The academic debate about whether developing country producers should involve in design
and marketing functions through which developed country firms hold strong positions
triggers research idea for this research. The research applies global value chain perspective
to analyze the relationship between functional upgrading and firm’s export development in
the context of Vietnam wood furniture industry. It employs qualitative analysis methods
including indepth interview, direct observation and case study analysis. The results from this
research indicate the positive impact of functional upgrading on firm’s export development
and the combination of different functions in different value chains enables developing
country firms to develop well in the long term. This paper suggests that firms should
combine both transactional and relationship marketing approach.