Enhancing vietnam tea export’s competitiveness capacity in the integrated period

some products of some countries are more likely to compete successfully than products in others. It includes the following: Conditions of inputs, Demand conditions, Supporting and related industries, Business strategy, organizational structure and competitive environment, Role of opportunity, and the role of the Government 2.1.4. Views on improving the competitiveness of Vietnam's export tea industry Based on the analysis of arguments on competition, competitiveness, and the context of international economic integration, the author offers a viewpoint to improve the competitiveness of Vietnam's export tea industry as " a group of businesses that produce tea-related products that compete directly with each other to achieve the goal of increasing market share, increasing sales through the use of low- cost strategies or creating products with outstanding features compared to other companies in the same industry or similar industries on the market ”. 2.2 The criteria for evaluating the competitiveness of the tea industry in the integrated period - Market share of tea products - Quality of raw material sources - Technological capacity of tea business 7 - Access to capital of tea enterprises - Business linkage capacity - Product brands 2.3. Factors affecting the competitiveness of the tea industry According to Michael Porter's diamond model, in the previous section, the national competitive advantage is formed from a group of factors such as: conditions of production factors, conditions of demand, supporting industries. In this section, the tea industry, with Vietnamese characteristics, will affect the following factors: - Conditions of production factors - The conditions of the demand - Conditions of management - The role of government - Marketing activities - The indigenous culture 2.4. Research diagram and establishment of factors affecting the competitiveness of the tea industry 2.4.1 Research diagram Figure 2.2 Proposed research scheme Research hypotheses From research scheme 2.2, the author proposes 6 research hypotheses as follows: H1: The condition of production factors has a positive impact on the competitiveness of the tea industry. H2: Management conditions have a positive impact on the competitiveness of the tea industry. H3: Marketing activities have a positive impact on the competitiveness of the tea industry. Production conditions Management conditions Marketing Activities Role of government Indigenous culture Demand conditions Competitiveness Capacity 8 H4: The role of government has a positive impact on the competitiveness of the tea industry. H5: Indigenous culture has a positive impact on the competitiveness of the tea industry. H6: Demand conditions for products have a positive impact on the competitiveness of the tea industry. 2.4.2 Research design Figure 2.3 Process of conducting research 2.4.3 The scale Table 2.4 Encryption and scale origin Factors Indicator Encode Origin of the scale Production Conditions Human Resources NTSX1 Momaya (2004), Research by Onar & Polat (2010), Phung Thi Trung (2016) and To Linh Huong (2018) Infrastructure and technology NTSX2 Resources NTSX3 Capital NTSX4 Management Conditions Business structure QT1 Nguyen Thanh Long, 2016; Phung Thi Trung 2016; To Linh Huong, 2018 Corporate culture QT2 Business strategy QT3 Marketing Activities Market research HDM1 Thompson, Strickland & Gamble 2007; Onar & Polat 2010; Sauka, 2014 ... Branding HDM2 Distribution channel HDM3 Research products HDM4 Price strategy HDM5 Role of Goverment Stable macro environment VTCP1 Sauka (2014), Nguyen Thanh Long (2016), To Linh Huong (2018) and Building a clear and VTCP2 9 transparent legal corridor development author Export support policy for tea industry VTCP3 Indigenous culture Farming practices VHBD1 The author develops on the basis of qualitative research History, literature on tea VHBD2 Tea drinking culture VHBD3 Demand Conditions Market CSP1 Thompson, Strickland & Gamble (2007) and To Linh Huong (2018) Momaya (2004), Research by Onar & Polat (2010), Phung Thi Trung (2016) and To Linh Huong (2018) New product CSP2 Price CSP3 Market share CSP4 2.4.4 Data collection methods The author uses a combination of 2 sources: primary data and secondary data Secondary data: the author will search and select the results of published works and scientific papers related to the country and abroad in order to find a model of factors affecting industry competitiveness. tea. The author uses search aids such as Proquest, ScienceDirect, Emerald, Scholar.google, ... Primary data: collected by survey method from the survey by questionnaire dedicated to the topic. The survey was conducted directly with paper questionnaires, soft copies and via face-to-face meetings or emailing to tea producing and exporting enterprises. Number of questionnaires sent: about 450. It is expected that the number of replies will result in 400 replies. 2.4.5 Data analysis method Secondary data is collected by the author from research works, documents, books, and specialized newspapers. The author uses statistical methods to synthesize the data and then proceeds to use analytical techniques to process the data. Primary data collected through the questionnaire was analyzed by statistical data analysis tool SPSS, SmartPLS. Specifically, the main techniques used include: Conventional analytical techniques: such as descriptive statistics to give an overall picture of demographics as well as estimates of the (average) mean of the criteria. Multi-factor analysis technique: to identify the components of factors affecting the competitiveness of export tea industry. Analysis techniques of semi-linear linear structure model: to determine the complex interaction between elements and components of a model. According to Henseler & Chin (2010), the research model PLS-SEM smallest variance value was assessed through two steps: evaluation of measurement model and structural model. First, the measurement model is assessed through the 10 reliability, convergence and discriminatory evaluation of measurement concepts in the model. 2.5. Experiences in improving tea industry's competitiveness in terms of integration and lessons for Vietnam's export tea industry From the experiences of China, Sri Lanka and Kenya, lessons learned for Vietnam include: - Having a reasonable tea industry development policy, organizing the tea industry very closely and consistently under the direction of the government. - Develop businesses; build a team of qualified entrepreneurs. All parties involved in the tea value chain must benefit - Actively apply science and technology to create new tea varieties with higher yield and quality. At the same time, changing farming techniques to meet the strict requirements of food safety standards of developed countries. - Invest in building and restoring symbols of long-standing tea drinking culture. Gradually assert as the cradle of tea drinking culture of mankind. To strongly develop high-class tea brands for domestic consumption as well as export to fastidious markets. CHAPTER 3 CURRENT SITUATION OF COMPETITIVE CAPABILITY IN VIETNAM'S EXPORT TEA INDUSTRY IN THE INTEGRATED PERIOD 3.1 Characteristics of the development of Vietnam's tea industry 3.1.1 Tea area harvested From 1990 to present, Vietnam tea area has increased. The average period of 2010-2017 increased by 1.26% / year, from 113,200 ha in 2008 to 123,188 ha in 2017. Through Table 3.1, tea area has increased in this period but in general, the growth rate is slow compared to with the wishes of many localities growing tea. Table 3.1 Area and quantity of dry tea nationwide Year Area Quantity Area (ha) Increase (%) Quantity (tons) Increase (%) 2010 113.200 1,61 198.466 6,87 2011 114.399 1,05 206.600 4,09 2012 114.433 0,02 211.500 2,37 2013 114.827 0,34 217.700 2,93 2014 115.436 0,53 228.360 4,89 2015 117.822 2,06 236.000 3,34 2016 118.824 0,85 240.000 1,69 2017 123.188 3,67 260.000 8,33 11 (Source: FAO data) 3.1.2 Tea production quantity In the period of 2010-2014, the average output increased by 4.23% / year, from 198,466 tons in 2010 to 228,360 tons in 2014. In the period of 2015-2017, the output continued to increase an average of 4.45% / year, by 236,000 tons in 2015, and 260,000 tons by 2017 (see table 3.1). The relatively high production of the whole tea industry has made Vietnam ranked fifth among the largest tea producing countries in the world, accounting for over 3% of global tea production (see Table 3.2). Table 3.2 Proportion of output of some tea producing countries in 2014-2017 Countr y 2014 2015 2016 2017 Value (tons) Perc enta ge (%) Value (tons) Perc enta ge (%) Value (tons) Perc enta ge (%) Value (tons) Perc enta ge (%) India 1.207.31 0 15,8 4 1.23.314 0 15,2 2 1.250.49 0 15,1 7 1.325.05 0 15,4 5 China 2.095.57 0 27,4 9 2.277.00 0 28,1 0 2.313.00 0 28,0 7 2.460.00 0 28,6 9 Sri Lanka 338.032 4,43 341.678 4,21 349.580 4,24 349.699 4,07 Kenya 445.105 5,84 399.100 4,92 473.000 5,74 439.857 5,12 Indones ia 154.369 2,02 132.615 1,63 144.015 1,74 139.362 1,62 Turkey 226.800 2,97 239.028 2,95 243.000 2,94 234.000 2,72 Japan 83.600 1,09 79.500 0,98 80.200 0,97 81.119 0,94 Vietna m 228.360 2,99 236.000 2,91 240.000 2,91 260.000 3,03 Argenti na 82.887 1,08 82.492 1,01 85.015 1,03 80.608 0,94 Banglad esh 63.780 0,83 66.101 0,81 64.500 0,78 81.850 0,95 World 7.621.15 4 100, 00 8.101.50 3 100, 00 8.239.97 3 100, 00 8.574.50 3 100, 00 (Source: FAO data) 3.1.3 Tea yield It is evident that the output of fresh bud tea nationwide increased over the past years compared to the tea growing area (in the period of 2010-2017 the area increased by 8.82%, the production increased by 31%) (see Table 3.1). 12 Table 3.3 Tea productivity of Vietnam and some countries in the world (Unit: tons / ha) 2010 2011 2012 2013 2014 2015 2016 2017 Argentina 24,82 25,11 21,06 21,31 21,27 20,83 21,46 20,35 Bangladesh 11,46 10,67 10,79 11,36 10,64 10,94 10,73 15,19 China 10,16 9,86 10,31 10,36 10,56 10,76 10,89 11,11 India 17,11 18,25 18,76 21,43 19,98 21,76 21,65 21,31 Indonesia 12,06 11,97 11,79 11,90 12,98 11,54 12,28 12,25 Japan 18,16 17,77 18,71 18,67 18,66 18,06 18,60 18,75 Kenya 23,20 20,11 19,38 21,77 21,92 19,05 21,64 20,12 Sri Lanka 14,93 14,75 14,86 15,32 15,22 15,16 15,04 14,95 Turkey 30,97 29,20 29,66 27,79 29,82 31,36 31,82 28,49 Vietnam 7,0 7,50 7,68 8,02 8,34 8,56 8,69 8,88 Average 18,04 17,57 17,38 17,89 18,08 17,95 18,43 18,36 (Source: FAO data) 3.1.4 Tea export value Currently, Vietnamese tea products are exported to more than 100 countries in the world, with a variety of rich and diverse teas. However, the value of our country's tea industry is still low, only reaching an export turnover of over 217.834 million USD / year in 2018) - a modest figure compared to other agricultural products such as coffee, pepper ... Table 3.4 Vietnam's export and export value of tea Year Export Quantity Export Value Quantity (tons) Percentage (%) Value (USD millions) Percentage (%) 2012 146.708 - 224,589 - 2013 141.434 -3.59% 229,719 2.28% 2014 130.000 -8.08% 230,000 0.12% 2015 124.780 -4.02% 213,130 -7.33% 2016 130.900 4.90% 217,200 1.91% 2017 139.785 6.79% 227,929 4.94% 2018 127.338 -8.90% 217,834 -4.43% (Source: Statistics of General Department of Customs) 3.2 Assessing the current situation of Vietnam's export tea industry competitiveness 3.2.1 Situation of teamarket share - Market share compared to the world market The export value shown by turnover did not change much between 2012 and 2017, the percentage of market share in the total amount of exported tea in the world 13 decreased from 3.56% to 2.82%. However, Vietnam still maintains as one of the top 10 exporting countries in the world. Table 3.6 Tea export turnover of some leading countries (Source: FAO data) - Export market structure Table 3.7 Main export markets of Vietnamese tea in 2018 Market Year 2018 +/- compared to year 2017 (%)* Quantity (tons) Value (USD) Quantity Value Export Turnover 127.338 217.834.138 -8,9 -4,43 Pakistan 38.213 81.632.660 19,42 18,82 Taiwan 18.573 28.752.190 6 5,35 Russian 13.897 21.209.765 -19,98 -14,62 Mainland China 10.121 19.667.609 -8,86 34,24 Indonesia 8.995 8.970.471 -6,18 2,75 USA 6.102 7.334.595 -13,15 -8,96 Saudi Arabia 2.218 5.719.161 28,88 33,11 U.A.E 2.712 4.209.844 -59,76 -59,1 Malaysia 3.931 3.035.875 9,29 11,56 Ukraine 1.489 2.456.144 6,59 16,22 Germany 392 1.958.538 4,26 39,07 Export Value (USD thousand) World percenta ge (%) Export Value (USD thousand) World percenta ge (%) Export Value (USD thousand) World percenta ge (%) Export Value (USD thousand) World percenta ge (%) Export Value (USD thousand) World percenta ge (%) Export Value (USD thousand) World percenta ge (%) 1 China 1.042.116 16.5 1.246.308 16.22 1.272.663 18.2 1.381.530 21.51 1.485.022 22.58 1.609.960 20.02 2 Sri Lanka 1.403.154 22.21 1.530.138 19.91 1.609.339 23.01 1.321.899 20.59 1.251.730 19.03 1.513.207 18.82 3 Kenya 635.621 10.06 1.218.039 15.85 642.436 9.19 724.124 11.27 745.053 11.33 1.424.682 17.72 4 India 685.600 10.85 819.630 10.67 656.214 9.38 677.933 10.55 661.719 10.06 768.194 9.55 5 Germany 222.923 3.53 249.052 3.24 248.354 3.55 215.570 3.35 235.441 3.58 250.145 3.11 6 Vietnam 224.847 3.56 229.719 2.99 230.000 3.29 213.130 3.32 217.200 3.3 226.797 2.82 7 Poland 174.917 2.77 202.301 2.63 235.580 3.37 180.630 2.81 194.278 2.95 201.196 2.5 8 UAE 229.095 3.63 335.635 4.37 312.642 4.47 116.871 1.82 117.565 1.79 186.112 2.31 9 USA 86.689 1.37 95.554 1.24 107.799 1.54 110.360 1.72 127.971 1.95 135.847 1.68 10 England 196.242 3.11 185.166 2.41 146.984 2.1 141.141 2.2 130.611 1.99 133.673 1.66 2016 2017 Year 2012 2013 2014 2015 14 Philippines 625 1.603.404 19,96 24,01 Poland 1.022 1.559.879 -16,98 -24,65 India 868 905.674 -49,94 -56,62 Turkey 381 784.440 -42,19 -48,1 Kuwait 17 46.008 -22,73 -23,62 (Source: Statistics of General Department of Customs) 3.2.2 Quality of preprocessing tea In fact, the whole tea area in our country exists some degraded varieties of low quality such as midland (accounting for over 44%), a relatively high proportion of high-yield PH1 cultivars. But the product quality is low. In addition, the old tea garden over 20 years accounts for 25%, the productivity and quality of buds has decreased. This situation requires replanting and completely eliminating low-quality tea varieties within the next 5 years. Only growing good tea varieties on a large scale can create products of uniform quality, creating large, uniformly quality batches. 3.2.3 Tea enterprisese’ technology capacity Table 3.9 Assessment of tea industry on technology used compared to the world level (%) Tea Average compared to other sectors Higher 0 0 Equal 58,97 61,54 Lower 41,03 38,46 Total 100 100 (Source: Survey results of VBCSD) According to the competitiveness report of three sectors: tea, coffee and rubber (2015) of the Vietnam Business Council for Sustainable Development (VBCSD) shows that: in general, the technological level of enterprises Tea industry is at par and lower than the world level. This is also a good illustration for Vietnam's production model is only in the early stages, when the value added is not much, not deeply involved in the global value chain. 3.2.4 Tea enterprises’ access to capital Table 3.13 Assessment of enterprises on access to capital from official sources (%) Degree evaluation Tea Average of sectors participating in the survey Very convenient 11,36 10,22 Advantage 36,36 37,95 Normal 38,64 37,23 Hard 13,64 14,6 15 Very difficult 0 0 Total 100 100 (Source: Survey results of VBCSD) From the survey results conducted by VBCSD, it shows that the level of convenience in accessing formal capital (promotion funds, banks ...) of enterprises in industries is at a fairly average level. Of which 13.6% of tea enterprises responded that they had difficulty in accessing formal capital, lower than the survey average of all three industries at 14.6%. This shows that the results of the easing of credit conditions for businesses have had an impact but not much and not yet thoroughly. 3.2.5 Tea enterprises’ lingkage capacity Looking at the table below, it can be seen that the majority of tea enterprises trading in raw materials in the country (up to 88.7% of enterprises) in which: 69% of enterprises said that they purchased raw materials in the area. The province and 19.7% of enterprises buy and sell raw materials with businesses in other regions. The survey results recorded a relatively small percentage of enterprises having trading activities with foreign enterprises (11.3%), of which: 8.5% had trading of materials with ASEAN countries and only 2.8% of enterprises have trade relations with non-ASEAN countries. Table 3.14 Location of enterprises that buy / sell raw materials (unprocessed raw materials to manufacture products) STT Source of raw material purchasing Average Percentage (%) 1 In the province 69,0 2 Other regions 19,7 3 ASEAN countries 8,5 4 Non-ASEAN countries 2,8 (Source: Survey results of VBCSD) 3.2.6 Brand of products In fact, Vietnam has not been recognized by the world as a leading producer and exporter. Vietnamese tea also has no brand in the world. The export market share of Vietnamese tea to developed countries like the EU and the US ... is still quite low, few businesses meet the standards set by the countries. Most of Vietnam's tea exports still mainly export to easy-going markets such as Pakistan, Poland, Saudi Arabia, China, etc. At the same time, tea products are only exported mainly as raw materials. The brand is still limited. 3.3 Assessment of factors affecting the competitiveness of Vietnam's export tea industry 3.3.1 Analysis of survey sample A total of 400 questionnaires were issued, the number of questions returned was 336, after eliminating the number of invalid questionnaires, the number of questionnaires included in the analysis was 295 questions, accounting for 65.5% of the total questions raised. . 16 3.3.2 Test the factor model affecting tea competitiveness Analyze factors and reliability of data Table 3.16 Results of independent factor analysis Nhân tố 1 2 3 4 5 6 NTSX1 .793 NTSX2 .700 NTSX3 .787 NTSX4 .897 QT1 .664 QT2 .958 QT3 .707 HDM1 .631 HDM2 .835 HDM3 .854 VTCP1 .716 VTCP2 .741 VTCP3 .698 VHBD1 .545 VHBD2 .555 VHBD3 .677 CSP1 .559 CSP2 .768 CSP3 .688 Eigenvalue 4.772 2.945 1.893 1.649 1.291 1.212 Variance (%) 23.862 14.725 9.464 8.243 6.455 6.058 Cronbach α .877 .823 .826 .770 .704 .711 Total variance extracted: 62,178%; KMO= 0,741; P=0,000 (Source: Summary of processing results on SPSS 22 software) Testing correlation coefficient Table 3.18 Correlation coefficients NTSX QT HDM VTCP VHB D CSP NTSX Pearson Correlation 1 QT Pearson Correlation .047 1 HDM Pearson Correlation .346 ** .113 * 1 VTCP Pearson Correlation .123 * .468 ** -.034 1 17 VHBD Pearson Correlation .452 ** .054 .386 ** -.047 1 CSP Pearson Correlation .233 ** .191 * .115 * .066 .297 ** 1 **. Correlation at statistical significance level 0.01 (2-tailed). *. Correlation at statistical significance level 0.05 (2-tailed). (Source: Summary of processing results on SPSS 22 software) Testing structural models - Assess the reliability of the model The reliability parameters of the model are reviewed in detail before conducting the test of influence level of factors. Table 3.19 Coefficients determining reliability of analytical data Cronbach's Alpha Độ tin cậy tổng hợp Phương sai trích (AVE) Production Conditions 0.877 0.915 0.730 Management Conditions 0.824 0.895 0.740 Marketing Activities 0.828 0.897 0.745 Role of Government 0.770 0.866 0.683 Indigenous culture 0.746 0.849 0.738 Demand Conditions 0.788 0.816 0.693 (Source: Summary of processing results on SmartPLS software) - Test the meaning of links in the model Table 3.23 Results of significance level of links (using Bootrapping) Original Sample (O) Sample Mean (M) Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values Production Conditions - > Competitiveness Capacity 0.401 0.397 0.038 10.508 0.000 Management Conditions -> Competitiveness Capacity 0.240 0.242 0.038 6.288 0.000 Marketing Activities -> Competitiveness Capacity 0.260 0.260 0.055 4.688 0.000 Role of Government -> Competitiveness Capacity 0.184 0.188 0.036 5.065 0.000 18 Productions Conditions Management Conditions Marketing Activities Role of Government Indigenous culture Demand Conditions Competitiveness Capacity Indigenous culture -> Competitiveness Capacity -0.078 -0.079 0.047 1.665 0.097 Demand Conditions -> Competitiveness Capacity 0.085 0.085 0.041 2.091 0.037 (Source: Summary of processing results on SmartPLS software) In Table 3.23, links with a value of less than 0.05 are significant links with 95% confidence. The results show that not all factors influence the competitiveness of Vietnamese tea exporters, in particular the link between indigenous culture and unsupported competitiveness (t). = 1,665 0.05). In addition, the remaining 5 links show a strong influence on the competitiveness of tea export enterprises (t => 1.96; p competitiveness has the strongest impact (t = 10,508> 1.96; p <0.05), followed by management activities -> competitiveness (t = 6,288> 1.96 ; p competitiveness (t = 5.065> 1.96; p competitiveness (t = 4,688> 1.96; p <0.05). And finally, the demand condition for the product -> competitiveness (t = 2.091> 1.96; p <0.05), the test result of this link shows the demand condition for the product. affecting the competitiveness of Vietnamese tea exporters, the level of influence is not great. Figure 3.2 Model test results Figure 3.2 shows the beta value of the links, combining table 3.21, table 3.22 and Figure 3.23 can see that the beta value of indigenous culture is negative, which shows that the hypothesis H5 is not supported by The model suggests that indigenous culture affects the competitiveness of Vietnamese tea exporters. Besides, the remaining 5 hypotheses are confirmed by the following model: Hypothesis 1: The results indicate that the production factor has a positive relationship to the competitiveness of the export tea industry (H1: β = 0,401; t = 19 10,508, p <0.01). It can be concluded that Hypothesis 1 is supported by the statement that "production factors have a positive relationship to the competitiveness of the export tea industry". Hypothesis 2: The relationship between governance factors and competitiveness of export tea industry. The results show that governance factors have a positive impact on the competitiveness of the export tea industry (H2: β = 0.240, t = 6.288, p <0.01). Hypothesis 3: Assuming that marketing has an impact on tea competitiveness, the results indicate that this relationship is strongly supported (H3:: = 0.260, t = 4,688, p <0, 01). Hypothesis 4: Assume that there is a positive relationship between government role and tea competitiveness. The results indicate that hypothesis 4 is supported and that the government's role has an impact on tea industry's competitiveness (H4: β = 0.184, t = 5.065, p <0.01). Hypothesis 5: Testing the relationship between indigenous cultural factors and the competitiveness of export tea industry is not supported by the model (H5: β = - 0.078, t = 1.665, p> 0.05) . Hypothesis 6: Predicting the relationship of product demand factors and competitiveness of export tea industry. The results showed that demand factor does not have a big impact on the competitiveness of the export tea industry (H6: β = 0.085; t = 2.091 p <0.05). From the results of the hypothesis tes