Nâng cao năng lực cạnh tranh xuất khẩu vào thị trường các nước EU của các doanh nghiệp chế biến chè xuất khẩu việt nam tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING
THUONG MAI UNIVERSITY

NGUYEN NGOC QUYNH

ENHANCING EXPORT COMPETITIVENESS OF
VIETNAM’S TEA PROCESSING AND EXPORTING
ENTERPRISES TO THE EU MARKET

Major : Business trade
Code: 62.34.01.21

PhD dissertation summar

Hanoi, 2019


The research was finished at Thuongmai University

-

A/Prof.Dr: Phạm Thúy Hồng

-

A/Prof.Dr: Nguyễn Thị Bích Loan

Reviewer 1:……………………………………………………….
Reviewer 2:……………………………………………………….
Reviewer 3:……………………………………………………….

Search for the dissertation available at:
- National Library
- Thuongmai University’s library


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INTRODUCTION
1. Rationale
Vietnam is known as a country with comparative advantages in
agricultural production thanks to its favorable natural conditions such
as climate, land and abundant workforce. Among various agricultural
products with good advantages of Vietnam, tea production and
exports have played an ever more important role and become the key
export commodity of the country. Compared with other varieties, tea
plants have high economic values as they help to cover bare hills,
reduce poverty and create jobs for more than 3 million laborers.
In comparison with major competitors in the EU market such
as Kenya, India, China, Sri Lanka, Indonesia, etc., it can be seen that
Vietnam’s tea processing and exporting enterprises possess big
resources and favorable conditions in tea producing and exporting
activities. However, the gained outcomes are not proportionate to the
country’s potential and current comparative advantages. Vietnam’s
tea products are mostly exported in the form of raw materials which
are mainly used for mixture but do not have their own brands.
Besides, as Vietnam’s tea processing enterprises mainly target low
market segment, the economic values of exported products are not
high, the prices of Vietnam’s tea exported products are always lower
than those of competitors. Moreover, strict technical barriers set by
the EU such as product quality, certificate of food safety and hygiene,
environmental friendliness, organic food, etc. always remain big

challenges to Vietnam’s tea processing and exporting enterprises.
Motivated by these objective reasons, the author has chosen
the subject “Enhancing Export Competitiveness of Vietnam’s Tea
Processing and Exporting Enterprises to the EU Market” for her PhD
economic dissertation in an attempt to propose feasible
recommendations and solutions to raise the export competitiveness of
Vietnam’s tea processing and exporting enterprises to the EU market
in the coming time.


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2. Research objectives and tasks
Research
objectives:
Proposing
solutions
and
recommendations with good scientific and practical grounds to raise
the export competitiveness of Vietnam’s tea processing and exporting
enterprises to the EU market on the research framework of theories
on export competitiveness of enterprises.
Research tasks:
Firstly, generalizing theories on export competitiveness of
enterprises; clarifying views on export competitiveness of
enterprises, research framework with criteria to evaluate export
competitiveness of enterprises and identifying factors affecting
export competitiveness of enterprises.
Secondly, analyzing, evaluating the export competitiveness of
Vietnam’s tea processing and exporting enterprises in the 2010 –
2018 period according to criteria to evaluate the export

competitiveness of enterprises and to compare with competing tea
processing enterprises from Sri Lanka..
Thirdly, proposing major views and solutions to raise export
competitiveness of Vietnam’s tea processing and exporting
enterprises to the EU market.
3. Research object and scope
The research object of the dissertation is the export
competitiveness of Vietnam’s tea processing and exporting
enterprises with export shares to the EU.
Scope of research:
- In terms of content: The dissertation researches the export
competitiveness of Vietnam’s tea processing and exporting
enterprises with export shares to the EU by discovering components
of the export competitiveness of enterprises; establishing research
framework with criteria and indicators to evaluate the export
competitiveness of enterprises; factors affecting the improvement of
the export competitiveness of Vietnam’s tea processing and exporting
enterprises with export shares to the EU.


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- In terms of research participants: Research participants
include tea processing enterprises participating in the supply chain of
dry tea materials and tea processing enterprises of organic tea and tea
products for exports to the EU market.
- In terms of time: Secondary data used in the dissertation are
collected for the 2010-2018 period, primary data were collected in the
years of 2017 and 2018. Solutions and recommendations are made valid
by 2025.
4. New contributions of the dissertation

Theoretical contributions
- Establishing research framework for the export
competitiveness: The concept of competitiveness, export
competitiveness of enterprise and export competitiveness of tea’s
processing and exporting enterprises based on previous competition
theories.
- Basing upon consulting tea experts combined, discovering 6
components of the export competitiveness of enterprises and factors
affecting the improvement of the export competitiveness of
enterprises.
- Building research model with 7 criterias, 42 indicators to
evaluate the export competitiveness of Vietnam’s tea processing and
exporting enterprises to the EU market. At the same time, analyzing
relationship between these components.
- Building 7 criteria, 42 indicators to evaluate the export
competitiveness of enterprises and 5 indicators to measure business
performance.
Practical contributions
- Evaluating the situation of raising export competitiveness of
Vietnam’s tea processing and exporting enterprises in recent time
according to criteria and to compare with competing tea processing
enterprises from Sri Lanka.
- Using SPSS software to analyzing the mean scores of
measurement scales and identify important coefficients as well as the


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impact levels of measurement scales on the export competitiveness of
Vietnam’s tea processing and exporting enterprises.
- Assessing the successes and causes of successes, limitations

and causes of limitations into raise the export competitiveness of
Vietnam’s tea processing and exporting enterprises in recent time as
the foundations to propose solutions and recommendations.
- Proposing orientations to improve the quality of components
to raise the export competitiveness of Vietnam’s tea processing and
exporting enterprises to the EU market in the coming time.
- By employing these theoretical and practical grounds, the
dissertation has worked out some forecasts, views and development
objectives as well as established groups of solutions to raise the
export competitiveness of Vietnam’s tea processing and exporting
enterprises to the EU market by 2025.
5. Dissertation organization
Chapter 1. Research overview and methodology
Chapter 2. Theoretical grounds on export competitiveness of
tea’s processing and exporting enterprises
Chapter 3. Status-quo of export competitiveness of Vietnam’s
tea processing and exporting enterprises to the EU market
Chapter 4. Solutions and recommendations to raise export
competitiveness of Vietnam’s tea processing and exporting
enterprises to the EU market
CHAPTER 1. RESEARCH OVERVIEW AND
METHODOLOGY
1.1. Overview of previous studies
1.1.1. Studies on competition and competitiveness
Based on competition theories, with closer look into
competitiveness, many views have been introduced by researchers
worldwide. Accordingly, competitiveness is understood via 4 groups
of factors: (1) Production and service components; (2) Demand; (3)
Supporting and relevant industries; (4) Strategies, structure and
competition of the industry. Research on competitiveness at various

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levels have attracted different views. Generally, researchers agree that
competitiveness should be considered at various levels of national,
local, industry, business and products.
1.1.2. Research on competitiveness of enterprises
However up to now, the concept of competitiveness at
business level remains a controversial one. Since 1990s, there has
been a boom in the theoretical research works on competitiveness.
These research works are classified into 5 orientations:
competitiveness from the approach of traditional competition
theories; competitiveness from the approach of value chain;
competitiveness from market orientation; competitiveness from the
approach of business resources; competitiveness from the approach
of resource theories.
1.1.3. Research on export competitiveness
Foreign and domestic research on the export competitiveness
mostly focuses at industry level in a country. Researchers believe that
the policy mechanism and improvement of infrastructure and logistic
system can impact on the export competitiveness of a country or
industry. To evaluate the export competitiveness of the industry,
researchers often use an indicator representing competitive
advantages – RCA. In a few studies on the export competitiveness at
business level in Vietnam, researchers build research models
constructed by components affecting the export competitiveness of
enterprises such as: selection and implementation of production and
business strategies, competence on technology, labor productivity,
production costs, management, research and development (R&D).
1.1.4. Research on tea exports

There have been various studies on tea exports, focus on the
following contents: establishing evaluation criteria for
competitiveness of Vietnam’s exported tea; analyzing components
affecting added values of exported tea via export supply chains;
features and development trends of the world tea market, marketing
components in tea exports; regulations on food safety and hygiene


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standards for tea when exported to the EU; impacts of international
economic integration on exports; market entry strategies for
Vietnam’s tea products; framework for supply chain of exported
agricultural products (rice, tea, flowers, fruits, seafood) of the
Northwestern region.
1.1.5. Conclusions drawn from the review of previous studies and
research gaps
1.1.5.1. Conclusions drawn
A review of previous studies related to the dissertation’s
subject, the following conclusions are drawn: (1) The evaluation of
business competitiveness is classified into 2 subjects (setting up
research models with criteria and indicators for evaluation and
measurement of competitiveness of specific enterprises); (2) There
are differences in research framework and systems of criteria and
indicators for evaluating tea competitiveness of enterprises; (3) There
are a few theoretical research in Vietnam to evaluate the export
competitiveness of the industry in general and businesses in
particular; (4) There is a view that internal resources (such as assets,
resources, human resources) can raise the competitiveness of
enterprises. However, these research works are merely done in the
conditions of foreign enterprises; in Vietnam, there has been no

research which analyses the export competitiveness of enterprises
from the competence theory approach and for Vietnam’s tea
processing and exporting enterprises; (5) Most research uses either
qualitative or quantitative methods; not many combine the two; (6)
Some research on competitiveness or entry strategies to international
tea market of Vietnam tea enterprises has shown the importance of
enterprises’ resources in tea exports as well as Vietnam tea brand
development. However, there has been no intensive research on the
export competitiveness of Vietnam’s tea processing and exporting
enterprises to the EU market. Most research has not yet identified
priority solutions to improve each component in the export


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competitiveness of Vietnam’s tea processing and exporting
enterprises.
1.1.5.2. Research gaps
The above conclusions illustrate that there remain some
research gaps that need filling in as follows: (1) Identifying
components and measuring the export competitiveness of tea
processing and exporting enterprises; (2) Establishing research
framework with appropriate criteria and indicators to evaluate the
export competitiveness of processing enterprises; (3) Analyzing
factors affecting the improvement of the export competitiveness of
Vietnam’s tea processing and exporting enterprises; (4) Evaluating
the export competitiveness of Vietnam’s tea processing and exporting
enterprises in comparison with competing tea processing enterprises;
(5) Using SEM model to analyzing relationship between these
components; (6) Analyzing the export competitiveness of Vietnam’s
tea processing and exporting enterprises in comparison with

competitor in the EU market; (7) In the 2015-2018 period, there was
no research on the export competitiveness of Vietnam’s tea
processing and exporting enterprises to the EU market.
Motivated by these research gaps, the dissertation’s author
aims to answer the following questions: (1) which components of the
export competitiveness of tea processing and exporting enterprises
are identified as components measuring the export competitiveness of
Vietnam’s tea processing and exporting enterprises? (2) Which
research framework criteria are proposed to evaluate the export
competitiveness of Vietnam’s tea processing and exporting
enterprises? (3) Evaluating the export competitiveness of Vietnam’s
tea processing and exporting enterprises in following research
framework criteria and in comparison with competing tea processing
enterprises? (4) Which solutions and recommendations are needed to
raise the export competitiveness of Vietnam’s tea processing and
exporting enterprises in the coming time?
1.2. Research methods


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1.2.1. Qualitative methods
Qualitative research in this dissertation aims to identify
components of the export competitiveness of enterprises or criteria with
indicators to evaluate the export competitiveness of enterprises; on that
basis build research model for the export competitiveness of Vietnam’s
tea processing and exporting enterprises.
1.2.2. Quantitative methods
Quantitative research aims to test measurement scales, evaluate
mean scores of measurement scales, establish research framework to
evaluate the impacts of components of the export competitiveness of

Vietnam’s tea processing and exporting enterprises to the EU market.
In other words, this is the process to analyze and evaluate the export
competitiveness of tea processing enterprises.
CHAPTER 2: THEORETICAL GROUNDS ON EXPORT
COMPETITIVENESS OF ENTERPRISES
2.1. Theories on competition and export competitiveness
2.1.1 Competition and competitiveness
There are different views and approaches to competition. In
the dissertation, the concept of competition is understood as:
Competition is the rivalry between economic entities using every
resource to gain objectives of market share, profits and reputation
from competitors in the same market.
2.1.2. Export competitiveness and export competitiveness of
enterprises
The dissertation covers issues on competitiveness, export
competitiveness from different views, then it focuses on research and
presents the concept of the export competitiveness of tea’s processing
and exporting enterprises for this dissertation as follows: The export
competitiveness of tea’s processing and exporting enterprises is the
capacity to exploit enterprises resources effectively and catch market
opportunities to gain dominance in export shares in comparison with
competitors in international market; meet market criteria for


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exported products such as quality, superiority, safety and high value;
sustain and develop market share in the target market to bring profits
for enterprises.
2.2. Research models on export competitiveness of enterprises
To evaluate competitiveness of enterprises, there are 4 main

methods: (1) SWOT matrix; (2) Diamond model by Michael Porter; (3)
Competitive Image Matrix; (4) Thompson – Strickland method.
2.3. Classification of research contents on enterprise competitiveness
2.3.1. Components of export competitiveness of enterprises
By reviewing documents, especially the results of in-depth
interviews with 15 experts, components of the export
competitiveness of tea processing enterprises are identified as: (1)
Competence of research and innovation in enterprises; (2) Human
resources and competence of human resource management, training
and development; (3) Financial competence for export activities; (4)
Competence of export marketing; (5) Competence to establish
relationships in export activities of enterprises; (6) Competence to
build up brands.
2.3.2. Citeria to evaluate the export competitiveness of enterprises
Upon researching and inheriting from previous domestic and
foreign studies, combining with opinions of experts, 7 criteria with 42
evaluation indicators, research model of the export competitiveness of
Vietnam’s tea processing and exporting enterprises to the EU market is set
up as follows:


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Table 2.3: Research model on export competitiveness of Vietnam’s
tea processing and exporting enterprises to the EU market
Criteria
Indicators
(measurement)
(independent observation variables)
I. Group of criteria on enterprise resource level
(1) Enterprises usually understand customer demand

and tastes to create products suitable with their
1. Competence requirements; (2) Enterprises’ innovation competence
of research
in production and management technology of
and innovation enterprises in case business environment changes is
in enterprises very good; (3) For enterprises, innovation is very
(DM01-DM07) crucial and often attached great importance to; (4)
Investment levels in research and development; (5)
Qualification of human resources in enterprises is
proportionate to technological advancement; (6)
enterprises with competence to maintain interdepartment working groups to stimulate innovations;
(7) Levels of production technology that enterprises
are using are higher than those in enterprises in the
same industry.
(1) Administration and management modes of
2. Human
enterprises are suitable with international business
resources and conditions; (2) Leadership competence of enterprises’
competence of leaders; (3) Enterprises can create a fair and civilized
human
working environment for all enterprises’ employees;
resource
(4) Competence of risk management in export
management, activities to the EU market is good; (5) Competence
training and
of analyzing market and making export plans in line
development
with production capacities of enterprises; (6)
(NL01-NL07) Managing changes in organization; (7) Enterprises
attach great importance to human resource training

and development to serve production and export
activities.


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Criteria
(measurement)

Indicators
(independent observation variables)
(1) Enterprises have strong financial sources to afford
3. Financial
export activities to target markets; (2) Enterprises
competence for have competence to mobilize and attract capital for
export
exports flexibly and actively; (3) Competence for
activities
contract settlement of enterprises; (4) Financial
(TC01-TC04) allocations for each stage in production and export
activities are appropriate and effective.
II. Group of criteria on coordination market level
(1) Enterprises have good competence of market
analysis and research; (2) Enterprises have good
competence to meet the EU regulations on exported
tea products; (3) Policies of exported products are
suitable with export marketing strategies of
enterprises; (4) Strategies to advertise images and
4. Competence brands for exported products of enterprises are
of export
effective; (5) Distributing products by delivery time

marketing
as stipulated in the contracts; (6) Enterprises have
(MAR01good integration competence to changes in
MAR12)
international
competitive
environment;
(7)
Competence to establish relationships with partners
in target markets; (8) Exported products of
enterprises can overcome non-tariff barriers of the
EU market (regulations on quality, food safety and
hygiene, packing, environment, etc.); (9) Competence
of managing supply chains for exported products;
(10) Competence of managing warehouses, storage
systems to ensure standards as signed with customers
in the contracts; (11) Competence to deal with
customs procedures and competence of managing
customs informations; (12) Competence of managing
logistics supplying of enterprise.
5. Competence (1) Enterprises have competence to establish good
to establish
relationships with partners in supply chains; (2)
relationships
Enterprises usually have customers-care policies and
in export
maintain relationships with old customers; (3)


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Criteria
(measurement)
activities of
enterprises
(QH01-QH04)

Indicators
(independent observation variables)
Enterprises maintain good relationships with local
authorities; (4) Enterprises have competence to
approach potential customers of enterprises in the EU
market.
6. Competence (1) Enterprises’ brands are known to many people; (2)
to build up
Enterprises’ brands are built up and managed
brands
professionally; (3) Enterprises’ brands guarantee
(TH01-TH03)
customer trusts and feelings.
III. Competitive positions of enterprises
(1) Revenue of enterprises from exports to the EU
7. Business
market; (2) Market share growth; (3) Customers are
performance
very satisfied with product quality of enterprises; (4)
(NLCTXK01- Positions of the enterprises compared with domestic
NLCTXK05)
enterprises in terms of exported products in the EU
market; (5) Ability to expand of business scales in the
long term.

(Source: author’s recommendations)
2.3.3. Factors affecting export competitiveness of enterprises
External factors include macro environment and industrial
environment. Internal factors include: Technology, techniques,
variety selection, natural conditions of material planting regions.
CHAPTER 3: STATUS-QUO OF EXPORT
COMPETITIVENESS OF VIETNAM’S TEA PROCESSING
AND EXPORTING ENTERPRISES TO THE EU MARKET
3.1. Overview of EU tea import market
3.1.1. Vietnam – EU trade relationships
The EU is a strong market and a trading partner of Vietnam
for many years. Vietnam - EU Free Trade Agreement (EVFTA) is a
new step in bilateral trade cooperation. The outstanding feature of the
export structure between Vietnam and the EU is the huge and less
competitive nature of direct confrontation. Therefore, this will be a
good opportunity for Vietnamese tea processing enterprises to access


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to the EU market and be exempt from tax for many agricultural
products including tea.
3.1.2. EU tea distribution channels
EU is a market with huge demand for tea consumption but its
tea supply mostly relies on imports as EU’s climate is not favorable
for tea planting. Tea is mostly grown in tropical climate in the
midland. Tea quality greatly depends on climate, weather and is
highly seasonal. After buying tea materials, EU producers process
and export them under their own brands. The distribution channels in
the EU tea market include: producers, associations, tea planting
cooperatives and purchasers; Intermediaries are middlemen

connecting buyers and sellers and earn commissions; importers and
distributors.
3.1.3. Consumption tastes and habits of EU people
EU consumers have a habit of drinking tea daily because this
product is both refreshing and good for health. In addition, EU
consumers are very responsible for society and living environment.
So they tend to choose environmentally friendly products, packaging
of products must be recyclable. Besides, is the most developed
economies in the world, in modern life, consumers want to use
convenient, easy to carry products and easy to prepare.
3.1.4. Regulations on standards, quality of imported tea products
Regulations on Food safety and hygiene; HACCP regulations;
Good Agriculture Practice Procedure and Regulations on packaging
and labeling.
3.1.5. Overview of exporting countries with tea exported to the
EU market
The exporting countries with tea exported to the EU market are
the
competitors of Vietnam’s tea processing and exporting
enterprises such as Kenya, India, China, Sri Lanka, Indonesia…
3.2. Overview of Vietnam exported tea supply channels and tea
export activities of Vietnam’s tea processing and exporting
enterprises to the EU market
3.2.1. Overview of Vietnam exported tea supply channels
3.2.2. Overview of Vietnam’s tea processing and exporting
enterprises with export shares to the EU market


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The 12 Vietnam’s tea processing and exporting enterprises

with tea exported to the EU market are classified into 2 groups
according to the kinds of exported products: Group of tea processing
and exporting enterprises with exported packages of over 3 kg and
group of tea processing and exporting enterprises with exported
packages of less than 3 kg and tea specialty with distinctive sources.
3.2.3. Situation of Vietnam’s tea exports to EU market
Compared with competitors, Vietnam’s tea prices are only 60 –
70% the prices of international tea exporters. Although both are
bought as materials, Vietnam’s tea prices are usually lower because
our quality is not up to the EU regulations, food safety and hygiene is
not fully guaranteed as plant protection substances are used widely in
many tea processing establishments.
3.3.
Analyzing the export competitiveness of Vietnam’s tea
processing and exporting enterprises to the EU market measured
by research model
To evaluate the export competitiveness of Vietnam’s tea
processing and exporting enterprises in recent time, the dissertation
uses business result reports of Vietnam’s tea processing and exporting
enterprises according to 3 criteria: Enterprise resource level,
coordination market level and competitive positions of enterprises.
3.3.1. Evaluation of export competitiveness of Vietnam’s tea
processing and exporting enterprises according to group of criteria
on enterprise resource level
3.3.1.1.
Competence of research and innovation in
enterprises
According to self-evaluation, 100% of enterprises believe that
the technology they are using is better or as good as that of other
enterprises in the domestic industry, but compared with international

competitors, production technology of Vietnam’s tea processing and
exporting enterprises is far lower. The reason is the limited financial
resources to invest and high-qualified human resources in tea
industry to create internationally-recognized technology.
3.3.1.2. Human resources and competence of human resource
management, training and development


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Tea processing enterprises with export shares to the EU are
mostly the biggest enterprises in the industry and those with high
export volume to other markets besides the EU, so their modes of
management are quite suitable with international business conditions.
They constantly update new knowledge of modern business
management methods and advanced production lines, the working
skills in international environment and foreign language proficiency
of these enterprises’ leaders are also continuously improved.
Investing in land and promoting tea plants totally with
organic fertilizers are often very costly and time-consuming (5 – 10
years), but when other enterprises pay higher prices for products,
many tea farmers are willing to break commitments and sell products
to these enterprises. Therefore, investing in tea exports is risky and
enterprises cannot fully control. The links between partners in the
chain only rely on economic relationships but also the trusts, wills
and responsibility of the stakeholders.
3.3.1.3.
Financial competence for export activities
It can be seen that although enterprises have made further
investments in assets, production expansions, factories and recruited
more laborers, they have not yet fully exploited the operational

competence of assets, asset utility efficiency remains low. In the
process of investing in assets, enterprises have not calculated and
used their assets effectively. The payables of enterprises such as
inventory, collectibles from customers, tea export batches subject to
returns due to poor standards account for big proportion in the
enterprises’ total assets, thus restricting asset efficiency.
3.3.2.. Evaluation of export competitiveness of Vietnam’s tea
processing and exporting enterprises according to group of criteria
on coordination market level
3.3.2.1. Competence of export marketing
Market research activities of Vietnam’s tea processing
enterprises remain limited. Besides, the financial resources,
qualifications and skills of people in charge of market research are
also low, so it is difficult to approach big orders from big important
markets like the EU.


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Enterprises are not willing to invest in safe agricultural
production, so the volume of output is small, which affects the
psychology and decisions of producers and they do not fully follow
regulations on safe agricultural production.
3.3.2.2. Competence to establish relationships in export activities of
enterprises
Tea processing enterprises should utilize relationships with
partners to make their tea products known to EU consumers.
However, up to now Vietnam’s tea processing enterprises have not
yet established contact points to promote new relationships, for
example with Vietnamese overseas associations in foreign countries
or organizations in charge of distribution channels in the target

markets.
3.3.2.3. Competence to build up brands
Survey findings indicate that both groups of processing
enterprises of tea materials and organic tea and tea specialty regard
that their brands are little known to consumers in the EU market, so
the mean score of this component is very low. This is because the
quality of Vietnam’s tea is lower than that of international competitor,
the proportion of material exports is high and enterprises have not yet
built up and managed their brands effectively. Besides, enterprises
have not been able to exploit stories about Vietnam’s tea such as
stories about territorial differences, origins, quality and culture
associated with Vietnam’s tea plants for thousands of years,
especially not highlighting the techniques of harvesting and drying
tea that is unique to Vietnam.
3.3.3. Evaluating enterprises’ positions
According to many experts, the positions of Vietnam’s tea
processing and exporting enterprises in the EU market remain low.
The values of Vietnam’s exported tea in the EU market are lower than
the values of its competitors. Although Vietnam ranks 7th in the world
in terms of production and 5th in terms of exports, compared with
competitors, our tea has the cheapest export prices, only 60 – 70% of
the world tea prices.


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3.4. Export competitiveness of Vietnam’s tea processing and
exporting enterprises to the EU market in comparison with
competitors
To select competitors for comparison with Vietnam’s tea
processing and exporting enterprises, the dissertation used in-depth

interviews with tea experts. After discussion and analysis, experts
suggested using tea processing and exporting enterprises from Sri
Lanka. The comparison export competitiveness of tea processing
enterprises between the two countries according to 3 group of criteria
(enterprise resource level, coordination market level and competitive
positions of enterprises). Sri Lanka used to be a British colony,
leaders of tea enterprises in this country follow the modes of
managing plantations and British famous tea brands, so they have
lots of experiences in production, processing, brand management and
possess good knowledge of target markets. The biggest competitive
advantage of Vietnam’s tea processing and exporting enterprises is
the favorable natural conditions in producing green tea for exports.
3.5. Evaluation of export competitiveness of Vietnam’s tea
processing and exporting enterprises to the EU market
From the above analysis, it is possible to evaluate the
successes and limitations in raising the export competitiveness of
Vietnam’s tea processing and exporting enterprises as follows:
3.5.1. Successes and causes of successes
3.5.1.1. Group of criteria on enterprise resource level
 Competence of research and innovation in enterprises
- Some big processing enterprises have invested in and used
modern processing technology to raise yields as well as quality of tea
products.
- Vietnam’s tea processing and exporting enterprises have
proactively integrated and approached to advanced production
technology, concentrated on material growing regions, controlled
quality and gained organic certificates from reputable organizations
for tea products exported to the EU market.
- To deal with low yield, tea processing enterprises are
gradually replacing old tea varieties by new ones with higher yields,

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higher quality, they have also applied new cultivation methods to
maximize the number of plants appropriate with each variety of tea.
 Human resources and competence of human resource
management, training and development: Tea processing enterprises
with export shares to the EU are mostly the biggest enterprises in the
industry and those with high export volume to other markets besides
the EU, so their modes of management are quite suitable with
international business conditions.
 Financial competence for export activities: Some Vietnam’s
tea processing and exporting enterprises learned managed capital,
saved costs, shorten business cycles by short-term raising methods,
and reduced intermediate costs. After a period of production
activities, many tea’s processing and exporting enterprises have
expanded their scale, recruited more workers and formed their own
clean raw material areas thanks to effective financial management.
3.5.1.2. According to group of criteria on coordination market level
 Competence of export marketing: Vietnam’s tea processing
and exporting enterprises have proactively integrated and approached
to advanced production technology, concentrated on material
growing regions, controlled quality and gained organic certificates
from reputable organizations for tea products exported to the EU
market.
 Competence to establish relationships in export activities of
enterprises: Enterprises have been proactive in learning advanced
production modes from foreign enterprises to deal with limitations of
low export quality.
Competence to build up brands: thanks to the supports from

Trade Promotion Agency and Tea Association, many tea processing
enterprises have affirmed their brands via participating in and
winning distinguishable awards in International Tea Contests,
bringing honors to Vietnam’s tea industry.
3.5.2. Limitations and causes of limitations
3.5.2.1. Group of criteria on enterprise resource level
- Competence of research and innovation in enterprises:
Processing qualifications are low, many factories do not have
adequate investments, processing technology is backward with low


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technical standards, tea is processed in old methods, there is a lack of
equipment to test chemical residues in fresh tea before processing.
- Human resources and competence of human resource
management, training and development: Human resources involving
in tea production and processing are not professionally trained, the
number of skilled workers is small.
- Financial competence for export activities: Tea processing
enterprises have not paid attention to techniques of harvesting and
storing material quality, which has affected product quality, raises
investments and labor costs and over-exploited tea plants.
3.5.2.2. Group of criteria on coordination market level
- Competence of export marketing: There is a lack of
information due to limited financial resources as well as poor skills
and qualifications of market researchers, so enterprises can hardly
approach big orders from large import markets from the EU.
- Competence to establish relationships in export activities of
enterprises: There is a paradox that enterprises with investments for
farmers have fewer opportunities to buy materials due to heavy

competition from other enterprises. This discourages enterprises from
investing in big tea fields, high-quality material growing regions or
providing technical and agricultural supports for farmers.
Competence to build up brands: Vietnam’s tea processing
and exporting enterprises are facing strict technical barriers set by the
EU such as product quality, certificate of food safety and hygiene,
environmental friendliness, organic food, etc. Many Vietnam’s tea
batches were rejected and returned due to excessive residue of plant
protection substances, bad influence to CheViet brands.
3.5.3. According to enterprises’ positions
Firstly, as the quality of exported tea products is not high, tea
processing enterprises are facing many barriers in markets, especially
in meeting requirements for food safety and hygiene and quality.
Secondly, up to 90% of exported tea is in form of material, so
added values remain low.
Thirdly, compared with competitors, our tea has the cheapest
export prices, only 60 – 70% of the world tea prices.


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Fourthly, enterprises have not been willing to invest in safe
agricultural production, so output of tea products remains small.
Besides, the psychology and decisions of producers in following safe
production regulations are limited.
3.5.4. SWOT analysis for the export competitiveness of Vietnam’s
tea processing and exporting enterprises to the EU market
CHAPTER 4: SOLUTIONS AND RECOMMENDATIONS TO
RAISE EXPORT COMPETITIVENESS OF VIETNAM’S TEA
PROCESSING AND EXPORTING ENTERPRISES TO THE
EU MARKET

4.1. Forecasts, views, goals for the export competitiveness of
Vietnam’s tea processing and exporting enterprises to the EU
market
4.1.1. Forecasts of major development indicators of the
international and EU tea market
This part presents some forecasts on the development of
international and EU tea market by 2027, vision by 2030 with specific
figures on demand, supply and price.
4.1.2. Development views and goals
General views: Raising to the position of Vietnam’s tea
processing and exporting enterprises to the EU market; turn
Vietnam’s tea brand into a strong brand which is appreciated and
trusted by EU consumers;
Development goals: Raising to the export competitiveness of
Vietnam’s tea processing and exporting enterprises to the EU market
by promoting comparative advantages.
Detail goal
 For enterprises processing tea materials with packages of
over 3 kg: Orientations for joining global value chain vertically and
orientations for joining global value chain horizontally.
For enterprises processing organic tea materials with
packages of under 3 kg and tea specialty: (1) Solutions should focus
on building geographical identifications for collective brands and
investing seriously and consistently in raising tea quality; (2)
emphasizing and highlighting distinctive and distinguishable features


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of organic tea from other kinds of tea; (3) associating origins of tea
specialty with cultivation and drinking culture of Vietnamese people

via stories and legendary.
4.2. Solutions to raise the export competitiveness of Vietnam’s tea
processing and exporting enterprises to the EU market
4.2.1. Groups of solutions to raise competence of research and
innovation in enterprises
Reviewing and classifying current technology of enterprises
as well as considering the needs for renewing technology; establishing
funds for technological development; establishing incentive schemes
to encourage laborers’ innovations; strengthening links and
cooperation with local and international organizations to approach
modern technology. Besides, there are solutions to innovating
production procedures.
4.2.2. Groups of solutions to raise human resources and
competence of human resource management, training and
development
Business managers have to update new knowledge and
improve necessary skills such as management skill in competition;
change management skill; skill to forecast and orient development
strategies; international communication skill to manage enterprises
effectively in the international business context.
4.2.3. Groups of solutions to raise financial competence for export
activities
- Increasing capital resources via technical economic solutions
to cut costs: encouraging initiatives and creative ideas in production,
promoting intellectual capacity of individuals and teams in
production; reviewing production stages and procedures to save
materials, time and labor force; utilizing wastes from production
process; maximizing the capacity of equipment and machinery;
streaming procedures to make them simple and effective.
- Renewing internal management system, strengthening

financial management.
4.3.4. Groups of solutions to raise competence of export marketing
Export marketing competence is one of the most important
components to create competitive advantages for enterprises in the


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international competitive environment, therefore enterprises should
raise their export marketing competence via the following measures:
solutions to market research, trade promotion, distribution channels,
product policies in EU market; logistic competence of enterprises.
4.2.5. Groups of solutions to raise competence to establish
relationships in export activities of enterprises
Relationships with partners are decisive components to the
success of export activities of tea processing enterprises. Therefore,
enterprises should establish relationships with strategic partners
including relationships between enterprises and tea farmers;
relationships between enterprises and enterprises; relationships
between enterprises and customers and importers; relationships
between of enterprises amid relationships between Vietnam’s
Government and EU.
4.2.6. Groups of solutions to raise competence to build up brands
Tea processing enterprises should build brands for 2 groups
of products: tea material and organic tea and tea specialty by
participating in trade promotion, trade fairs to advertising Vietnam’s
tea products to EU people; doing market research to understand
consumers’ tastes; collaborating with tourism to organize tours to
famous tea hills with beautiful sceneries to introduce national
landscapes and promote tea producing and processing activities at the
same time; caring about packaging and history of tea specialty.

4.3. Proposals to raise the export competitiveness of Vietnam’s
tea processing and exporting enterprises to the EU market
4.3.1. Proposals to the government
Firstly, making development orientations for tea industry
Secondly, making policies on land ownership and profit
allocation for farmers based on production value chains.
Thirdly, implementing incentive policies to encourage investments
in modern technology and equipment to improve tea quality.
Fourthly, choosing exported products and producing products
with high processing ratio, transferring product structure to meet the
demand of local and international markets.


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Fifthly, streaming legal documents, building national technical
standards and regulations to create legal framework for the operations
of each product line.
Sixthly, enhancing to inspect of production process follow the
technical barriers set by the EU such as product quality, certificate of
food safety and hygiene, environmental friendliness, organic food.
Seventhly, throughout the corridor route to connect between
domestic and international.
Eighthly, promoting public-private partnership model, i.e. the
Government and enterprises join hands to attract more enterprises to
participate in and promote sustainable agricultural development.
Ninthly, reforming administrative procedures, reducing
industrial checks, simplifying customs procedures, adjust
transportation shares towards reducing road transport and increasing
rail and water transport.
4.3.2. Proposals to relevant ministries and agencies

Upon analyzing factors affecting the improvement of the export
competitiveness of Vietnam’s tea processing and exporting enterprises and
identifying objective reasons, in this part, the dissertation makes some
proposals to the Government, Ministries and agencies to have policies to
instruct and raise the export competitiveness of Vietnam’s tea processing
and exporting enterprises to the EU market in the coming time.
4.3.3. Proposals to Tea Association
Raising the roles of product associations; increasing training
and farm incentives to direct producers, processing enterprises,
exporters, authority and civil servants in localities; building CheViet
brands; implementing trade promotion activities effectively;
organizing training courses on skills such as contract signing,
negotiation in import-export, international practices as well as skills
to collect information, research market, analyze and forecast demand
for tea products for employees in tea exporting enterprises.