Hoa Tho Textile and Garment section has 3,175 points, Quang Ngai 28 Joint Stock Company has a score above average (2,731), slightly higher than Truong Giang Company and Binh Dinh Garment Joint Stock Company with scores of 2,581 and 2,504.
Main competitive tools of Quang Ngai 28 Joint Stock Company
Through analysis and evaluation of the main competitors above, although the competitiveness of Quang Ngai 28 Joint Stock Company is higher than some companies, it is still lower than that of large companies in the Central region in terms of production scale, brand image, market share, distribution network and especially the ability to quickly respond to diverse market needs. An easily recognizable feature is that most of Quang Ngai 28 Joint Stock Company's competitors focus on the jacket market segment with uncomplicated product structure and design, with little change. Meanwhile, the jacket market has not been invested in or exploited, or if it has, it is not deep because this is a relatively demanding market, requiring many strict technical requirements. In order to limit the strengths of competitors and overcome its weaknesses, the Company needs to focus on the main competitive tools available such as:
Premium products
With the current scale and production capacity, the team of managers, technical staff, and production workers have experience in organizing and implementing production of orders with high technical requirements and complex product structures, especially women's fashion jackets and high-end workwear, so the Company can exploit this market segment, promoting exports to the US, EU, Japan, etc.
Low cost manufacturing
When equitized, 28 Quang Ngai Joint Stock Company was assigned by the Ministry of National Defense to manage and use more than 10,600 m2 of land through a 49-year defense land lease contract with preferential rental prices. The above land is currently located in the center of Quang Ngai city, near National Highway 1A. With convenient transportation: near Dung Quat port, Da Nang port
Da Nang, Chu Lai airport, Da Nang airport, will be a great advantage for the Company in
The exploitation of real estate business in the future will bring in significant revenue to offset production costs and reduce the cost of the Company's products. In particular, labor costs in Quang Ngai are much cheaper than in big cities. In addition, the Company also receives maximum support from Corporation 28 in terms of human resources and materials. With strong financial resources and abundant human resources, Corporation 28 is strongly supporting its member units in innovating production technology, training human resources, research and development... to increase competitiveness in the entire Corporation system in the market.
Order fulfillment capability
With the support of the 28th Corporation and its units, Quang Ngai 28 Joint Stock Company has extensive partnerships with domestic and foreign enterprises, has access to a diverse market information system, and has a lot of experience in production implementation... Therefore, the Company is capable of meeting orders from small to large, with complex product designs and structures, high fashion, high seasonality, short production and delivery times... and has gained prestige with customers. In the increasingly fierce competition conditions today, ensuring delivery deadlines and product launch times (especially when current fashion trends change very quickly) is also an important competitive tool to help the Company develop its production and business activities in the future.
Highly skilled workers, stable labor source
Currently, for garment enterprises in large cities and provinces in the country, the labor source is a difficult problem, but at Quang Ngai 28 Joint Stock Company, the labor source is very stable, the workers are highly skilled. With stable jobs, close to home, conditions to take care of family, low living costs compared to big cities, most workers choose to work in their hometown. Some workers after a period of working in big cities also choose to return to work in their hometown. And most of these workers have a lot of experience.
experience. This is a great advantage of Quang Ngai 28 Joint Stock Company, helping to reduce training and retraining costs.
2.3.2.2 Customers
Although in recent years the export turnover of the Vietnamese textile and garment industry has had a high growth rate (over 20% per year), most of Vietnam's textile and garment products must go through the distribution system and intermediary companies to reach major markets such as the US, Japan, EU, etc. The same goes for Quang Ngai 28 Joint Stock Company, which has only officially exported its products abroad since the beginning of 2011 under the brands Snickers and AMW. Therefore, the production, business and export activities of the Company depend entirely on customer orders. With this advantage, customers always find ways to squeeze prices, request development and production of designs to serve their sales activities. Customers also designate domestic and foreign suppliers of raw materials and accessories (70-80% of raw materials and accessories must be imported by the Company according to customer instructions). The payment terms are often disadvantageous to the Company (buying raw materials and accessories, paying in advance, selling finished products, paying later). When products cannot be sold, or are sold slowly... customers often use quality reasons to delay payment.
To develop, the Company focuses on market research, improving designs, enhancing product quality to meet customer needs. From there, building image, reputation, establishing direct relationships with branded retailers, direct distribution systems to consumers. Reducing costs through distribution channels, intermediary trading companies, increasing the Company's competitiveness in the market.
2.3.2.3 Supplier
Raw materials are a factor that greatly affects the production and business activities of the Company. Fabric is the main raw material in production (usually accounting for 70% of the factory cost of the product) and is often imported from countries such as Hong Kong, China, and Thailand. Because the quality of domestic raw materials has not met market demand, as well as the input raw materials are all from the outside.
foreign suppliers (including some domestic materials such as thread, buttons, etc.), so although the Company currently has a large number of raw material suppliers, there are almost no domestic raw materials (100% of fabrics and glue are imported), there are only a few packaging materials (nylon bags, carton boxes, etc.). The Company can proactively choose domestic suppliers (value about 2-3% of the factory price of the product). Due to not having the advantage of negotiating with suppliers, the Company is under a lot of pressure from them in terms of price, delivery schedule (usually having to place orders 2 months in advance of the start date of production), payment terms (almost having to pay in advance when the supplier delivers the goods on board, which will lead to capital backlog and will be very disadvantageous for the Company when disputes and risks occur). The Company is very passive in arranging production plans because it depends entirely on the delivery schedule of suppliers.
In the coming years, the Company needs to be more proactive in developing raw materials, especially domestic raw materials, increasing the localization rate of raw materials in its product structure to reduce production costs and reduce passivity in preparing input factors for production.
2.3.2.4 Alternative products and services
Garments belong to the group of essential products that meet the daily needs of consumers. Therefore, in the future, it is difficult for any product to replace garments. However, the Company's two strategic products: (1) are fashionable jackets belonging to the group of highly fashionable products, so the product design and model will continuously change to promptly meet the increasingly high tastes of consumers and (2) are high-end protective clothing belonging to the group of products with very high technical requirements and complex designs. Therefore, manufacturers in general and Quang Ngai 28 Joint Stock Company in particular, in order to survive and develop in this industry, must constantly improve product quality, research the market, invest in improving new product designs to suit the ever-changing needs of the market.
2.3.2.5 Potential competitors
According to the Government's strategy for textile and garment industry development to 2015 and vision to 2020, textile and garment is a key export industry, creating many jobs and solving social problems. In the period of 2011 to 2020, production growth is from 12-14%; export is 15%. Of which, garment products have a target of reaching 2,850 million products by 2015 and 4,000 million products by 2020. To achieve this goal, the Government will focus on prioritizing the development of the textile and garment industry towards accelerating modernization, ensuring rapid, stable, sustainable and effective growth. The State will have favorable policies for new enterprises of all economic sectors to join the textile and garment industry, policies to attract foreign investment. This is an advantage for the Company in the coming time, however, there are also difficulties when the Company will have to face potential competitors - also potential competitors of domestic garment enterprises. Those are African textile enterprises with cheap labor costs, very low production costs, competitive prices. With this advantage, African textile enterprises will create a lot of pressure on the export market.
Analysis of the industry environment has shown the competitive pressures in the industry of Vietnamese textile and garment enterprises, including Quang Ngai 28 Joint Stock Company, through the following main factors:
- International competitors have advantages in capital, advanced technology, techniques, diverse products, and low prices. Domestically, there is fierce competition among companies in the industry. The competitiveness of Quang Ngai 28 Joint Stock Company is low, the main competitive tools of the Company are product quality, low production costs, a team of highly skilled and stable workers and the ability to organize production, focusing on the market segment of fashionable women's coats and high-end workwear.
- Export markets are difficult to access for main customers, textile and garment companies mainly penetrate international markets through intermediary customers.
- The textile and garment supporting industry is still weak, unable to meet the requirements of the domestic and export markets. The production and business activities of enterprises are mainly dependent on foreign raw material suppliers.
- Potential domestic and international competitors are growing. In particular, large-scale domestic enterprises and production facilities, African textile and garment enterprises are the main potential competitors in the future.
- Alternative products with diverse and rich materials and fashion designs are developing strongly. Requiring businesses to constantly research the market and invest in improving new product designs to suit market needs.
2.3.3 External Factor Matrix (EFE)
The EFE matrix of Quang Ngai 28 Joint Stock Company is built on the basis of:
(1) Process of building EFE matrix.
(2) Consulting experts and business executives in the textile industry on the importance of the impact of external environmental factors on the production and business activities of Vietnamese textile enterprises: A set of 12 main factors of the external environment is structured into observation variables (Scale items) from a1 to a12 to get experts' opinions on the observation variables, the scale used is a 5-level scale (Interval scale). (Appendix 01; 02)
(3) Analysis and evaluation of the external environment.
(4) The author's classification score for the factors was given after consulting with the staff and colleagues of Quang Ngai Joint Stock Company 28 and General Company 28.
Table 2.5: EFE matrix of Quang Ngai 28 Joint Stock Company
Variable
External factors | Level of importance weight | Classify | Important points | |
a1 | Sociopolitical stability | 0.084 | 3 | 0.252 |
a2 | High GDP growth rate, people's disposable income increased | 0.083 | 2 | 0.165 |
a3 | High inflation rate and many complicated developments that are difficult to control | 0.095 | 3 | 0.285 |
a4 | Foreign exchange rates gradually stabilize | 0.081 | 2 | 0.162 |
a5 | Financial crisis, global recession | 0.089 | 2 | 0.178 |
a6 | US government policies on preventing Vietnamese garment products from being imported into the US | 0.078 | 2 | 0.157 |
a7 | The State has many policies to support investment and development for the textile industry in terms of taxes, capital, interest rates, and labor. | 0.084 | 2 | 0.169 |
a8 | Development of science and technology | 0.082 | 3 | 0.245 |
a9 | International competitors are increasing competitive pressure on Vietnam's textile industry. | 0.095 | 2 | 0.190 |
a10 | Export markets are difficult to access to main customers, mainly penetrating international markets through intermediary customers. | 0.081 | 1 | 0.081 |
a11 | The textile and garment supporting industry is still weak, and textile and garment enterprises mainly depend on foreign raw material suppliers. | 0.090 | 1 | 0.090 |
a12 | Potential domestic and international competitors are growing day by day. | 0.059 | 1 | 0.059 |
Total | 1,000 | 2,031 |
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Through the EFE matrix of Quang Ngai 28 Joint Stock Company (Table 2.5), the total important score is 2,031, much lower than the average, showing that the Company's ability to respond is below average to opportunities and threats from the external environment. Moreover, factors such as high inflation, financial crisis and global economic recession, domestic and international competition, weak textile and garment supporting industry, etc. are very important factors affecting the Company's success. Therefore, the Company's development strategy must be improved.
ability to respond to the above factors. At the same time, take advantage of opportunities such as economic growth, labor resources, developed domestic market, state support, science and technology development... to invest in expanding production scale, increasing competitiveness, developing domestic and export markets.
Analyzing the external environment of Quang Ngai 28 Joint Stock Company, identifying the following opportunities and threats:
Opportunities
O1: Socio-political stability and an increasingly improved legal system will contribute to promoting the Vietnamese textile and garment industry.
O2: Textile and garment is one of the top priority industries for development. The Government has policies to support investment and development of the industry.
O3: High GDP growth rate, growing economy, increasing living standards and income of people will increase demand for garment products, especially mid-range and high-end products.
O4: Vietnamese garment products are increasingly gaining the trust of importing countries (US, EU, Japan...) due to high product quality, so they will be able to expand their export market share as well as increase export value.
O5: Science, technology and engineering in the textile industry are increasingly advancing, creating conditions for textile enterprises to apply new technology in production, replacing manual labor, creating high-quality products, increasing competitiveness and meeting increasingly diverse market needs.
Threats
T1: The economic recession in the country and the world, the increasingly complicated territorial disputes are factors causing economic and political instability in the region, which will directly affect the production and business activities of textile and garment enterprises.