Discussion Papers

No.161 Value Chain Dynamics and Growth of Local Firms: The Case of Motorcycle Industry in Vietnam


July 2008


Vietnam’s burgeoning market for motorcycles has attracted global industry leaders, players from developing countries, and local firms. This has led to a dynamic evolution of value chains. This paper presents an explanation of the varieties of the growth patterns experienced by the local suppliers, focusing on the roles of customer and local supplier strategies. Case studies showed that while the role of customers may be important, strategies of suppliers to improve the competitive edge in the production of motorcycle components and to diversify into other products account for important variations of growth trajectories among local suppliers. Findings presented in this paper suggest the need to direct more attention to strategy that local firms use to boost their competitive edge in business.

Keywords: local suppliers, motorcycle industry, value chains, Vietnam
JEL classification: L22, L62, O33

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