0.11.2 Northern Mountain 20
0.11.3 South central coast 20
0.11.4 Southeast area 20
0.11.5 Mekong River Delta 21
0.11.6 Mountainous and Middle high lands 21
0.11.7 Central highlands 21
0.12 Demography 21
0.12.1 Population and population growth 21
0.12.2 Age structure 22
0.12.3 Sex structure 22
0.12.4 Household structure 22
0.12.5 Agriculture and living land distribution 22
0.13 Workforces 22
0.13.1 Characteristics 22
0.13.2 Labor in fishery industry 23
0.13.3 Female labor 23
0.14 Income structure 23
0.15 Capital structure 23
0.16 Economic structure 25
0.16.1 State Owned sector 25
0.16.2 Collective sector 25
0.16.3 Private sector 25
0.16.4 Household sector 25
0.16.5 Foreign sector 25
0.17 Training and education 25
0.18 Incentive programs 26
0.19 Health care system 26
FISHERY INDUSTRY ANALYSIS 27
0.20 Fisheries exploitation 27
0.20.1 Aquatic resource 27
0.20.2 Fishing capacity 28
0.20.2.1 Fishing fleet capacity 28
0.20.2.2 Categories of fishing gear 30
0.20.2.3 Labor in fishing sector 31
0.20.3 Yield and productivity 31
0.20.4 Freshwater fish exploitation 33
0.20.4.1 Pond fish exploitation 33
0.20.4.2 Fish exploitation in low land areas 33
0.20.4.3 River fish exploitation 33
0.20.5 Conclusion 33
0.21 Fisheries aquaculture 34
0.21.1 Water Surface 34
0.21.2 Labor in Aquaculture Sector 35
0.21.3 Total Yield and Exported Value 35
0.21.4 Culture Method 35
0.21.4.1 Freshwater culture 35
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0.21.4.2 Brackish shrimp culture 36
0.21.4.3 Marine culture 37
0.21.5 Extension service for aquaculture 37
0.21.5.1 Brood-stock hatchery system 37
0.21.5.2 Feed production 38
0.21.6 Conclusion 38
0.22 Fisheries Processing and Manufacturing 40
0.22.1 Raw material 40
0.22.2 Raw material processing 41
0.22.3 Processing and Manufacturing facilities in fisheries industry 41
0.22.4 Labor in fisheries manufacturing 43
0.22.5 Product categories 43
0.22.6 Food quality inspection and management 45
0.22.7 Conclusion 45
0.23 Fisheries trading 46
0.23.1 Foreign market 47
0.23.1.1 Exported value 47
0.23.1.2 Exporting market 48
0.23.1.3 Exported products 48
0.23.2 Domestic market 49
0.23.3 Conclusion 49
STRATEGIC INFORMATION AND RECOMMENDATIONS 51
0.24 Summary of analysis 51
0.25 Development strategy formulation 51
0.26 Recommendations 52
0.26.1 Fisheries exploiting 52
0.26.2 Aquaculture 53
0.26.3 Processing 54
0.26.4 Marketing and trade 55
0.26.5 Supportive industry 56
0.26.6 General 57
CONCLUSIONS 58
References
Appendixes
vi
LIST OF FIGURES
vii
LIST OF TABLES
viii
Chapter 1
Introduction
1.1 Background
Vietnam fisheries, being a long-standing one, are an important economic sector. Vietnam
fisheries productions contribute yearly more than 9% of GDP and attract a manpower of more
than 3 million people. The total output and export value of the fisheries industry continuously
increase respectively from 1,4 mill tones and USD 550 mill and in 1995 to 1,8 mill tones and
USD 980mill in 1999.
Though having great potential, Vietnam's fisheries sector remains underdeveloped. At
present, Vietnam has only 142 fishing ports, 22 others are in construction. Degrading major
infrastructures such as water supply, electricity and transport systems can not serve
development of the sector. In recent years, foreign investors have cancelled 44 out of 48 FDI
fishery projects. Merely 4% of capital for aquaculture are from foreign investment
1
.
Lacking money and knowledge, farmers have failed to develop effective aquaculture. 96.3%
of fish raising areas are of extensive cultivation which can generate low yields. Tens of
thousands of aquaculture farms have suffered from losses and bankruptcy when their fish die
or are not good enough to be exported due to lacking breeding technologies.
Vietnam now has 196 aqua-product processing factories. 70% of them have been working for
over ten years without upgrades. Due to insufficient investment, most enterprises and
families don’t have renovated equipment to increase their output. To date, the country has
only 27 enterprises qualified to export products to the European market. Around 81% of
aqua-product exports are sold at low prices. At a recent meeting of international donors for
the fisheries sector, Fishery Minister Ta Quang Ngoc said that Vietnam would need around
VND 3,112 bill in the coming time to develop the sector
2
.
0.1 Problem statement
Recently, Vietnamese government targets to raise the total output and export value of
fisheries industry to 2 mill tones and USD 2.5 bill, respectively, in year 2010
3
. Due to the
resources lacking and to survive in the competitive world it is necessitated to analyze the
fisheries industry distinctly and explore factors, which directly or indirectly influence the
improvement of this sector, to formulate the long-term development strategy for this industry
in Vietnam.
1
Ministry of Trade
2
Vietnam economic review: 1999
3
Economic Development Magazine: 2000, pp. 41
1
0.2 Objectives
1. To describe current performance of Vietnamese fisheries industry
2. To identify the structure and characteristics of internal linkages in the fisheries industry
3. To analyze and determine strengths and weaknesses of the fisheries industry.
4. To identify the barriers for development of Vietnamese fisheries industry
5. To formulate a development strategy for future development and improvement of the
fisheries industry in Vietnam.
0.3 Approach to the study
1. Mission: the mission of this research is to develop the fisheries industry in Vietnam.
2. Goal setting: to formulate a development strategy
3. Gathering information: primary data were gathered by unstructured interview with
fishing company, middle man, technical and academic institutes, related government
agencies and departments. Secondary data were gleaned by reviewing relevant texts,
government reports and publications.
4. Data analysis: before going to formulate the strategic plan, it is important to
understand the fishery business environment and this was done with the help of
Porter’s concept and SWOT analysis.
5. Formulation of strategic plan: after data analysis and data interpretation, a
suggested strategic plan is formulated.
0.4 Expected contribution
It is hoped that the research will be beneficial for the policy-makers as well as for fishery
business entities. It may also serve as a stimulus to boost the fisheries in the global market.
0.5 Scope of the study
This study is confined at national level for overall development of the fisheries industry in
Vietnam. The research geographically describes the fisheries industry and focus on industrial
linkage analysis, which can support the industry strategic formulation.
0.6 Organization of the research
The research consist of six chapters, which is further described as follow:
Chapter 1: Introduction chapter
2
Chapter 2: This chapter is a review of literature particularly on the concept of strategic
planning and the environment of fisheries industry.
Chapter 3: chapter 3 describes the performance and distribution of Vietnamese
fisheries industry, and aims at understanding the development of factors which directly
and indirectly supplements the performance of the fisheries industry in Vietnam.
Chapter 4: Industry analysis bases on the existing data with help of Porter’s concept,
SWOT matrix and cluster concept.
Chapter 5: This chapter is formulating a strategic plan and recommendation, which
aims at developing and improving the fisheries industry in Vietnam.
Chapter 6: Conclusion chapter
Figure 1. 1: Framework of the research
3
Problem identify
Objectives of research
Research methodology
Literature review Data gathering
Data analysis
Competitive advantage
(Strengths and weaknesses)
External environment
(Opportunities & threats)
Development strategy
Findings and recommendations
Chapter 2
Literature Review
This chapter dues with the theory foundation, which concern on the strategic development. It
is started with definition of strategic management and narrow down to the scope of study that
focuses on strategic formulation stage. A number of industry analysis techniques will be
examined to support the strategic formulation activities.
0.7 Strategic management process
0.7.1 Definition of strategy
Starting from its military root, strategy, ever considered as “the science of planning and
directing military operations”, is not a new term. However, applications of this concept into
business area is a breakthrough idea took place in the later half of this century. In the
decades of 1960s and 1970s, most management definitions of strategy by many authors
were emphasized on the planning them as an important component. Alfred Chandler has
defined strategy as “ the determination of the basic long term goals and objectives of a
enterprise, and the adoption of course of action and the allocation of resources necessary for
carrying out these goals”. The main idea in Chandler’s definition is that strategy involves a
rational planning process. The organization is depicted as choosing its goals, identifying
courses of action (or strategy) that best enable it to achieve its goals, and allocating
resources accordingly. Similarly, Quinn defined strategy as “ the pattern or plan that
integrates an organization’s major goals, policies and action sequences into a cohesive
whole”. Finally, Glueck defined strategy as “a unified, comprehensive and integrated plan
designed to ensure that the basic objectives of enterprises are achieved”. (Hill/Jones,1989)
However, definitions of strategy based on planning have been criticized. Hill and Jones
indicated a new approach based on Henry Mintzberg’s definition of strategy as “a pattern in a
stream of decisions or action” (Hill and Jones, 1989), the pattern being a product of whatever
intended (planned) strategies are actually realized and of any emergent (unplanned)
strategies. Mintzberg’s concept of strategy suggests that strategy involves more than just
planning a course of action
In the decades of 1980s and 1990s, “ strategy” becomes more and more essential in
business domain. Thereby, the concept of strategy has received a great attention by various
authors
Hax and Majluf (1991)pointed out that strategy can be seen as a multidimensional concept
that involves all the critical activities of the firm, providing it with a sense unity, direction and
purpose as well as facilitating the necessary change caused by its environment
(Glueck/Janch, 1986).
Johnson and Schole (1993) have stated the nature of corporate strategy by the
characteristics usually associated with the word ”strategy” or “strategy decision”
4
In summary, according to them, strategy is a unified, comprehensive and integrated plan that
relates the strategic advantages of the firm to the challenges of the environment and that is
designed to ensure that the basic objectives of the enterprises are achieved through proper
execution by the organization (Glueck/Janch,1986)
The concept of strategy has become one of everyday words of managers during the past 20
years and the practice of strategic planning is now widespread among large and medium
sized companies. This interest in strategy was caused by growing realization that the
company’ s environment has become progressively changeable and discontinuous from the
past and that as a result, objectives alone are insufficient as decisions rules for guiding the
company’s strategic reorientation as it adapts to changing challenges, threats and
opportunities.
1.1.1 Process of strategic management
Strategic management is a stream of decisions and actions that leads to the development of
an effective strategy or strategies to help achieve corporate objectives. The strategic
management process is the way in which strategists determine objectives and make strategic
decisions. However, strategic management is not simply the management of the process of
strategic decision making. According to Chakrvarthy (1986), strategic management is the
process through which managers ensure the long-term adaptation of their firm to its
environment. It should be also emphasized that strategic management process is continuous
– it never really stops within the organization. Certo and Peter (1990) defined strategic
management as “a continuous, integrative process aimed at keeping an organization as a
whole appropriately matched to its environment”
The process of strategic management involves three basic stages: (1) strategy formulation,
(2) strategy implementation, and (3) evaluation and control. Based on context of this study,
however, the focus will be on the strategy formulation process
Strategy formulation is often referred to as strategic planning or long range planning.
Regardless of the long term used, the process is primarily analytical, not action oriented. As
shown in the Strategic Management Model, the formulation process is concerned with
developing a corporation’s mission, objectives, strategy and policies. In order to do this,
corporate strategy makers must scan both the external and internal environments for needed
information on strategic factors.
Wheelen and Hunger (1998) detailed the first six steps commonly found in strategy
formulation are a series of interrelated activities:
1. Evaluation of:
• The corporation’s current performance results in terms of return on investment,
profitability and so on
• The corporation’s current mission, objectives, strategies and policies
2. Examination and evaluation of the corporation’s strategic managers- board of directors
and top management
3. Scanning of external environment to locate strategic opportunities and threats
5
4. Scanning of internal corporate environment to determine strategic strengths and
weaknesses
5. Analysis of the strategic factors from step 3 and 4 to
• Pinpoint problem areas, and
• Review and revise the corporate mission and objectives as necessary
6. Generation, evaluation and selection of the best alternative strategy appropriate to the
analysis conducted in step 5
However, the above strategy formulation process can be divided into 2 stages, as illustrated
in the figure 2.2
• The first stage is the situation analysis. Beginning with an evaluation of current
performance and ending with the review and possible revision of mission and objectives,
this stage includes step 1 through step 5
• The second stage is the process of generation, evaluation and selection of the best
alternative strategy. This stage is step 6
In order to construct an appropriate competitive strategy, a ”picture” of the competitive
environment is always a useful basic. In other words, there is clearly a need for competitive
environment analysis, an industry structure analysis.
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