Success factors influencing vietnams textile garment export capabilities to japan

as Japan has been just the third largest export market for Vietnam’s textile and garment.. Relevant recommendations for Vietnamese textile and garment companies to maintain sustainable e

SUCCESS FACTORS INFLUENCING VIETNAM’S TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Majoring in International Business

SUCCESS FACTORS INFLUENCING VIETNAM’S TEXTILE & GARMENT EXPORT CAPABILITIES TO JAPAN

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Acknowledgment

First and foremost, I would like to express my deepest thanks to my advisor – Dr

Ho Thi Bich Van for her valuable suggestions and dedicated instructions during the time that I conducted the thesis New knowledge and ideas gained from my advisor play a crucial part in the thesis as well as in my future life Especially in the final stage, her tutorials and recommendations helped me a lot to solve difficulties in statistical analysis Without my advisor’s guidance and support, this thesis will not be completed

Secondly, I would like to send my sincere appreciation to all professors and lecturers in Master course – International University for teaching and training me during 2 years which provided to me a lot of precious knowledge

I am indebted to my family for strong support during the last two years Last but not least, I also want to thank all people who were willing to participate in my survey

I am grateful to their valuable suggestions that I can use in writing in this thesis

International University – Vietnam National University Ho Chi Minh City

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Table of content

Acknowledgment i

Plagiarism statements ii

Copyright statement iii

List of tables vi

List of figures vii

Abstract viii

Chapter one – Introduction 1

1.1 Background 1

1.2 Rationale for the study 11

1.3 Research questions 11

1.4 Research objectives 12

1.5 Research scope 12

Chapter two - Overview of garment industry 13

2.1 Global textile and garment industry 13

2.2 Overview of textile and garment sector in Vietnam 14

2.3 Overview of Japan’s textile and garment market 18

Chapter Three - Literature review 22

3.1 Mercantilist theory 22

3.2 The comparative advantage theory 23

3.3 Michel Porter’s (1980) on Competitive Advantages 23

3.4 The commercialization theory based on the "differentiated product" 25

Chapter Four - Research Methodology 27

4.1 Previous studies 27

4.2 Research model 29

4.3 Research conceptual framework 29

4.3.1 Pricing 30

4.3.2 Product quality 31

4.3.3 Design capabilities 32

4.3.4 Time delivery and Material sources 34

4.3.5 C/O requirement 35

4.3.6 Business partners 36

4.4 Research Design 37

4.4.1 Qualitative study 37

4.4.2 Quantitative study 38

4.4.3 Questionnaire design 38

4.4.4 Sampling Method 39

4.4.5 Pilot test 39

4.4.6 Data collection 40

4.4.7 Data analysis 41

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Chapter Five - Data Analysis 42

5.1 Frequencies Analysis 42

5.2 Descriptive Statistics 45

5.3 Reliability Test 46

5.4 Factor Analysis 52

5.5 Correlation Testing 56

5.6 Regression Analysis 57

5.7 Revision of Hypotheses and Model 60

5.8 One-way ANOVA 61

Chapter six - Conclusions and Recommendations 64

6.1 Discussions 64

6.2 Recommendations 65

6.2.1 For Government 65

6.2.2 For Vietnam textile and Apparel Association (VITAS) 72

6.2.3 For enterprise 73

6.3 Limitation and recommendation for further research 76

6.4 Conclusion 77

REFERENCES 78

APPENDIX A 81

APPENDIX B 85

APPENDIX C 89

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List of Tables

Table 5.1 : Company type .35

Table 5.2 : Company size .36

Table 5.3 : Export market .36

Table 5.4 : Working department .37

Table 5.5: Descriptive Statistics .38

Table 5.6 : Pricing reliability .39

Table 5.7 : Quality reliability .40

Table 5.8 : Design reliability 1 .41

Table 5.9 : Design reliability 2 .41

Table 5.10 : Delivery and material reliability .42

Table 5.11 : CO reliability .42

Table 5.12 : Business partner reliability .43

Table 5.13 : Export capacity reliability 44

Table 5.14: Independent variables 45

Table 5.15: Dependent variables 48

Table 5.16 : Correlation testing .49

Table 5.17: Regression Analysis 50

Table 5.18: Results of hypotheses testing .52

Table 5.19: One-way ANOVA 54

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List of Figures

Figure 2.1: Vietnamese Textile and Garment Export Revenue during 2008-2013 .8

Figure 3.1: Three Generic Strategies .18

Figure 4.1: Research Model .23

Figure 5.1: Final model result of the research 54

as Japan has been just the third largest export market for Vietnam’s textile and garment Therefore, this thesis is an attempt to determine factors which can affect export capabilities in order to recommend solutions to improve the competitiveness of Vietnamese textile and garment export to Japan

Firstly, based on the literature review, the research identifies 6 dimensions which can effects on export capabilities Next, the hypotheses are developed to test quantitatively The primary data if this study is collected by the survey using a questionnaire developed based on literature review and verified by pilot test with experts’ comments and recommendations The survey is conducted with the sample size of 319 and analyzed by using SPSS software with frequency analysis, descriptive statistic, reliability test, factor analysis, correlation testing, regression analysis and

one-way ANOVA

Based on the findings, products quality is the most important factor whereas pricing is the least important This can be explained by the unique characteristics of Japanese market Relevant recommendations for Vietnamese textile and garment companies to maintain sustainable exports to Japanese market are made in the final chapter

Currently, the textile and garment industry is holding an important role in national economy with nearly 6000 companies, attracted nearly 2.5 million workers Total export turnover of textile fibers and garment in 2013 reached USD 20.096 billion, up 18% compared with 2012, revenue reach to USD 20 billion, accounting for 15% of GDP and become the leading sector of exports, accounting for over 18% of total exports, bringing Vietnam into the top 5 largest textile exporter in the world Until now, export textile and garment products of Vietnam was in 180 countries and territories around the world, conquered the difficult markets like the U.S., Europe, Japan, South Korea In which the best difficult import market is Japanese market

Japan is a developing economy country, and the third largest export markets of Vietnam about textiles and garment However, in recent years, Japan is a saturated market and the relative complexity about textile and garment products The difficulties of economy has led to Japanese consumers are increasingly more careful with their spending However, this market continues further development although influenced by the global financial crisis Japanese consumers and customers are very high conscious and demand for the design and quality issue They are interested in every detail of the product The

is an unsolved problem

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For garment enterprises in specific and Vietnam garment industry in general To continue strengthen exporting and occupy a large slice of the market share in Japan, Vietnam garment enterprises and Vietnam garment industry need to identify success factors influencing Vietnam garment exports to Japan That is also the topic author choose for author’s research This topic is significantly important to both theory and practice in the field of author’s work

1.2 Rationale for the study

With a large potential market and regulatory and economic environment more increasingly favorable, Vietnamese enterprises can find export opportunities to the Japanese market, contributing to a comprehensive economic cooperation between two countries However, the strict requirements about price, design and quality products and increasingly fierce competition from other still and will be a big challenge for textile enterprises Vietnam when exporting to this market

Vietnam textile and garment exports grow rapidly, reaching to the top of the export goods of our country However, Vietnam textile and garment exports to Japan only account a modest proportion of the imports total of Japan Under that situation, the textile and garment exports to the Japanese market need to promote It's just a matter of urgent and strategic issues because Japan is still the largest trade partner of Vietnam

1.3 Research questions

To help Vietnamese enterprises strengthen the exports of textile and garment products to Japan, answering the following questions below is necessary:

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● Why is the performance of Vietnam textile and garment exports to Japan not so

good as compared to the U.S and EU markets?

● How can Vietnam’s enterprises improve export capabilities to Japan?

● What are Japanese customer distinct requirements about garment products?

● What are success factors influencing Vietnam textile and garment exports to

Japan?

1.4 Research objectives

To answer the above research questions, three research objectives are developed as follows,

● Describing current status of Vietnam textile and garment exports to Japan

● Identifying and measuring success factors for textile and garment export

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Chapter two - Overview of garment industry

2.1 Global textile and garment industry

Apparel is one of the oldest and largest export industries in the world It is also one

of the most global industries because most nations produce for the international textile and apparel market Apparel production is a springboard for national development, and often

is the typical starter industry for countries engaged in export oriented industrialization due

to its low fixed costs and emphasis on labor-intensive manufacturing (Adhikari & Weeratunge, 2006; Gereffi, 1999)

Although the global apparel industry has been expanding at a rapid rate since the early 1970s and providing employment to tens of millions of workers in some of the least-developed countries in the world, the industry has experienced two major crises in the past five years The first crisis is regulatory The Multi-Fiber Arrangement (MFA), which established quotas and preferential tariffs on apparel and textile items imported by the United States, Canada, and many European nations since the early 1970s, was phased out

by the World Trade Organization (WTO) between 1995 and 2005 via its Agreement on Textiles and Clothing The concern of many poor and small developing economies that relied on apparel exports was that they would be pushed out of the global trading system

by much larger, low-cost rivals, such as China, India, and Bangladesh

The second crisis is economic The recent global recession, which was sparked by the banking meltdown in the United States in 2008 and quickly spread to most of the major industrialized and developing economies, brought the world to the brink of the most severe economic crisis since the Great Depression of the 1930s Plant closures and worker

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layoffs in the industrialized nations led to slumping consumer demand, which resulted in fewer orders and shrinking markets for export-oriented economies in the developing world The recession hit the apparel industry especially hard, leading to factory shutdowns, sharp increases in unemployment, and growing concerns over social unrest as displaced workers sought new jobs

Consumption in the global apparel industry is highly concentrated in three main regions: the United States, the European Union, and Japan In 2008, the European Union (EU-27, including intra-EU-27 trade) accounted for nearly half (47.3%) of total world apparel imports of US$ 376 billion, while the United States accounted for 22%, Japan for 6.9%, and the Russian Federation for 5.7% (see Table 1) Together, the United States, the EU-27, and Japan represented over three-quarters of world apparel imports in 2008, which

is down from the 82.4% they accounted for in 1995 Particularly notable is the steady decline in the U.S share of global apparel imports, which fell from a peak of 32.1% in

2000 to 22% in 2008, and Japan’s drop from 11.5% in 1995 to 6.9% in 2008

At the onset of the current recession, global apparel imports increased by nearly 7% ($22.3 billion) between 2007 and 2008 U.S imports declined during this period, but those of 4 the EU-27, Japan, and the Russian Federation grew Thus, the negative impact

of the economic recession was not yet apparent in the annual import statistics for 2008

2.2 Overview of textile and garment sector in Vietnam

Over the last many years, Vietnam textile and garment industry has witnessed strong development Products made in Vietnam have penetrated to the world market, thus

it was contributing to the economic development of the country The export values increased rapidly, and this sector is one of the industries that for many consecutive years

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has ranked very high in terms of key export products Over many years, the industry continuously invested and changed equipment and technology to meet the market demand and to improve its competitiveness

In general there are two major factors which contribute to Vietnam’s remarkable performance The first is the transition of central planning to an open market system and the second is the increasing integration between regions and countries by becoming a member of ASEAN, CEPT, AFTA, WTO These 2 factors are strongly related to each other and help the Vietnamese textile and garment industry made significant achievements

The above mentioned factors and the political stability The industry employs a large labor force, with low labor cost Thanks to the open door policy, the government of Vietnam took bold reform measures to promote the economic development of the country, attract foreign investment Now, Vietnam has 5,982 enterprises in textile and garment industry, with involvement of multiple economic sectors Only 1% of companies are state owned and they are in the process of equalization, the mother holding company of Vinatex will also be equitized, about 60% of textile and garment export turnovers come from FDI companies

There are 30% companies located in Northern provinces, 8% in central and highland provinces, and 62% in southern provinces, attracted nearly 2.5 million workers

in the country

During the economic integration process, Vietnam actively participated in all activities of the global economy and step by step integrated into the regional and global

Figure 2.1: Vietnamese Textile and Garment Export Revenue during 2008-2013

Key markets are still markets with high purchasing power such as United State,

EU, Japan, Korea, Canada, Australia and retail markets which play a role as shopping centers in the region

Besides the achievements, Vietnam has to cope with many difficulties: it is currently less developed in terms of machinery and equipment, technology, and labor

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skills Another difficulty is the high inflation (2007: 16%) compared to economic growth (2007: 8.5%) Besides this, labor costs are becoming more competitive There are many workers in this sector, so companies compete with each other to get the best workers On the other side, it could be possible that in future labor costs are getting less important when there is more demand for technical skills

In the future when participating in the TPP agreement, the Vietnam textile and garment enterprises will be opened up opportunities for export growth especially two large markets U.S and Japanese, increase the added value of the product However, there are not simple poses new challenges for businesses Now, the biggest challenge for Vietnam's textile and garment enterprises is how to reach the market in the TPP countries while producing raw material exports of Vietnam mainly imported from TPP abroad In addition, the companies will also face the risk of opening up the domestic market for the TPP member countries will into Vietnam Intrinsic Vietnam textile and garment industry still limitations, is not really sustainable, not done their supply chain This situation leads

to the weakness of the sector It is the cumulative proportion of the industry is not high, the major textile and garment companies to meet the demand for sewing (the stage of low investment, easy to move) Currently, materials of industry only get localization rate of about 50 %, remaining parts still dependent on foreign suppliers

In general, textile and garment plays a very important role in the economy of the country To truly sustainable and development, the textile and garment enterprises should form the complete supply chain from design - materials - sewing- distribution and the link between the stages, commitment, responsible community for building the competitiveness of the chain with the goal of creating an important boost for

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Vietnam's textile and garment sustainable growth Furthermore, businesses should take advantage of opportunities for sustainable development, accumulation potential

in all aspects to build competitiveness, should not rest on winning

2.3 Overview of Japan’s textile and garment market

The Japanese consumer market has remarkably high purchasing power for a country of its size With a population of 127.5 million, Japan is the world’s 10th largest country The Japanese economy, however, ranks as the world’s 3rd largest (behind the U.S and China) The corresponding high level of per capita income gives consumers in Japan considerable purchasing power and offers an attractive market for retail investment

Currently Japanese is the third largest apparel market in the world after the U.S., E.U, Japanese has consumption level of garments annually to USD 3.7 billion, domestic production is only 5% of the remaining, 95% is imported So, here is a fertile market for textile and garment exporters into Japan

Due to shortage of labor and high labor costs, many manufacturers of textile and garments in Japan moved production in abroad Thus, producing of the domestic textile and garment goods in Japan has and will decrease, garment market mainly import Chinese goods are the dominant textile and garment market imported from Japan, with a market share in 2013 was 71.08% market share Most Japanese textile and garments are imported from China by Japanese companies or Japanese-Chinese joint ventures located in China and producing Vietnam's textile and garment export to

Today, Japanese consumption goods market is developing follow two trend The first trend is consumers who looking for the not high price goods Thus, Japan producers must divert to the ASEAN countries, especially China and Southeast Asia

to processing with the low labor cost The second trend is in the context of a series of domestic garment factory closed, then the successful research and development of high-value products such as shirts be worn immediately that should not iron after washing and drying it is an outlet for Japanese manufacturers Beside the core interests of products, the Japanese consumer demanded new hobbies such as the suit can add moisture to escape, not wrinkled, crumpled by special fabric sewing

In terms of the quality of goods, Japan is one of the countries with the most demanding in the world Defects in other countries that is not a problem as a minor

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wound, unbalanced contour on a product, then the Japanese were considered damaged goods Japanese consumer set out reliable and high quality goods standards for the industry goods and create require that different products but same type must follow

Different standards of color also exist in Japan, based on a combination of the traditional standards and influence of western Elderly people often choose light and soothing colors fashion in the former, but now, everyone likes a different color groups depending on their tastes that do not depend on age For young women's fashion, colors change depending on the seasons Each sample of garments can have many different colors The exporter should choose suitable color depends on the body type and personal tastes of the Japanese market

Today consumers about garments in Japan quite difficult, especially about the fashions Businesses need to capture, predict fashion trends, must provide a timely trendy fashion products, especially for younger buyers - the garment hobbyists are changing fast The Japanese suppliers usually do this better than foreign suppliers because they capture and predict better fashion trends and because they have a "rapid response" system to capture information from consumers through retailers However, the Japanese have more conservative in that still accept the standard stylized items add details or new materials For example, chum pants/skirt and vest/jacket are still selling Japanese consumers are often attention to the smallest details like sewing stitch (even on the inside), stitching, buttons sewing way, folding way, etc

When business with Japanese partners, garment oversea suppliers should avoid mistakes as delivery no color standard, wrong size, not enough or slow delivery The

Japan also have test law for household products containing toxic substances This law requires that all household products must comply with the standards for permissible levels of hazardous substances to the skin The garments have toxic levels higher than allowed level will be banned from sale in the Japanese market

One of the policies of Japanese market about garment, there is also Customs Tax Law This law prohibited importation of products which counterfeit labels violate trademarks or patents

Policies of Japan on importing of garments is relatively strict, especially for developing countries because these countries less business based on their label, the quality product is not high, the localized rate products is low Therefore, importers need

to further strengthen the business on their own label, enhance the localization rate products using efficiently domestic materials to adapt to the Japanese books and won the competitors

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Chapter Three - Literature review

A number of theories are reviewed in this chapter in order to highlight the issues

of comparative and competitive advantages, which would help to find out the competitive advantages of Vietnam’s textile and garment export enterprises to

Japanese market

3.1 Mercantilist theory

Mercantilist theory was born in Europe, the most powerful in the UK, France around the fifteenth century According to mercantilist theory, the prosperity of the country is reflected in the volume of money which it holds, it is considered national assets The only way to increase national wealth is to develop foreign trade and stressed that excess of imports over exports is the most effective measures in foreign trade activities Trading profit is the result of no par value and fraud exchange

Economic benefits that a country is obtained from the resources of other countries International trade is not only based on the potential of a country in which government plays an important role through trade protectionist policies

This theory has certain disadvantages because if Vietnam wants textile and garment industry sustainable development is not only to increase the number of export goods but also pay attention to the value of the textile and garment goods Therefore,

if creative apply in the present context, the theory remains highly effective for exporter enterprises in particular and textile and garment industry of Vietnam in general

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3.2 The comparative advantage theory

David Ricardo (1772 - 1823) is famous British economists According to him,

if each country specialized in producing and exporting their products which have comparative advantage and import those products that do not have a comparative advantage, all countries will benefit However, comparative advantage here is based

on the level of development of production elements of each nation Comparative advantages depend on the time and level of development of each country or local

Besides, Paul R Krugman “International Economics Theory & Policy” Pearson International Edition 8, pp.28-29 He was also defining about the comparative advantage: “Trade between two countries can benefit both countries if each country exports the goods in which it has a comparative advantage”

Applying this theory, to improve exporting textile and garment of Vietnam, we should take advantage of abundant labor, cheap cost in manufacturing textile and garment products to export

3.3 Michel Porter’s (1980) on Competitive Advantages

Competitive advantage is at the heart of any strategy A firm needs to make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain

Competitive advantage occurs when an organization acquires attributes that allows it to outperform its competitors These attributes can include access to natural resources, highly trained and skilled personnel human resources, new technologies such as robotic sand information technology or as a competitive aid in the business

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process (for example, better identification and understanding of customers) As a result, there are two types of competitive advantage an organization can achieve relative to its rivals: lower cost or differentiation

Cost leadership is applied when a firm competes based on cheaper prices, flexible prices, etc The goal of Cost Leadership Strategy is to offer products or services at the lowest cost in the industry The challenge of this strategy is to earn a suitable profit for the company, rather than operating at a loss and draining profitability from all market players Products are to be created at the lowest cost in the industry An example is to use space in stores for sales and not for storing excess product

Differentiation Strategy’s goal is to provide a variety of products, services, or features to consumers that competitors are not yet offering or are unable to offer This gives a direct advantage to the company which is able to provide a unique product or service that none of its competitors is able to offer An example is Dell which launched mass-customizations on computers to fit consumers' needs This allows the company to make its first product to be the star of its sales

Main sources for differentiation include product features, product quality, product design, after-sale service, product delivery, firm reputation

Beside the two generic strategies based on cost or differentiation mentioned above, other two strategies also based on cost or differentiation, but with narrower scope are as follows,

Cost focus using cost focus strategy does not compete based on low costs for its whole product mix, but only for a specific product

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Differentiation focus is applied when a company using differentiation focus strategy does not differentiate its products from those of their direct competitors in many aspects/sources as mentioned above, but just differentiates for specific aspect

Competitive Scope

Broad target

Narrow Target

Figure 3.1: Three Generic Strategies

3.4 The commercialization theory based on the "differentiated product"

Typically, in each country, each local, manufacturers only focus on doing these products serve to majority tastes That will create gaps for minority tastes and it will be effectively satisfied through path of imports because imported products will be

"different" than domestic products Moreover, product differentiation and economies

of scale have intimate contact each other Fierce competition on the international market forcing each manufacturer in the countries focus produce some goods for a certain number of designs to take advantage of scale and the lowest cost of production per unit

1.Cost Leadership 2 Differentiation

3A Cost Focus

3B.Differentiation Focus

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Applying this theory the author draws commented that to strengthen textile and garment exports, the exporters do accordance to business law, which is "selling what the customer needs." Problems of enterprises today is the textile and garment products of the Vietnam is only mass production, according to customers' designs which have not yet confirmed the brand as well as the characteristics of their products

on the market of the world in general and Japan in particular

1 Pricing - Competitive CMT price

- Competitive FOB price

- Flexible prices

-Embassy of Denmark in Vietnam

- Khalid Nadvi, John Thoburn, Bui Tat Thang, Nguyen Thi Thanh Ha, Nguyen

Thi Hoa and Dao Hong Le (2003)

- Ho Thi Bich Van (2007)

-Ho Thi Bich Van (2007) -Embassy of Denmark in Vietnam

(2010) -Japan External Trade Organization

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(2011)

- Vietnam Textile & Apparel Association (2013)

- Kenta Goto (2012)

7 Export capabilities to

Japan

- Retaining and continous searching big clients

- Different size

- Flexible product mix

- Khalid Nadvi, John Thoburn, Bui Tat Thang, Nguyen Thi Thanh Ha, Nguyen

Thi Hoa and Dao Hong Le (2003)

- Vietnam Economic News (2014)

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4.2 Research model

Figure 4.1: Research Model

4.3 Research conceptual framework

In this section, research model, description for each variable, and hypotheses are developed

+ H 6

3

H + + H 4

5

H + + 2 H

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4.3.1 Pricing

Overall, Vietnam's textile and garment products without the high price competitions Due to many difficulties the problems which Vietnam companies face such as inputs for the production of textile and garment Raw material of the garment industry in the country is produced that do not to meet enough demand in terms of quantity, quality, design led to the Vietnam textile and garment industry still has to import most raw materials from abroad leading to high input costs

Due to raw material sources must import, raw materials should not be proactive and take a lot of market volatility In addition, markets fluctuate constantly This greatly affects the cost of raw materials production textile and garment enterprises Besides, low labor productivity, wasted consumption of raw materials, and the irrational labor organizations, not compact engine management yet that has contributed to increased production cost Meanwhile textiles and garments of China, Thailand has high competitiveness Especially stable raw material, raw material prices led to lower prices of Chinese textile and garment products are very low, making Chinese textile and garment have highly competitive prices

Vietnam is a crowed population country, labor in the textile and garment industry accounts a large proportion and has cheap price This is attractive to investors when they choose Vietnam textile and garment companies to order processing

Beside, importers are very interested to producers can supply the products with multi price level depend on their orders Pricing is one of the competition tools on Japanese market So, to ensure suitable prices, Vietnam companies need to research price of input materials, transportation costs, warehousing cost, loading cost, CMP cost to decrease to lowest price level And therefore, companies discount product

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price and give suitable prices to meeting competitive price levels and price flexibilities with many kinds of products

H1: There is a positive impact of PRICING on EXPORT CAPABILITIES of

Vietnam’s textile and garment

While consumer’s demand is higher about garment, one of the first factors that pay attention is quality of commodity This is an important factor to maintain and develop about export markets of trading business Aware of the importance of this issue, Vietnam garment export companies should strive to improve quality goods through seeking the sourcing of high quality fabric A fabric product is quality when ensure quality in weaving or knitting, dyeing and finishing stages Besides, product quality is not only demonstrates fabric quality but also in sewing and cutting

Therefore, companies must pay attention and ensure quality through each stage to meet requirements of Japanese customers

Labelling legislation can be a major headache for textile and clothing companies To affix a mandatory quality mark or a voluntary quality mark requires

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prior product type approval and possibly factory inspections for quality control assessment Regulated products must bear the appropriate mandatory mark when shipped to Japan in order to clear Japanese Customs Regulations may apply not only

to the product itself, but also to packaging, marking or labelling requirements, testing, transportation and storage, and installation

The Japanese rules on clothing labels were detailed for clothing manufacturers such as: Yarn that has not been finished, woven fabrics, knitted fabrics and lace only need to be labelled with the composition of the fibers included and to have the name

of the maker and contact details, but finished clothing items - everything from jackets through skirts, cardigans, aprons and nightwear - require details on home washing and care The home washing instructions must specify whether the item is suitable for chlorine bleaching, whether it needs to be dry cleaned, can be wring- dried or needs to

be otherwise dried Data on ironing must also be provided, including the maximum temperature the garment can withstand

In addition, chemicals used in printing required to ensure non-toxic Often when printed T-shirts, very easy to stick to this error that returned goods are very expensive to reproduce and amortization expense

H2: There is a positive impact of PRODUCT QUALITY on EXPORT

CAPABILITIES of Vietnam’s textile and garment

4.3.3 Designing capabilities

Products of the textile and garment industry is consumer products, serve to all needs Consumers are different each other about culture, customs, religion, geographical region, climate, gender, age so will have very different needs on clothing such

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model, colors, sizes and materials Therefore requires textile and garment products have diversity The characteristics of the textile and garment product have life cycle is very short so design of textile and garment product plays a very important role Fashion trends are constantly changing on the world requires multiple models to meet this trend To be able to make new models that require a creative team is trained to be able to create unique designs, consistent with the trend of fashion

Because of characteristics Vietnam's textile and garment industry in the current period is mainly produced in the form of purchase of foreign partners Vietnam businesses are only focus on the production form, it leads to low value in each product Vietnam does not have a creative team is professionally trained, not to understand the world fashion trends and needs of the market Up to 90 % of businesses said that the design team of them mainly sketches to the client's idea and not take the idea and sketch their designs for customers When making goods exports

to Japan, the design team will design base on customer require and provide a sketch of the specific technical parameters as well as the characteristics of the product, according to customer requirements and thus brought into production Can see the design team of the enterprise as a whole exports and exports to the Japanese market in particular those like who re-inform for customer to information, it is not done designing

H3: There is a positive impact of DESIGNING CAPABILITIES on EXPORT CAPABILITY of Vietnam’s textile and garment

we export textile and garment products into the Japan under the FOB value, but raw material production to follow the instructions of the importer From there we can see the reason for boosting export of Vietnam’s textile and garment industry decline compared to other competitors when not actively raw materials

One of the basic elements of Vietnam garment enterprises when exporting to Japan is reputation for on-time delivery Japanese market has high requirements about transfer condition, delivery, geographical advantages, and preferential entry procedures Vietnam enterprises need to keep advantages in delivery that is difficult and necessary duty because on time delivery is an important element, it must fit to seasonal and fashionable elements, especially in Japan

Japan enjoys fours season throughout the year Since the climate and temperatures vary substantially between the four seasons, product in demand varies according to season That is why precautions must be taken especially when importing seasonal and fashion products from remote places without season Moreover, initial

From there we can see the reason for boosting export of Vietnam’s textile and garment industry decline compared to other competitors when not actively raw materials

H4: There is a positive impact of TIMES DELIVERY & MATERIAL SOURCES on EXPORT CAPABILITIES of Vietnam’s textile and garment

4.3.5 C/O requirement

Besides the high demands of the Japanese market, the enterprises of our country were in trouble again bringing technical factors: need to meet the

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requirements of the Japanese on certificates of origin Providing preferential Certificate of Origin attach with goods from exporters to importers is one of the most important factors to boost export Vietnam garment products to Japanese market After Vietnam participating in AJCEP and VJEPA, Vietnam's textile and garment into Japanese market enjoyed preferential tax rates of 0% This is an opportunity for Vietnam textile enterprises to boost exports to the Japanese market However, in order

to enjoy 0% tax rate, the exporter must meet two requirements that goods must be produced, processed in Vietnam and the origin of main materials must from Vietnam, Japan, ASEAN

H5 : There is a positive impact of C/O REQUIREMENT on EXPORT

CAPABILITIES of Vietnam’s textile and garment

4.3.6 Business partners

For Japanese partners, creating credibility, strengthen relationships, trust building and implementation of trade commitments as determinants of success To do that, enterprises should actively participate in international trade fairs in Japan or to open a representative office in Japan to introduce the product When having a relationship, must maintain and develop, to ensure the credibility and to build the trust

as well as do seriously the signed trade agreements to get the stability and orders more often

In addition, to keep steady growth in the Japanese market, the Vietnam textile and garment enterprises to build their own trust export images To success in trust building, Vietnam businesses need to learn the needs, tastes of the Japanese people, grasp the fashion trend of Japanese consumers, and commodities have also shown the

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specific style Moreover, the implementation of social responsibility to ensure employees is one of the factors that increase brand image and attracting imports from Japan

H6: There is a positive impact of BUSINESS PARTNERS on EXPORT

CAPABILITIES of Vietnam’s textile and garment

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In this thesis, literature review is comprised of concepts and theoretical from other researchers to ensure academic and objective perspective Competitive advantages suggested by M Porter (1985) Besides, articles from websites on the world and other related articles on Internet also are used to gain understanding of overall market, the current situation and policies of the government and mainly, the current problem situation

4.4.2 Quantitative study

According to Creswell (2003), quantitative method is the way that the investigator primarily uses post positivist claims for developing knowledge (for example cause and effect thinking, reduction to specific variables and hypotheses and questions, use of instrument and observation and test of theories), employs strategies

of inquiry such as experiments and surveys and collects data on predetermined instruments that yield statistic data In this research, quantitative method is applied by asking experts to give opinions in questionnaire about effecting of Vietnam garment and textile companies to Japan to determine factors affect strengthen exporting

4.4.3 Questionnaire design

The questionnaire is comprised of two parts The first part includes 6 questions about company information on location, type of business, operation fields, products, export market, number of workers The second part is about the evaluation of factors constructed based on the research model Each factor is evaluated based on 5-point Likert scale include: (1) Strongly Disagree, (2) Disagree, (3) Neutral, (4) Agree and (5) Strongly Agree In fact, the Likert scale, developed by Rensis Likert, is the most