Canifa Case Study

EXECUTIVE SUMMARY

The report provides an analysis and evaluation of the current strategy and prospect of Glory Sun Corporation (CANIFA).

In part I, the report shows an overview of the company’s situation and its strategies product line, pricing, distribution and marketing and customer service.

In part II, it shows an industrial analysis of texitile industry. The texitile and garment industry is one of the key industries in the national economy, especially in terms of retailing clothes. The analysis indicates the potential conditions which come from a abundant human resource, a huge and developing domestic consumption market, export quotas and tax incentives. Therefore, the retailing situation of CANIFA seems to be very well-matched with the outlook of the indusrty.

In part III, we analyse deeply the firm’s generic strategy including five components which are (1) Vision, mission and core values, (2) Product line strategy, (3) Pricing strategy, (4) Distribution strategy, (5) Marketing and customer service. The report find the positive prospects of the company in its curent position.

In part IV, the report evaluates the competitive advantages of CANIFA over its closest competitors such as PT2000 and Ninomaxx. The results based on competitve strength assessment in Casual Wear Sector indicates its competitve advantages including high-quality products with reasonable price and widely distributed network. From which, we draws the position of the company in the market.

In part V, the report concludes by SWOT analysis and recommendations discussed include: (1) maintaining their strengths to catch opportunities of expanding to oversea market, (2) Downsizing their weakness by finding a great sources of machines and raw materials, (3) Defending from threats by carrying out better plans, training employees and increase more fashion designers.

1. OVERVIEW

Glory Sun Corporation (Hoang Duong) founded in 1997 in Czech Republic in the field of fashion goods with the goal of providing wool for the Eastern European market. By the end of 1998 when the market fell into difficulties, Hoang Duong leadership turned its sights on Vietnam market. They realize the market with more than 70 million people at that time was lack of quality fashion brands. Therefore they decided to put the business model of Canishop return to their homeland. Three years later (2001), the market appears a fashion line from Vietnam with a very Western name: CANIFA. The brand “CANIFA” was born to exploit the growing demand of the domestic market by product line wool, yarn with rich design and high quality and diversification in product line.

With the experience gained in Eastern Europe market, fashionable wool is the first product line that CANIFA choose when turned on doing business in the domestic market. In 2007, CANIFA started to complete customer chain by positioning chain Fashion For All by formally entering the fashion market for children from 2-12 years old with CANIFA Kids. CANIFA customers, many young girls, after 5-7 years with the brand, who have become mothers, continue to catalog CANIFA to choose clothes for your child.

On this case, we focus on CANIFA’s strategy and its competitiveness in the current textile industry. With the goal of becoming a leading company in the field of operation, the company's vision was to become an organization to innovate and prosper, have customer trust, become membership in organizations and society recognition. In order to achieve the setout target, CANIFA company have had many strategies in product line, pricing, distribution and marketing and customer service such as diversification in models, reasonable price, extensive branch network, promotion and warranty service.

1. INDUSTRY ANALYSIS

Textile industry is one of the key industries in the national economy of our country and it provides an indispensable item in the daily life of the people.

The demand for labor in the textile industry is annually huge. Each year, textile industry creates about 2.2 millions different kinds of jobs for workers. The export turnover of the textile industry in recent years has always ranked the second in the total number of branches in exports (behind the export turnover of oil). This helps to earn a huge source of foreign currency, contributing considerably in the part on state budget. Textile industry of our country has convenient conditions for developing such as a young and abundant workforce, even the domestic consumption market is quite large (over 80 millions) creates the relatively large potential consumer market. The Vietnam climate is suitable to develop natural raw materials for the textile industry. Because Vietnam joined the World Trade Organization (WTO), it created more favorable conditions for the textile industry to further develop our country. The member countries of the World Trade Organization have abolished export quotas and tax incentives for Vietnam's garment sector.

After more than 20 years of continuous growth with an average speed of 20% per year. Until 2011, textile has become one of the largest economic industry nationwide in scope and stature with 4,000 enterprises, turnover reaching 20 billion US dollars, accounting for 15% of GDP and become the industry leader in terms of export turnover, reaching $ 14.5 billion, accounting for 18% of total export turnover, bringing Vietnam into the top five countries largest textile exports.

Vietnam's garment has also confirmed its position on the international market in the presence of hundreds of countries and conquered demanding markets such as the US, EU, Japan, Korea ... According to general perception, although the world and country economy will continue to experience difficulties in 2012, 2013,  with internal resources and efforts to overcome difficulties of enterprises, Vietnam's garment industry is projected to grow at the rate of 25% this year, expected revenue reaching about 25 billion dollars, of which exports are expected from 19 to 19.5 billion dollars. In the period 2016-2020, the garment sector will grow in depth and reach consumers by taking the initiative.

The domestic market is considered a cure of many textile businesses during the economic crisis. In 2011, the economy is difficult, but revenue from the domestic market of textile enterprises still grew. The reason why consumers return to the domestic consumer products is launched including: reasonable prices, diversity, promotion services, good warranty, and most importantly, ensuring that products are healthier than the Chinese products.

The retailing situation of CANIFA is suitable for the development of textile industry in Viet Nam for some certain factors. In 2001, capturing the demand for using wool and fiber products highly in the world, Vietnam was determined to build one factory with industrial workers and to develop quality management system according to the proactive way. Glory Sun Corporation - CANIFA has bravely invested in machinery, technology and especially sent staff to study abroad in order to raise the level of technical and management experience. The brand CANIFA fashion was born to exploit the growing demand of the domestic market by wool and yarn products with rich design and high quality.