The Selection of Strategic Alliance Partner in Vietnam Garment Industry Using Grey Theory and DEA

Abstract

This study applies an assessment model to measure the efficiency of companies in Vietnam garment industry based on Grey theory (GM (1, 1)) and data envelopment analysis model. The objective of this research is to provide an effective method to find the right strategic partners. Total 11 companies of garment industry are chosen with realistic data collected from financial statements of Vietnam published stock market during period 2007 to 2010. Firstly, the GM (1, 1) is employed to predict the inputs and outputs factor. Secondly, Slack based measure of supper efficiency (Super-SBM) model is applied to help the target company to find the right partners. The empirical results show that companies who have better efficiencies do not guarantee them to get the good performance after alliances, companies with low-mid efficiencies may have the chance to put in efforts for alliances because they may get some benefits for both candidate and target companies. This study could give companies some recommendations about how to improve productivity as well.