i

Thai nguyen University Southern luzon STATE University

Socialist Republic of Vietnam Republic of Philippine
s PHAN THỊ MAI HƯƠNG
(English Name: Diana)

“FACTORS AFFECTING THE
COMPETITIVENESS OF SMALL AND MEDIUM
SIZED AQUACULTURE ENTERPRISES IN THE
NORTH OF VIETNAM”

DOCTORAL THESIS
examination, entitled “FACTORS AFFECTING THE COMPETITIVENESS OF
SMALL AND MEDIUM SIZED AQUACULTURE ENTERPRISES IN THE NORTH
OF VIETNAM” truthfully declare that the said paper is a product of my original research
investigation.
Signed this …………………… 2013 at Thai Nguyen University

Phan Thi Mai Huong
DBA Candidate
iv
Abstract
The study was conducted to analyze the factors affecting competitiveness of SMEs in
aquaculture of Northern Vietnam. The research utilized both primary and secondary data.
The respondents in this study were the members of board of directors of 122 small and
medium aquaculture enterprises of six coastal provinces in the North of Vietnam. Data
for this study was collected via email with director of aquaculture enterprises. The study
adapted from David Aker’s model (2007) for analyzing the factors impacting
competitiveness of aquaculture enterprises in 6 coastal provinces of Northern Vietnam.
Eight criteria that this dissertation identifies as most important internal factors
accounting for enterprises’ competitiveness include: finance capability, management
capability, intangible assets, manufacturing equipment, marketing, production capability,
human resource and R&D.
The dissertation identified the indicator of competitiveness of small and medium sized
aquaculture enterprises in Vietnam nowadays and in particular evaluated the factors
affecting the competitiveness of small and medium aquaculture enterprises in the North of

degree of Doctor in Business Administration has been examined and recommended for acceptance
and approval for ORAL EXAMINATION.
Professor. Dr
.

Cecilia N. Gascon

Adviser
Approved by the Committee on Oral Examination with a grade of PASSED on ……. 2013
Dr……………………… ………………… Member
Dr……………………… ………………… Member
Dr……………………… ………………… Member
Dr……………………… ………………… Chairman
Accepted in partial fulfillment of the requirements for the degree of Doctor in Business
Administration.
THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY
Dean Dean

vi

TABLE OF CONTENT
CHAPTER I………………………………………. 1

INTRODUCTION…………………………………… 1

1.


1.2.

Porter’s 5 forces Model 10

1.3. Analyzing competitors & David Aaker’s model 12
2.

Literature Review 14

CHAPTER III………………………………………. 20

RESEARCH METHODOLOGY………………… 20

1.Research design 20

2. Location of the study 22

3. Population, Sample Size and Sampling technique 22

4. Description of research points 24

5. Research Instrument 24

6. Statistical analysis 25

CHAPTER IV…………………………………… … 27

RESULTS AND DISCUSSION…………………… 27

1. Evaluating the reliability of statistic data 27


3.6.

Production capability 44

3.7.

Human Resources 45

3.8.

R&D 48

4. Comparison of competitiveness between provinces in Northern Vietnam in aquaculture
sector. 49

4.1. Financial capability of six coastal provinces in the North of Vietnam 49

4.2. Management Capability 51

4.3. Intangible assets 52

4.4. Manufacturing equipment and technology capability 53

4.5. Marketing 54

4.6. Production capability 56

4.7. Human resources 57


Table 4: Cronback alpha of management capability 27
Table 5: Cronback alpha of intangible assets 28
Table 6: Cronback alpha of manufacturing equipment and technology capability 28
Table 7: Cronback alpha of marketing 29
Table 8: Cronback alpha of production capability 29
Table 9: Cronback alpha of human resources 30
Table 10: Cronback alpha of research and development 30
Table 11: Illustration method of calculating group variables via mean value 31
Table 12: Financial Capability Crosstabulation 32
Table 13: Management Capability of aquaculture enterprises in the North of Vietnam 34
Table 14: Number of aquaculture enterprises assessed management capability at high level of six
provinces in the North of VietNam 36
Table 15: Intangible assets Crosstabulation 37
Table 16: Manufacturing equipment and technology capability Crosstabulation 39
Table 17: List of Basa price of six coastal provinces surveyed (per kg) 40
Table 18: Price of prawn of six coastal provinces surveyed (20 units / kg) 41
Table 19: Marketing Crosstabulation 43
Table 20: Production capability Crosstabulation 44
Table 21: Human Resources Crosstabulation 46
Table 22: R&D Crosstabulation 48
Table 23: Post Hoc Tests on financial capability 50
Table 24: Post Hoc Tests on management capability 51
Table 25: Post Hoc Tests on intangible assets 52
Table 26: Post Hoc Tests on Manufacturing equipment and technology capability 54
Table 27: Post Hoc Tests on marketing 55
Table 28: Post Hoc Tests on production capability 56
Table 29: Post Hoc Tests on Human Resources 57
Table 30: Post Hoc Tests on Research and Development 59

LIST OF FIGURES


x
AQUACULTU
RE
Sea product export
UN United Nations
VASEP Vietnam Association of Seafood Exporters and Producers
VCCI Vietnam Chamber of Commerce and Industry
WB World Bank
WEF World Economic Forum
0

1

CHAPTER I
INTRODUCTION
1. Background of the study
Market economy and international integration are creating many opportunities and
challenges for enterprises, especially the small and medium sized enterprises. So how
Vietnam’s Small and medium sized enterprises should operate to survive and develop in a
competitive and integrative environment is now a major issue worth being paid great
attention to.
In recent years, the Vietnam's economy in general and aquaculture sector in particular
is in the process of economic integration in the Region and the World. This is also a great
opportunity for aquaculture enterprises in the North of Vietnam. However, aquaculture
enterprises in the North have met the big challenges such as stiff competition.
Opportunities of SMEs:
First, Vietnam is increasingly involved deep integration into the economy of the region
and the world, opportunities for the aquatic products will increasingly be expanded. The
northern aquaculture enterprises will have the huge global market for export and

commodity in other areas of the country. Therefore products of aquaculture enterprises of
the northern region to compete with other enterprises in the country: category, price and
product quality.
Second, most of the aquaculture enterprises in the northern region are small-scale
production, weak production capacity. So many enterprises have fallen into weak position
to produce goods in large quantities and high quality.
Third, facilities of many aquaculture enterprises in the northern region are old, outdated
technologies they lack of funds for the renovation of equipment manufacturing.
Fourth, the quality of labor in the aquaculture enterprises in the northern region is low,
limiting the access to scientific and technical progress in advanced manufacturing. The
training of managers and technical workers pay attention nowadays but due to limit funds
and experience, so the number of training classes are not many, did not meet the
requirements in terms of quantity and quality, especially the lack of skilled entrepreneurs.
Conclusion, the current aquaculture enterprises in northern region are facing many
opportunities and also many difficulties and challenges. However, it should be aware that
the advantages and the comparative advantages of major enterprises belong to the objective 3

factors, while the challenges that they meet belongs to the subjective factors derived from
the inside of enterprises .
Therefore, to achieve high efficiency, they need to know to take advantage of every
opportunity and comparative advantage of themselves to overcome challenges to achieve
effective high production, high efficiency of integration.
2. Statement of the problem
Aquaculture sector is strength of Vietnam and has now been identified as key economic
sectors of the country by the achievements that this sector has achieved in the past and
future prospects. Currently, the Northern region of Vietnam has 122 aquaculture
enterprises in six coastal provinces. Every year, the manufacturing aquatic sector brought

There are many factors that affect competition; they can be divided into two main
groups of factors: external factors and internal factors.
a- External factors include:
 Environmental political factors
 Tax policy
 Interest rate
 Financial Policies
 Administrative procedures
 Climatic factors
b - Group internal factors:
 Financial Capability
 Human Resources
 Manufacturing equipment and technology capability
 Production capability
 Management Capability
 Marketing
 R&D
 Intangible assets
However, within the framework of this thesis the author has focused on the internal
factors affecting the competitiveness of small and medium sized enterprises in aquaculture
sector. The external factors will not be analyzed because of the following reasons: 5

 In the same area to the north of Vietnam so the climatic conditions of the provinces
surveyed are similar to each other.
 Tax policy, interest rates, fiscal policies and regulations on administrative
procedures specified performance across Vietnam
3. Hypothesis

The study was carried out in small and medium sized enterprises in aquiculture in
six coastal provinces the north of Vietnam.
The research focuses on presenting the factors affecting the competitiveness of
enterprises in aquiculture in north of Vietnam and giving some solutions to improve the
competitiveness of small and medium sized enterprises in aquiculture in the future
.
6. Definition of terms
To ensure common understanding among the readers, the following terms are
defined conceptually and operationally:
Aquaculture
 According to the FAO (2000) aquiculture is understood to mean the farming
of aquatic organisms including mollusks, crustaceans and aquatic plants. Farming
implies some form of intervention in the rearing process to enhance production, such as
regular stocking, feeding, protection from predators, etc. Farming also implies
individual or corporate ownership of the stock being cultivated.
 It is commonly defined as the active cultivation (maintenance or production)
of marine and freshwater aquatic organisms (plants and animals) under controlled
conditions. This definition encompasses a broad range of operations, cultivating a wide
variety of organisms, using a wide variety of production systems and facilities.
Competitiveness
 According to Porter (1985) the definition of a conceptual term such as
competitiveness is never true or false in an absolute sense but its appropriateness can be
judged for specific research or policy question. A shared definition of competitiveness will
thus also reflect a shared view of what it should be used to analyze. He defines the
competitiveness of a location as the productivity that company located there can achieve. 7

He uses this definition of competitiveness to understand the drivers of sustainable

that knowledge to create new and improved products, processes, and services
that fill market needs.
Revenue:
For a company, this is the total amount of money received by the company
for goods sold or services provided during a certain time period. It also includes all net
sales, exchange of assets; interest and any other increase in owner's equity and is calculated
before any expenses are subtracted.
Technology: Referring to industries that are experiencing, or recently have
experienced, technological progress.
Small and medium sized enterprises in Vietnam
 Vietnam’s Small and Medium Sized Enterprises can be defined as legal enterprises
(regardless types of economic components, location and standard of production,
technology, processing and trading capacity) with a certain capital volume and labour force
satisfying the governmental regulations applied to particular industry in particular period of
the country’s economic development.
 Definition of a small and medium scale enterprise follow current World Bank and
Vietnamese Government definitions. The World Bank SME Department operates with
three groups of small and medium-sized enterprises: micro-, small-, and medium-scale
firms. Micro-enterprises have up to 10 employees, small-scale enterprises up to 50
employees, and medium-sized enterprises up to 300 employees. These definitions are
broadly accepted by the Vietnamese Government (see Government decree no. 90/2001/CP-
ND on “Supporting for Development of Small and Medium Enterprises”)
9



10

In the interest of competition, especially competition in business, it is necessary to
mention the aspect of competitiveness.
Competitiveness is the capability of achieving success in a competition of the same
products on the same consumption market.
There are many different points of view on this aspect. Some people think that
competitiveness only indicates the capability of effectively carrying out production and
trade activities and raising goods and service provision to a higher standard in order to
improve quality of people’s life. Some others believe that competition and competitiveness
only show significance in trade relationships and are indicated in the indexes of real
exchange rate. While some economists think that competitiveness is only suitably viewed
at a micro level – company, others believe it should be analyzed at a macro level - nation.
However, a recent research shows that some international organizations, supported by
many famous economists, have advanced several solutions to measuring competitive
advantages of nations, corporations, and companies, so that economic targets can be built
to measure key factors that influence and determine competitiveness. According to the
World Economics Forum 2009 (WEF), there are eight key factors that foster
competitiveness of a nation: Government (accounting for 17%), Finance (17%), degree of
market extensibility (16%), Labour (16%), Technology (11%), Infrastructure (11%),
Constitution (6%), and Management (6%).
1.2. Porter’s 5 forces Model
The famous American economist Michael Porter, who supports the idea that
competitiveness depends much on five forces that determine profitability of a company. It
is the original competitive forces model, which impact on an organization’s behavior in a
competitive market.
The first (The Degree of Rivalry) comes from production scale and level of current
competition between companies, which are specified in the following data: the presence of
competitors in an industry; the quantity of products/services of a company; the level and

Choosing clients is crucial because a firm should avoid to be in a situation of dependence.
The level of concentration of customers gives them more or less power. Generally their
bargaining power tends to be inversely proportional to that of the suppliers.
The fifth (The Threat of Substitutes) comes from the ability of other sectors to replace
products/services that better satisfy needs of the existing customers of a company. The
higher the ability of other sectors to replace products/services, the more disadvantageous it 12

is for the industry to make profit. These substitute products can be dangerous and the
company should anticipate to cope with this threat.
When analysing these five forces, M. Porter clarifies the advantages and disadvantages
of an enterprise in competition. Apart from these five different pressures, there is a
common one for all. This is also called the general environment factor, including natural
condition, population, economy, politics, laws, social culture, and technology. This factor
is rare and, if any, will be hardly to control, but it can directly influence companies.
1.3. Analyzing competitors & David Aker’s model
Rivalry among firms is the central force determining a business’s competitive position.
It is therefore necessary to analyse competitors in a similar way to how enterprises would
do with their own businesses. The elements of a competitor analysis are:
• Current strategy or positioning;
• Strengths;
• Weaknesses;
• Opportunities;
• Threats;
• Possible changes in strategy;
• Reaction to changes in your business’s strategy;
• Financial strength;
• Operational strength.

Table 1: KSF Competition Ranking

Factors Importance
weight
A B C D C
Strength
Rating
Firm
Strength
Strength
Rating
Firm
Strength
Strength
Rating
Firm
Strength
Strength
Rating
Firm
Strength
Strength
Rating
Firm
Strength
Market Share
0.25 5 1.25

4 1 4 1 3 0.75



4 0.28

2 0.14

3 0.21
R&D
0.05 3 0.15

5 0.25

4 0.2 3 0.15

3 0.15
Patents
0.02 3 0.06

3 0.06

4 0.08

2 0.04

3 0.06
Overall
1 4.56

3.86

4.23

enterprises’ competitiveness include: finance capability, management capability, intangible
assets, manufacturing equipment, marketing, production capability, human resource and
R&D.
2. Literature Review
Over the past decade, many researchers have studied on competitive advantages. They
identified some indicators such as lower spending, lower price, better quality, better
marketing job, higher levels of related services… affecting competitiveness between
enterprises or firms in one sector.
Hovanyi (2000) and Lev (2004) indicated some following factors directly influenced
competitiveness of enterprise: capital, technological development trends, the global market