TABLE OF CONTENTS ACKNOWLEDGEMENT 5 PREFACE 6 CHAPTER 1: THEORETICAL FOUNDATION ABOUT COMPETITION 9 AND COMPETITIVE STRATEGY 1. Concepts about competition and competitive strategy 9 1. Concepts about competition 9 1. Concepts about competitive strategy 10 1.
Process of setting up competitive strategy 11 1. Objectives of competitive strategy 12 1. Analysis of competitive strategy 12 1.1 External environment factor analysis 12 1.2 Internal environment factor analysis 13 1. Selection of competitive strategy 14 1.
The foundation of selecting strategy 14 1. Evaluation methods for strategic projects 14 1. Approaches and tools of competitive strategy analysis 15 1. Methods analyzing external environment 15 1.Porter’s five force model 16 1.
Methods analyzing competitive capacity of business 18 1. SWOT analysis model 20 1. The role of SWOT analysis in setting up strategy 20 1. Internal – External factor matrix (IE) 22 1.
The imperativeness to set up competitive strategy in domestic market of 23 Dap Cau Garment Joint Stock Company 1. The garment competitiveness in domestic market 23 1. The imperativeness to set up competitive strategy in domestic market of 24 Dap Cau Garment Joint Stock Company 1 CHAPTER II: ANALYSIS OF COMPETITIVE CAPACITY OF DAP CAU GARMENT JOINT STOCK COMPANY IN DOMESTIC MARKET 2. General overview about Dap Cau Garment Joint Stock Company 26 2.
The foundation and development’s history of the company 26 2. Market and products 28 2. The result of production and business operations in period of 2006- 31 2010 2. Analysis of competitiveness in garment industry in Vietnam’s market 32 2.
Political and law environment 34 2. Socio-cultural environment 35 2.2 Analysis of five forces with respect to garment industry 38 2. Competitive capacity of Dap Cau Garment Joint Stock Company in 44 domestic market 2. Research and Development 48 2.
SWOT analysis of Dap Cau Garment Joint Stock Company in domestic 57 market 2. Strengths and weaknesses 57 2. Opportunities and threats 58 2. SWOT matrix and possible strategies 58 2.
Internal factor environment (IFE) and External factor environment (EFE) 60 2. Internal factor environment 60 2. External factor environment 60 2. Internal – External environment (IE) 61 2.
Strategic projects in possibility 62 CHAPTER III: STRATEGIC PROJECTS AND SOLUTIONS FOR IMPLEMENTING THE PROJECTS IN PERIOD OF 2011-2015 3. Strategic projects for Dap Cau Garment Joint Stock Company 63 3. Analysis of strategic projects 63 3. Senior market oriented projects 63 3.
Product diversification projects 63 3. Selection of strategic projects 64 3. Solutions for implementing strategic projects 66 3. Improving, expanding distribution system 66 3.
Establishing market research staff 66 3. Establishing customer care service system 67 3. Promoting marketing activities 67 3. Promoting activity chain 68 3.
Improving product quality 69 CONCLUSION 70 REFERENCES 71 APPENDIX 3 ACKNOWLEDGEMENT To finish the Global Advanced Master of Business Administration Program and write this essay, we have received the instruction and contribution of many people. And we will not gain achievement without them. First of all, we thank teachers in Hanoi National University and Griggs University, The United State of America for their enthusiasm and dedication in teaching; as a result, we have achieved useful knowledge for our current work. We also express our gratitude to board of directors of departments of Dap Cau Garment Joint Stock Company (Bac Ninh) providing us information and data base to complete this capstone project.
We are thankful to relatives in our families. With their attention and encouragement, we finish the course without any difficulties and barriers. We guarantee that this project was programmed by us with gained knowledge, hand on experience and collected information without copying from other projects. We complete the essay as good as possible with our knowledge and capacity.
Nevertheless, we cannot avoid mistakes, conclusion has not been accurate and optimal; we hope to receive contribution of all concerned ones, especially teachers in Global Advanced Master of Business Administration Program and Directorate of Dap Cau Garment Joint Stock Company. Thanks and Best regard! Hanoi, 15 February, 2011 Group 7 – Class GaMBA01, M0809 4 PREFACE Vietnam is well known as a successful story in export growing strategy after the reformation in the last of 80s decade of the last century. In which, similar to other nations in export oriented industrialization project, garment and textile is selected as one of the initial one of the project. With the basic comparison advantages, garment businesses of Vietnam have gradually have market share and marked certain position in international garment and textile market.
Though the main gained advantages come from processing work, the achievements of Vietnam garment and textile industry in international arena and the role of the industry with respect to national economy are significant. In 2010, Vietnam is voted as one of the five nations having the biggest garment export turnover in the world at the first time. With the export turnover of over 11 billion USD, increasing 23% in comparison with 2009, garment surpasses crude oil to become the field having the biggest export turnover in Vietnam. Besides, garment industry also marks the point as creating more than 2,5 million livelihoods for labors which contributed significantly to solving social problems of the nation.
In spite of becoming one of world-class garment industries in the world, Vietnam’s garment industry has not made advantages in domestic market with more than 86 people against the cheap price products made in China and deluxe products made in Thailand and some foreign fashion firms. The mistakes in export concentrated policy while ignoring domestic market have been proved in the past economic crisis and since import countries apply technical barriers with respect to some sensitive products including garment products. At that time, Vietnam’s businesses cannot promote the basic competitive advantages as cheap price labor. As a result, there are quite many garment businesses having been went out of business or changed the business.
Acknowledge of it, some companies pay attention to domestic market together with export markets. Dap Cau Garment Joint Stock Company as a state – governed Company under Viet Nam Textile – Garment Company capitalized with 40 years of experience is having success in export market and has remarkable contribution to creating livelihood and foreign exchange for Vietnam. Furthermore, the company also realizes potential 5 and the importance of domestic market and spends noticeable resources for research and development of domestic market over the past years. Nevertheless, the position, trademark and penetration of the company in domestic market have not met the given objectives.
Boards of directors, directorate of the company realize this problem and they always find out all ways, set up efficient strategy for domestic market development. And domestic market development will create the safe development for the company as the balance between export market and domestic market. In a further way, domestic market development will make the company have basic foundation for production and business operations. With gained knowledge in Global Advanced Master of Business Administration Program of Griggs University, the instruction of lecturers in program and contribution of members in class, our group sees the opportunity to have suitable strategy in developing domestic market of the company.
Therefore, we select the topic in line with the theme: “Improving competitive capacity of Dap Cau Garment Joint Stock Company in domestic market in period of 2011 – 2015”. Board of directors of the company is particularly interested in this topic as it contributes the important role in the development of the company in the future. Research objective: to introduce competitive strategy, develop penetration of Dap Cau Garment Joint Stock Company in domestic market, create the balance of turnover and earnings between domestic and export market as well as create the proactiveness in business. The introduced strategy is achievable, suitable with the reality and sources of the company while maintaining export market.
Research scale: The topic focuses on issues relating to competitive strategy of Dap Cau Garment Joint Stock Company in domestic market in period of 2011 - 2015. Research subject: Internal and external factors of the company are important ones needed considering when implementing the project especially factors relate to competitive strategy of the company as competitive capacity of Dap Cau garment and external environment factors affect to competitive strategy of the company. Research method: Combine the reality and gained knowledge, we use strategy analysis methods studied in the program including: SWOT analysis, M. Porter’s five 6 forces, internal – external environment factor matrix basing on collected data base from primary and secondary information sources.
This capstone project includes three chapters: Chapter I: Theoretical foundation about competition and competitive strategy Chapter II: Analysis of competitive capacity of Dap Cau Garment Joint Stock Company in domestic market Chapter III: Strategic projects and solutions for implementing, conclusion 7 CHAPTER 1: THEORETICAL FOUNDATION ABOUT COMPETITION AND COMPETITIVE STRATEGY 1. Concept about competition and competitive strategy 1. Concept about competition The term of “competition” is widely used at present in many areas. It is concerned by many objects from many different viewpoints and scale.
Depending on the area, scale and research, the concept of competition is understood according to different ways. In general, competition is the vying between two or among many individuals in the same environment to catch the advantages. Under the economic view, competition exists in the process of formation and development of production and goods exchanging. And competition is presented in all economic institutions.
Nevertheless, competition exists in the process of foundation and development of production and goods exchanging. Competition exists in all economic institutions but it has the most present in market economy since competition is connected closely to market rules as: value rule, supplying and demand. Competition is in all relationship among objects in the market economy: business with business, seller and buyer. In which, the competition between business and business is particularly violent and interested.
There are some concepts about competition between business and business as following: i) Competition is the attempt about service product quality of business in order to make it better than other’s; ii) Competition is to mark position in market, create two-way relationship between business and customer; as a result, customers will believe in and use products of business; iii) Competition is the mutual acquisition among competitors to hold the market, customers. From above viewpoints, competition of business can be understood in the most general way as: competition is the use of sources to be able to hold favorable conditions to gain objectives. Competition has extremely important role and is one of the strong motivation promoting the production development. It forces the manufacturers be active, horse- trading to improve skillfulness, improve technique, apply scientific technology, and 8 complete the organization to increase labor productivity and economic efficiency.
If business lacks of competition or has aspect of monopoly, they are underdeveloped. Apart from the positive aspect, competition also has negative aspects in unfair competition with actions violating ethical or law (smuggling, dodging the tax) or discrimination actions, damaging ecosystem. In current violent competition environment, if business is satisfied with current position in market, they will be quickly pushed into out of date. Concept about competitive strategy According to BCG – Boston Consulting Group, strategies determine the allocation of available sources with the aims of changing competitive balance and moving advantages toward the business.
According to Michael Porter, the author of “Competitive strategy” said that: “The strategy to face up with competition is the combination of expected targets and the means which business needs to fund out to reach targets” (Competitive strategy, 1998). Therefore, the basic role of strategy is to define a direction, a way to reach predetermined objectives. A competitive strategy plays particularly important role in long term development of business. In fact, there are many businesses, especially the small and medium ones paying less attention to strategy, even they do not find out a strategy by their own.
The most basic reason is that they have not awarded of the role of strategy. The problem here is that, enterprise scales need to have strategy despite big, medium or small.