Nâng cao năng lực cạnh tranh của Tập đoàn dệt may Việt Nam trong bối cảnh hội nhập kinh tế quốc tế tt

MINISTRY OF EDUCATION AND TRAINING
HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
----------------

NGUYEN GIA SON

IMPROVEMENT OF COMPETITIVENESS OF VIETNAM
NATIONAL TEXTILE AND GARMENT GROUP IN THE
CONTEXT OF INTERNATIONAL ECONOMIC
INTEGRATION

SUMMARY OF PHD THESIS IN ECONOMICS

Hanoi, 2022


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The thesis is completed at:
Hanoi University of Business and Technology

Supervisors:
1. Prof. Dr. Vu Van Hoa
2. Assoc.Prof. Dr. Nguyen Dinh Kiem

Reviewer 1:

Reviewer 2:

Reviewer 3:

The thesis will be defended in front of the School-level Thesis Evaluation

Council

Location: PhD Thesis Defense Room A503 at Building A, Hanoi University of
Business and Technology.
Time: at hour

day

month

2022

INTRODUCTION


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1.Rationale

Textile and garment is a sprearhead economic sector that has been making
great contributions to export turnover, creating jobs and solving socio-economic
issues of the country. Vietnam textile and garment has entered top 5 largest
textile and garment exporting countries in the world, including: China, India,
Turkey, Vietnam and Bangladesh. Contributing to the position of Vietnam textile
and garment industry in the current context of international economic
integration, it is impossible not to mention the role of Vietnam National Textile
and Garment Group (VINATEX). Since its establishment (1995), VINATEX has
shouldered the historical role of the Vietnam Textile and Garment Industry,
taking on the mission of overcoming the shortcomings of the subsidy period,
transforming from administrative to business accounting under the market

mechanism, with the focus on export to the international market. And also from
having to compete in the international market, the Group has always improved
its operation, invested heavily and restructured continuously to meet the needs
of customers and partners. Those two strengths contribute to helping VINATEX
overcome difficulties and challenges to grow continuously and become a
prestigious economic group with a national and regional strong position.
With the viewpoint that competitiveness is synonymous with maintaining
and enhancing competitive advantages, some economic experts believe that the
competitiveness of the enterprise is the ability to build, maintain and use and
create new advantages, gain higher productivity and quality than those of
competitors, occupy a large market share, generate high income and develop
sustainably. The factors that make up the competitiveness of the enterprise are:
Quality, supply ability, specialization level of inputs; Manufacturing industries
and supporting services for the enterprise; Customer requirements for product
and service quality; Position of the enterprise compared to its competitors.


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For 25 years of construction and development, VINATEX has grown from
an enterprise with 100% State capital and owned by the State into the textile and
garment industry in Vietnam and internationally. However, in recent times, the
competitiveness of Vietnam National Textile and Garment Group has not been
high compared to other countries manufacturing the same type of textile and
garment products and not commensurate with the available potential; Limit in
quality of human resources and the proportion of workers without basic training
have been still high; There is no planning and construction of a sustainable
source of raw materials for the industry. The source of raw materials and
accessories mostly depends on foreign countries, the method of export
processing is main, etc. There are many reasons leading to this situation, of
which the very important reason is: The State and some localities related to

textile and garment activities have not really created a driving force for the
development of VINATEX in particular and the textile and garment industry in
general; Labor productivity is not high, the management model of VINATEX
has not kept up with the development pace in the world market; The chain link
between member enterprises for the common benefit of the Group is not
effective.
Systematic research, comprehensive assessment of activities and factors
related to the competitiveness of VINATEX are very necessary today, thereby
giving effective solutions for improving the competitiveness of VINATEX in
particular and Vietnam textile and garment industry in general in the context of
comprehensive international economic integration.
From the above fact, inheriting relevant theoretical issues and operating
results of Vietnam National Textile and Garment Group, the author chooses
“Improvement of competitiveness of Vietnam National Textile and Garment
Group in the context of international economic integration” topic as the one
for PhD thesis majoring in Business management.


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2. Research objectives

2.1. General objective
The research topic of the thesis further clarifies the theoretical issues about
the competitiveness of the enterprises in general and textile and garment
enterprises in particular in the current context of international integration,
thereby assessing the actual situation and develop solutions to help Vinatex
improve its competitiveness in the textile and garment industry in Vietnam and
internationally in the coming time.
2.2. Specific objective
-

Systematize

the

theoretical

basis

of

enterprises

and

their

competitiveness, including textile and garment enterprises.
- Research the current competitive situation of VINATEX in the textile
and garment market in Vietnam and in the world.
- Recommend solutions for improving the competitiveness of VINATEX
by 2025, with a vision to 2030.
3. Research questions

(1). What is the competition and competitiveness of the enterprise?
(2). On which aspects is the content related to the competitiveness of the
enterprise assessed?
(3). How is the actual situation of VINATEX's competitiveness and
supply chain participation in the domestic and international textile and garment
market in 2016-2020 period? What are the limitations and weaknesses in

competitiveness and the causes of such limitations?
(4). What solutions are needed to improve the competitiveness of
VINATEX in the context of international economic integration in the coming
time?


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4. Research subject and scope

4.1. Research subject: Theoretical and practical bases for competitiveness of the
enterprise in the context of international economic integration.
4.2. Research scope
- Regarding space:

Vietnam National Textile and Garment Group

(VINATEX).
- Regarding time: Vinatex's business activities in 2016-2020 period and
proposed solutions by 2025, with a vision to 2030.
5. New contributions of the thesis

5.1. Theoretical contribution
The thesis has systematized and explained a number of theoretical issues
about the enterprise; Competition of the enterprise in the market economy in our
country; Built a theoretical framework to evaluate the competitiveness of the
enterprise. Quantitative and qualitative criteria to evaluate the competitiveness
of the enterprise; pointed out the objective and subjective factors affecting the
competitiveness of the enterprise.
Therefore, the result of the study will make certain contributions to the
completion of the theoretical framework on improving the competitiveness of

the enterprise and textile and garment enterprises in Vietnam.
5.2. Practical contribution
- Research result helps researchers, central and local managers have a more
complete and comprehensive view of an approach and assessment of
competitiveness of textile and garment enterprises.
- The research result helps researchers and state management agencies on
enterprises to see the actual operation situation, achievements, limitations and
causes of existing limitations in the competitiveness of VINATEX, a typical
Group of Vietnam textile and garment industry.


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- Propose solutions for VINATEX, Vietnam Textile and Apparel
Association and management agencies related to textile and garment enterprises
to refer to, thereby contributing to improving the competitiveness of Vietnam
textile and garment industry in the context of international integration.
- Although there are many research works on VINATEX and VINATEX's
fields of operation, none of them has been implemented fully and on a large
scale, ensuring the generality of VINATEX's competitiveness in the current
context of intensive international integration.
- This research work can be a reference for those who are interested in the
competitiveness of enterprises and textile and garment enterprises.
6. Research methods:

*Methodology: The research is based on the method of dialectical
materialism and historical materialism. This is the common basis for any
perception in the research process. In addition, the research on the topic always
adheres to the guidelines and lines of the Party, policies and laws of the State on
socio-economic development in general, and development of Vietnam textile
and garment industry in particular, without separating the development objective

of the Vietnam Textile and Apparel Association.
*Theoretical synthesis, analysis and systematization: The author collects
documents from different sources, categorizes and systematizes them into a
coherent logical structure according to each scientific issue.
*Data collection, statistics, synthesis and analysis: Collect secondary data
sources from financial statements, annual reports, year-end reports related to
VINATEX's competitiveness; Annual review meeting of Vietnam Textile and
Apparel Association, data from a number of organizations; Statistical
yearbook…for the research process.


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*Desk research method: By systematically utilizing information
technology applications, the Internet, communication network, etc., the author
has consulted a lot of useful information for the research process.
*Expert method: The author screens and inherits some theories from
textbooks, survey results and some practical assessments of economists,
economic experts at conferences, seminars, reports on scientific research topics,
and theses in the same industry to better clarify the conclusions drawn from the
research process.
* Method of comparison, collation, inference: Based on the secondary
information sources collected, filtered, classified and processed as mentioned
above, the author analyzes, compares, collates in order to assess the actual
situation of the research subject.
7. Structure of the thesis

In addition to the introduction, conclusion, table of contents, list of
abbreviations, list of tables, figures, references, the thesis is arranged in 4
chapters:
Chapter 1: Overview of research works related to the thesis topic

Chapter 2: Theoretical bases for competitiveness of the enterprise
Chapter 3: Actual situation of improvement of competitiveness of Vietnam
National Textile and Garment Group
Chapter 4: Solutions for improving competitiveness of Vietnam National
Textile and Garment Group in the context of international economic
integration

CHAPTER 1
OVERVIEW OF RESEARCH WORKS RELATED
TO THE THESIS TOPIC


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1.1 INTERNATIONAL RESEARCH WORKS RELATED TO THE THESIS
TOPIC

In the market economy with the context of increasingly expanding
globalization and international economic integration, competition is a common
phenomenon and has important implications for economic development in
countries. The research on competitiveness and the theory of competition has
also appearred from very early with famous schools in the world such as:
classical competition theory, neoclassical competition theory and modern
competition theory. These theories have clarified the nature of competition, the
role and impact of competition, modes of competition, etc. In addition to
classical economists and classics, competition theories are associated with
famous names of perfect competition school such as w.s.Jevos, A.Coumot,
L.Walras, Marshall...and the modern competition school such as E.Chamberlin,
J.Robinson, J.Schumpeter, R. Boyer, M.Aglietta, Michael Porter, Michael
Eairbank,…
However, competitiveness and the systematic study of competitiveness was

started quite late and only since the 1980s until now. According to the combined
results of researches on competitiveness by British economists Buckley, Pass
and Prescott, in 1988 there were very few accepted definitions of
competitiveness. And M.E. Porter - a world leading expert on competitiveness
pointed out that until 1990, competitiveness was still not fully understood and
there was no universally accepted definition. In 1996, Waheeduzzan et al. stated
that "competitiveness is still one of the misunderstood concepts". Until 2004,
Henricsson et al. pointed out that the concept of competitiveness was still
controversial among policymakers, economists, journalists and scholars. In
studies on competitiveness, some authors such as Thorne (2002, 2004), Momay
(2002, 2005), Flanagan et al. (2007) showed that since the 1990s, the theory of
competitiveness in the world had entered the "boom" period with a large number
of published research works.


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1.2 DOMESTIC RESEARCH WORKS RELATED TO THE THESIS TOPIC

Domestic research works on competitiveness of enterprises in recent years
have also been interested by many researchers and scholars. Researches mainly
focused on two main directions, including research on competitiveness and
solutions for improving competitiveness of enterprises in an industry; Research
on internal factors affecting competitiveness of enterprises.
1.3 GENERAL OVERVIEW OF RELATED RESEARCH WORKS, THESES
THAT NEEDS TO BE REFERRED

Although there are differences in objectives, tasks, content and research
scope, the above studies have directly or indirectly solved problems related to
competition, competitiveness of enterprises in general and garment and textile
enterprises in particular and have achieved research results

1.4 RESEARCH GAPS AND ORIENTATION FOR FURTHER RESEARCH OF
THE THESIS

1.4.1. Research gaps:
1.4.2 Orientation for further research of the thesis

SUBCONCLUSION OF CHAPTER 1

CHAPTER 2
THEORETICAL BASES FOR COMPETITIVENESS
OF THE ENTERPRISE
2.1 OVERVIEW OF THE ENTERPRISE

2.1.1 Concept
Theoretically, there are many ways to understand the enterprise because in
the end, from any angle to approach the enterprise, there will be the concept of
the enterprise from that angle. It is also natural because the enterprise, like many


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other concepts, is studied and considered from many different perspectives.
According to M.Francois Peroux, “an enterprise is a production-organizing unit
in which various production factors (with regard to their prices) are combined
by the company's employees in order to sell goods or services in the market in
order to receive different amount of money between the selling price of the
product and its cost”. According to the development point of view, “an
enterprise is a community of people who produce assets. It is born, develops,
has failures, has successes, sometimes overcomes critical times and in contrast
sometimes has to stop production, sometimes disappears due to insurmountable
difficulties.

2.1.2 Characteristics
2.1.3 Enterprise classification
2.1.4 Enterprise role in the socio-economy
2.2 COMPETITIVENESS OF THE ENTERPRISE

2.2.1 Overview of competition
2.2.1.1 Some viewpoints on competition
Competition in general and competition in economics in particular is a
concept with many different interpretations. Competition is used for enterprise
scope, industry scope, national scale or transnational area scope, etc. This only
differs in that whether the objective is set in enterprise scope or in country
scope. While for an enterprise, the main objective is to survive and seek profit
on the basis of national or international competition, for a country the objective
is to raise the standard of living and welfare of the people, etc.….Competition
has become an inevitable phenomenon in the economy. The origin of
competition, according to Marx: “The division of labor in society makes
independent producers of goods face each other, those do not admit any other
power but competition” [31].


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From the different definitions and interpretations, the following general
points can be drawn: Competition is to try to gain more, win more for oneself in
a competitive environment. The nature of competition is to seek profit, which is
a profit higher than the average profit that an enterprise is gaining.
2.2.1.2 The role of competition
In the field of production and business, competition always takes place
continuously and is understood as a non-stop race among competitors. In the
current context when Vietnam economy has been gradually asserting its
advantages, the increasingly complete competitive environment poses

opportunities and challenges for enterprises. The enterprises that know their
competitors, know to satisfy the needs and tastes of customers better than
competitors, know how to take the initiative with suppliers of goods and take
advantage of competitive advantages will exist, on the contrary, the enterprises
that do not have competitive potential or do not "nurture" competitive potential
will inevitably fail.
Therefore, the enterprises have to accept competition, wait for
competition in front and be ready to use their effective competitive tools. This is
most clearly seen in the role of competition:
(1). Competition allows for optimal use of resources.
(2). Encourage the application of scientific and technical advances.
(3). Satisfy consumer needs increasingly better.
(4). Promote production development, increase labor productivity and
economic efficiency.
(5). Moreover, competition also makes the prices of goods and services
decrease but the quality is improved, stimulates purchasing power and increases
the growth rate of the economy.
2.2.2 Competitiveness of the enterprise in the market economy


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2.2.2.1 Concept
Competitiveness [12] is an expression of the strength and advantages of a
business entity compared to its competitors in best satisfying customer
requirements in order to gain increasingly higher profits. Competitiveness must
be compared with specific competitors, specific products and goods in the same
market and at the same time. Competitiveness is considered at three different
levels, including national competitiveness, enterprise competitiveness and
product or service competitiveness.
2.2.2.2 Necessity to improve the competitiveness of the enterprise

In the market mechanism, competition is an objective inevitability. Every
enterprise, when participating in the market, needs to accept competition and
obey the rules of competition, even though sometimes competition also becomes
a double-edged sword. On the one hand, it mercilessly eliminates enterprises
with high costs, bad product quality and poor sales organization, on the other
hand it forces enterprises to constantly try to reduce costs for decreasing product
prices, improve the use value of products and organize the product consumption
system.
2.2.3 Some criteria to evaluate the competitiveness of the enterprise
The measurement and determination of the enterprise's competitiveness
measurement criteria are issues that have not been consistently understood.
There are quite a few studies under the theoretical perspective to determine the
competitiveness measurement method. Within the scope of the thesis, a number
of qualitative and quantitative criteria are proposed as follows:
2.2.3.1 Qualitative criterion
2.2.3.2 Quantitative criterion
2.3 INTERNATIONAL ECONOMIC INTEGRATION’S IMPACTS ON THE
COMPETITIVENESS
ENTERPRISES

OF

VIETNAM

TEXTILE

AND

GARMENT

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2.3.1 Overview of international economic integration
Economic integration, understood in a stricter way, is the institutional
binding of economies. This concept was proposed by Béla Balassa in the 1960s
and was accepted mainly in academia and policymaking [33]. More specifically,
international economic integration is a process of proactively doing two things
at the same time: On the one hand, link each country's economy and market with
regional and world markets through efforts to open up and promote the
liberalization of the national economy; and on the other hand, join and
contribute to the building of regional and global economic institutions [34].
2.3.2 Vietnam's perspective on international economic integration
In the context when the scientific and technical revolution has been
increasingly developing and playing an important role in the world's socioeconomic life, establishing a guideline of economic, scientific and technical
cooperation with other countries is an urgent need for Vietnam's renovation
process. Moreover, in the early 90s of the twentieth century, international
economic integration became a tendency of the times, took place strongly in
many aspects with the appearance of many economic and trade blocs in the
world. For a country with an inferior and backward economy like Vietnam at
that time, international economic integration was the way to shorten the gap with
other countries in the region and the world, bring into play the advantages and
find ways to overcome limitations through learning from the experiences of
other countries.
2.3.3 Impacts of international economic integration on Vietnam textile and
garment industry
In recent years, Vietnam's international economic integration has created
many opportunities and challenges for the development of strategies and
production and business activities of the textile and garment industry.

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2.4

FACTORS

AFFECTING

THE

COMPETITIVENESS

OF

THE

ENTERPRISE

2.4.1 Objective factors
2.4.2 Subjective factors from the enterprise
2.5 EXPERIENCE IN IMPROVING THE COMPETITIVENESS OF FOREIGN
ENTERPRISES, LESSONS FOR VIETNAM NATIONAL TEXTILE AND
GARMENT GROUP

2.5.1 China's Experience
2.5.2 India's Experience
2.5.3 Thailand’s Experience
2.5.4 Some lessons learned on improving competitiveness that can be
applied to Vietnam National Textile and Garment Group

SUBCONCLUSION OF CHAPTER 2

CHAPTER 3
ACTUAL SITUATION OF IMPROVEMENT OF COMPETITIVENESS
OF VIETNAM NATIONAL TEXTILE AND GARMENT GROUP
3.1 OVERVIEW OF VIETNAM NATIONAL TEXTILE AND GARMENT
GROUP

3.1.1 Development process of Vietnam National Textile and Garment Group
3.1.2 Overview of Vietnam Textile and Apparel Association
3.2

ACTUAL

SITUATION

OF

COMPETITIVENESS

OF

VIETNAM

NATIONAL TEXTILE AND GARMENT GROUP IN 2016-2020 PERIOD

3.2.1 Building of business strategies and plans of Vietnam National Textile
and Garment Group


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- Build operational strategy. Vietnam National Textile and Garment Group
built a development strategy for 2016-2020 period and adjusted for each year in
accordance with the reality of the domestic and international textile and garment
market.
3.2.2 Business result of Vietnam National Textile and Garment Group
In 2016-2020 period, Vinatex promoted its role as the political nucleus,
leading the comprehensive implementation of all work aspects, maintaining
annual growth, maintaining its position in the supply chain and being Vietnam's
largest textile and garment producer, demonstrating its leading role and
orientation for the development of the national textile and garment industry.
3.2.3. Research and development of products and brand name of Vietnam
National Textile and Garment Group
3.2.3.1 Research and production of a variety of products
3.2.3.2 Building and development of brand name of Vietnam National Textile
and Garment Group
3.2.4 Actual position situation of Vietnam National Textile and Garment
Group in the global textile and garment supply chain
Since September 2011, VINATEX has become a member of the the
International Textile Manufacturers Federation (ITMF), has a direct connection
with the textile industry of many countries around the world; receives update of
the latest information about the textile industry in the world; participates more
deeply in the global textile supply chain; have the opportunity to interact with
leading economic experts about future development trends. At the same time,
this is a great opportunity for VINATEX to introduce Vietnam textile and
garment industry to its customers and partners, expand export markets and call
for investment in fields where the industry is still facing difficulties.


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3.2.5 Quality of human resources of Vietnam National Textile and Garment

Group
3.2.6 Risk management of Vietnam National Textile and Garment Group
Since Vietnam National Textile and Garment Group operated under the
model of a Joint Stock Company, the Board of Directors and the Executive
Board have agreed on the viewpoints and implemented as follows:
(1) Always consider risk management to be the focus and the factor
providing reasonable assurance for the achievement of the Group's objectives.
(2) Risk management is not risk minimization but it is necessary to fully
analyze risks, optimize the correlation between risks and opportunities, and
know how to accept risks at a reasonable level (within permissible limit of the
Group).
(3) Risk management is only effective when it is implemented throughout
all fields, at all staff levels and must be carried out by qualified personnel with
the support from methods and techniques for risk identification and assessment
in a diverse manner and according to different fields.
(4) Risk management must always be improved, meet the requirements of
relevant standards, stay relevant and respond to all changes that the Group faces,
in order to keep up with the advanced approaches of enterprises in the same
industry in the region and the world, promote the suitability of the system and
integrate into the Group's system. Accordingly, Ernst & Young Vietnam Limited
is assisting the Group in reviewing, improving and implementing the corporate
risk management framework at the Group's parent company, including
regulations on risk supervision and management structure; the role of
stakeholders in the risk management process; procedures for identifying,
assessing, reporting and managing risks; criteria and standard forms for
identification, assessment, reporting and management of risks, list of key risks.


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3.3

ANALYSIS

OF COMPETITIVENESS

OF VIETNAM

NATIONAL

TEXTILE AND GARMENT GROUP ACCORDING TO MICHAEL PORTER'S
FIVE FORCES MODEL OF COMPETITION
3.3.1 Potential competitors in the textile and garment industry

Along with the products of the Information Technology, Electronic
Industry, the products of the Vietnam Textile and Garment industry in which
Vietnam National Textile and Garment Group plays a key role also bring high
export value in total national export turnover.
3.3.2 Competitive advantage in the textile and garment industry
3.3.2.1 Production factors
- Human resources: With a population of more than 96 million people (in
2019), Vietnam is a country in the golden population period; the labor force
accounts for a high proportion of total population over 50% (GSO 2019); The
average population growth rate in the current period is about 1.33%. Young
human resources are associated with strengths such as good health, dynamism,
quick absorption of new technologies and easy mobility. If they receive cultural
training, skills training and professional qualifications development, labor
productivity in Vietnam will increase. Thus, the current human resources of
Vietnam can only bring competitive advantages in terms of quantity and in
professional quality. These two advantages create a premise to develop in terms
of quality, develop basic elements into high-end, popular into specialized ones,

this will be an urgent issue that needs to be preferentiallysolved.
- Physical assets and infrastructure: According to the "Global
Competitiveness" report of the World Economic Forum, Vietnam's infrastructure
score has improved in recent years, showing strong growth and supported by
larger foreign direct investment inflows.
3.3.2.2. Demand conditions


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- According to the Vietnam Textile and Apparel Association, with a
population of more than 96 million people, the current consumption of textile
and garment accounts for about 5 - 6% of people's spending, equivalent to about
USD 3.5 billion, which shows that this is a very potential market for domestic
textile and garment enterprises. For the past time, we have focused on
production for export demand and not paid attention to the domestic market, so
the market share of domestic textile and garment products accounts for a modest
proportion of less than 10%. Recently, there have been a number of enterprises
focusing on promoting the development of the domestic market but the
effectiveness is not high because they have to compete with many sources of
goods from countries in the region and around the world.
3.3.2.3. Supporting and related industries
3.3.3 Bargaining right of customers and Vietnam National Textile and
Garment Group supplier
3.3.3.1 Bargaining right from customers
- Buyers often have power to make frequent and large purchases; Buyers
can switch offers at low cost; It is economical for buyers to buy from several
companies at once; Buyers are able to integrate vertically… In fact, the
bargaining power of domestic customers in the textile and garment industry is
quite high. And the Textile and Garment Group has met the needs of millions of
fastidious domestic customers by diversifying product lines:

3.3.3.2 Supplier’s bargaining right
- The power of suppliers in Vietnam textile and garment industry in
general and VINATEX in particular is high. In fact, the textile and garment
industry is one of the industries that are directly and quite heavily affected by
the Covid-19 pandemic. Not only is the production interrupted due to
dependence on imported raw materials and accessories but also the consumption
and output in many major markets face difficulties. At the moment, Vietnam


19
textile and garment industry is facing a double impact when the source of
imported raw materials and accessories has not yet stabilized, a series of major
customers in the EU and US markets continuously cancelled and postponed
orders, making the industry lose more than VND 3,000 billion every month and
about 1 million people were unemployed. This number is expected to continue
to increase in the next few months, if the Covid-19 pandemic is not controlled.
In which, the biggest impact is the lack of imported raw materials and
accessories supply from the markets of China, Korea, Japan, Thailand,
Malaysia,... Due to the shortage of imported raw materials and accessories
sources, textile and garment enterprises have to adjust their plans, rearrange
production lines from woven to knitwear, reduce working hours, downsize
workers, etc. to ensure maximum production efficiency.
3.4 ASSESSMENT OF ACTUAL SITUATION OF COMPETITIVENESS OF
VIETNAM NATIONAL TEXTILE AND GARMENT GROUP IN 2016-2020
PERIOD

3.4.1 Achieved results
On the basis of the analysis of the actual situation of competitiveness in the
2016-2020 period of VINATEX, an overall assessment of actual situation of
achieved results on the following aspects:

3.4.1.1 Vietnam National Textile and Garment Group always fulfills its
business plan, contributing to the growth of export turnover of the textile and
garment industry and the growth of the economy.
Vietnam National Textile and Garment Group has implemented the
planning and direction of the Prime Minister approved in Decision No.
36/2008/QD-TTg dated March 10, 2008 on the development strategy of the
textile and garment industry by 2020; Decision No. 42/2008/QD-BCT dated
November 19, 2008 on approving the master plan on development of the textile
and garment industry by 2015, with an orientation to 2020, Decree No.
111/2015/ND-CP effective on January 1, 2016, is one of six fields in the list of


20
supporting industry products prioritized for development of Vietnam, in order to
promote the development of the textile and garment supporting industry.
3.4.1.2 Enhancing the quality of corporate governance
Enterprises ensure enough jobs for employees, strictly abide by the Law
on Social Insurance and establish trade unions; 100% of employees join
grassroots trade unions. In addition, the Group always pays attention to and
directs the improvement of the working environment; builds policies related to
reasonable salary, bonus and welfare; builds a harmonious relationship between
the interests of employees and the interests of the enterprise in order to achieve
sustainable development in the process of promoting international integration.
Annually, the Group subsidizes employees in difficult circumstances about VND
6 billion/year.
3.4.1.3 Building supply chains in the industry and actively participating in
global supply chains in the context of international economic integration
VINATEX represents the Vietnam Textile and Garment Industry in terms
of production capacity, brand and position on the map of global textile and
garment production - supply; Benefits on a large scale of production and

consumption compared to the Textile and Garment industry. For the past 5 years,
Vinatex has built a strategy of linking yarn - weaving - dyeing for sewing finish
chain to gradually change the production method from CMT to FOB and to
ODM. Enterprises in the Group will connect with each other to form a complete
supply chain, increase competitiveness and provide customers with package
products.
3.4.1.4 Successfully building and developing Vietnam National Textile and
Garment Group brand
VINATEX has gradually built its brand with products supplied to domestic
and foreign markets. The fact has created brand reputation and responsibility to
customers when buying products through the following actions: With any
product, when customers have complaints about quality, all claimed products
will be temporarily revoked. If the test result shows that the quality is not


21
satisfied, the products will not be allowed to be sold in the market; Willing to
replace and return unqualified products to bring customers peace of mind and
comfort when shopping. For example, when coming to Vinatex Fashion Center,
customers will be free to choose for themselves beautiful, delicate, easy-to-wear
costumes at very reasonable prices. Especially in many times of the years, the
Center offers customers nearly 2,000 discount codes up to 69%. Many products
of Viet Tien discount up to 40%, Phong Phu 30%, Nha Be 30%, Kico 40%,
Virgo 30%, Towel Viet 49%, Thien Phuc 40%...
3.4.2 Some shortcomings and limitations
Firstly, limitation in competitiveness:
Secondly, limitation in the quality of human resources.
Thirdly, limitation in technology and investment.
Fourthly, limitation in the application of brand communication tools,
Fifthly, the legal corridor to create a reciprocal environment is lacking and

not specific to the industry,
3.4.3 Causes of shortcomings and limitations
3.4.3.1 Subjective causes
3.4.3.2 Objective causes
SUBCONCLUSION OF CHAPTER 3
CHAPTER 4

IMPROVEMENT OF COMPETITIVENESS
OF VIETNAM NATIONAL TEXTILE AND GARMENT GROUP
IN THE CONTEXT OF INTERNATIONAL ECONOMIC
INTEGRATION
4.1 TENDENCY OF INTERNATIONAL ECONOMIC INTEGRATION AND
COMPETITION IN VIETNAM TEXTILE AND GARMENT INDUSTRY


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4.1.1 Changes in product demand structure and textile and garment supply
chain in the global market
Currently, retailers and branded marketers have increasingly asserted their
role as supply chain coordinators in replacement of the position of
manufacturers in the world textile industry. They actually become the ones who
make most of the important decisions such as where to buy or import from,
price, product circulation process. They also concurrently control many aspects
of the manufacturing process such as design, fabric sourcing, delivery time,
quality and price. With the near-absolute advantage of information (in terms of
volume, quality and speed), retailers increasingly play a pivotal role in design
and sales and are preparing for manufacturing own branded products. As a
result, from being the main customers of manufacturers, retailers have turned
into competitors of such manufacturers. This fundamental structural change in
the supply chain has resulted in the transfer of power in the supply chain from

the hands of manufacturers to the hands of retailers and brand marketers supplier -driven supply chain has transformed into a buyer-driven supply chain
4.1.2 The role of FDI sector in the development of Vietnam textile and
garment industry
In most of the textile and garment export countries, the FDI sector
continues to play an important, even key role in many countries. In these
countries, the FDI sector is the bridge that helps the textile and garment industry
integrate with the global market. This is especially true for Vietnam. According
to data of Vietnam Textile and Apparel Association, this sector's export turnover
accounts for more than 60% of total textile and garment export turnover from
Vietnam. Not only that, the products of FDI enterprises generally have a higher
quality, thus such products may enter higher-end market segments and bring
more profits.


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4.2 ORIENTATION OF IMPROVEMENT OF COMPETITIVENESS IN
VIETNAM TEXTILE AND GARMENT INDUSTRY

4.2.1 International economic integration in Vietnam textile and garment
industry
Currently, Vietnam has signed 16 free trade agreements. For the Textile and
Garment industry, the fundamental benefit from FTAs is the opportunity to
expand export markets through the reduction of tax rate and import tax of
partners. Previously signed FTAs within the framework of ASEAN and ASEAN
plus (ASEAN signed with partners in China, Korea, Japan, India, Australia New Zealand), including bilateral FTAs with Korea and Japan all applied simple
rules of origin, just need to sew into clothes to be eligible for preferential tax
rate and import tax.
4.2.2 Development strategy of Vietnam textile and garment industry
The Ministry of Industry and Trade issued Decision No. 3218/2014/QDBCT on approving the development planning of Vietnam textile and garment
industryby 2020, with a vision to 2030. This decision clearly states the

viewpoint of developing the textile and garment industry in a modern, efficient
and sustainable direction; Strongly shift production from processing to
purchasing raw materials and semi-finished products, ensure quality
improvement, diversify export products and meet increasing domestic needs;
create many jobs for the society; improve competitiveness, firmly integrate into
the regional and world economy,...
4.2.3 Strategy for development and improvement of competitiveness of
Vietnam National Textile and Garment Group
For 2021-2025 period, with a vision to 2030, VINATEX sets out the
objectives of innovation, accelerating business restructuring, ensuring stable
development and maintaining a pivotal role in Vietnam textile and garment
industry:


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4.3 GROUNDS FOR GIVING SOLUTIONS
4.3.1 Difficulties for the textile and garment industry
Up to now, the pandemic situation has still been complicated in the world.
Even the negative impact of the pandemic may last in the next 1-2 years. In that
context, it is difficult for textile and garment enterprises to come up with a stable
solution. As predicted, in 2021-2022, textile and garment export will continue to
face difficulties because in the post-pandemic period, people's income is still
very limited; The purchasing power of the domestic market will still be stagnant,
without a breakthrough growth.
4.3.2 Advantages for the textile and garment industry
The Prime Minister has directed: Party committees, authorities and
localities continue to pay attention to and facilitate textile and garment
enterprises to develop. Not only land, but also favorable locations for the textile
and garment industry need to be planned. Currently, most places have not yet
produced Yarn and Dye due to environmental pollution. But new technology

completely can control this problem. And if we fail to complete the technology
of Yarn, Dye..., C/O for the products will be not able to be completed? In
addition to the local planning, the whole industry also needs to have studies to
ensure environmental issues, towards the implementation of greening the
Vietnam textile and garment industry.
4.4

SOLUTIONS

FOR

IMPROVING

THE

COMPETITIVENESS

OF

VIETNAM NATIONAL TEXTILE AND GARMENT GROUP

Based on the development orientation of the textile and garment industry of
the Government and Vietnam Textile and Apparel Association, along with the
actual situation of operation result in 2016-2020 period of VINATEX,
opportunities and challenges in the coming time are predicted. In order to
achieve the objectives for 2021 - 2025 period, VINATEX must identify business
in an market that is uncertain, difficult to accurately forecast and unable to make