.7% compared to 2009 (corresponding to an increase of 1,293,266 units)

In 2011 increased by 14.18% compared with 2010 (eq to 1,626,785 units respectively)

In 2012 increased 15.33% compared to 2011 (equivalent by 1.1589177

units)

we also found that the increase in the number of products of following year is higher than the previous year, but the equivalent increase of value is reduced This shows that although the product quality has improved but this is not proper, and has

no high-value products Also showed that the market size is not really large, the ability of dominating market is not high In the next time, the company should have effective measures to further improve product quality, actively expand market both domestic and oversea, to create the position of enterprises in the market

2.4 Enterprise Market

The main market of the enterprise is the domestic market of Vietnam The enterprise is the strategic business partner of Saigon Coop in the supply of children's clothing products nationally (according to the expansion of Coop Mart) Until now, all the supermarkets in Saigon Co-op system located in most of the provinces and cities such as Hanoi, Hai Phong, Quang Binh and Thanh Hoa are offering products of the company Besides, Hoang Vinh Quang also provides for fashion shops and traditional markets in the provinces and cities: Ho Chi Minh City, Hanoi, Can Tho, Da Nang, Vinh, Hai Phong, Hue, Binh Duong, Long An, Tien Giang, Dong Thap, Kien Giang, An Giang, Ca Mau, Soc Trang, Vinh Long, Tay Ninh, Khanh Hoa, Gia Lai, Kon Tum, Quang Nam, Quang Ngai, Thai Binh, Bac Ninh, etc on the basis of franchise and business operation The enterprise invests on the display and decoration of fashion shop, whereas its customers concentrate on sales

2.5.Hoang Vinh Quang Brand

Hoang Vinh Quang Garment Embroidery PTE products called Hoang Vinh Quang Children‟s Fashion (Hoang Vinh Quang Three-Doll Brand) Over the past 11

years, the company has been successful with girl khaki pants, boy khaki pants, shirts, T-shirts being mentioned very much in the minds of consumers

Table 2.5.1: Logo of Hoang Vinh Quang Garment Embroidery PTE

Hoang Vinh Quang Children‟s Fashion is suitable for babies aged from 3 months to 14 years wearing at home or on the street Hoang Vinh Quang is trying to become a strong and sustainable brand in the field of children's fashion in the domestic market

For the successful production of high quality consumer but has not been widely known because companies do not have policies to build a strong brand in the market by selling companies primarily through wholesale prices (through agents) not build retail system for private enterprises in order to increase market competitiveness for the brand of the company

HVQ produces have high quality but not been widely known because the company does not have policies to build a strong brand in the market since it primarily sells products through wholesale price (through agents), not yet built a retail system for private enterprises in order to increase market competitiveness for the brand of the company

2.6 Analysis of external environment factors impact on business activities

2.6.1 Macro environment

2.6.1.1 Government policy on textile

the Minister assigned the Ministry of Finance to research, propose to reduce VAT from 10% to 5% for import cotton, extend time of pay VAT for imported equipment and entrust for export, reduce 30% corporate income tax for textile enterprises, allow to extend personal income tax payment for the remaining salary over to the following year

- March 10, 2008, the Minister issued Decision No 36/2008/QĐ-TTg approved on Development strategy on Vietnamese textile and garment industry to year 2015, orient to 2020 Implementation of the Decision of the Minister, the Ministry of Trade and Industry is implementing three programs include: program of textiles production for export till 2015, program of cotton development, program of human resources training for textile industry The goal of program is set till 2015, the area of cotton plants reached 30,000 ha and continues to grow to more than 2.5

times (76.000ha) in 2020 The implementation of this program will gradually help the textile enterprises can proactively domestic materials

- Considering textile industry and petro industry as key export of the economy

- On the Government side, there are still many factors detrimental to the development of the domestic textile market as import policies of origin has not been done; tax policies do not have the effect of encouraging enough strongly for usage

of domestic raw materials therefore not facilitate the development of production inputs for textile products; poor infrastructure limit the ability to expand the market and the last one is that import management policies also loosely lasted status of unfair competition between contraband goods more and more difficult for businesses

Support policies, investment incentives and development of textile industry create conditions for business growth: capital accumulation and re-investment to expand production and reduce import tariffs, use import quotas to protect domestic production These policies have supported many businesses When opening, businesses will have to deal with issue of massive imports in the domestic market led to competition more intense on local market by products with various designs, high quality and cheaper price This is the pressure to HVQ

Because Hoang Vinh Quang has main market is domestic market local with only around 2% -3%, the main factors are influence the Government policy, of textile industry association

2.6.1.2 Legal environment

- The period from 1990 to 2000, the legal environment constantly change, admin procedures in the field of business, investment is still straw hinders the operation of the business

- Vietnamese law has much improved since opening economic period, trend

to clear and compatible with international law

- Status of discrimination between different business types, economic management under administrative order was gradually dismantled Company Law

2005 and Investment Law 2005 is a breakthrough in the equality and autonomy in the Company's business

- Accession to several international conventions on protection of intellectual property rights, enforcement of international standards show that the determination

of Vietnam Government in the legal integration in the upcoming period

- According to the World Bank, the trend from now to 2018, the legal environment will complete, ventilation, stability and create more favorable conditions for businesses and Hoang Vinh Quang

2.6.1.3 Political – economic environment

The economic grows over the past 10 years Gross domestic product (GDP)

in 2012 is 5.03% This is the good growth in the context of the world economic crisis is affecting directly the Vietnamese economy

Economic development speed increase leads personal income improve gradually This leads to necessity of social and economic life is increasing The demand creates business opportunities for many industries; many companies throughout the country, including consumer demand increased markedly, especially garments, lead to larger domestic market The high demand for goods is an opportunity for businesses to improve productivity, product launch in the market

Tab 2.6.1.3.1: GDP of Vietnam in recent years

Figure 2.6.1.3: GDP of Vietnam over years

Appreciate the efforts of the Government of Vietnam in curbing inflation, stabilizing macro economy, the Organization of economic cooperation and development (OECD) forecast that economic growth of Vietnam 2011-2015 would

be 7.1%, the highest average growth rate of ASEAN International Monetary Fund (IMF) has also forecast the GDP growth of Vietnam from 2011 to 2015 is quite high, respectively 5.75%, 6.27%, 6.84%, 7.17%, and 7.47 %; inflation average in

2012 is 12.13%, and the period 2013-2015 at 5.25% - 6% / year

According to The Economist (UK), economic growth of Vietnam in the period 2011 - 2018 is about 7.2% / year due to consumption, investment and export growth The CPI is expected to average 7.8% / year

The trend of diversification of ownership and enterprise equitation is to attract capital from domestic and foreign investors On the other hand, we mention the trend of international economic integration as joining AFTA, APEC, WTO that will get many opportunities and challenges for Vietnam's garment International economic integration may appear more competitors in the market, especially the big fashion houses in the world, so that domestic enterprises should pay attention to build their own strategies to deal with this situation In addition, the integration also gives us opportunity to participate in the international market now that tariffs were reduced

Perspective the socio-economic situation from 2013 to 2020, as forecast by the World Bank can be generalized as follows:

- Security and political system of Vietnam will continue to stabilize in the period 2013 – 2020

- There are many opportunities new challenges, the process of regional integration and the world in the roadway to implement of bilateral agreements such

as the agreement on Trade PPT, etc… create opportunities and challenges for Hoang Vinh Quang in the future

2.6.1.4 Geographical situation of the population

Textile industry is influenced by elements of the population in a relatively large geographical area because the geographic situation population is a factor in labor supply source for the textile business and it is a factor in the decision scale garment needs

Table 2.6.1.4.1: Distribution of population divided by sex and sex ratio distributed by age (1/4/2011)

Chart 2.6.1.4 Tower Vietnamese population

The results also showed that Vietnam is in the period of "golden population structure" - the period in which the working-age population is nearly double time the side population (51.1% of the population) This is the consumer group that textile enterprises have not paid formally adequate attention And this is the source

of sizable labor force for the textile business However, the quality of the labor force in textiles also did not meet the needs of the textile industry because of qualified labor force lack

With the percentage of children from 0 to 14 years accounted for nearly 40%

of the nearly 90 million people in Vietnam, market segment for children's fashion really is "fertile ground" for domestic enterprises (companies) of textile Among many world famous fashion brands for children existing in Vietnam, "Made in Vietnam" has gradually won the hearts of the parents

Hoàng Vinh Quang private textile enterprise produces and distributes fashion clothes for children from 3 months to 15 years old, so base on the age population statistics of our country, we can say that our current domestic market in next years

is very potential and the competition of textile companies for the market share of children at this age period is very hard

2.6.1.5 The development of science and technology

For the textile industry, the development of science and technology has created the opportunities and risks for businesses: investment costs increase, the ability to manage not catching up, higher hedging costs

The State have preferential tax policies to encourage the newcomer enterprises for investment of modern equipment and technology to expand production, increase ability of competitiveness, create brand prestige in business market

Companies can reach higher level after applying innovation in technology, equipment and absorbing management experience However, this is the rapid changes in technology today which makes Hoàng Vinh Quang company difficult Since limited funding, company cannot invest more, which has limited competition capacity to supply products to the market To be competitive, companies must have the right investment strategy and must constantly research new technologies in time and must avoid import obsolete and less competitive technology

2.6.1.6 The natural environment

Customers are very interested in the product produced from raw materials not only safe but also natural and produced in the plant with environmental protection commitment In fact, customers always ask for non-toxic products

climatic and geographical areas require businesses to provide textile products for adapting to the seasons of the year In Vietnam, the climate difference is quite clear between the Northern, Central and Southern regions

In recent years, global weather has abnormally changed, affecting to the supply of raw materials such as cotton, fiber Shopping needs of fashion products of consumer‟s changes for seasons So climate change is a challenge for businesses in meeting the needs of consumers, is also an opportunity for companies to develop new products to increase sales and profits

Thus, the nature is associated with human life Textile enterprises need to be sensitive to the weather changes and other natural elements to serve the needs of customers for suitable products, seasonal and regional services

2.6.2 The Micro Environment

2.6.2.1 Pressure of competition

* For domestic competitors

HVQ produces very wide range of products, in which fashionable products for boys and girls e.g shirts, t-shirts, T-Jean Pants Kaki are the main force product

of the company The direct competitors of HVQ may include: YF (Da Gia Company Limited), Sanding (SAIGON 2 FASHION TRADING-Sai Gon Garment Company 2) These are the two companies with a good market share, a team of professional designers, process & closed embroidery, strong financial resources and experience in the field of embroidery fashion garment children for many years

Besides, the export market in recent few years has been very difficult due to the difficulties of the world market, leading to the fact that strong export business has focused on exploiting the domestic market with the strong strategy based on the experience of manufacturing exports to the difficult credit markets, so these firms

have strengths in launching products with good design and high quality at reasonable prices, which satisfies consumer needs (Public Thanh Cong textile company, Thang Long Garment Co , )

Official Imports and unofficial (smuggled) products from various sources in recent times with many new products of equivalent quality of HVQ but cheaper products have attracted the attention of customers It is the product imported from China with dominant species, various designs at affordable prices suitable for consumers of low-and middle-income; however the product quality products is fable, so there are not so many customers faithful to these kinds of product Korea's textile and garment with various types and designs along with good marketing strategy has attracted to a large number of customers shopping for their children

Venture business, 100% foreign capital business have many advantages with famous brands such as Fashion Gap, Pepco, Circo, Faded Glory, Polo, Next, Guess, Old Navy, Zaza, as well as the large capital investment, modern machinery, good workers, good commodity markets in countries not restricted by quotas

In addition, there are a number of products from the private designer manufacture which also attract certain customers

These sources above are really the challenges for HVQ, and also the driving force for HVQ to affirm itself in the domestic market

* For foreign competitors

The competitiveness of textiles from China, India, Korea, Bangladesh, ASEAN countries in the domestic market is very fierce It mentions especially China which is the factory of the world, and other countries where labor cost is cheap as Myanmar, Cambodia, Bangladesh, India, that has attracted a lot of textile production groups, the world's leading fashion companies investing and taking advantages on human resources as well as on the cheap tax policies of the developing countries to get the best competitive price on the market to Vietnam as well as other markets Multinational corporations which take advantage not only on cheap human resources, low tariffs, investment incentives but also on ancillary industry support such as: cotton, raw materials, etc good infrastructure, a team of skilled technical personnel, the ability to master marketing, management experience have launched products to market with high quality to satisfy customer needs

2.6.2.2 Customer pressure

On the consumer side, they are totally free to choose the appropriate goods and services from many different providers, their reaction will be very strong pressure force for business to comply with competition law economy This is also the motivation to maintain continuous innovation of enterprises

The fashion needs of children on the market grow rich and diverse Customer needs always alters If the manufacturer does not meet customer needs, they will quickly leave and find another provider better At the present, many companies

have the ability to meet the needs of the market with many different types of products, fabrics, diverse style, but the competitive price Customers have the ability to choose the products differently from different companies, which puts pressure on the company Customers require HVQ to offer products with the best quality fabrics, raw materials at low prices that have created many difficulties for HVQ in market to keep the market share as well as to meet the increasing demands

of consumers

2.6.2.3 Pressure of suppliers

Materials are important inputs in the production, so that the relationship between the company and suppliers directly affect the operations of the company Almost supply of raw materials and accessories now mostly imported, accounted for a very large proportion, over 75% of the cost of foreign imports, the rest is from domestics However, the long-term trade relations plus prestige in the payment and amount of raw material that the enterprise has built also provides confidence to the traditional suppliers, thereby reducing the pressure on raw materials Moreover, the source of raw materials from the domestic country and from abroad are growing and expanding although at not great speed But in a general way, the pressure from suppliers is also significant, and if we set the scale of 10 for maximum pressure, the pressure is put on the company at figure 6.8

Almost HVQ depends on the suppliers of both domestic and abroad When the market changes, it will affect production activities such as: supply price increases, supply schedule delays, poor quality, or the action that the company imports more material for stock to reduce prices, will affect production and business activities

2.6.2.4 Pressure from substitute products

Garment is a special commodity, it is both essential and luxury goods So substitute products is very difficult, referring to replacing capacity, it would probably be the use of money and time on products other than textile products

So the pressure from substitute products for the company is low, counting on the 10-point scale for the degree of substitution, the substitute product probability is about 3 at the largest

2.6.2.5 New intrusion pressure of potential competition

Company's potential competitors are both difficult and easy to identify The potential rivals join the textile market depending on many factors, in which the important factor is the attractiveness of the industry:

- Textile sectors not very big, level entrants into textile industries not strict

- Profits in the textile industry is quite big if the production business is in accordance with the definitive sell business and have a good brand

- Demands for apparel goods increases in both number and quality, so that profit also increases by the fastidious customers

- The process of creating brand and reputation development base on the process that customers experienced the products in a certain time

- New companies joining the industry is difficult to find customers on the market with numerous manufacturer brands and reputation

Thus it can be said that the pressure from potential competitors at 5 points if the scale on the ability to compete with competitors potential at maximum of 10 points

2.6.2.6 Pressure from customers

- For the first level agent of HVQ company, the pressure of price, payment methods are very important So about 60% of agents are traditional agents, others are not regular gents of the company

- The final consumers of products by HVQ company are more difficult because there are more and more choices for customers when customers can find many suppliers of textile products from both domestics and abroad and at both quality and price Subjective pressure assessment of customers to products of the company is 8/10 points

From the analysis of influencing factors of the industry, we can generalize the situation of enterprises through the following diagram

Diagram 2.6.2.1: Pressure of competition

From this strategy portrait table, we can see that HVG Private Embroidery company has many advantages but also many difficulties affecting the Company's market development

2.6.3 Competitive matrix image of HVQ

Competitive image matrix is built by the expert method, based on awareness

of the group and through consultation of leading experts and BOM of HVG Private Embroidery company

Competitive image matrix of HVQ Private Embroidery company is as shown:

Table 2.6.3: Competitive matrix image of HVQ

No Factors Impor

Potential competitors

Substitute products

Suppliers Customers

Current

Classificat ion

Important point

Classificat ion

Important point

Classificat ion

Important point

Human factors and product quality play a very important role in the production and business activities and in creating the company's reputation Therefore, these two factors have the highest impact (0.13 points) Next factor is the ability of competition on price (0.12 points) The competitive prices will attract customers and will help determine the number of orders Besides, with a closed production process (0.11 points) from spinning, weaving, dyeing to embroidering, HVQ can actively control the outputs of product and increase competitive advantage The remaining factors such as financial status, branding, market share,

key products and distribution channels with the importance diminishing in the order from 0.10 points to 0.06 points

Base on the competitive image matrix, we can rank the competitors are as following:

Saigon Garment Company (Sanding) is ranked first (with a total important score of 3.51), then followed by YF (3.32 points) and finally is HVQ (2.94 points),

it shows that Sanding and YF are the two strong competitors of HVQ

Therefore, when building the company strategy, the company must pay attention to restrict the powerfulness of YF and Sanding, promote to exploit strengths of the company (brand reputation, product quality, distribution network, etc.), to overcome his weaknesses (human resources training, research design, marketing, etc.) and defensive strategy to Sanding and YF

2.6.4 External factor evaluating matrix (EFE)

It can be said that the operation of HVQ since its establishment and in the next trend will be affected and influenced by many factors Evaluating the impact and HVQ response to the external environment will make the strategic planning more accurate

Table 2.6.4.1: EFE of Hoang Vinh Quang

Importance Classification

Total important points

1

The percentage of children aged from 0 to

14 years old accounted for 36% of nearly 90

million people This is a huge market that

the company can exploit

2

Children‟s fashion domestic market aged

from 1 to 14 years old is not concerned

because of the cost of investing in chains,

high cost, and competitive difficulties As a

result, most apparel companies focus on

export markets with good price and high

profit

3

The campaign “Vietnamese people prioritize

using made-in-Vietnam goods” launched in

recent years by Vietnam customers has

created more opportunities for the potential

development of the domestic textile market

4

Recently, Chinese-made children‟s clothes

were found to have toxic substances for skin,

and toxic coloring, leading to the boycotts of

customers and shrinking market share down

Hence, it facilitates opportunities for goods

with clear origin and materials to consumers

Children‟s clothes are special products and

fastidious market so it is an opportunity for

prestigious companies such as Hoang Vinh

Quang to expand the market as well as to

build up the Vietnamese brand to consumers

5

Policy support: Government supports on

regional planning developing raw material

and textile industry to provide more help to

6

Vietnam joined the WTO to access to the

raw materials at competitive prices through

tax breaks and access to the strength of the

economic auxiliary industries for apparel

such as Bangladesh, India, China, etc., from

which it is more active for the production

plan in accordance with the enterprise

market

1

The Policy Environment is not favorable

The legal documents of Vietnam are in the

process of completion

2

FDI Enterprises enjoy many preferential

policies for investment leading to unfair

competition with domestic firms (transfer

pricing policies, loss declaration, etc.)

3

Strong competition from rivalry nationally

and internationally occurs and it is fiercer

since Vietnam has become a member of

WTO and the market is in the context of

globalization

4 The design capacity of domestic firms in the

6

Increasing piracy and counterfeiting affect

the brand reputation and market share of the

company

7

Sources of raw materials, domestic

production technology cannot meet the

requirements of the industry and of the

customers

8 Human Resources does not meet the

9

Xenophile psychology, cheap preference,

and the prejudice "run down" Vietnam's

poor design of many consumers in the

country

1

Garment textile enterprises, which faced to

exported difficulties, has focused more to

domestic market so it will pressurize more

competitions to Hoang Vinh Quang

Following Fred David „s view in his "Outline of strategic management", the translation of publisher statistics 1999, the enterprise's ability to react to external