Business plan for viet world company in 2011 2013

Vietnam has exported textile and garment products to many countries as United Stated, Japan, Europe, Korea, Singapore, Malaysia, Middle East… Dubai is a business hub of Middle East and a

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

NGUYEN DIEU PHUONG

BUSINESS PLAN FOR VIET WORLD COMPANY

IN 2011 - 2013

MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION

(PART-TIME)

Tutor’s Name: HOANG THI PHUONG THAO

Ho Chi Minh City

(2010)

I would like to express my sincere thanks to professors of Solvay Business School –

University of Brussels for the profound knowledge that they managed to impart to me, for the time they had to spend to answer my questions My thanks are reserved for my husband, Mr Nguyen Van Thien for his advice on conducting choosing the topic and his idea contributing I would also like to extend my gratitude to Mr.Vijay S Satwani who helped me to complete the questionnaires and all distributors in Dubai who spent their time completing the questionnaires

My deepest gratefulness goes to Prof Hoang Thi Phuong Thao, lecturer of the University

of Economics and also my tutor, who enthusiastically helped me from project outline until

to project finishing

Las but not least, I would also like to thank Mr Serge Bywaski and Ms Bui Phan Bao Tran, our helpful co-ordinators, who have been with us throughout the course, for their enthusiastic connection between the class and Solvay professors

III BUSINESS DESCRIPTION

VI FINANCIAL PLAN

GCC countries: Gulf Cooperation Council countries

UAE: United Arabica Emirates

VITAS: Vietnam Textile and Apparel Association

VINATEX: Vietnam Textile and Garment Group

GDP: Gross Domestics Product

SWOT: Strengths, Weaknesses, Opportunities and Threads

MOQ: Minimum Order Quantity

LCL: Less Container Load

FCL: Full Container Load

CIF: Cost, Insurance and Freight

LC: Letter of Credit

TT: Telegraphic Transfer

D/P: Documents against Payment

IATF - International Autumn Trade Fair

TABLES

Table 3.2.1 - Exporting sales of Viet World Company in 2005 - 2010

Table 5.2 - Export sales forcast for three years 2011-2013

Appendix 3- GDP of Middle East Countries

Appendix 4 - Schedule of Action Plan 2011

Appendix 5 - Export monthly sales forcast in 2011

Appendix 6 - Projected Income statement in 2011

Appendix 7 - Projected Balance sheet at 31 Dec, 2011

Appendix 8 - Projected Cash Flow Statement in 2011

FIGURES

Figure 1 – Project Structure

Figure 2 – Viet World Company Organization

Figure 3 – Fabric Manufacturing Process

Figure 4 – Viet World’s image to distribution channel

Figure 5 – Basic of pricing

Vietnam's textile industry has increased significantly in the last ten years as it was growing year by year with very high percentage According to Vietnam Business & Economy News – For year 2010, despite the fluctuations on global and domestic markets, the Vietnamese textile industry continues to grow fast which helps Vietnam remain in top 10 world garment export countries Export revenue of the Vietnamese textile in 2010 can surge to US$11 billion, an increase of 23-24 percent over same period last year and 5 percent above this year’s set plan This was an extremely hard target to achieve, according to experts Textiles will become the country’s largest export sector of Vietnam

The industry helps generate jobs with good income for many workers The increase in the number of orders and quantity of raw materials as well as the raise in workers’ salaries helped boost the productivity According to experts, importers want to place orders for textile products of Vietnam because they trust the quality and price of products, the reliability of the delivery offered by Vietnamese producers This is why, many of them have switched from China to Vietnam Vietnam has exported textile and garment products

to many countries as United Stated, Japan, Europe, Korea, Singapore, Malaysia, Middle East…

Dubai is a business hub of Middle East and a huge of many kinds of goods are imported to Dubai before delivered to other countries in Middle East, Africa, Europe…The $4 billion plus Dubai textile mart, which sits at the center of a 1.4 billion booming consumer market Viet World producing - trading – services Company limited is a private textile company which is specialized in various types of fabrics as Jacquard, Dobby… The Company has the independent import and export right Almost of fabric products of the company are exported to Middle East, Singapore, Thailand According to figures of General Statistic Office of Vietnam based on the first eleven months of 2010, Middle East has a low percentage of export revenue of the Vietnamese textile But this market is the main market

of Viet World Company in last few years For this market, Viet World has exported fabrics

to Dubai and from this business hub goods will be delivered to other countries of Middle East such as Iran, Kuwait, Egypt and also Africa

countries Because developed countries don’t focus to low and medium cost of these products anymore as they keep the premium segmentation Viet World has decided to plan for exporting these products to Dubai and they started to sell some black fabric products to Dubai in September 2010 Beside of develop new products, Viet World also focus to improve quality of their products Although Viet World is established in 2005, the company didn’t have any Business plan So, I would like to concentrate to Dubai market for how to develop Viet World business with launching their new products to this market Data, information will collected from website of Government of Dubai, Dubai Economic Council, website of Government Statistic of Vietnam, data of Viet Word’s documentations Beside of it, the primary research was done through sending questionnaire to fifteen key distributors in Dubai and interview two of them by phone I also carry out in-depth interview three key persons of Viet World Company, Chief of Executive, Sales Manager and Chief of Accounting and Human Department This primary research has objective to analysis Dubai textile market in details which concerned to black and white fabric products for making traditional clothes of Islam women and men From the results I got I would like

to propose a Business plan for Viet World Company in 2011-2013

as well as thoughtful services, the company has prestigious and good corporations with customers at abroad

Among the oversea markets above, Middle East is the core market of Viet World Company as the sales come from this market obtained more than 90 percent of export sales in last few years Dubai is a business hub of Middle East and a huge of many kinds of goods are imported

to Dubai before delivered to other countries in Middle East, Africa, Europe…The $4 billion plus Dubai textile mart, which sits at the center of a 1.4 billion booming consumer market extending from the CIS (Commonwealth of Independent States) to Africa and the Indian subcontinent, has emerged as one of the most modern and profitable trading points in this region's commercial map

On process doing business in Dubai, Viet World has found an opportunity for two kinds of fabric products that the company can develop its business in this market These are black and white fabric for traditional clothes of Islam men and women of Middle East countries As the demands of these products are very huge and the market of them are stable, not changing much Other thing, developed countries don’t focus to low and medium cost of these products anymore as they keep the premium segmentation Viet World has decided to plan for exporting these products to Dubai and they started to sell some black fabric products to Dubai

in September 2010

Although Viet World was established in 2005 and has exported their products to foreign countries about five years but they didn’t have any Business plan for the company One of the

greatest challenges for most organizations in today’s dynamic and competitive business environment is to uncover new ways to measure and manage their own performances So a Business plan is really necessary for Viet World Co as they have changing in their strategy, directions in business in this time A business plan will define the structure of the company and the objective of the business activity It contains a market analysis and details of strategic marketing, management structure, personnel and finance When properly conceived, it acts as

a valuable tool

1.2 Research objectives:

This research has following objectives analysis Dubai textile market in details which

concerned to black and white fabric products for making traditional clothes of Islam women and men And from this to suggest a Business plan for Viet World Company in 2011-2013

The research questions for this project are:

1 How is about market situation of Dubai textile market in general? How is about market size, market trends of the market?

2 What are characteristics of black and white fabric products for this market?

3 How are the main competitors in this market?

4 How should business plan for Viet World be developed to gain more market share in the next three years?

1.3 Research methodology:

“Research done with intention of applying the results to solving specific problems currently being experienced in the business is called applied research” (Robert Y.Cavana 2001, p.12) For applied research, there are two methods: quantity research and qualitative research

In this project, qualitative method is applied to examine by interviewing and sending questionnaire to target group who are wholesalers specialize in doing business for black and white fabrics in Dubai

Information will be gathered through:

- Secondary data: be collected from statistic figures of website of Government of Dubai, Dubai Statistic Center, website of Textile Industry’s Reports of Viet Nam and in the World,

newspapers and magazines of Textile industry, website of General Statistic Office of Vietnam Information were collected such as economic index for market situation

- Primary data: collect information from a group of fifteen key distributors in Dubai who were specialized in business for black and white fabrics for traditional clothes of Islam by in-depth interview and sending questionnaire to them

In-depth interview and discussion with the Chief of Executive of Viet World Company, Head

of Sale Department and Chief of Finance and Human Resource Department

1.4 Scope of research:

- This primary research has a scope that collection information of Dubai textile market, specific for Black and White fabrics for making traditional clothes of Islam people Information of Viet World Company were collected by in-depth interview

This research has been done from September to December 2010

Samples of research: Fifteen distributors in Dubai and three key persons of Viet World Company as mentioned in above

- For fifteen distributors in Dubai: sending questionnaire to them by e-mail in September and October They have full filled and replied questionnaire until December After receiving their feedback carry out in-depth interview by phone with three key distributors for understanding more about the market Every interview was done in 30 – 40 minutes

- For three key persons of Viet World: In-depth interview and discussion face-to-face in about one hour for every interview in the Company

1.5 Structure of project:

The project will include six chapters:

Chapter 1: Introduction The writer will summarize the problem that Viet World is facing

This chapter also is included objectives, methodology of research

Chapter 2: Literature review This chapter will review literature about market analysis, SWOT analysis as basic things for the next parts

Chapter 3: Business description This chapter will give general information about textile

industry; also introduce Viet World Company business activities

Chapter 4: Market analysis From the information of market research the writer will do

market analysis, target segment analysis and the company SWOT analysis

Chapter 5: Business Strategy and Implementation The writer will suggest the strategy and

action plans for Viet World Company in 2011-2013

Chapter 6: Financial Plan This chapter will include some basic information concerned to

finance situation of Viet World

Figure 1: Project structure

Primary research

(15 questionnaires;

In-depth interviews)

Secondary research (Statistics figures, articles )

- Product: Sourcing and Production

CHAPTER II LITERATURE REVIEW

2.1 Market analysis theory

One of the most critical sections of a firm’s business plan is its manager’s market analysis Find out just what information managers need to know about their potential customers

Every business plan should include market analysis This is one of the first and most important reasons to do a business plan And whether everyone is just starting a new business or reviewing an existing business, they should renew their market analysis at least every year Markets change a business needs to watch for changes in its market

The market we need to look at is our potential market, not the actual market served, the one that's limited to our existing customers Firm’s target market is much wider than just the people the company already reaches

For example, the market of a local movie theater or restaurant includes not just the people who regularly go there but everybody who lives within driving distance The market for a landscaping business includes all the homes and commercial properties within a logical reach The market for downloadable e-books over the internet includes everyone connected to the web The market for personal computers includes homes, schools, businesses, and government organizations

It's a firm’s plan and every plan is different so managers need to know as much as they can know about their target market

2.1.1 Getting the Information

The information sources that will help managers conduct a market analysis are different for every business plan For example, a firm might need local information that can be get from its local chamber of commerce They might also need to find other government statistics, or other commercial statistics, so they may be conducting some internet searches to track down the information

Not all the information managers need is going to be publicly available, and they may have to settle for educated estimates Sometimes they'll have to extrapolate information from different sources to get the information they're seeking A good market research may be come from telephone directories, catalogs, industry association statistical compilations, real estate information and density maps

2.1.2 Segmentation

Marketers always try to divide their target market into useful slices or segments by geography, education background, ages, income, lifestyle… Example: a computer manufacturing company that targeted such market segments as homes, small offices, businesses, educational organizations, and government Dividing the market into these segments helped the company address the more specific market needs, media, pricing patterns and decision criteria in each of their different market segments

Segmentation helps firms target specific people with specific messages and helps them focus

on user needs Families might need quick, consistent service while students might need night service Families read the newspaper; students read posters on bookstore walls Knowing your market segments will help you make smart decisions when it comes to providing the products and services that will work best for them and for communicating with them

late-2.1.3 Market Size and Growth

Firm’s managers need to be able to measure and quantify their market For example, if local homeowners are part of their target market, then they should be able to count them They need

to know whether they have 500 people in your market, or 200,000, or 2 billion Be able to show what the total market is for their business

When it comes to market growth, managers need to think about percentage change as a market forecast Is the number of homeowners in the target market increasing or decreasing? By how much per year? Market forecasts start with the total numbers of possible purchasers in each market segment, then project percentage change over the next three to five years

2.1.4 Market Trends

Business man needs to understand what's going on with his market What trends and fashions

do you see having an influence on firm’s market segments? If he is selling cars, for example,

is there a trend that shows people responding to higher gasoline prices or more environmental concerns? In computers, is there a trend toward more power and lower prices? How does the increase in TV recorder equipment affect market? The questions that affect target markets will

be different for every business, and these are just examples What's important is that as a person creates his or her business plan, he/she become aware of the market trends that affect his/her specific market

2.2 Marketing mix

The marketing mix is probably the most famous marketing term Its elements are the basic,

tactical components of a marketing plan Also known as the Four P's, the marketing mix

elements are Price, Place, Product and Promotion

When marketing their products firms need to create a successful mix of:

• The right product

• Sold at the right price

• In the right place

• Using the most suitable promotion

To create the right marketing mix, businesses have to meet the following conditions:

2.2.1 Product

• The product has to have the right features - for example, it must look good and work well

• The price must be right Consumer will need to buy in large numbers to produce a healthy profit

• The goods must be in the right place at the right time Making sure that the goods arrive when and where they are wanted is an important operation

• The target group needs to be made aware of the existence and availability of the product through promotion Successful promotion helps a firm to spread costs over a larger output For example, a company like Kellogg's is constantly developing new breakfast cereals - the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as cost of manufacture, promotion involves engaging in

a range of promotional activities e.g competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains The

product is the central point on which marketing energy must focus Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function However, it is concerned with what the product means to the customer Marketing therefore plays a key role in determining such aspects as:

• the appearance of the product - in line with the requirements of the market

• the function of the product - products must address the needs of customers as identified

through market research

The product range and how it is used is a function of the marketing mix The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan

2.2.2 Price

Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs The price of an item is clearly an important determinant of the value of sales made In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay An organization’s pricing policy will vary according to time and circumstances Crudely speaking, the value of water in the Lake District will be considerably different from the value

of water in the desert

2.2.3 Place

Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer Getting the right product

to the right place at the right time involves the distribution system The choice of distribution method will depend on a variety of circumstances It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers

2.2.4 Promotion

Promotion is the business of communicating with customers It will provide information that will assist them in making a decision to purchase a product or service The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item However, successful promotion increases sales so that advertising and other costs are spread over a larger output Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organization to develop and build up a succession of messages and can

be extremely cost-effective

2.3 SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment It is the first stage

of planning and helps marketers to focus on key issues SWOT stands for Strengths,

Weaknesses, Opportunities and Threats Strengths and weaknesses are internal factors Opportunities and threats are external factors

2.3.1 Strengths

A firm’s strengths are its resources and capabilities that can be used as a basis for developing competitive advantage Examples of such strengths included:

• Your specialist marketing expertise

• A new, innovative product or service

• Location of company’s business

• Quality processes and procedures

2.3.2 Weaknesses

The absence of certain strengths may be viewed as a weakness For example, each of the following may be considered weaknesses:

• Lack of marketing expertise

• Undifferentiated products or services (i.e in relation to your competitors)

• Location of company’s business

• Poor quality goods or services

• Developing market such as the Internet

• Mergers, joint ventures or strategic alliances

• Moving into new market segments that offer improved profits

• A new international market

• A market vacated by an ineffective competitor

2.3.4 Threats

Changes in the external environmental also may present threats to the firm Some examples of such threats include:

• Shifts in consumer tastes away from the firm’s products

• Price wars with competitors

• A competitor has a new, innovative product or service

• Competitors have superior access to channels of distribution

• Emergence of substitute products

• New regulations Taxation is introduced on your product or service

However, SWOT analysis can be very subjective Two people rarely come-up with the same final version of SWOT

Chapter Summary

In the Chapter II, the writer has reviewed literature about market analysis such as how to getting information, segmentation, market size and market trend The writer also reviewed the theory of Marketing mix, SWOT analysis This information is basic things for the next parts

In the next Chapter, the writer will describe the overview of textile industry, company history and current status

CHAPTER III BUSINESS DESCRIPTION

3.1 Textile industry overview

Vietnam's textile industry has increased significantly since normalizing relationships with the United States in the 1990's Vietnam was granted most favored nation status (MFN) in December 2001, which led to a dramatic reduction in import tariffs in the US market Vietnam's induction to the World Trade Organization (WTO) in 2007 and the Vietnamese government's strong support of the textile and garment sector have provided strong incentives

to attract foreign investors

According to Vietnam Business and Economic News on 31 December 2010 - Despite the fluctuations on global and domestic markets, the Vietnamese textile industry continues to grow fast which helps Vietnam remain in top 10 world garment export countries Export revenue of the Vietnamese textile in 2010 can surge to US$11.2 billion, an increase of 23-24 percent over same period last year and 5 percent above this year’s set plan This was an extremely hard target to achieve, according to experts December will be the sixth successive month that export revenue from garments exceeds US$1 billion, said Le Van Dao, Deputy Head of the Vietnam Textile and Apparel Association (Vitas) This means that the net profit for the whole industry will increase by 18 percent to over US$4.5 billion Textiles will become the country’s largest export sector in this 2010

According to the article by Mr. Tielman Nieuwoudt, on 19 November 2009 - In the textile industry, companies are increasingly looking for lower cost countries that can provide outsourcing opportunities The rising cost of land and labour are diminishing China's labour cost advantage and Vietnam is increasingly seen as a low cost sourcing alternative to China Estimates are that wage levels in Vietnam are about one third of those in China's coastal region Companies that are chasing lower labour costs are increasingly moving production to Vietnam In a 2008 Booz Allen Hamilton survey 88 percent of companies originally chose China for its lower labour costs Of the companies surveyed, 55 percent believe China is

losing its competitive edge to countries such as Vietnam The survey also indicated that 63 percent named Vietnam as their top low cost sourcing alternative to China However, costs may be rising and low cost labour is hardly a competitive advantage in the long term Labour cost keeps changing and today's low cost location is not necessarily tomorrow's viable outsourcing location As labour costs increased, manufacturing was later moved to South Korea and Taiwan When labour cost increased in South Korea and Taiwan, it was moved to China and later also to Vietnam Justin Wood, a Director of the Economist Intelligence Unit Corporate Network in Singapore makes the point that in the last 15 years Vietnam has moved from a low to a middle income country The move towards a middle income will likely put additional pressure on Vietnam's low cost labour status

The manufacturing advantages in Vietnam go beyond labour cost and the country has some competitive advantages as Vietnam has very good embroidery skills and needle work A lot of designers and manufacturers need embroidery skills and Vietnam has kept in touch with its traditional roots Vietnam is currently a great location for smaller manufacturers as the market

is more flexible Vietnam has higher production minimums than many other countries According to specialists in textile, lower minimums would allow smaller companies to source their product in Vietnam

For many companies outsourcing to Vietnam, intellectual property (IP) remains a concern Within the fashion industry, IP is not as enforced as it is within the film and music industries Designers can "take inspiration" and it is seen as a major driver for setting trends in the industry The World Intellectual Property Organization (WIPO) has called for stricter intellectual property enforcement within the fashion industry to better protect companies and promote competitiveness within the textile and clothing industries

For Vietnam to advance as an outsourcing location, the textile industry supply chain needs to

be considered Local logistics are influenced by direct and indirect cost In Vietnam's textile industry raw materials are often imported, which increases cost compared with those countries able to source locally Managing reverse logistics can also be a challenging undertaking in Vietnam Procedures, processes and infrastructure are sometimes not in place to manage repairs, returns and warranties

Even with cheap labour cost, poor infrastructure remains a major barrier for entry This is largely due to Vietnam being in the early stages of infrastructure development.Through assessing the overall supply chain, rather than a singular focus on labour costs, it is easier to identify where Vietnam's opportunities and challenges lie in the textile industry While small scale designers and manufacturers take advantage of a flexible environment, infrastructure and logistics processes will need further investment to make Vietnam an outsourcing destination

3.2 Company description

Viet World Co is a private limited company producing, trading and services of textile products, specializing in jacquard, plain from polyester and visco, etc These goods are made mostly by using advanced technologies transferred from Korea

Name and Address of the Company:

VIET WORLD COMPANY Ltd.Pte

18 Tan Chau – Dist.Tan Binh – Ho Chi Minh City – Viet Nam

Tel.: 84 8 3 9717065 – 3 9717046

Fax: 84 8 3 9717066

3.2.1 Company History and Current status

Viet World was found in 2005 by two persons Mr Nguyen Van Thien and Mr Chau Van Tuan Both of them had knowledge and experiences in textile industry before they started up their company

Mr Thien has worked for textile industry at big textile companies in Vietnam from 1993 He

is specialized in business of textile from fibers to fabrics, not only domestic market but also for export products to other countries, especially for Middle East countries market He had experiences in doing textile business in Dubai and had relationship with some wholesalers of textile products He is CEO, the main person who runs business of Viet World Company in last few years

Mr Tuan has specialized in manufacturing of fabrics; he had run his own small factory before

he and Mr Thien cooperate to establish Viet World Company He is a technician specialize in fabric manufacturing

In the start-up years, Viet World Co has focused on export fabric products to Middle East market and other countries as Thailand, Singapore The Company has got orders from customers and then did contract with many different manufacturers for producing That means Viet World had to work with many small or medium factories for sourcing

The Company’s turnover was growing up very fast in the first three years, turnover of exporting sales growth every year from eight to fifteen per cent

However, there were many issues that happened in these years Viet World can’t control qualities of their products and sometime it can’t meet requirements of their customers The problem is the company doesn’t have sources of high quality fabrics as most of suppliers using the old-fashioned technology For getting orders as much as possible, the company has tried to decrease the price of their products

Other hand, they were always facing with lacking of capital and they had overcome by borrowing debt from banks So the company couldn’t get profit as they expected because their finance costs was too high when they couldn’t sell their products with better prices Beside of these issues, due to lacking of professional management, Viet World also has faced with the problem of high cost for administrative expenses

In 2008, the owners of Viet World Company have decided to invest to Viet Thanh manufacturer, to import Korea textile machines and technology From this action, Viet World had Agreement with Viet Thanh manufacturer that Viet Thanh will supply fabrics mainly for Viet World Company Viet Thanh will produce fabrics follow to requirements of Viet World’s orders By this way, Viet World can solve the problem of sourcing of good quality products in this period But Viet Thanh couldn’t supply all quantities as Viet World’s orders as their limited productivity And Viet World still had to use other manufacturers in two years of 2008 and 2009 For year 2010, the company focused to improve the quality of their products and they just sold the fabrics of Viet Thanh manufacturer The average unit price was increased, so the turnover of 2010 was maintained while the quantity of sold goods was decreased

The exporting sales of Viet World Company from 2005-2010:

Year Quantity (Y) Amount (USD)

Sales Department:

- Sales Manager: Ms Nguyen Thi Bao Tram, who is responsible for selling products to customers, it is included introducing products to their customers, building relationship, getting orders from customers, carry out and follow up implementation

- Export Sales Officers: two staff, report to Sales Manager, one doing documents for exporting, one implement and

- Employees for deliver goods in import and export: two staff, responsible for customs procedures of imported goods; to implements for deliver goods at port

- Domestic Sales Officer: report to Sales Manager, responsible for selling imported products in Vietnam market In fact, Viet World has done as an agent for foreign company to sell their products to Vietnam and having commission from them

- Sales Secretary: one staff, responsible for typing, input data of selling and buying of both Export and Domestic sales

Admin Department:

- Chief of Finance and Human Resource Department: Ms Pham Thi Hoai Chi, who is responsible for both functions Finance and Human Resource

- Accountant: assist Ms Chi for accounting working for the company’s activities

- Treasurer: responsible for contacting, working with bank officer, keeping cash of income and expenses, follow up debts of the company

- Admin Secretary: doing as a receptionist and assist Ms Hoai Chi to do works for taking care staff, implement as Labor law as labor contract, labor registration, social insurance, health care insurance, jobless insurance She also has been doing works of a receptionist

Figure 2 Organization chart of Viet World Company

NGUYEN VAN THIEN Chief of Executive 

CHAU VAN TUAN President 

PHAM THI HOAI CHI Chief of Admin Dep.  

3.2.3 Products

Product Description

Viet World has done business for textile products The products were included many kinds of fabric made from 100% polyester, polyester cationic, polyester visco

All products of Viet World Company can be classification by two main product lines:

Jacquard and Dobby

- Medium weight 150-200g/m2, suitable for female jackets, bridal dress

This type is included: Black Metalic Jacquard, Black Amuzen Jacquard, Three tones Slub Double Beam, European Jacquard and Bridal Satin Jacquard

Characteristics of production for this product line:

Manufacturing process for Jacquard fabric use many workers, lower productivity compare to other woven processes So this is just suitable for countries which having low labor cost as developing countries

Competitive Comparison

Vietnam has exported Jacquard Fabrics to Dubai market from 2002 From that time until now, Vietnam Jacquard Fabrics have been accepted in Dubai market as good quality products Vietnam Jacquard has characteristics as soft, smooth, silky-like, light weight that meets requirements of end-users It can say that it is influenced by Vietnamese women’s traditional

dress as “Ao dai” Normally “Ao dai” is made from a type of fabric which has characteristics

as mentioned above Example: natural silk, silky-like fabric (Jacquard fabric)

Viet World has advantage from good image of Vietnam Jacquard and Vietnam product in general in Dubai Their products have good quality constantly as they have selected manufacturers with standard manufacturing process and high technology from Korea

Sourcing and Production

From Jan 2008 until now, the owners of Viet World have done financial investment to Viet Thanh Company, a manufacturing company in Binh Duong By this way, Viet World has got commitment with Viet Thanh that “Viet Thanh will be the main supplier of Viet World and sell majority their products to Viet World Company and they will manufacture products follow to Viet World Company’s requirements”

Today Viet Thanh Manufacturer has about 230 textile machines with some different kinds as Shuttle Loom with Narrow width, Shuttle Loom with Large width, Rapier Loom Narrow width, Rapier Loom Large width and Water Jet Loom Narrow/Large width With these machines, Viet Thanh has productivity about 300,000 yards of all kinds of products per month, i.e about 3.6 million yards per year in total

Summarize of fabric manufacturing process as follow:

In the Chapter III, the writer described business of Viet World Company It included overview

of textile industry, the company history with the main points and current status of the company It also included product descriptions which the company has been doing business such as various types of fabrics: Jacquard, Dobby…And the products that the company has planned to develop in the next three years

In the Chapter IV, the writer will do analysis all factors concerned to the company business from market environment, market segmentation, distribution patterns, competitors and Viet World’s SWOT analysis

Wrap and Filling Yarn

Cloth (Gray Fabric)

Dyed Fabric

Up-to-standard Fabric

Fabric Roll

CHAPTER IV MARKET ANALYSIS

4.1 Market Overview

Dubai has changed dramatically over the last three decades, becoming a major business centre with a more dynamic and diversified economy Dubai enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East

Its low logistical and operational costs and excellent infrastructure, international outlook and liberal government policies are attracting investors in a big way Activities such as trade, transport, tourism, industry and finance have shown steady growth and helped the economy to achieve a high degree of expansion and diversification

The Dubai economy enjoys a competitive combination of cost, market and environmental advantages that create an ideal and attractive investment climate for local and expatriate businesses alike In fact, these advantages not only rank Dubai as the Arabian Gulf’s leading multi-purpose business center and regional hub city, but they place it at the forefront of the globe’s, dynamic and emerging market economies

Dubai, with its ancient commercial and seafaring traditions, has long been recognized as the Middle East region’s leading trading hub and has emerged as its key re-export center In more recent years, the Emirate has become a major venue for a number of growing, profitable industries and activities as Conferences, Exhibitions, Tourism, Regional transport, distribution and logistics center, Banking, finance and insurance…

Courtesy and hospitality are among the most highly prized of virtues in the Arab world, and visitors will be charmed by the warmth and friendliness of the people Dubai’s culture is rooted in Islam, providing a strength and inspiration that touches all aspects of everyday life Virtually every neighborhood has its own mosque, where the faithful congregate for prayer five times every day

Dubai is the business hub of the Middle East region and is one of the world’s leading re-export locations – it is easily accessible and also serves North Africa, Central Asia, India, Pakistan

and all Middle Eastern markets Dubai’s economy has been kept open and free to attract

investors and business Government control and regulation of private sector activities has been kept to a minimum with no direct taxes on corporate profits or personal income

For Dubai textile market, there are many suppliers come from different countries to access this market as Japan, Korea, Indonesia, China, India

Vietnam started to export Jacquard Fabric to Dubai in 2002 and these goods were accepted even at the first shipment Since then Vietnam continue to export fabric products and growing market share year by year in Dubai market

For market size of Black and White fabrics in the market, there are not any official figures It may be assumed by calculating from population of Muslim people in this area

Middles East – North Africa has about 380,000,000 Muslim people, equivalent twenty per cent of Muslim people of the World (Houssain Kettani - June 2010) Assuming that about thirty five percent of populations are women who wear traditional clothes, it is Abaya Every Abaya needs about five yards and one woman buy average five sets per year In this case, market size can be estimated 3.325 billion yards of Black fabrics per year for this market In the past, distributors of Dubai imports Black items from Korea and Japan mostly with various kinds of products In the recent years, they have changed to import from other countries as China, Indonesia and then Vietnam for the low and medium products as Korea and Japan companies almost withdraw for this segmentation of Black fabrics So this is opportunity for Viet World to develop their Black and White fabrics market share in Dubai market, based on their current customers of Color Jacquard and other fabrics

4.2 Distribution Patterns

As Dubai is the hub of Middles East market and other countries, there are a huge number of wholesalers and retailers for textile products However, it is different with color fabrics for black and white fabrics There are about twenty distributors of black fabric and about thirty distributors of white fabric, it is included someone who do business in both black and white fabric and someone else just do black or white fabric The writer has sent the questionnaire to fifteen key distributors who do business in both black and white fabric and in-depth interview three of them by phone for understand more about market environment

The contents of the questionnaire and interview (See appendix 1 & 2)

The results of the research will be included information:

- Market size and market trend: all of them said that there aren’t the figures of black/ white fabrics market size separately In generally, the black and white fabrics market is stagnant, but

it doesn’t mean the market decreases There is the changing of original countries for supplying these products According to them, there are not any official figures of Dubai textile market separately as the government doesn’t manage cooperate tax by items They just pay annual fee for office when doing office registration in Dubai

Mr A: he bought Black items mainly from Japan, Korea, he changed to import it from China, then Indonesia, Vietnam now According to him, China products are not “protected”, that means the suppliers have sold too many distributors and wholesalers Then the profit margin will be decrease due to competitive between these distributors Beside of it, the product qualities are not stable and he didn’t believe to them anymore For market size, he assumed that about 2 billion yards of Black items and 1.5 billion yards of White items per year

Mr B: he bought Black and White items from Korea, Japan, he still imports premium products from Japan with smaller quantities than other products, but for medium goods come from Indonesia, some from China and Vietnam The results for Mr.C interview is similar as Mr.B

- Government Policy: Government control and regulation of private sector activities has been kept to a minimum There are no direct taxes on corporate profits or personal income for almost companies (except for oil companies and branchesof foreign banks) Fabric products have import tax of five percent when goods arrive to Dubai But whenever distributors re-export to other countries the government will refund import tax to these companies They only pay USD100 one for set of documents for doing tax refund procedure

Getting general information concerned to four P of Marketing mix: Product, Price, Promotion and Place (Distribution) and their opinions for selecting a fabric supplier

- Product: some various types are most popular

* Black items: both Jacquard and Dobby fabrics; with different kinds of materials as the width

44 and 58 inches are most popular; others are 36, 68 & 72 inches For packaging, roll is most popular for almost, except 36 inches width is double-fold packed