Analysis of Competitiveness of Song Hong Garment Joint Stock Company in the Domestic Market

for the long-term business operations of the enterprise, is the basis to ensure equality for enterprises when competing with each other in the market.

c) Culture and society

The cultural and social environment includes factors related to social attitudes and national cultural values that shape customers' shopping habits. Any influence from this factor can potentially affect the effectiveness of a business's business strategy. In many countries, demographic factors (population and growth rate, age structure) are sometimes one of the factors that create competitive advantages for businesses if businesses know how to grasp and exploit them, and it also becomes a challenge for businesses if they do not know how to overcome them.

d) Technological forces

The level of science and technology always has a great influence on the life cycle of a product or service today, and also entails changes in the business strategy cycle of enterprises. The emergence and development of the above factor has changed the nature of competition because now a product appearing on the market does not simply compete on price as before but also comes from the quality of the product that it brings to the buyer. The application of science and technology to the product not only increases the competitive value of the product but is also the premise for the enterprise to build its brand and reputation. For that reason, every enterprise always needs to pay attention and pay attention to this factor.

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1.4.2. Micro factors

a) Industry competitors:

This is always a potential factor and a target that puts pressure on each business when it wants to gain market share. The nature and intensity of industry competition are assessed through the following criteria: Number of competing companies, growth rate in the industry, diversity of competitors, characteristics of products/services, volume of fixed costs and inventory, and exit barriers.

At different times and stages, there are often new competitors entering the market and weaker competitors withdrawing from the market. To combat potential competitors, businesses often implement strategies such as product differentiation, improving product quality, adding new product features, constantly improving and perfecting their products to have more outstanding features in the market. Businesses should be on guard and anticipate business partners and customers, because they can become potential competitors. If in a certain business market, the business is superior to

If a business has the ability to compete with its competitors in terms of product quality, price and service quality, it will have the conditions to go further than its competitors .

b) Replacement products:

Originating from scientific and technological advances, it is understood that products/services come from other industries/business fields but have the ability to replace existing products/services in satisfying the same needs or can increase competitive costs. In other words, substitute products improve the quality/price relationship.

Because of their relationship with quality and price, substitute products limit the potential profit of an industry by setting a maximum threshold for the price at which businesses in the industry can profit. Because of their nature as substitute products, they often lead to competition in the market. When a main product increases in price, consumers tend to choose similar substitute products and vice versa.

c) Supplier:

Suppliers are very important to companies because they ensure that the business activities of the enterprise are carried out stably according to the predetermined plan. In fact, suppliers are often divided into three main types: equipment and material suppliers, labor suppliers, and money and banking and insurance services suppliers. Thus, each enterprise has relationships with many sources of supply belonging to all three types at the same time. The problem is that the supply must be sufficient in quantity, timely in time, guaranteed in quality and stable in price. Any deviation in the relationship with suppliers affects the business activities of the enterprise, which will reduce the competitiveness of the enterprise. Therefore, each enterprise must build a good relationship with suppliers so that they provide sufficient quantity, but it is necessary to avoid being too dependent and always have to make a backup plan for its supply chain.

d) Buyer:

Customers are always an inseparable element in a business and are the factor that directly determines the existence and development of the company in the present and future. Gaining the trust and love of customers when choosing to buy their products is always the top priority of every business, especially in the context of a free economy when the role of the buyer is pushed to the highest level. To gain the trust of customers, businesses often have to fully meet the factors of price, quality, after-sales service, because of which competition is pushed to a higher level, causing losses to the profit level of the entire industry.

CHAPTER 2: ANALYSIS OF THE COMPETITIVENESS OF SONG HONG GARMENT JOINT STOCK COMPANY IN THE DOMESTIC MARKET

2.1. General introduction to the organizational structure and factors affecting the competitiveness of Song Hong Garment Joint Stock Company.

2.1.1. General introduction to the organizational structure

Company name : Song Hong Garment Joint Stock Company English name : Song Hong Garment Joinstock Company Abbreviation : SH. GARNY

Stock code : MSH

Head office : No. 105 Nguyen Duc Thuan Street, Thong Nhat Ward, Nam Dinh City, Nam Dinh Province

Phone : +84 2283 649365

Fax : +84 2283 646737

Website: https://www.songhong.vn/

Email: changagoisonghongnd@gmail.com

Tax code / Business registration number : 0600333307

Business registration certificate : No. 0703000386 first issued by the Department of Planning and Investment of Nam Dinh city on June 3, 2004.

Charter capital : 500,094,000,000 VND.

Owner's investment capital : 500,094,000,000 VND.

Song Hong Garment Joint Stock Company was established on July 1, 1988 under the name of 1/7 Garment Enterprise, a state-owned enterprise with a scale of 100 people.

In 1993, the company was renamed Song Hong Garment Company. In 1997, the Recycled Cotton Factory was merged into Song Hong Garment Company, becoming Song Hong II area. The whole company has 3 garment factories with 1,000 people.

In 2001, the Bedding brand named Song Hong was born. In 2002, the head office moved to 105 Nguyen Duc Thuan, Nam Dinh City, with a scale of 3 sewing factories and 1,500 people.

In 2004, the company was equitized and became Song Hong Garment Joint Stock Company. In 2006, the Song Hong III area was developed on National Highway 10, Nam Dinh City. The entire company had 3,600 employees with 6 sewing factories, 1 laundry factory, 1 bedding factory, 1 cotton and quilting factory.

In 2007, Song Hong Garment Company Limited was established, with a representative branch in Hong Kong. In 2008, Song Hong IV area was developed in Xuan Truong district, Nam Dinh province with a scale of 4 garment factories and 6,000 people.

In 2010, the project to build the Song Hong V area in Hai Hau district, Nam Dinh province with a scale of 4 garment factories was implemented. In 2013, the Song Hong 8 production area was established, specializing in the production of high-quality bedding and cotton without using chemicals, the leading brand in Vietnam.

In 2016, the company opened 4 more garment factories in Nghia Hung district, the total number of employees reached nearly 11,000 people with 18 garment factories. In 2018, celebrating its 30th anniversary, the company listed its shares on the HOSE stock exchange on November 28 with a total charter capital of up to 476,280,000,000 VND. In 2019-2020, Song Hong Garment was in the Top 50 Best Listed Companies voted by Forbes.

In nearly 33 years of operation, Song Hong Garment Joint Stock Company, from a small enterprise struggling to survive in the market, has now become a large-scale company, participating in business activities in both international and domestic markets. The company has achieved outstanding achievements such as: in 2006, the company was granted ISO 9001 - 2000 certificate and won the 3rd prize for social responsibility. In 2010, the company's bedding products were awarded the title of high-quality Vietnamese goods voted by consumers and in the same year, the company also received the WRAP certificate. Following that, in 2013, the company was certified as a typical enterprise in the Vietnam Textile and Garment industry for the 8th time - VITAS (2010 - 2013). And until 2018, the company was certified as Top 50 leading brands in Vietnam in 2018. 2018.

- Organizational chart of Song Hong Garment Joint Stock Company.

Figure 2.1: Organizational chart of Song Hong Garment Joint Stock Company

General Meeting of Shareholders

Winter

Board of Directors

Audit Committee

Board of Directors

Deputy General Director of Production

Functional department

Deputy General Director of Business

Business Management

Human Resources Department

Production management

CGGD Workshop

Factory Sales Department

Manufacture

QA Department

Finance and Accounting Department

Other Rooms

Functions and duties:

The General Meeting of Shareholders is the highest decision-making body of the Company, comprising all Shareholders with voting rights, and meets at least once a year. The General Meeting of Shareholders decides on matters stipulated by law and the Company's Charter. The General Meeting of Shareholders approves the Company's annual financial statements and business plans for the following year. In addition, the General Meeting of Shareholders has the function of electing, dismissing, and removing members of the Company's Board of Directors.

The Board of Directors is elected by the General Meeting of Shareholders and is the Company's management body, with full authority on behalf of the Company to decide on all matters related to the Company's purposes and interests, except for matters under the authority of the General Meeting of Shareholders. The Board of Directors has from 3 to 11 members with each member's term of office not exceeding five (05) years and can be re-elected for an unlimited number of terms.

The Internal Audit Committee is a body under the Board of Directors as prescribed in Point b, Clause 1, Article 134 of the Law on Enterprises. The majority of the members of the Audit Committee are independent members of the Board of Directors and non-executive members of the Board of Directors. The Board of Directors shall decide to have at least one member of the Audit Committee with expertise in finance, accounting or auditing and not working for the accounting or finance department of the Company. The members of the Audit Committee shall have diverse expertise and experience in risk management, operations and compliance.

The Company's Board of Directors consists of 01 General Director, 02 Deputy General Directors and 01 Chief Financial Officer. The General Director is appointed by the Board of Directors, is responsible to the General Meeting of Shareholders and the Board of Directors for the performance of assigned duties and powers and must report to these agencies when requested. The Deputy General Directors and Chief Financial Officer are appointed by the Board of Directors upon the proposal of the General Director.

Deputy General Director in charge of production: Responsible before the law and the Board of Directors for assigned work. Directly direct the activities of departments on technical work, import-export planning. Direct the activities of workshops on the development and implementation of production plans, material and equipment plans, equipment and spare parts repair plans, technical and economic norms, and cost allocation work within the assigned scope of responsibility. Organize control and monitor the company's production and business processes in specialized business areas.

Deputy General Director of Business: Responsible before the law and the Board of Directors for assigned work. Authorized by the General Director to negotiate and sign contracts with processing customers, manage and operate all activities in the garment sector. Review business plans of the company's business units and provide support in the field.

business area. Directly supervise the operations of the Hong Kong Representative Office and the International Chamber of Commerce. Approve suppliers/subcontractors in the business area. Report on business activities in the business area to the General Manager.

Human Resources Department: Performs tasks related to management, organization of human resources and labor. Develops plans and implements training and human resource development. Advises the director on organizational issues, salaries, and health care for employees. Recommends measures to manage human resources and salaries, resolves questions and conflicts, and reports to the director.

Finance and Accounting Department: Advises the director on financial and material matters. Performs the company's financial and accounting management functions in accordance with accounting laws, accounting standards and financial regimes under current regulations.

Technical Department: Directing, researching technical and technological design, building quality standards and norms, establishing production processes. Managing, checking and supervising product quality. Directing, supervising, checking and urging the implementation of technical processes. Researching sample designs, directing, instructing, supervising sample testing and drawing diagrams before production.

2.1.2.Factors affecting the company's competitiveness

a.Macro factors

+ Economic change:

- Bank interest rates: Whether bank interest rates increase or decrease sharply will affect the company's business strategy. When interest rates increase, the company will be forced to limit its production scale, and develop business strategies such as: lowering input costs, minimizing costs, making the most of available resources, and effectively using business resources with the aim of ensuring maximum profit. At this time, the company will have to calculate well the output and input costs to set a price that consumers are willing to pay. On the contrary, when bank interest rates are low, it will always be a good time for businesses to borrow capital to expand production scale, purchase equipment as well as invest in research activities to develop their products, but usually when bank interest rates are low, it means that the general market economic situation is going down, consumer purchasing power is reduced and input costs are increased, so businesses need to calculate To set a reasonable product price that consumers can afford will always be a difficult problem. This directly affects the company's competitiveness compared to other competitors. Therefore, Song Hong Garment Enterprise always has reasonable debt strategies to ensure capital needs from production activities and minimize interest rate risks.

- Inflation factor: Domestic inflation in our country is high. This has caused consumers' demand for products to decrease, at the same time high inflation also increases input costs leading to increased production costs, increased product prices, and reduced competitiveness of Song Hong Garment.

- Exchange rate: Exchange rate has a great impact on the production and business activities of import-export enterprises. For Song Hong Garment Joint Stock Company, due to the implementation of a number of transactions and loans in foreign currencies, the company will be exposed to risks when there are fluctuations in the exchange rate between Vietnamese Dong and the corresponding foreign currency. Especially in 2019 and 2020, with the VND/USD exchange rate remaining stable, even increasing slightly while the foreign exchange market had almost no pressure at the end of the year, combined with the fact that the Chinese Yuan continued to depreciate sharply against the Vietnamese Dong, it created a great advantage for Song Hong Garment when the company's main customers come from the US and raw materials are mostly imported from China.

+ Political-legal forces:

As a listed company, Song Hong Garment is completely affected by the legal framework of the Vietnamese stock market. Thus, any adverse changes in the system of legal documents can negatively impact the business operations. In addition, Song Hong Garment also has to face trade barriers along with strict requirements from other markets, thereby creating many challenges for the business. Not only that, the Company operates in the textile and garment sector and is subject to industry management and the impact of specific policies in the business sector of the company, so any issuance or change of new policies, regulations... by the state, especially adjustments related to the industry's operations, can affect the company.

Although in recent years, Vietnam has tried to build a relatively stable legal environment, the legal basis for industry-specific activities as well as regulations on the stock market have also been adjusted to be more complete, however, there are still many shortcomings and are still being adjusted, requiring companies to regularly monitor and update to promptly apply new regulations, ensuring compliance with the law.

+ Culture- society:

With more than 30 years of establishment and participation in the market, it can be said that the company's development is closely linked to the process of change and development of the country, so the company is strongly influenced by the socio-cultural factors of Vietnam. Currently, the Vietnamese economy is developing, the average income of people is increasing, so the demand and criteria when choosing a product are also increasing such as: increased quality requirements, requirements for convenient design, more diverse models. Therefore, the company must grasp the above issues to serve the needs of consumers in the best way.

b. Micro factors:

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