Million People 17. The above figures show that the potential for labor resources is very abundant.

Production and business have been affected by inflation, high interest rates have increased input costs, affecting production and business. In the first 6 months of 2011, the average capital mobilization interest rate increased by about 3% compared to the end of 2010 (in 2010, the average was about 12%/year), the difference between mobilization and lending interest rates is quite large (about 3-4%); borrowing credit capital of a part of enterprises is still difficult; the bad debt ratio tends to increase. The profits of many enterprises have decreased, some enterprises have made losses and had to reduce the scale of production and business.

The recent adjustment of the exchange rate band by the Government has had positive impacts on the economy in the current period. The exchange rate has more closely reflected the actual supply and demand of foreign currency in the economy, providing good support for exports.

2.3.1.2 Political and legal factors

(a) Politically :

A stable political environment has a decisive significance in economic development, creating favorable conditions for attracting foreign investment, and resolving

15 General Statistics Office (April 26, 2011).

create jobs for workers, accelerate economic growth, have a strong impact on increasing social consumption demand. Foreign relations are in the direction of multilateralization, diversification, economic relations are increasingly expanding, participating in many international economic organizations, consolidating Vietnam's position in the international arena. The Government has been strongly implementing its commitments to administrative reform, comprehensive economic reform, building a more dynamic and effective business environment.

However, although Vietnam has a stable political situation, administrative procedures are still cumbersome, corruption of some officials and civil servants still exists... In international relations, besides positive factors, there are still some instabilities, disputes over the East Sea involving many countries will continue to develop complicatedly, national sovereignty still has hidden risks of being threatened, reactionary and hostile forces at home and abroad continue to sabotage our country's revolution. Therefore, besides the task of economic development, we must continue to build

regular, modern army to maintain territorial sovereignty and protect the fatherland, protect the revolutionary cause of our Party and people 16. The above factors will negatively impact businesses in investing and expanding business development in the coming time.

(b) Regarding the law:

In the trend of integration into the world and regional economy, the National Assembly has promulgated and continued to complete economic laws such as: Domestic Investment Law; Foreign Investment Law; Commercial Law; Enterprise Law; Corporate Income Tax Law... to accelerate the process of international economic integration. Many open economic policies to encourage the development of economic sectors have also been passed, contributing to creating a favorable, healthy and stable business environment for the entire economy.

Besides, there are still many shortcomings in the implementation and enforcement of laws, the content of the laws is not really clear and reasonable, lacking consistency and

16 Report at the conference on deploying tasks for 2011 of the General Department of Logistics - Ministry of National Defense (December 2010).

The lack of synchronization between terms and regulations has caused many controversies between businesses and the implementing agencies, as well as between law enforcement agencies... These limitations have caused many difficulties for businesses in the process of operation and development.

2.3.1.3 Social factors

Vietnam's population as of 0:00 on April 1, 2010 was over 86 million people, of which rural areas accounted for 77% of the total population. It is forecasted that by 2015 Vietnam's population will reach

89.2 million people 17. The above data shows that the potential for labor resources is very abundant.

In addition, the unemployment rate is considered quite high, especially in the current period. The labor force of working age in our country in 2010 was about 46.21 million people, an increase of 2.12% compared to 2009. The unemployment rate in 2010 was 2.88%. Of which, the unemployment rate in urban areas in 2010 was 4.43%, a decrease of 0.17%. The unemployment rate in rural areas was 2.27%, an increase of 0.02% compared to 2009. The rate of the country's population aged 15 and over participating in the labor force increased from 76.5%

to 77.3% in 2010 18 . However, the high unemployment rate creates conditions for the Company to

Quang Ngai 28 Joint Stock Company in expanding and developing production with low labor costs, especially in the garment industry which is a highly labor-intensive industry.

Table 2.3: Vietnam's population situation over the years (1995-2010)

Unit: million people

Year

Source: Statistical yearbook over the years [18]

2.3.1.4 Technical and technological factors

The overseas labor market is also expanding, Vietnamese workers have the opportunity to actively participate in the international division of labor, and have the opportunity to access

17 General Statistics Office (7/2010)

18 General Statistics Office (August 2011)

Opportunity for Quang Ngai 28 Joint Stock Company to acquire advanced science, technology and management, design technology, etc. to train a team of business managers and skilled technical workers.

2.3.2 Industry environment

According to Michael Porter, the micro-environment (industry environment) of a business includes the following main factors: (1) competitors in the industry; (2) customers; (3) suppliers; (4) potential competitors; (5) substitute products. These factors will directly impact businesses, including Quang Ngai 28 Joint Stock Company.

2.3.2.1 Competitors

Competitive image matrix of Quang Ngai 28 Joint Stock Company

Previously, Vietnam was still considered to have an advantage in terms of cheap labor costs, but currently, Vietnam's textile labor costs are still higher than some rural areas of China and some countries in the region. Vietnam's textile industry is also heavily dependent on imported raw materials, mainly from China, with about 70% of raw materials having to be imported. Vietnamese textile enterprises, including Quang Ngai 28 Joint Stock Company, are under great pressure from rising input costs, unable to proactively plan production and production sources to serve exports and domestic consumption. Therefore, on the international level, China is the biggest competitor, having a direct impact on the world and regional textile markets. In addition, some countries also have high competitiveness in the textile sector such as: India, Indonesia, Bangladesh...

19 Economic Forecast Magazine No. 9 (2007)

Domestically, the number of enterprises in the textile and garment industry is also very large. By December 2010, the Vietnamese textile and garment industry had about 2,200 enterprises. Of which, domestic enterprises accounted for 75.8%, most of which were small and medium-sized with popular garment products such as trousers, shorts, jackets, shirts, vests, t-shirts, etc. accounting for 70% of the industry's garment products . 20. Quang Ngai 28 Joint Stock Company is an enterprise in the group of large-scale companies, although it has a lot of experience.

in the garment industry since its establishment (27/7 Garment Factory - Military Region 5 - 1979), but during the process of formation and development up to now, the Company's production activities have mainly followed the above plan with the main task of producing military uniforms for the army. The transition to independent accounting, operating under the market mechanism since 2006 and participating in the new export market has been implemented since the beginning of 2011. For this reason, the Company's competitiveness in the market is still very limited, the Company has not created its own reputation and image in the market, but is mainly known thanks to the image of General Company 28.

With a large scale, the Company's production and business activities mainly focus on the market segment of jackets, women's fashion coats, and workwear with long orders, high technical requirements, and high quality. Therefore, although there are many competitors, the Company's main competitors are enterprises of the same scale, producing the same type of products, serving the same market segment. Typical companies are the following:

Vinatex Quang Ngai Garment One Member Co., Ltd. is located at Lot C6 - Tinh Phong Industrial Park - Son Tinh - Quang Ngai with an area of ​​about 49,000m2, specializing in the production of export garments with a scale of nearly 3 million jackets/year, creating jobs for 3,400 workers in Tinh Phong Industrial Park, Son Tinh District. This company was acquired by Vinatex from Dai Cat Tuong Garment Joint Stock Company and became one of the major competitors of garment enterprises in the Central region.

20 Vietnam Textile and Apparel Association – Vitas [15].

Hoa Tho Textile and Garment Joint Stock Corporation was established in 1962, a member of Vietnam Textile and Garment Group, headquartered at 36 Ong Ich Duong - Cam Le District - Da Nang City. Products of Hoa Tho Textile and Garment Joint Stock Corporation are present in most markets in the world such as the United States, EU, Japan, Middle East, South America, ... through major importers in many countries. With nearly 7,000 employees including managers, designers, technicians and highly skilled sewing workers, a production capacity of 10 million products/year, Hoa Tho Textile and Garment is one of the leading enterprises in the Vietnam Textile and Garment industry. Truong Giang Garment Joint Stock Company is headquartered at 239 Huynh Thuc Khang, Tam Ky City, Quang Nam Province, established in 1979. As one of the companies with a long history of operation in the garment industry in Vietnam, on that foundation, the Company has gradually affirmed its position at home and abroad. The Company has invested in developing technology to serve production, which is highly appreciated by customers. Currently, the Company has invested in technological innovation, equipped with over 950 devices.

Advanced, modern Japanese sewing machine, with over 10,000m2 factory , production capacity

Exporting over 1 million jackets per year. The company's export products are exported to many countries around the world such as the EU, the United States, Taiwan, Korea, etc., creating a reputation in the market.

Binh Dinh Garment Joint Stock Company is headquartered at 105 Tran Hung Dao, Quy Nhon City, and was established in 2006. Currently, the total number of employees of Binh Dinh Garment Joint Stock Company is over 6,000 people with a production capacity of nearly 2.7 million jackets/year. The strength of this company is focusing on investing in market research, fashion tastes, design work, and product model diversification, which is highly focused on. The company regularly has hundreds of different models to serve customers in its segment. The company's export products are exported to the EU, the United States, Japan, etc.

The competitiveness of Quang Ngai 28 Joint Stock Company compared to its main competitors is shown in the competitive image matrix (Table 2.4).

The set of 12 main factors is considered to have a decisive impact on the competitiveness of enterprises. These factors are structured into observed variables (Scale items) from c1 to c12 to examine their importance to the competitiveness of enterprises. The scale used is a 5-level scale (Interval scale) to get experts' opinions on the observed variables (Appendix 01-04). The author assigned the classification points for the factors after consulting with the opinions of officers and colleagues of Quang Ngai 28 Joint Stock Company and 28 Corporation.

Table 2.4: Competitive image matrix of Quang Ngai 28 Joint Stock Company

Variable

The competitive image matrix shows that with a total weighted score of 3,336 (highest), Vinatex Quang Ngai Company is leading in the competitiveness of jackets and coats in the export market, followed by Vinatex Quang Ngai Joint Stock Company.