A network approach for the study of sourcing strategy for garment in Vietnam : with strategic implications to the Hong Kong Office of Kaukomarkinat Oy

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A network approach for the study of sourcing strategy for garment in Vietnam : with strategic implications to the Hong Kong Office of Kaukomarkinat Oy

 

Author: Lam, Wing-yiu Charles
Title: A network approach for the study of sourcing strategy for garment in Vietnam : with strategic implications to the Hong Kong Office of Kaukomarkinat Oy
Degree: M.B.A.
Year: 1993
Subject: Kaukomarkkinat Oy
Clothing trade -- Vietnam -- Case studies
Clothing trade -- Management -- Case studies
Vietnam (Democratic Republic) -- Commerce -- Case studies
Hong Kong Polytechnic -- Dissertations
Department: Dept. of Management
Pages: xii, 174 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1150966
URI: http://theses.lib.polyu.edu.hk/handle/200/1803
Abstract: Kaukomarkkinat Oy - my present company is one of the trading houses in Finland specialising in international trade, import and export business. We are sourcing garments from China, Hong Kong and Macau for over 20 years and now extending our purchasing activities to Taiwan and North Korea. Vietnam suggests us a trading opportunity because it has its competitive advantages by having cheap and skilful labour as well as quota advantage. I have established 4 objectives in the study, namely : A. To assess the macroeconomic, political, social, technological and cultural environments of Vietnam. B. To identify and evaluate the actors, activities and resources in the textile / garment industry. C. To formulate sourcing and marketing strategies for my company. D. To determine the role of Hong Kong Office in coordinating activities for the Vietnam market. An exploratory research is carried out to investigate this potential market. Desk research is used to study Vietnam on 2 dimensions : country risk assessment and foreign market analysis aimed at textile / garment industry respectively. Expert opinions are sought at the same time to enrich the depth of the study. A network analysis is then performed to find out the interactive relationships among the actors, activities and resources in the system. After analysis, it can be found that Vietnamese textile / garment industry is facing problems including shortages of raw materials supply, obsolescence of equipment, lack of supporting services, limited supply of quality fabrics, deficiency of management and production know - how, red tape, poor infrastructure, plus insufficient capitals. Fortunately, Vietnam is equipped with diligent and skilful labour, abundant natural resources and quota advantage. The critical actors - fibre supply and fabrics provision are located for textile sector and garment sector respectively. It is recommended to treat these actors seriously and Vietnamese Government should place the first priority to get sufficient funds for the development on the supply of raw materials then to upgrade the production of the quality fabrics. Other problems such as management, infrastructure, technical knowledge etc can be solved in a later stage. Strategies are formulated to include the strategic and operational levels : From strategic viewpoint, it is recommended to examine the ideology of Vietnamese, formulate negotiating strategy and identify the critical actors in the industry. From the perspective of operational level, it is suggested to use adaptation strategy at the beginning stage then do CMT ( cutting / making / training ) business after developing relationships with the manufacturers. In addition, we have to pay attention to the total transaction costs in the purchase to ensure that we gain competitive advantages from the deal. At the same time, we are prepared to formulate our marketing strategy by doing counter - trade or reciprocal trading with this country. The role of Hong Kong Office can follow the strategies formulated by the company. The office is equipped with superiorities such as physical proximity to Vietnam, closer coordination, sample making and accessories sourcing, quality assurance, implementation and control. Besides, the office has strategic position by acting as a service centre in the region. My company can take Hong Kong Office as a stepping stone in penetrating to other markets like Burma, Cambodia and Laos in the future. In conclusions, it can be found that network approach is appropriate for this study, we can apply network management for purchase / marketing and enrich prospective marketing activities and sales exposure in the region. In this study, I face the data problems and limitations which are commonly found when investigating the less developing countries like Vietnam. Finally, future research is recommended to examine several areas to enhance the thorough understanding of the textile / garment industry.

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