Mike, One Of The Marketing Strategists On Your Team, Raises ✓ Solved

Mike, one of the marketing strategists on your team, raises

Mike, one of the marketing strategists on your team, raises concerns that domestically-made fabrics cannot be shipped to some countries due to laws and regulations, threatening product consistency. Consider the following in your response: Why should resources be a concern in a global strategy? What resources may be a concern in the country you selected? How will this impact the decision to move to the country that you selected? How will this impact your competitive strategy in your global market?

Paper For Above Instructions

Executive summary

Resources are a foundational element of any global strategy: they determine cost structure, product quality, supply chain resilience, regulatory compliance, and ultimately competitive positioning (Porter, 1990). This paper selects Vietnam as the candidate country for potential production expansion and analyzes which resources could constrain operations, how those constraints affect the decision to move, and the consequences for competitive strategy in global apparel and textile markets.

Why resources matter in a global strategy

Resources—natural inputs, human capital, infrastructure, technology, and institutional capacity—shape a firm’s ability to produce consistently, at scale, and in compliance with regulations. Resource availability affects unit costs, lead times, and quality control (Porter, 1990). In global strategy, resource concerns also determine vulnerability to trade restrictions, geopolitical risk, and supply-chain disruption (Gereffi, 1999). For a company whose selling point is consistent fabric quality, constraints on raw materials or prohibited cross-border transfers can undermine brand promises and increase compliance costs (McKinsey, 2020).

Resource concerns specific to Vietnam

Vietnam is an attractive apparel manufacturing hub due to lower wages and numerous trade agreements, but several resource issues merit attention:

  • Raw materials and upstream inputs: Vietnam imports a large share of cotton and synthetic fibers (ITC, 2021). Dependence on imported raw materials can create exposure to supplier-country export rules and price volatility (USITC, 2019).
  • Skilled labor and technical capability: Vietnam has an abundant workforce but limited availability of highly skilled textile technicians and quality-control specialists compared with more mature hubs (Asian Development Bank, 2020).
  • Infrastructure and logistics: Port congestion, inland transport variability, and customs processing times can lengthen lead times and increase variability in delivery (World Bank, 2020).
  • Regulatory and environmental constraints: Vietnam is tightening environmental standards for textile effluent and chemical handling; compliance may require capital investment in wastewater and emissions controls (Vietnam Ministry of Industry and Trade, 2021).
  • Intellectual property and quality standards: Ensuring proprietary finishes or specialized fabric treatments are protected and replicated to domestic-quality standards can be challenging (WTO, 2020).
  • Political and trade risk: Bilateral trade tensions or sudden changes in preferential trade agreements could affect tariff advantages relied upon for competitive pricing (OECD, 2020).

Impact on the decision to move production to Vietnam

These resource realities shape the go/no-go and the form of entry in several ways. First, reliance on imported fibers reduces the benefit of relocation unless the firm secures local upstream suppliers or vertical integration (Gereffi & Frederick, 2010). A prudent strategy is phased relocation: begin with lower-risk product lines or finished-goods assembly while investing in local supplier development for critical inputs.

Second, investments in capability-building—training programs, technical managers, and quality-control systems—are necessary to protect consistent quality claims. This raises initial fixed costs but is essential to maintain brand reputation (ILO, 2018). Third, environmental and regulatory compliance will require capital expenditure; failure to budget for this risks fines and disruptions. A compliance audit and environmental impact assessment should precede any move (Vietnam Ministry of Industry and Trade, 2021).

Fourth, logistics planning and inventory strategy must be adjusted. Longer or more variable lead times necessitate higher safety stocks or nearshoring key SKUs to minimize obsolescence and service failure (McKinsey, 2020). Finally, legal counsel should assess export controls on any proprietary fabrics to determine whether local production or licensed joint ventures are required to work around cross-border restrictions.

Impact on competitive strategy in the global market

Moving production to Vietnam will influence whether the firm competes primarily on cost, quality/differentiation, or a hybrid model:

  • Cost leadership considerations: Lower labor costs can enable price-competitive offerings, but imported raw materials and compliance costs can erode margins. Effective cost leadership will require supply-chain redesign and supplier consolidation (Porter, 1985).
  • Differentiation and quality consistency: If the firm’s brand promises consistent fabric quality, it must protect that attribute through strict supplier standards, in-line quality inspection, and possibly proprietary finishing done under controlled conditions. Differentiation through certified quality and traceability (e.g., blockchain or ISO systems) can justify price premiums (Gereffi, 1999; McKinsey, 2020).
  • Risk management and agility: Competitive advantage can derive from superior risk mitigation—dual sourcing, buffer inventories, and modular product design. Firms that transparently communicate risk-management measures may strengthen buyer trust (World Bank, 2020).
  • CSR and sustainability as strategy: With rising consumer concern over environmental impact, early investment in compliant wastewater treatment and worker welfare can become a differentiator rather than a cost center (ILO, 2018; ADB, 2020).

Recommended actions

1) Conduct a supplier landscape and raw-materials audit to determine domestic sourcing gaps and develop partnerships with local fiber suppliers or backward integration where feasible (ITC, 2021). 2) Pilot production lines in Vietnam for selected SKUs while maintaining a controlled domestic line for highest-spec fabrics. 3) Invest in quality-management systems, technical training, and environmental controls to preserve product consistency. 4) Design inventory and lead-time buffers and implement dual-sourcing for critical inputs. 5) Use legal and trade expertise to navigate export/import restrictions; consider licensed production or toll-finishing contracts when fabrics cannot be shipped internationally.

Conclusion

Resources are central to any global strategy because they directly affect cost, quality, compliance, and resilience. In Vietnam, challenges include dependence on imported fibers, skills gaps, infrastructure variability, and environmental regulations. These factors increase the complexity and early investment required to relocate production but do not preclude a move. A staged entry combined with supplier development, rigorous quality controls, and sustainability investments will allow the firm to preserve its promise of consistent fabric quality while pursuing competitive advantage through a calibrated mix of cost efficiency and differentiation.

References

  • Asian Development Bank. (2020). Vietnam: Economy profile and workforce trends. ADB Reports.
  • Gereffi, G. (1999). International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics.
  • Gereffi, G., & Frederick, S. (2010). The global apparel value chain, trade and the crisis. World Bank Policy Research Working Paper.
  • International Labour Organization. (2018). Improving working conditions in the textile and garment sector.
  • International Trade Centre (ITC). (2021). Trade statistics and country briefs: Vietnam textiles and apparel.
  • McKinsey & Company. (2020). Fashion’s new must-have: Sustainable sourcing at scale.
  • OECD. (2020). Trade tensions and their effects on supply chains.
  • Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
  • Porter, M. E. (1990). The Competitive Advantage of Nations. Free Press.
  • World Bank. (2020). Logistics performance index and Doing Business: Vietnam country profile.

Related Assignments