High Fashion Cluster Modern AoDai

By: Phomsavath PhilachanhJeu LimmanyTran Thi Xuyen Nguyen Thi Linh Giang

• Location: Van Phuc Village, Ha Dong, Ha Noi• Area: 500 m2 (with 10 floors building and 2 floors

factory)• Total Investment: $2,5 million • SMEs: 37 (30 domestic companies, 7

multinational)• Employee: 2000 (1400 main workers, 500

workers from SMEs outside and 100 officers)• Products: High fashion modern Aodai for high

class woman• Market: Domestic market (4 cities) and Russia for

1st period

Cluster Overview

Put Aodai Vietnam into a new peak

Cluster’s mission

Main Content:•Level of market•Market size and trend•Competitors•SMEs join cluster •Marketing and Sale Objectives

Market Analysis

• Market for AoDai has 2 level:

– Primary Market: High salary women

– Secondary Market: AoDai for men and children, AoDai for Doll or Toy

Level of market

• Market size

Market size and trend

1 HanoiHo Chi Minh City

Big market Domestic market

2 DanangHue Medium

market Domestic market

3 RussiaSmall market International

market

• Market trend

Market size and trend

No Cities

Population Business Growth Rate

Trends of Ao Dai

1 HanoiHo Chi Minh City

8,000,00010,000,000

7.5% - 8% Increase follow the business growth rate

2 DaNangHue 752,493

950,000

3 Russia 141,894,772 4.1%

• In international market: China• In domestic market: Trach Xa Village

– Products: 800,000/year– Revenue: USD500,000/year– Strengths

• Long history• Sophisticated design• Having a lot of great tailors

– Weakness• Not productive(1-2suit/day)• Low salary of workers(USD2/day)

Competitors

SMEs join cluster

SMEs Tyle of SMEs Unit Local SMEs - SMEs Silk

- SMEs button - SMEs thread - SMEs accessories - SMEs jewery - Designer team - Garment - Packaging team - Marketing group - Logistic group

10 4 4 2 2 2 2 2 1 1

Multinational SMEs - Designer team - Agents

1 6

• Marketing Objectives: + Holding 10 fashion events for 1st year.

+ Establishing 6 agents in 4 cities (2 in Hanoi, 2 in HCM city, 1 in Hue and 1 in Danang).+ 100.000 people click into cluster website in 1st year.+ 10 million people in Vietnam (especially in 4 cities) know about cluster in 1st year.

• Sales Objective: $9000/month for each SMEs in cluster for 1st year

Marketing and Sale Objectives

The 1st P: Products and Service strategy

Marketing Strategies

Type of Products

In the 1st period Later

Common products

70% Produce only base on order of customersCustomized

products30%

At that time, value of products can be increased because of exclusivity.

The 2nd P: Pricing strategy

Marketing Strategies

Type of Products In the 1st period Later

Common products

$x

Customized products

Double $x Higher because of exclusivity

The 3rd P: Places (Agents)

Marketing Strategies

Places In the 1st period LaterHanoi 2 4

Ho Chi Minh city 2 4

Danang 1 2

Hue 1 2

Moscow 1 2

Other cities in Vietnam 1

China 1 in Beiijing1 in Shanghai

The last P: Promotion•Promotion tools:

– Direct Mail using a good brochure with designs – Trade Shows, fashion events– Advertising, media, televisions– Internet

Marketing Strategies

The last P: Promotion•Promotion plan (Main marketing activities)

1st: Holding event/fashion show for sample products

2nd: Do market survey (both domestic and international market)

3rd: Advertising through media about the cluster

4th: Fashion show in 4 cities5th: Fashion show in Moscow

Marketing Strategies

• Objectives- Developing and expand market of modern and high quality AoDai- Make well-known Ao Dai brand-name & image

• Current status- Thousand year history - Ha Dong District has the fastest growth rate in comparison with other districts in Hanoi.

• Difficulties/risks- Current AoDai industry decreases- AoDai is not suitable for ordinary days, just for ceremony days (need to change this bias)

R&D Plan

• Staffing- 785 families working in textile silk in Van Phuc

Village - Total Employee: 2000 (1400 main workers,

500 workers from SMEs outside and 100 officers

• R & D Budget: $320.000

R&D Plan

• Facilities: + Expand scale;+ Find and buy good sewing machine+ textile machines, tinting machine+ spinning machine+ Cut machine+ machine embroidery+ Equipment necessary (desks, printers, photocopiers, personal computers, cabinet documents...)

Operation Plan

• Staffing: + recruitment plan+ Study tour+ skills training+ capacity development

Operation Plan

• Storage & Warehouse: + Plan about number of Storage and Warehouse and space of them( 2 factory about 500 m2 include to production and storage)+ Find place to build or rent Storage and Warehouse near location of production (about 2100m2, 500 m2 for factory and 1500 for building and car parking, lobby)+ Buy equipment to security (camera, fire…)

Operation Plan

Board of Directors

Marketing Office

HumanResoure Management Office

Producing Office

Raw Material Management Office

Sale team

Customer Service Group

Quality Control Group

Price Evolution Group

Logistic Group

Health Care Centre

Security Office

Training Centre

Secretary Office

Design Team Garment Team Package Team Accountant Finance Staff

SMEs silk SMEs Button SMEs Thread SMEs accessories

SMEs jewelry

Maintain Machine

QC Team

Organization Chart

Organization Chart

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1 Make conversation with local authorities

2 Recruiting personnel

* For Raw material management Office

* For Producing Office

* For Secretary Office

* For Human resource management Office

~ For other offices under HRMO

* For Sale team

3 Getting funds (finding sponsors)

4 Procuring land

5 Clearing the land

6 Designing buildings and factories

7 Constructing buildings and factories

8Recruiting SMEs (both domestic and international SMEs)

9 Producing samples

10 Holding fashin show/event with samples

11Do market survey (both domestic and international market)

12 Locate agents

* In domestic market

* In international market

13 Procuring machines

14 Procuring office euipments

15 Training workers

16 Advertising cluster through media

17 Establish website

18 Producing common products

19 Producing customized products

20 Training Models

21 Fashion show in 4 cities

22 Fashion show in Moscow

2012 2013

No Activities

Time table

• Objectives:– In 1st year, cash flow of cluster will be positive

with over $500.000– In 1st year, cluster will be profitable with over

$15.000 (BEP 93%)

Finance

• Important figures– TOTAL PROJECT COST: $2,3 millions– 1st year sale: nearly $4 millions– 1st year profit: over $15.000 (increase continuously)

Finance

THANK YOU FOR YOUR ATTENTION!