Assessing the challenges and opportunities for small and medium enterprises (SMEs) in the Vietnamese apparel retail market

Lee, Jong Geun
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Since the Vietnamese government implemented an economic renovation policy in 1986, Small and Medium Enterprises (SMEs) have tremendously contributed to a rapid growth in the country's economy (Tran, Le, & Nguyen, 2008). Although SMEs play an important role in Vietnam's apparel retail market, relatively little is known about Vietnam's apparel retailing market environment and domestic Vietnamese apparel retailers' dynamic business performance in the marketplace. Therefore, the present study aimed to extend an understanding of the competitive advantages of domestic Vietnamese small-sized apparel retail firms and examine their growth potential in Vietnam's apparel retail marketplace.

Rostow's Stage of Growth Model (1960) and the VRIO framework (Barney, 1995) were used to frame the qualitative-dominant mixed methods approach. For this study, face-to-face interviews and a paper-based survey were conducted among a target sample including domestic Vietnamese small-sized apparel retail store owners who independently-owned and operated an apparel retailing store in Hochiminh City of Vietnam. To obtain candid responses from participants, closed-ended and open-ended responses in semi-structured questionnaire were used. The sample (n=13) for the present study was obtained using a snowball sampling technique.

Open coding, constant comparison, and axial coding processes were used to analyze the data (Strauss & Corbin, 1990). For the qualitative phase, interpretive analyses revealed overarching themes, including (1) resources generated for domestic Vietnamese small business owners in the apparel retail market, (2) limited access to financial resources, (3) lack of reliable human resources, (4) need for further development of transportation infrastructure, (5) use of retail technology, (6) economic conditions' influence on apparel consumption, and (7) facing other difficulties in retail operations. For the quantitative phase, descriptive statistics were calculated from the paper-based survey results to support evidence from the in-depth interviews, including the calculation of means, standard deviations, and frequencies of item scores.

Based on the VRIO framework (Barney, 1995), the findings suggest that a majority of the domestic Vietnamese small-sized apparel retail stores are weak and lack resource management. The results confirmed that a number of participants in this study have valuable resources in retail operations. However, the findings also re-affirmed that the firms are lacking in rarity, imitability, and organization structure toward valuable resources to sustain a competitive advantage in Vietnam's apparel retail market. Therefore, this study suggests that by understanding these resource management practices for domestic Vietnamese apparel retail business owners, other small business entrepreneurs in Vietnam can build appropriate resource management strategies for their stores to sustain a competitive advantage in the marketplace.

In addition, a majority of the domestic Vietnamese small-sized apparel retail stores confront several business constraints in the marketplace. Descriptive statistic results illustrated that a majority of participants are facing difficulties in business operations because of several key determinants identified in this study, including capital resources, human resources, transportation infrastructure, and technology infrastructure. Therefore, this study provides guidelines to policy makers and organizations in Vietnam who may be responsible for specific assistance programs to domestic Vietnamese small businesses in transition markets.

This study is a beginning point for domestic small-sized apparel retail entrepreneurs' research in Vietnam. By identifying information about domestic Vietnamese small business entrepreneurial activities in the apparel retail market, this study encourages other researchers to conduct future studies by utilizing the findings from this study. This study generated a series of testable propositions based on analyses of domestic Vietnamese small firms' entrepreneurial activities and Vietnam's apparel retail market conditions. Therefore, future research should advance the propositions and test the framework by investigating new relationships among the components necessary to understanding market growth and sustainability in Vietnam's retail market.

Apparel, Merchandising, and Design