Vous êtes sur la page 1sur 102

Impact of China on Indian Garment Industry

by

Aditya Marwaha

A dissertation presented in part consideration for the degree of

MA Marketing

The University of Nottingham


2008
Abstract

To survive and succeed in garment manufacturing business in today’s era of globalisation and

increasing competition, it is important for firms to analyse the environment in which it is

working. With cutting margins between the cost and the selling price, firms have to make

efforts to decrease their cost. Therefore, various factors, in the form of theories, affecting the

success of a firm and the cost of a product are critically evaluated during the literature

review. The theories are global competition; strategic management; PEST analysis; five

competitor force model; and resource based view. The interviews of garment manufactures

were gained so as to get an insider view of this industry and gain the practical side with their

relation to the theories. Integration of China in the global economy is one of the most

significant developments that is affecting the structure and evolution of the global system.

This research mentions what factors is China ahead of India in the garment industry. A

comparison will be made with the garment industry in China, as they are the biggest

competitor. This industry in India needs to be improved, and for this, various

recommendations are outlined which would help enhance the competitive position of the

Indian garment industry in the period of global competition.


Acknowledgement

Before I begin, I would like to thank few people who have supported and guided me

throughout my dissertation. Firstly, I would like to thank my mom, dad and my elder brother

Karan for suggesting me to do research on this topic. It was a great experience for me to

know better about this industry before getting involved into this business. Without your

constant help and support, it would not have been possible for me to complete this research

effectively. Secondly, I would like to thank my Supervisor, Ms. Mona Moufahim, who made

me believe that she was always there to help for my dissertation. Her constant reminders

asking about the updates of my work, fast replies to my e-mails, and also providing detail

suggestions and comments about my work provided me a great vigour. I can never forget the

incident when she had to leave the city for a conference. As I couldn’t meet her early on that

day due to some reason, she met me just before leaving the city to help me with my

dissertation. She brought her luggage in her office and left directly to catch the train. Her

interest and faith in my work and in my efforts eventually motivated me more to complete

this research. Thirdly, I would like to thank my friend Hari, for rendering a helping hand in

the final phase of my dissertation.


Table of Contents

ABSTRACT..............................................................................................................................
ACKNOWLEDGEMENTS......................................................................................................
TABLE OF CONTENTS..........................................................................................................
LIST OF TABLES AND FIGURES.........................................................................................

CHAPTER ONE .......................................................................................................................


1. INTRODUCTION ............................................................................................................1
1.1. Research Objectives...................................................................................................2
1.2. Framework of the study .............................................................................................2
1.3. Overview of Textile Sector in the Indian Economy ..................................................3
1.4. Sub-Segments ............................................................................................................4
1.5. Components in the Value Chain of Textile industry .................................................5
Fibre 5
Yarn5
Cloth/Fabric ................................................................................................................6
Textile Processing Sector............................................................................................6
Readymade Garment...................................................................................................6
1.6. Summary....................................................................................................................7

CHAPTER TWO ......................................................................................................................


2. LITERATURE REVIEW .................................................................................................8
2.1. Brief Hostory of Strategic Management....................................................................9
2.2. Strategy ....................................................................................................................10
2.3. Strategic Management Process ................................................................................11
2.4. Internal and External environment analysis ............................................................12
2.5. External analysis......................................................................................................13
Political Environment ...............................................................................................14
Economic Environment ............................................................................................14

Social and Cultural Environment..............................................................................15


Technological Environment......................................................................................15
Threat of New Entrants: ...........................................................................................16
Threat of Substitutes .................................................................................................17
Bargaining Power of Suppliers .................................................................................17
Bargaining Power of Buyers.....................................................................................17
Extent of Industrial Rivalry ......................................................................................18
2.6. Internal Analysis......................................................................................................19
Resources ..................................................................................................................19
Capabilities ...............................................................................................................20
Core Competencies ...................................................................................................20
2.7. Strategic Management Process in Small and Medium Sized Enterprises ...............21
2.8. Global competition ..................................................................................................22
2.9. Value Chain and Value system ................................................................................25
2.10. Clustering................................................................................................................26
2.11. Summary.................................................................................................................27

CHAPTER THREE ..................................................................................................................


3. METHODOLOGY .........................................................................................................28
3.1. Sources of Data Collection ......................................................................................28
Associated Chambers of Commerce and Industry of India ......................................28
Books and Journals ...................................................................................................29
Internet ......................................................................................................................29
Interviews..................................................................................................................30
3.2. Why Qualitative research? ......................................................................................30
3.3. Advantages of Interviews ........................................................................................32
3.4. Disadvantages of Interviews....................................................................................32
3.5. Approaches to Qualitative Interviewing..................................................................33
3.6. Interviews ................................................................................................................35
Thematizing ..............................................................................................................35
Designing ..................................................................................................................35
Interviewing ..............................................................................................................35
3.6.1.1.Sampling .................................................................................................36
3.6.1.2.Stages of Interview..................................................................................38
Transcribing ..............................................................................................................41
Analysing ..................................................................................................................41
Verifying ...................................................................................................................42
Reporting...................................................................................................................41
3.7. Summary..................................................................................................................43

CHAPTER FOUR.....................................................................................................................
4. EXPORT OF GARMENTS FROM INDIA AND CHINA............................................44
4.1. Exports to USA........................................................................................................46
4.2. Exports to Europe ....................................................................................................47
4.3. Major Competitors...................................................................................................49
4.4. Summary..................................................................................................................49

CHAPTER FIVE ......................................................................................................................


5. ANALYSIS/DISCUSSION/RECOMMENDATIONS ..................................................51
5.1. Factors determining Competitive Advantage of India and China ...........................51
Labour: Training, Productivity and Laws ................................................................51
Structure....................................................................................................................56
Infrastructure.............................................................................................................58
Technology ...............................................................................................................60
Raw Materials ...........................................................................................................61
Economies of Scale...................................................................................................63
Foreign Direct Investment ........................................................................................64
Export Finance and Subsidies...................................................................................65
Growing Domestic Market .......................................................................................66
Iconic Brand..............................................................................................................66
Competitor or Complement each other.....................................................................67
5.2. Future Prospects of India and China........................................................................67
5.3. Government Schemes Issues - Indian Garment Industry ........................................70
Bureaucratic Hurdles ................................................................................................70
Technology Upgradation Fund Scheme (TUFS) .....................................................70
Scheme for Integrated Textile Parks (SITP) ............................................................71
5.4. Summary..................................................................................................................72
5.5. Recommendations....................................................................................................73
Labour Laws and training facilities ..........................................................................73
Manufacturing Expertise...........................................................................................75
Infrastructure ............................................................................................................76
Brand India................................................................................................................76
Trade Diversification ................................................................................................76
Changes in Existing Schemes and Establishment of SEZ.............................77
5.5.1.1.Bureaucracy reforms................................................................................77
5.5.1.2.TUFS........................................................................................................78
5.5.1.3.SITP.........................................................................................................78
5.5.1.4.Special Economic Zones..........................................................................78
5.6. Summary..................................................................................................................80

CHAPTER SIX.........................................................................................................................
6. CONCLUSION...............................................................................................................81

APPENDIX ..............................................................................................................................
ACRONYMS............................................................................................................83

REFERENCES .....................................................................................................................84
List of Tables and Figures

Figure 1 – “The Textiles-Garments Production Chain”

Figure 2 – “Attributes shaping environment to create competitive advantage”

Figure 3 – “World Imports of Readymade Garments: Share of India and China as suppliers”

Figure 4 – “Share of components in total exports of Apparel from India”

Figure 5 – “Percentage Share of India and China as suppliers of Readymade Garments to the

World”

Figure 6 – “Exports of Knit and Woven Garments to the United States of America”

Figure 7 – “Exports of Knit and Woven Garments to the EU15”


Chapter 1

Introduction

This research is essential for all existing garment manufacturers and for those who are

interested to start this business in India. It reveals the issues faced by this industry and

highlights the possible recommendations to be applied. Firms can further develop strategies

by looking at the comparative advantage possessed by Indian and Chinese textile and

garment manufacturers highlighted in this research, and therefore manufacture and procure

goods accordingly to sell locally to internationally.

The phase out of WTO agreement on textiles and clothing (ATC) on 1 January 2005 led to

increase in competition among the garment exporting countries around the world. Even

though the global imports of this sector have risen, the production has remained stagnant or

reduced in the medium to high cost countries such as United States, Canada, Mexico, and

Korea. In contrast, low cost countries such as China, India, Bangladesh, and Indonesia

where wages are low, and there is high productivity, pose a strong competitive advantage.

These countries can expand their production as well as export capacities so as to become the

preferred suppliers.

The textile and garment industry involves use of relatively modern technology which is

available at low investment, thereby suiting industrialization in developing countries. At the

same time, it is high value added segment where research and development, and design are

important factors for improving the competitiveness. Many researchers believe that India and

China will dominate the production in this sector (Nordas, 2004, Francois and Spinanger,

2001).

1
1.1 Research Objectives

To date, very little research has been conducted that analyse the factors affecting growth of

garment industry in India and their competitiveness with the manufacturers in China. This

research offers a perspective focusing on two themes: firstly, the characteristics of India and

China in production of garments in the era of globalisation and their competitive advantage in

various fields, their structure supporting the export profile, and the effects of various policy

regulations; secondly, recommendations for garment manufacturers and the government in

India. These aspects are important to be understood as this sector plays an important role for

the economic development of India and its future growth. The industries competitiveness can

be enhanced only after recognising the areas it is not good at.. These challenges need to be

identified and understood so as to position it successfully in the global competitive

environment.

1.2 Framework of the Study

This chapter highlights the role played by textile and garment industry in the Indian

economy. The various components involved in its supply chain in general are outlined along

with major players of India. The next chapter (literature review) provides a detailed review of

various theories and concepts such as global competition; strategic management; PEST

analysis; five competitor force model; and resource based view. The views of various

theorists have been discussed to understand importance of these concepts in the garment

industry. These theories outline various factors that are directly relevant to determine the

competitive advantage of garment manufacturing firms of India and China. In addition, these

theories are extremely significant to be understood for the success of firms in India. Chapter

three describes the methodology used in collecting the data. The justification of using

interviews as the primary method to collect data has been explained. The process used for

2
analysing the information obtained from interviews is also elucidated. Chapter four illustrates

the past and current export trends of the garment industry of India and China to USA and

EU15. The major competitor countries of India have also been mentioned. Chapter five

examines the challenges faced by Indian garment manufacturers to position itself successfully

in the global competition. These have been compared and their competitiveness examined,

with regard to China. Furthermore, various recommendations have been mentioned to

improve the competitive position of Indian garment industry in accordance with global

markets. The final chapter provides concluding remarks of the entire research.

1.3 Overview of Textile Sector in the Indian Economy

In the one trillion dollar Indian economy, the textile and garment industry has emerged as one

of the most important sectors in the Indian Economy in terms of investment, production and

employment. It is directly linked to the rural economy and to the agriculture sector. It has

been estimated that one of every six households in the country, either directly or indirectly

depends upon this sector, (Dhanabhakyam and Shanthi, 2008).

This industry is robust and well established, enjoying huge demand in domestic as well as the

international market. Its capacity has been continuously increasing after dismantling of quota

regime. The major factors in determining success of this industry are economies of scale with

higher productivity and low cost. India has an advantage with the existence of a complete

value chain of textiles with the production of yarn, fibre, fabric, and readymade garments.

The textile sector in India contributes four percent to the gross domestic product (Ministry of

Textiles, 2008). It also contributes 14 percent to the total industry production, with 10.9

percent contribution to index of industrial production (Singh, 2007). This sector is the second

largest employment provider after agriculture employing about 35 million people in the

country (Ministry of Textiles, 2008). In addition, it is also estimated that 50 million people

3
are engaged to this industry for the related activities. The industry attracted investment of

Rs.33000 crore in the financial year 2006-07, which rose by 51% from the investment in

previous year. The textile industry in India is worth $47 billion which constitutes $30 billion

in domestic market and $17 billion for exports market (Report by ASSOCHAM, 2007).

Textile and garments is the second largest export sector in value terms in India after

engineering goods. They together contribute 15.56% in the total merchandise exports which

comprises of 7.51% textiles and 8.15% readymade garments. In the financial year 2006-2007,

this industry grew by 6.76% and 0.83% amounting to $8.3 billion and $8.6 billion in

comparison to 9% and 28% growth in fiscal 2005-2006 (Apparel Export Promotion Council,

2008). It is also India’s largest earner of foreign exports accounting for 35% of the gross

export earnings in trade (Report by ASSOCHAM, 2007). Government has made

commendable efforts to boost this sector by developing various schemes such as Technology

Upgradation Fund Scheme (TUFS), and Scheme for Integrated Textile Parks (SITP) which

will further strengthen the manufacturing base in textile and garment sector as a whole.

1.4 Sub-Segments

Textile industry is vertically integrated which undertakes production of all components in the

textile chain, right from fibre, yarn, fabric to garments. At the same time, it is a highly

fragmented sector that comprises small scale, non integrated industries in spinning, weaving,

finishing and garment making. The unorganised sector forms the bulk of the industries which

comprises of handlooms, powerlooms, hosiery, knitting, readymade garments, khadi and

carpet manufacturing.

Textile industry can be classified into 2 segments on basis of their scale namely organised

sector and unorganised or decentralized sector. The organised sector consists of spinning and

4
composite mills. Spinning mills perform spinning of cotton yarn from cotton fibres, whereas

composite mills perform spinning, weaving, and processing of natural as well as made fabric.

1.5 Components in the Value Chain of Textile industry

“The textile and garments industries form part of a larger production chain” (Figure 1)

(Dicken, 2003). The production chain of textiles and garments has been outlined below which

also includes the top players in the industry in India.

Figure 1 – “The Textiles-Garments Production Chain”


Materials Processes End uses

HOUSEHOLD GOODS
c.25% carpets etc.
furnishings,

Natural Fibers Textile Industry


GARMENT INDUSTRY
FABRIC design-preparation-production
Raw cotton, YARN
MANUFACTURE
wool etc. PREPARATION DISTRIBUTION
weaving/knitting, c.50%
spinning Retail/wholesale
finishing basic garments fashion fashion
operations
-basic garments
garments
Chemical Fibers Chemical plants PRODUCTION c.25%
and OF MAN-MADE
Wood, oil, INDUSTRIAL GOODS
petrochemical FIBRES
natural gas a)cellulosics,
Belting, upholstery for auto
refineries
b)synthetics industry etc.

Source: Dicken, P. (2003)


1.) Fibre – The production of fibre take place in the organised mills segment at non small

scale industry level and decentralised level in small scale industries.

2.) Yarn – It is of two types namely Spurn yarn and Man-Made Filament yarn. Spurn

yarn consists of cotton yarn, blended yarn and 100% non-cotton yarn whereas Man-

Made yarn consists of viscose, polyester, nylon and propylene. The major players for

cotton and blended yarn in India include Vardhman Textiles, Rajasthan Spinning and

Weaving Mills (RSWM), Nahar Industrial Enterprise, Aditya Birla Nuvo, Nahar

Exports and Alok Industries. Major companies for polyester yarn are Reliance

5
Industries, Indo Rama Synthetics, Recron Synthetics, Modern Syntex, and Garden

Silk Mills. For woollen yarn, the major players include Indoworth India Ltd., Oswal

Woolen Mills, and BSL ltd.

3.) Cloth/Fabric – The type of fabric ranges from cotton, blended, 100% non-cotton,

khadi, silk and wool. Their production takes place at organised as well as unorganised

sector. The major players in Indian industry are Arvind Mills, S Kumar Nationwide,

Alok Industries, Krishna Knitwear and Bombay Dyeing.

4.) Textile Processing Sector – The processing and finishing of fabrics is by far the

weakest segment in the value chain of textiles. This is due to lack of modern

technology and inadequate capacity for continuous processing.

5.) Readymade Garment – The readymade garment industry, also known as apparel

industry and is the largest contributor of value addition in the whole textile process

chain. The major players of garments in India are Gokaldas Exports, Pataloon Retail,

Aditya Birla Nuvo, Orient Craft, SPL industries, and Vishal Retail.

Each of these stages have their own organisational and technological characteristics that are

recently changing substantially. The textile industry involves two major operations namely

preparation of yarn, and manufacture of fabrics. These can be performed by industry of any

size. The output of this industry is transferred to the end users, in which the garment industry

is the most important (Dicken, 2003).

1.6 Summary

This chapter highlighted the role played by textile and garment industry in the Indian

economy, components involved in its supply chain and the major players in India. The next

6
chapter ‘literature review’ mentions various theories and factors that affect the garment

industry in one way or the other.

7
Chapter 2

Literature Review

This chapter details the literature review consisting of various theories and concepts that

affect the garment industry in a negative or positive way. As the garment industry in India is

dominated by small scale industries, they are struggling to survive due to huge competition

from big players such as China, Mexico, Indonesia, Turkey and Bangladesh present in global

economies. This is due to the upliftment of the quota restrictions in January 2005 which were

earlier imposed on this industry. Therefore, for the success of Indian garment industry, it is

important for firms to understand the theories related to competitive advantage and

environmental analysis. These theories have been published by various authors in their books,

journals and other papers. In this research, they have been further related specifically to the

garment industry of India and China.

This literature review is framed in two areas namely strategy and competitive advantage. A

brief history on how strategic management developed is outlined followed by the definition

of strategy. The components of strategic management process including internal and external

analysis are reviewed and its importance in relation to the garment industry stated. Internal

analysis includes resources, capabilities and core competencies. On the other hand, external

analysis include political environment, economic environment, social and cultural

environment, technological environment, threat of new entrants, threat of substitutes,

bargaining power of suppliers, bargaining power of buyers, and extent of industrial rivalry. .

Later, the importance of strategic management process in small and medium size enterprises

is reviewed. Further, global competition and various other factors affecting an industry are

outlined and the importance of values chain and value system is stated. Recently, clustering

as a strategy has gained significance as it instils innovative measures thereby improving the

8
competitiveness of small firms so that they can survive in global competitive market.

Therefore, these underlying philosophies have been critically examined by referring to

various related journals and books.

2.1 Brief History of Strategic Management

One of the first scholars to study strategic management was Alfred D. Chandler (1962).He

indirectly referred to the impact imposed by strategies on the internal organisational

environment (Browne, 1994; Chandler, 1962). This resulted in influencing other researchers

and academicians such as Ansoff (1965), Learned et al.(1965) for further study. Andrews

further examined organisations internally in the form of strengths and weaknesses, and

externally in the form of opportunities and threats. The ‘design school’ of strategic

management was formed on the basis of his work (Feurer and Chaharbaghi, 1995; Browne,

1994; Barney, 1991, 1995). The design school was based on the idea that organisations will

analyse the external environment to appraise the threats and opportunities available and

evaluate the strengths and weaknesses in the internal environment (Child, 1972; Montanari,

1978)

Later in 1980, Michael E. Porter studied industries and market structure in which the

organisations compete. The five forces competitive model developed by him provides

managers in organisations, a method for assessing the market attractiveness to develop a

competitive position within that market (Robbins et al., 2000; Feurer and Chaharbaghi, 1995;

Browne, 1994). The five forces were threat of new entrants, bargaining power of suppliers,

bargaining power of buyers, threat of substitutes, and the extent of industry rivalry. During

1980’s, strategy analysis was mainly focused on the external environment. The analysis of

internal resources of a firm for developing strategy gained momentum only in early 1990’s

(Grant, 1991). The concept of value chain was also developed by Porter in 1985. It allowed

9
managers to determine the potential sources that can provide competitive advantage by

examining the links between various activities undertaking in the organisation (Nonaka,

1991). All these developments are important to be recognized by garment manufacturing

firms as their success depends on how effectively these factors are deployed.

2.2 Strategy

“The greatest thing in this world is not so much where we are, but in which direction we are

moving.”

- Oliver Wendell Holmes

The success of any industry depends on its own and its competitors strategy. For Indian

garment industry to compete successfully, various factors should be analysed that forms basis

to develop a positive strategy. These factors are mentioned later in this chapter. Barney and

Hesterley (2007) defined strategy as a theory about how to achieve high performance by a

firm within the markets and industries it is operating. Grant (1991) defined strategy as “the

match an organisation makes between its internal resources and skills...and the opportunities

and risks created by its external environment”. Strategy provides direction and scope to an

organisation for a long term through which the firms’ gain advantage by configuring the

resources within a challenging environment. Therefore, its development forms the basis for

managerial decision making (Browne 1994; Porter 1980; Robbins et al. 2000) who further

have to make a choice between the competing priorities and alternate strategies confronting

the firm (Hitt et al, 2003).

Porter (1980, 1985) mentioned two categories of strategic choices namely business level

strategies and corporate level strategies. Business level strategies are the actions taken by

firms to decide how to gain competitive advantage in single product market (Beard and Dess,

10
1981). It includes cost leadership and product differentiation (Porter 1980, 1985). Corporate

level strategies are the actions taken by firms simultaneously in multiple markets to gain

competitive advantage. It includes vertical integration strategies, diversification strategies,

strategic alliance strategies, and merger and acquisition strategies (Barney and Hesterley,

2006; Hitt et al, 2003). A strategy is selected that supports a firms’ mission, is consistent with

its objectives, exploits opportunities with its strengths, and neutralises the threats while

avoiding its weaknesses (Barney and Hesterley, 2006). These strategies should be developed

by garment manufacturing firms according the environment it is in.

2.3 Strategic Management Process

Strategic management has two main functions namely strategy formulation and strategy

implementation. Strategy Formulation is the theory and process of determining relevant

course of action creating firms strategies to achieve organisational objectives. Strategy

Implementation is the process of putting the organisational practises and policies in

accordance with the strategy adopted (Barney and Hesterley, 2006; Hitt et al, 2003). It

depends on the nature of knowledge, technology and availability of competent resources. The

strategic analysis process helps to integrate opportunities with the distinctive competencies of

a firm to create an effective strategy (Brown, 1994). The garment firms in India can generate

a number of strategies by analysing its internal and external environment and comparing it

with China as China leads production in this sector. These analyses have been mentioned

below:

2.4 Internal and external environment analysis

11
A vast majority of articles and books have focused on importance of analysing internal and

external environment of firms to understand their present and predict the future (Barney and

Hesterley, 2007; Morden, 2007; Hitt et al, 2003; Macmillan and Tampoe, 2000; Autio et al,

2000; Luffman et al, 1996). It is known that the environment under which the firm operates,

changes over time (Bowman and Faulkner, 1997). Through external analysis, the garment

units can identify the threats and opportunities facing its competitive environment (Leavy,

2003; Black and Boal, 1994; Barney, 1991; Grant, 1991). It can recognize how the

competition in the market is likely to evolve and the implications this would have on them.

Internal analysis helps them to identify its strengths and weaknesses (Analoui and Karami,

2003). The Resource Based View (RBV) of internal analysis helps to understand the scarce

resources and capabilities of a firm required to be a source of competitive advantage (Barney

and Hesterley, 2007; Hooley et al, 1998). It focuses on firm’s specific resources and includes

assets, capabilities, organisational processes, attributes, information and knowledge (Barney,

1991). This resource based view was developed as an attempt correct the imbalance with

concepts developed by Porter (1980, 1985) (Browne, 1994). This model can be seen since 5

decades (Penrose, 1959) but has gained significance only in early 1990’s (Wernerfelt, 1995;

Grant, 1995; Barney, 1991). It has developed as a complimentary aspect in the strategic

management process (Henderson and Cockburn, 1994). However, there is risk of short-

sightedness while setting strategy in capabilities during fast changing environment. The

important areas of these two themes have been explained further.

2.5 External analysis

12
Duncan (1972) and Milliken (1987) said that uncertainty exists in a firm due to its external

environment if the decision makers do not understand the future events or are unable to

assign probabilities about the particular changes that will be incurred. Gorry and Scott-

Morton (1971) divided external information needs for firms into seven characteristics. These

include broad scope information (broad sets of information inputs), timely information

(Acquiring information quickly and on time) (Mangaliso, 1995; Chenhall and Morris, 1986),

current information (marketing data about recent information) , aggregated information

(information being summarised) (Mangaliso, 1995; Specht, 1986), accurate information

(reliability and correctness of output information to satisfy its intended purpose) (Li, 1997) ,

personal information (direct contact with other individuals) and impersonal information

sources (computer generated or market research reports) (Ashill and Jobber, 2001).

According to Luffman et al (1996: 34) “Environmental change is one of the major influences

upon the performance of business” which is far from control by the organisation. These

trends and events have potential to affect strategies of garment manufacturing units in a

particular country (Tsiakkiros, 2002). For analysing the macro-environment, the important

variables that influence the supply, demand, and its costs should be identified (Johnson and

Scholes, 1993; Kotter and Schlesinger, 1991). The key dimensions for environmental analysis

are political, economic, social and cultural, and technological factors (PEST) (Morden, 2007;

Hitt et al, 2003; Macmillan and Tampoe, 2000; Luffman et al, 1996). There analysis

consequently, should be used to develop contingency plans for threats, and the advantages

should be harvested by identifying the opportunities, while preparing strategic plans for these

units (Byars, 1991). Kotler (1998) claims PEST analysis as an important strategic tool which

is useful for understanding the position of business, its potential, and the direction for

operations. These factors have been highlighted below.

13
2.5.1. Political Environment

The political factors are those in which “organisations and interest groups compete for

attention, resources, and a voice of overseeing the body of laws and regulations guiding the

interactions among nations (Keim, 2001 in Hitt et al, 2003: 48)”. Garment units are affected

by the government at both national and local levels not only for a short period through laws,

policies, and authority but also on strategic level by creating opportunities and threats

(Luffman et al, 1996). Political decisions have an effect on markets, industrial structure,

economic and social trends, employment law, tax policies, trade restrictions and tariffs. The

impact of these vital changes should be anticipated by the garment manufacturers (Morden,

2007).

2.5.2. Economic Environment

It refers to the nature and direction of the economy that may have an impact on the activities

of an industry, here specifically the garment industry in which it competes. Therefore, it is

important for firms to study the economic environment, identify the changing trends, and

their strategic implications (Hitt et al, 2003). Luffman et al (1996) also supported the

viewpoint, and said that the economic environment provides both threats and opportunities,

and therefore should be analysed. The key economic variables leading to economic change

are effects of economic cycle, government policies, world trade pattern, commodity prices,

changes in currency conversation rate, capital markets, labour markets and their rates,

inflation, tax rates, and interest rates (Morden, 2007; Macmillan and Tampoe, 2000).

2.5.3. Social and Cultural Environment

14
According to Hitt et al (2003) and Morden (2007), social and cultural factors such as changes

in work patterns, population growth, age structure, family structure, changes in tastes and

habits, and fashion have a direct impact on attitudes of people, consumers, business

behaviour, and cultural values within a society (Morden, 2007; Macmillan and Tampoe,

2000; and Luffman et al, 1996). Hitt et al (2003:49) said that as these factors “form a

cornerstone of a society”, by often driving demographic, economic, political/legal, and

technological conditions and changes that may increase the opportunities for segmenting and

differentiating the market. Their effect on the garment industry is required to be studied.

2.5.4. Technological Environment

Gavetti and Levinthal (2000) and Coff (1999) suggested that to gain competitive advantage, it

is vital for firms to innovate continuously. This view has been supported by vast literature on

strategic management (Johnson and Scholes, 1993; Capron and Glazer, 1987).The strategic

and operational decision-making depends on knowledge and technological conditions of the

external economy. Hitt et al (2003) and Macmillan and Tampoe (2000) further detailed by

expressing that, technological change effect particularly through new products, processes,

materials, and distribution channels. Developments in technology offer the firms to purchase

in higher quantity, better quality, and replace labour with capital. It also has the power to

change the economic rationale of an industry (Luffman et al, 1996).

Therefore, it is important for garment manufacturing units to conduct PEST analysis and

focus on changes in the external environment that are particularly essential for their

businesses (Macmillan and Tampoe, 2000). Apart from PEST factors, Ashill and Jobber

(2001) included distributors, active end users, market characteristics, competition, suppliers

and natural/physical factors to the list of external factors that affect an organisation. He said

15
that it is difficult for a firm to react to the environment changes quickly due to uncertainty in

their occurrence and therefore the implications cannot be predicted.

In addition to these factors, Porter (1980, 1985) analysed the industries environment as a part

of external analysis. Hitt et al (2003) defined an industry as, a group of firms producing close

substitutes. The changes in the external environment affect organisations; however, the

degree of benefit or loss provided varies (Macmillan and Tampoe, 2000). The industry

environment has more direct effect on the strategic competitiveness of firms in comparison to

the general environment (Hitt et al, 2003). The five forces model developed by Michael

Porter (1980, 2008) is powerful in its ability to position a firm by analysing the economic

forces that are weakest within an industry. Further research is required that focuses on the

competition faced by Indian garment manufacturers from China. Five major variables that

determine the competition in the market between garment industries have been outlined

below.

2.5.5. Threat of New Entrants

High industry attractiveness and low barriers to entry leads to high threat of entry (Macmillan

and Tampoe, 2000). New competition poses a threat to the existing firms by bringing in

additional production capacity which results in lower revenue and returns for the competing

firms if demand of product is not increasing (Luffman et al, 1996; Barney, 1995). Porter

(2008) argued that changes in the barriers can raise or lower the threat of new entrants. For

instance, new competitors may be unleashed on expiry of patents, or may be reduced if the

space to keep new products is limited. Due to low barriers to entry in the garment industry,

competition is gradually increasing.

2.5.6. Threat of Substitutes

16
The availability of products or services performing similar or same functions with the actual

product produced in that industry, and satisfying the customer needs, causes high threat of

substitution in that industry (Porter, 2008; Hitt et al, 2003; Macmillan and Tampoe, 2000).

With advances in technology, the threat of new substitutes being developed increases over

time. To overcome this, Porter (2008) suggested that the companies could introduce new

features in the existing product or provide wider accessibility thereby offering better value to

customers (Porter, 2008). Hitt et al (2003) also supported by stating that the attractiveness of

substitute products can be reduced by distinguishing a product or service through various

element valued by customers such as price, quality, after sales service, and location. These

differences in product need to be evaluated between India and China.

2.5.7. Bargaining Power of Suppliers

High bargaining power of suppliers is when it is difficult to switch between different

suppliers “or if the total supply in this industry is only a small part of the suppliers total

output” (Macmillan and Tampoe, 2000: 103). Thus, suppliers can exert power over firms by

raising the prices and lowering the quality of its products (Morden, 2007; Hitt et al, 2003).

Porter (2008) said that the power of suppliers changes with time. For example, the airlines

industry was earlier only dependent on travel agents to sell tickets, now due to advent of

internet, these companies are able to sell tickets online directly to customers. With this the

bargaining power of airlines companies increased so as to cut down agent’s commission.

2.5.8. Bargaining Power of Buyers

As said by Porter (2008), “Powerful customers-the flip side of powerful suppliers-can capture

more value by forcing down prices, demanding better quality or more service (thereby

driving up costs), and generally playing industry participants off against one another, at all

the expense of industry profitability.” With tremendous competition in the garment industry,

17
this factor needs to be analysed. High bargaining power of buyers is when buyers are easily

able to switch between suppliers of the products required to gain discounts or any additional

services. To counter this, Porter (2008) suggested that services should be expanded by

companies, thereby raise the switching costs of buyers, or by finding alternative ways to

reach customers so as to neutralize the powerful channels.

2.5.9. Extent of Industrial Rivalry

According to Porter (2008), “Rivalry among existing competitors takes many familiar forms,

including price discounting, new product introductions, advertising campaigns, and service

improvements”. Existence of high rivalry in the garment industry is a cause of limited

profitability (Hitt et al, 2003). Porter (2008) believed that the nature of industrial rivalry can

be altered by mergers and consolidations or by technological advances. He also said that

companies could invest heavily in unique products or expand its support services to

customers.

Apart from the five forces framework developed by Porter (1980), he also mentioned that the

sixth force affecting the industry can be the government ideologies and policies. A different

sixth force was added by Grove (1996) as the power of ‘complementors’. Complementors are

the businesses from which customers buy complementary products. Porter (2008) however

disagreed with Grove (1996) and said that “like government policy, complements are not a

sixth force determining industry profitability since their presence is not necessarily bad (or

good) for industry profitability.” They affect the profitability by the way they influence the

five forces. In addition, Macmillan and Tampoe (2000) mentioned two other forces namely

lobby groups and fashion and fickleness. Lobby groups are able to change the ground rules

within which the firm operates and it influences the values of customers. Increasing rate of

change in fashion and fickleness can also affect the business to a large extent. All these forces

18
threaten the future prospects of garment industry, and therefore should be analysed before

developing a strategy.

2.6. Internal Analysis

Pitts and Lei (1996) contend that to gain maximum competitive advantage, firms need to

recognise the best activities performed by them so as to maximise their effect. Several articles

mentioned that a firm should use their distinctive competencies and strengths in a way that

are different from others to formulate an effective strategy (Bowman, 1998; Mintzberg and

Quinn, 1998; Piits and Lei, 1996; and Ansoff and McDonnel, 1990).

Internal analysis is an effort to explain the internal differences that cause variation in the

firms’ performance. A rigorous analysis of resources, capabilities, and core competencies of

the garment industry is required as they form the basis of competitive advantage (Hitt et al,

2003). Resources and capabilities are created through history of the organisation that cannot

be changed rapidly and therefore, are the results of continuous addition to the learning

processes (Teece et al, 1992). Their combination in turn creates core competencies (Hooley et

al, 1998). These have to be analysed for the garment industry to develop strategies. They

have been outlined below.

2.6.1. Resources

According to Javidon (1998:60) “Resources are the inputs into the organisations value

chain”. Amit and Schoemaker (1993) defined them as the stock of available factors being

controlled or owned by a firm. These are tangible and intangible assets that are used to

implement firms’ strategies (Barney and Hesterley, 2007; Hooley et al, 1998). Their presence

needs to be compared with regard to India and China. Tangible assets include firm’s physical,

financial, organisational, and technological resources. Hitt et al (2003) and Macmillan and

19
Tampoe (2000) stated that intangible assets are greater source of core competencies than

tangible assets, as they involve intellectual and systems capabilities which are difficult to

understand, purchase or imitate by competitors. Intangible assets in a firm are human

resources, innovation resources, and reputational resources (Hooley et al, 1998, Barney,

1991).

2.6.2. Capabilities

Helfat and Raubitschek (2000); Teece et al (1997) defined dynamic capability as the ability to

organize firms’ resources that enable them to introduce new products and processes in

accordance to changes in technology and conditions in the market. Hooley et al (1998:101)

referred capabilities as “a firm’s capacity to deploy assets, usually in combination, using

organisational processes to effect a desired end”. The foundation of capabilities lay in the

skills, knowledge, and functional expertise of the firm’s employees (Morden, 2007; Hitt et al,

2003). Burgoyne et al (2001) classified firms’ strategic capabilities into economic,

technological, human, organisational, management and leadership capabilities. These firm

specific resources and capabilities are referred to strategic assets or core competencies that

provide them with competitive advantage (Hooley et al, 1998). The differences between

capabilities of India and China in the garment industry are needed to be studied.

2.6.3. Core Competencies

Tampoe (1994: 69) defines core competence as a "technical or management subsystem which

integrates diverse technologies, processes, resources and know-how to deliver products and

services which confer sustainable and unique competitive advantage and added value to an

organisation”. According to Hamel and Prahalad (1990: 20) competitive advantage of a firm

depends on core competencies that provide “potential access to a wide variety of markets;

make a significant contribution to perceived customer benefits of the end products; and

20
finally, are difficult for competitors to imitate” for a long period of time (Hafeez et al, 2002;

Hooley et al, 1998, Tampoe, 1994).

From the perspective of RBV, a firm can gain sustainable competitive advantage if the

resources of firm are valuable to the organisation, through exploiting opportunities and

neutralising the threats; are rare or unique in competitive environment of the organisation;

are difficult to copy or imitate; and no substitutes are available for them (Teece et al, 1997;

Porter, 1996, Michalism et al, 1997; Hamel and Prahalad, 1994; Ferdinand, 1999; Barney,

1991).

Thus to summarise internal analysis, firms capabilities are created by combining

organisational resources through various activities, processes or routines (Grant, 1991).

Superior resources, skills, processes, activities, routines, and capabilities are not sufficient for

sustained competitive advantage. Their combination represents collective learning of an

organisation (Hamel and Prahalad, 1990) which is an important capability to be possessed by

them (Barney et al, 2001; Senge, 1990). The ability to improve, learn, and create new

innovative processes is difficult to be imitated by competitors, thereby providing indubitable

competitive advantage (Hamel and Prahalad, 1989).

2.7. Strategic Management Process in Small and Medium Sized Enterprises

As small and medium-sized enterprises (SME’s) play a crucial role to generate employment,

promote innovation, create competition and generate wealth in the economy (Bridge and

Peel, 1999; Smith, 1998; Bantel and Jackson, 1989), a huge amount of research has been

done into strategy formulation and implementation in SME’s (Krishnan, 2001; Hitt and

Ireland, 2000; Berry, 1998; Boyd, 1991; Watts and Ormsby, 1990). The garment industry in

India is dominated by small scale industries, and therefore, different views of various writers

have been stated regarding the relevance of strategic management process in these industries.

21
The use of strategic management procedures for SME’s is argued and stated as inappropriate

by some authors because SME’s do not have enough management and financial resources to

follow the sophisticated techniques of strategic management (Watts and Ormsby, 1990;

Shrader et al, 1989; Cragg and King, 1988). However, Ottewill et al (2000); Jennings and

Beaver (1995) supported that strategic management process in SME’s is essential as by

manipulating the limited available resources, maximum gain can be achieved. It also helps in

providing competitive advantage to them. Many studies such as by Watts and Ormsby

(1990); Wood et al (1988); Bracker et al (1988) and Robinson (1982) have found positive

relationship for a firm in strategic planning and performance. It is also often argued that for a

business to grow and survive in the long term, it has to adopt strategic management

techniques (Wolff, 2000; Hitt and Ireland, 2000; Stone, 1999). Therefore, it can be stated

that, it is important for the Indian garment industry to adopt strategic management process

and analyse the factors mentioned above so as to improve their performance.

2.8. Global competition

Nothing focuses the mind better than the constant sight of a competitor who wants to wipe

you off the map”

– Calloway, D.W. (1991)

Today, the extent of competition in the garment industry is not only limited by national

boundaries or by the definition of any particular industrial sector, it is now global (Ernst and

Connor, 1989). The firms expand internationally in new markets to exploit the current

competitive advantages in countries consisting of favourable government policies or those

offering low costs (Qian and Li, 1998). Various forces of globalisation such as new

international combinations of buyer and sellers that provide competitive advantage are being

used. Spulber (2007) mentioned four types of barriers or trade costs that a business could face

22
namely transaction costs, tariff and non-tariff costs, transportation costs and time costs.

However, he said that their degree may vary in different countries. Various authors and

researchers such as Baier and Bergstrand (1999), Rousslang and To (1993), Anderson and

Gatignon (1986), and Wiliamson (1981b), also support the view of Spulber (2007), by

mentioning these factors in one way or the other.

Anderson and Gatignon (1986) and Wiliamson (1981b) mentioned that international business

have different cultures, traditions, customs and societies, and therefore, same things (such as

business practises, marketing methods, and languages) can have different meanings in each

country. Rousslang and To (1993) mentioned that transportation costs such as freight on

imports and exports, complex logistics to coordinate the supply chain and distribution

network still pose a barrier to trade goods between countries. The firms incur costs in

marketing, distributing, and tailoring products to different countries (Baier and Bergstrand,

1999). The presence of government 1bureaucracies’ and geographically dispersed supply

chain has also resulted in higher investment, inventory, and time cost to be faced by a firm

(Spulber, 2007). These factors are present differently in India and China and therefore, their

effect to the garment industry should be known.

Barney and Hesterley (2006) mentioned important sources that provide cost advantage to

firms. They include size differences and economies of scale (volume of production and

specialised machines, cost of plant and equipment, higher employee specialisation, spread

overhead costs); size differences and diseconomies of scale (physical limits to efficient size,

managerial diseconomies, worker de-motivation, distance to markets and suppliers);

Experience differences and Learning curve economies (firms with higher experience have

1For more information see Porter, M.E. (2008), “The Five Competitive Forces that
Shape Strategy”, Harvard Business Review, Vol. 79

23
economies of scale, cost advantages, competitive advantages with higher market share);

Differential low cost access to productive inputs (such as labour, land, capital and raw

material); Technological advantages independent of scale (machines, computers and other

physical tools); and finally policy issues.

By analysing these factors, the Indian garment industry can gain strategic competitive

advantage. Porter (1990) recognised factors such as innovation, improvement and

upgradation as important for organisations. Simon (1996) emphasized on continuous

improvement in the products and services. Spulber (2007: 15) said that the firms “much

achieve world class cost efficiencies, product quality and innovation”. Hamel and Prahalad

(1991) suggested firms to test launch new products so that the successful products are

recognized. It is known that scale of production, technology, and products are different

among nations. A firm can achieve competitive advantage due to national differences. Porter

(1990) recognised certain attributes that shape the environment for creation of competitive

advantage. These are factor conditions; demand conditions; related and supporting industries;

and firms strategy, structure and rivalry (Figure 2).

Figure 2 – “Attributes shaping environment to create competitive advantage”

Factor Conditions Subsidies, Policies towards capital markets and education

Demand Government is a major buyer of many products in a nation. It shapes


Conditions the local demand conditions by establishing product standards or
regulations that affect the buyer’s needs

Related and Shape the circumstances of industries through factors such as setting
supporting industry controls on advertisement media or regulations in supporting services

Strategy, Structure, Influences through devices such as capital market regulations, tax
and rivalry policies, and antitrust laws

24
Source: Porter, (1990)
These above mentioned factors are extremely significant to garment industry as they

determine cost of the product. Their variation in different nations, play a major role in

determining the competitive advantage (by create opportunities) or disadvantage (by causing

problems) in those countries. Strategies should be formulated by firms so as to provide them

global competitive advantage with higher performance in comparison to local and

international rivals. Therefore, there is a need to find relevance of these factors with relation

to the garment industry of India and China. This research will analyse these factors and

determine their effect on this industry, particularly to firms in India.

2.9. Value Chain and Value system

Value Chain is a chain of related and value generating activities of an organisation in

producing goods and services (Morden, 2007). It is important for garment units to measure

the value delivered and profit contributed through each link of the chain in the sector

(Macmillan and Tampoe, 2000). Porter and Miller (1985) pointed out that information can

provide competitive advantage to an organisation through cost reduction and differentiation

as it pervades the whole value chain. M.E. Porter segmented the value chain into primary and

support activities of an organisation. Primary activities involve inbound logistics, operations,

outbound logistics, marketing and sales, and services. Secondary activities in the model

support the primary activities. They are procurement, technological development, human

resource management, and firm’s infrastructure.

2.10. Clustering

The garment industry requires the whole chain to be located close together as it will result in

increasing their output and make them perform like one big firm (Baptista, 1996). Rapid

changes in technology and competition in the market has stimulated the evolution of clusters

25
of firms (Guerrieri et al, 2001). Porter (1998: 78) defined clusters as “geographic

concentrations of interconnected companies and institutions in a particular field.....They

include for example, suppliers of specialized inputs as components, machinery, and services

and providers of specialized infrastructure”. Importance of clusters is now increasingly

recognized as it yields significant insights by providing various options for business strategy

development (Lagendijk, 1999). This development is done by encouraging synergies,

external economies and which result in increasing returns (Feser, 1998). Schmitz (1995a, b)

noted that Marshal (1920) introduced the concept of external economies to show why and

how the location of industry matters, and why and how the small firms could achieve

efficiency and be competitive.

The globalization and liberation of trade has broadened the scope of many markets and thus

intensified the competition. Clustering acts as a driving force in the international market to

enhance the ability of a firm to innovate (Frisillo, 2007; Vanhaverbeke, 2001) and produce

improved variety, reliability, speed of delivery, (Mccormick, 1999; Brautigam, 1997;

Schmitz, 1995, a, b) strategic information exchange (Visser, 1999), and labour market

pooling (Kloosterman and Lambregts, 2001; Porter, 1998). With increasing globalisation,

competition is increased in developing countries from imports, multinational corporations,

and other low cost enterprises. The business cluster approach has been recognised as an

important strategy to help small businesses compete successfully in the global markets. It will

also provide economic gains to help small firms to become more efficient and competitive in

the market (Jacobson and Mottair, 1999). The importance of this strategy for the garment

industry should be understood and developed.

2.11. Summary

26
To summarize, the literature review determined various theories on strategic management,

PEST analysis, competitive forces approach, resource based perspective model, dynamic

capabilities theory, value chain, global competition, and clustering as a strategy for small

firms. Various questions have emerged regarding their significance in the garment industry

and are therefore outlined in the next chapter.

27
Chapter 3

Methodology

“Somewhere, something incredible is waiting to be known”

-Dr. Carl Saqan

This chapter explains the overall methodology used to collect data for this research. It starts

with the sources of data collection, the selection and justification of primary research method

used (qualitative interviews), its aspects, types and use of in-depth interviews as a method for

investigating the attitudes, opinions and perceptions of various executives in leading

industries (Riley et al, 2000). It further describes the method used for analysing the data and

verifying the accuracy of information obtained.

3.1. Sources of Data Collection

The information for this study was gathered from both primary as well as secondary sources.

These include, Associated Chambers of Commerce and Trade of India, Books and Journals,

Internet sources and interviews from various executives in garment manufacturing units.

These sources have been further explained.

3.1.1. Associated Chambers of Commerce and Industry of India

First source of secondary information was the “Associated Chambers of Commerce and

Industry of India”. Important data and figures were collected from them in order to

supplement and support the responses gathered from the interviews of garment

manufacturers. Some new insights into the topic were also gained from research done by

them on the “Textile Industry of India”.

3.1.2. Books and Journals

28
Information was also collected through books and journal articles published by many

academic practitioners and researchers. The information collected from them is safe to certain

extent as they are published only after a peer-review process (Sapsford & Jupp, 2006).

3.1.3. Internet

Beyond books and articles, the Web gives access to a wide range of other publications that

are not otherwise available. The government sites consist of enormous amounts of

information and articles on wide range of topics including policy documents, legislation and

official documents, local and national research reports and published administrative statistics

(Sapsford & Jupp, 2006). Some of the websites used include Ministry of Finance

(http://finmin.nic.in), Ministry of Textiles (http://www.txcindia.com). Full text newspapers

articles, press media, and reports give access to published works of the whole world such as

Press Information Bureau – Government of India (http://pib.nic.in). University sites also

contain information about previous research and sometimes provide access to reports and

summaries online. Some academic organisations as well as many others have their own

websites that include reviews, statistics, publications, or other potentially useful information.

These include World Trade Organisation (http://www.wto.org), World Bank

(www.worldbank.org), Powerloom Development and Export Promotion Council

(http://www.pdexcil.org), The Cotton Textiles Export Promotion Council of India

(http://www.texprocil.org), and Apparel Export Promotion Council

(http://www.aepcindia.com).

However, the main problem with using any of the information from this method is the

question on evaluating its worth. As press reports may be news, they cannot be taken

straightforwardly as a fact nor can be work from any other unreliable websites. Hence, these

29
issues have been taken into consideration before making this report through triangulation.

This concept has been explained towards the end of this chapter In the ‘verifying’ stage.

3.1.4. Interviews

Interviews from Garment Manufacturers in India were taken as the primary source to collect

data. The whole process of selecting this data collection method, conducting interviews and

analysing its data are explained further.

3.2. Why Qualitative research?

As the objective of this research is to explore, interpret and obtain a deeper understanding of

the topic, qualitative research was the most appropriate method to be used that can provide

explanation which is not provided through any other research method. The appropriateness of

this method is further explained. Qualitative methods help to develop rich insights into a

topic that may be difficult to gain initially by using other research methods such as mail

questionnaire and archival data (Bonoma, 1985).

According to Proctor (2000), Quantitative research outshines qualitative methods due to its

ability to analyse the data based on the representative samples which constitutes a large

population with a complete set of categorization for the events or the activities described

(Silverman, 2000). However, this advantage of qualitative research is minimal in this

research as it involves gathering information from various sources and understanding the

topic in depth.

Halfpenny (1979: 801) believes that “Qualitative research ... is concerned with developing

concepts rather than applying pre-existing concepts”. A researcher’s ability to carry out

research depends upon the availability of data which forms the basis for analysis and

conclusion. If the real-world input is flawed then the use of technically advanced and

30
computerized techniques would be ineffective (Maanen, 1998). Thus qualitative research

technique is an important element to rectify gap in the extent literature and therefore provide

invaluable insights that may be generated during the research. Evert (2000) compares the

researchers with the iceberg metaphor. The iceberg shows only 10%-15% of its mass above

water. With this he implies that the researchers are not satisfied just by looking from above

and doing the analysis. Nor, they are satisfied by gaining the access through questionnaires

and collecting quantitative data which leads to setting only a foot on the iceberg. For getting

the close-up of the remaining 85%-90% of information which is hidden below could only be

gained by getting under the surface, mobilizing more resources, and getting more involved,

thus in short, by using qualitative research methods that are capable of generating more in-

depth and comprehensive information (Evert, 2000).

Qualitative methodology and case studies are powerful tools for research which provide

insight in management and business subjects (Maanen, 2000). These include general

management, public sector management, entrepreneurship and small business, marketing,

human resource management, development of strategies, organizational theory and

behaviour, employment relations, industrial/organizational psychology, finance and

accounting, information systems, technology, innovation and operations management (Lee,

1999). This research is conducted through interviews from various executives of garment

manufacturing units by considering a variety of these subjects. This method also helps to

bring out organisational realities by providing opportunities to the field through “unique,

socially important and theoretically meaningful contributions” (Gephart, 2004:

461).Interviews as a method of qualitative research was chosen over the other techniques due

to various advantages this method carries with this particular research.

3.3. Advantages of Interviews

31
Qualitative research interview is a method suitable for examining topics that are needed to be

explored through different levels of meanings (King, 2004). Interviews provide richer and

better quality of responses than questionnaires as they offer standardised explanations to

certain problems and misunderstandings arising in the data collection process (Oppenheim,

2000).

This method also enhances the existing knowledge by providing the view of an ‘Insider’

(Cassell & Symon, 1994) as it adds an “inner perspective to an outward behaviour” (Patton,

1987:109). This further helps in explaining what people are doing; why they are doing; and

how do they understand the world around them (Rubin, 1995). In our research, this method

provides an understanding of latent issues currently facing the industry. Probing or asking

follow-up questions are also possible through the interviews when particular details have to

be elicited (Patton, 1987). Specific information can be gathered quickly according to the

requirements of the research by directing and controlling procedure of the interviews.

3.4. Disadvantages of Interviews

Interviews require huge resources for designing the interview guide, conducting the

interviews, transcribing and then analysing the transcripts. It is also difficult to analyse the

data collected due to its huge volume. Moreover, the quality of information largely depends

on the interviewer’s ability to analyse the data. As compared to other methods such as survey

or mail questionnaire, the sample size is usually small and can be subjected to interviewer

and respondents bias.

These issues were addressed in this research as access to relevant contacts to be interviewed

was comparatively easier because the researcher’s family owned business was of garment

manufacturing. Being in the same field, he had the basic knowledge about this sector and

therefore knew the exact information to be obtained from interviews for this research. Only

32
the important lines or paragraphs were transcribed from the whole interviews and therefore

consumed very less time as it would have taken in transcribing the whole interview.

Important information was noted in the form of notes during the interviews itself. The

problem of availability of huge data for analysis was sort by grouping the information

obtained into different themes. Data analysis method has been explained later in this chapter.

Finally the interviews were conducted until sufficient knowledge was gained for the topic

being researched. Therefore, the small number of samples for the research was not an issue.

3.5. Approaches to Qualitative interviewing

Patton (1987) writes about three basic approaches in collecting qualitative data through in-

depth, open-ended interviews. They are informal conversational interview, general interview

guide approach, and the standardized open-ended interview. Each of these types serves

different purposes that determine the interview questions before the actual interview.

The Informal, conversational interview or unstructured interviews as described by Patton

(1987) involves spontaneous questions to be asked by the interviewer in the natural flow of

an interaction. No predetermined questions are possible for such kind of interview as the

interviewer does not know precisely the things that are going to happen and the appropriate

questions to be asked according to the flow of the conversation (The World Bank, 2008).

Therefore, the data collected from this type of interview is extremely difficult to pull together

and analyse. This is because each person being interviewed responds differently and

questions are asked according to that flow itself (Patton, 1987). This may also result in

diverting from the main topic required to research. This method consumes great deal of time

to find patterns emerging at different points of time with different people (McKay, 2006).

According to Hoepfl (1997), the general interview guide approach or semi-structured

interviews intend to ensure that same general area of information is collected from each

33
interviewee without pre-determining the responses. It includes a list of questions or issues of

the subject area needed to be explored during the course of interview. This is done by the

interviewer by asking illuminating and probing questions which elucidate the particular

subject being enquired. These questions provide a checklist at the time of interviews which

confirms that all the important topics are covered. This approach helps to provide systematic

and comprehensive interviews from different people by demarcating the issues to be

discussed in the interview. It keeps the interaction to be focused even by generating a degree

of freedom and adaptability in getting information from the interviewee’s perspectives and

experiences (Patton, 1987).

The standardized open-ended interviews or structured interviews involve asking same set of

open-ended questions from all interviewees in the same sequence (Patton, 1987). This

method is used when variation in questions posed to the interviewees is to be minimised.

Thus, it helps reduce bias that can be incurred by conducting interviews from different people

(Sewell, 2008). Patton (1987) also said that this approach facilitates faster interviews that are

easier to analyze and compare. However the flexibility for probing is limited as it depends

upon nature of the interview and skills of the interviewer. It also inhibits pursuing topics that

were not considered while preparing the inter questions.

Therefore, from the various approaches mentioned, the general interview guide approach was

most suitable for this research. This is because the method allows in-depth probing by the

interviewer while keeping the interview within the parameters being researched according to

aim of the study. It also ensures comparability while allowing flexibility in attaining greater

insight into the topic (Strauss and Corbin, 1990).

3.6. Interviews

34
Kvale (1996), details seven stages of in-depth interview enquiry. They include thematizing,

designing, interviewing, transcribing, analysing, verifying, and reporting. Each step has been

briefly examined below along with the strategies adopted for their implementation in this

research.

1.) Thematizing: The purpose of the research was stated, the conceptual and theoretical

understanding of the investigated theme was formulated. The key questions concerned here

were why, what and how of the interview. “Why” clarifies the purpose of the study. “What”

concerns with obtaining knowledge in advance of the topic to be investigated. “How” relates

to the different techniques of interviewing that were used for obtaining the intended

knowledge about the theme and its analysis (Kvale, 2007). After deciding the general purpose

of the interview, the key information to be collected from the interview was pinpointed.

Knowledge about the topic was obtained before investigation in order to recognise whether

the knowledge obtained by the interviews was new and thus recognising that it makes

significant contribution to the research topic (Kvale, 2007).

2.) Designing: After deciding the specific information to find from the research, a design of

the interview was prepared. The design was planned by considering the seven stages of

investigation. It resulted in obtaining the intended knowledge and the moral implications of

the study (Kvale, 2007). This process has been explained further.

3.) Interviewing: The purpose and need of interview was to know the views and understand

the real world scenario of the garment industry from the perspective of different

manufacturers. The possible advantages and disadvantages, strength and weaknesses, and the

future prospects of the two countries India and China were needed to be studied during the

interview. This purpose and need was determined so that the interviewees can understand the

35
importance of the interview. This method of qualitative research was employed with the

objective to acquire richer data about the issue.

According to Patton (1987:108), “in-depth interviewing involves asking open ended

questions, listening to and recording the answers, and then following up with additional

relevant questions. It helps probe beneath the surface, soliciting details and providing holistic

understanding from the interviewee’s point of view.” Thus, the purpose of interviewing was

to understand the complexities, phenomenon and various perspectives of different

manufacturers of the garment industry so as to generate new ideas and develop future

strategies (Hoque, 2006).

3.6.3.1. Sampling

Identifying the respondents who constitute a fair representation of the entire population for

collecting the data was a major task before the interview. Dalkey and Halmer (1963)

mentioned specific criteria for the selection of panel experts. Firstly, they should exhibit high

degree of knowledge and experience in the subject matter. Secondly, they should be

representative of their profession in a way that their suggestions and opinions are adaptable or

transferrable to the population (Schofield, 2006). Thus, the sample selected should enable the

researchers to advance the current theoretical knowledge by providing significant empirical

contexts, illustrations or situations (Mason, 2002).

Potential participants for this study were identified through their expertise in garment

manufacturing in the Indian environment. They included Directors of organisations,

Marketing Executives and Production Managers. On the negative side of this research, due to

availability of limited resources, the companies interviewed were only from India and do not

constitute any garment manufacturers from China.The idea behind qualitative research is to

purposefully select participants who are suitable to provide best answers to the research

36
questions (Creswell, 1994). Therefore, the respondents were selected on the basis of 5 years

of minimum level working experience in garment manufacturing unit. This was done so that

the persons being interviewed are experts in their field who understand current and the past

issues, and therefore constitute a substantial variety of viewpoints.

According to Patton (2002) there are no set of rules for an appropriate sample size as it

depends on the actual situation being scrutinised. This indicates that the number of samples

selected should be according to the knowledge and understanding provided by them of the

overall current scenario and other relating information (Mason, 2002). Therefore, unlike the

survey method where the researchers target a specific sample size, interviews were conducted

until suitable justification was gained on the topic being researched (Yin, 2003b). In-depth

interviews were conducted from 10 garment manufacturers in India using open-ended semi

structured questions. The duration for each interview was 45-60 minutes.

Open ended questions are used when the nature of the questions is complex, its dimensions

are unknown and topic being researched is exploratory (Stacey, 1969 in Newell, 1995).

Therefore, open ended questions were used over closed ended due to nature of topic being

researched. Many scholars contend that by allowing respondents to answer questions in their

own words, the salient concerns related to the enquiry can be instigated (Geer, 1988) and the

“imposition of predetermined responses while gathering the data” (Patton, 1987:122) can be

minimised. Yin (1994) mentions that open questions form an integral part of the interviews

that certifies the respondents to see themselves as informants and not mere interviewees.

Therefore, these interviewees tend to provide more information. They also bring about

discussion of the related issues arising during the interview. On the other hand, closed ended

questions should be used where the alternate replies are limited and clearly known (Stacey,

1969). This format forces people to choose among a fixed set of responses (Geer, 1988).

37
Thus, in order to know the views of informants, only open ended questions correspond with

this research.

3.6.3.2. Stages of Interview

The actual interviews were conducted in three parts. The first part involves certain

preparations for the interview. The second part of the interview guide comprises the actual

interview questions, and probing questions. The final part lists the things done after the

interview.

First Stage: Preparation for Interview

The general purpose of the interview was explained to the interviewees. “The relationship of

particular questions to that overall purpose is an important piece of information that goes

beyond the simple asking of questions” (Patton, 1987:126).Although, the interviewer might

be clear with reasons for asking a particular question, these may be unclear to the

respondents. Therefore, respect is communicated to the people being interviewed by

explaining them why these questions are being asked. This helps in increasing the motivation

of the interviewee’s to respond questions openly and in detail (Patton, 1987).

Before the actual interview, the respondents were ratified that their opinion is important.

They were thanked for providing their support.This helped to make the interviewee feel the

process of interview valuable. Rapport was established and confidentiality of the data was

assured before the interview to the respondent. During the analysis, the confidentiality of has

been maintained by mentioning the quotes stated during the interviews by various firms in the

form of Firm, A, Firm B, Firm C and so on. Further, the format of the interview was

explained. As time is a precious element, they were indicated the usual length of the

interview. Permission for recording the data was also taken. A tape recorder forms an

38
indispensable instrument during interviews as it helps to increase accuracy of the data

collected. It also compels the interviewer to be more attentive to the interviewee. The

remaining doubts to the respondents, if any, about the interview were also clarified.

Second Stage: Semi-structured Interviews

As the opening of the interview sets the tone for the remainder of the interview, the goal was

to establish a climate where myself (researcher) as well as the interviewee participates freely

and communicates accurately to answer open ended questions. The selected respondents were

first asked some general questions such as the products they manufacture, time since

establishment of their industry, and the countries they export their products. The task was to

bring the interviewee into his or her world (Patton, 1987). Further, they were asked to express

their opinions and judgements on current development of the garment industry and provide

the factual information they reside. It would be the knowledge about the topic and the world

that is being acquired. The whole framework of the questions was made such that the

respondents can express their understandings in their own terms. For managing the time

properly, control was maintained by knowing the things to find out and asking relevant

questions for getting the information. These research questions formulated for the

investigation were:

 What are the aspects in which China is better than India and vise-versa?

 What are the reasons behind lower production cost in China compared with India?

 How can India match the low per-unit cost as in China?

 Are the government policies favouring or hindering for the development of this

industry?

 What are the problems faced by the Indian garment industry?

39
 How can they be improved, thus making them more conducive for the garment

industry?

 Is China only a competitor for India or they complement each other?

 What is the role played by the export promotion councils in both the countries?

The interviewee was given signal for the upcoming concluding question by saying as with,

“My final question is “What do you think are the Future Prospects of India and China in the

garment industry?” The order of the questions asked varied depending on the situation, and

additional questions that arose during the interview were raised. The purpose of probing is to

deepen the response to a question and gain richness associated with the data so obtained

(Patton, 1987). These questions were offered in a conversational and naturalistic style of

voice in order to follow-up the initial responses. The last questions might be to allow

respondents to provide any other information they prefer to add and their impressions of the

interview. These research questions were carefully prepared according to the themes analysed

during the literature review. If any other important point was identified during the interview,

the literature related to it was added.

As the interview was aimed to collect information, neutrality was maintained in the content

of responses gathered. In the situation of a clash between the responses of different

interviewees, it was further clarified with them.

Third Stage: After the interview

Any correction and clarifications required on the written notes were made. This was done for

increasing the accuracy and reliability of the interview notes. Further, the tape recorder was

verified if the recording has come out successful. The quality of recording play an essential

role as the presence of background noise or the tape being left blank would virtually serve as

the recording to be worthless. Due to malfunction of the recorder in one of the interviews,

40
extensive notes were made of the information provided by the interviewees. Observations

regarding the knowledge of the respondent for the particular questions were made during the

interview. Observational data also includes the location of the interview conducted; the

interviewee’s reaction to the interview and any other relevant information that helped

developed a context for interpreting and creating logic out of the interview (Patton, 1987).

My (researcher) contact information was also provided to the companies being interviewed so

that they could get in touch in the future. Finally, the respondents were thanked for spending

their valuable time for the interview.

4.) Transcribing: To transcribe means to transform, or to change from one form to another.

Transcribing here means reproduction from an oral interview to a written mode of

conversation or text. The interview material was prepared for analysis by encoding the

important passages during the interview in a form amenable for closer analysis. However,

this stage was the most difficult and time-consuming part of using the recorded interviews.

As interviews were conducted in India, they were in Hindi as well as English. Therefore,

transcribing all the interviews in English was a tough task. However, due to bilingual skill of

the researcher, this task was completed efficiently.

5.) Analysing: As stated by Patton (1987: 140), “examining an interview after it is completed

can also be the beginning of analysis”. The analysis of qualitative data is a creative process.

This process requires intellectual rigour, and demands significant hard and thoughtful work.

The interviews were analysed based on the purpose and topic of investigation and the nature

of material obtained. The notes collected during the interviews and the other data transcribed

were used to analyse the data. Bogdan and Biklen (1982: 145) defines qualitative data

analysis as "working with data, organizing it, breaking it into manageable units, synthesizing

it, searching for patterns, discovering what is important and what is to be learned, and

deciding what you will tell others". However, “interpretation involves attaching meaning and

41
significance to the analysis, explaining descriptive patterns, and looking for relationships and

linkages among descriptive dimensions” (Patton, 1987:144). The data was analysed in

different stages as suggested by Miles and Huberman (1994). They are:

First Stage – Consolidation and data reduction

Through comparative method, the data from interviews was organised and reduced in order to

construct various themes and categories.

Step 1: Constantly make notes on relevant data and patterns

Step 2: Writing down main ideas and identify categories.

Step 3: Grouping different themes together

Step 4: Form categories into which these themes or groups can be consolidated.

Second Stage – Data Display and Interpretation

Data is simplified in this stage so as to interpret and draw conclusions.

Step 1: Data was transferred to visual form for making comparison and interpretation.

Step 2: Data was interpreted and conclusions were drawn.

6.) Verifying: Data was integrated in a framework to gain greater insights and to verify

themes in accordance to the validity criteria. The data was interpreted according to the

research questions as well as the literature review. Professionals in the garment industry

exhibiting high degree of knowledge and experience were interviewed. The validity,

reliability and generalizability of the findings were ascertained. Validity refers whether the

interviews were successful in investigating the intended areas (Kvale, 2007) and reliability

refers to the consistency of the results obtained on different occasions (Hammersley, 1992).

42
Validity and reliability checks were made throughout the interviews including the analysis.

Various methods of data collection have their own advantages and disadvantages. The

information obtained from various interviews was matched with views of different

respondents and was also backed up with facts and figures researched in reliable secondary

sources of data through internet, books, and journals. Therefore, weakness arising in

obtaining information from one interview can be supplemented from second source or third

strong source. This method is called ‘triangulation’ (Seale, 1999). It results in checking the

accuracy of the same phenomenon or research question from more than single data source

(Decrop, 1999).

7.) Reporting: The final step of the process is to share what has been learnt from the in-depth

interviews. The whole research was a part of the dissertation submitted to University of

Nottingham. The data analysed and results thus obtained were also given to the different

manufacturers that were interviewed.

3.7. Summary

Therefore to conclude, this chapter details the methodology adopted for this research. Various

problems incurred during the research were mentioned along with the measures taken for

limiting or removing their effect. Both primary and secondary data sources have been used

for this research as each method has their own advantages and limitations. The importance of

interviews as the primary source of data in this research is also mentioned. In addition,

various stages involved in the interview process have been outlined along with the method

used for analysing the data. The next chapter illustrates the past and current export trends

from India and China to US and EU in garment industry.

Chapter 4

43
Export of Garments from India and China

The garment industry in India is mostly fragmented and exists largely in the small scale

industrial sector. The reservation for small scale industries to manufacture garments was

abolished in 2001, thus leading to new opportunities for development of this industry in

India. This sector faces tremendous competition both internally and externally. The multi

fibre agreement (MFA) expired in 2005, which intensified the competition from domestic and

international competitors (Shimane, 2006).

This chapter illustrates the past and current export trends of the garment industry, specifically

India and China to USA and EU15. These two areas (USA and EU15) have been selected for

this research as they currently constitute 62.3% of the world imports of garments (Apparel

Export Promotion Council, 2008). Furthermore, the major competitor countries to India are

also mentioned.

Figure 3 – “World Imports of Readymade Garments: Share of India and China as suppliers”

VALUE IN BN USD
Yr. Yr. Yr. Yr. Yr. Yr. %age change CAGR
2000 2001 2002 2003 2004 2005 Yr. 2005/04 (6 years)

Global Imports 196.42 196.6 203.02 229.5 232.68 266.66 14.60 6.305
India's Exports of RMG 5.66 5.06 5.77 6.16 6.34 8.08 27.44 7.38
China's Exports of RMG 32.29 32.41 36.57 45.76 54.78 65.91 20.32 15.33
Source: Apparel Export Promotion Council (2008)
Figure 3 shows the past export trend of India and China to the world. It can be interpreted

that while the global imports of value of garments from the year 2000 to 2005 have increased

by 35.76%, export contribution from India and China have increased by 42.75% and

104.12%. China dominates production in this sector, and is a major competitor to India. It has

grown at a fast pace. India has also performed well in comparison to its contribution to global

imports in terms of increase in value of its exports. According to ASSOCHAM (2007) the

44
apparel exports in India in the year 2006 were $8.61 billion which marginally increased in

2007 to $8.68 billion. Their division of exports for the year 2007 is shown in Figure 4.

Figure 4 – “Share of components in total exports of Apparel from India”

Component Share in total exports of Apparel from India


Cotton Readymade Garments 75%
Man-Made Fibre Garments 11%
Wool Clothes 4.6%
Silk Garments 3.11%
Others 6.29%
Source: The Associated Chambers of Commerce and Industry of India (2007)
As India consists rich resources of cotton it can be seen in figure 4 that the production of

garments in India is cotton dominated with 75% share. Garments made from Man-Made fibre

constitute 11% share followed by wool clothes and silk garments with 4.6% and 3.11% share.

Figure 5 – “Percentage Share of India and China as suppliers of Readymade Garments to the
World”

Source: Apparel Export Promotion Council (2008)


In 2005, China was the top manufacturer and supplier of readymade garments in the world

which constituted 24.72% share. India on the other hand had 3.03% share (Figure 5) and was

regarded as the 5th major exporter of readymade garments after Hong Kong, Italy, Germany,

and Turkey (Apparel Export Promotion Council, 2008). During the last four years, this

industry in India has grown at the rate of 15-16% and recorded 22% growth in 2006 on

45
account of removal of quota restrictions in 2005, strong domestic demand, growth in

organised retailing, and brand promotions (Report by ASSOCHAM, 2007).

4.1. Exports to USA

China is the largest exporter of garments to USA in terms of value (Figure 6). However its

growth rate was hampered as USA set quotas in garment products to restrict the imports from

China in 2006 (Yamagata, 2007). According to Karmakar (2007), the exports of apparel from

India and China would rise tremendously after MFA phase out. Furthermore, due to

occurrence of various structural changes, radical changes in the composition of sourcing

countries for USA can be seen. The change is reflected from the import figures from various

countries in the table (Figure 6).

It can be seen from the figures that annual growth of garment exports from China to USA

dropped from 56.77% in 2005 to 18.19% in 2006 and that from India dropped from 34.31%

to 6% during the same period. This was due to major competitors countries such as

Indonesia, Vietnam, Bangladesh and Cambodia that benefited from the restriction applied on

exports from China to USA. These countries continued to grow at a fast pace. However,

growth of garment exports from India suffered with regard to high duties being levied to

them. At the same time, the growth rate for import of garments in USA was mere 5.89% in

2005 which declined to 3.65% in 2006. The principle sourcing area for USA is Asia as 6 out

the top 10 countries are from the Asian region. These top 10 countries constitute 65% share

in the total garments imports to USA (Apparel Export Promotion Council-4, 2008).

46
Figure 6 – “Exports of Knit and Woven Garments to the United States of America”

Rank Origin Amount (Million US$) Rate of Change (%)


2004 2005 2006 2005/04 2006/05
World 66,875 70,811 73,393 5.89 3.65
1 China 10,723 16,810 19,868 56.77 18.19
2 Mexico 6,845 6,230 5,448 -8.99 -12.55
3 Indonesia 2,402 2,882 3,675 19.99 27.5
4 India 2,277 3,059 3,242 34.31 6
5 Vietnam 2,506 2,665 3,158 6.37 18.49
6 Hong Kong 3,878 3,524 2,817 -9.13 -20.08
7 Bangladesh 1,872 2,268 2,809 21.17 23.85
8 Honduras 2,742 2,685 2,518 -2.09 -6.24
9 Cambodia 1,418 1,703 2,131 20.08 25.17
10 Philippines 1,765 1,822 1,999 3.21 9.7
11 Thailand 1,823 1,833 1,859 0.6 1.39
12 Sri Lanka 1,553 1,653 1,687 6.46 2.03
13 Guatemala 1,947 1,817 1,667 -6.66 -8.28
14 Dominican 2,036 1,831 1,535 -10.09 -16.14
15 Italy 1,585 1,520 1,474 -4.12 -2.98
16 Pakistan 1,147 1,273 1,427 10.99 12.11
Note: Knit and woven garments are defined as commodities with HS codes of 61 and 62.
Source of data: U.S. Dept. of Commerce, Bureau of Census by World Trade Atlas in
Yamagata (2007)

4.2. Exports to Europe

Europe reached an agreement with the Chinese government called ‘transitional arrangement’

on 10th June, 2005, for restricting the growth of garment exports of 10 categories in Europe

between 8 and 12.5% per year. This agreement will be in force until liberalisation of trade in

2008 so as to ensure a period of adjustment to this industry for EU15 and the developing

countries (Report by ASSOCHAM, 2007). For this reason, the exports figures of various

countries to EU15 are outlined in Figure 7.

It can be seen that exports from China and India to European Union15 grew in 2005 at

54.41% and 33.74%. During the same time, imports from whole world by EU15 rose by only

7.83%. In 2006, the world average for imports by EU15 grew at 10.74%, whereas exports

from China rose by only 6.84% and from India 17.65% (Yamagata, 2007). The percentage

growth in exports in 2006 from China dropped sharply and from India reduced to almost half.

47
Other major competitors such as Bangladesh, Hong Kong, Indonesia, and Sri Lanka grew at a

fast pace.

Figure 7 – “Exports of Knit and Woven Garments to the EU15”

Rank Origin Amount (Million US$) Rate of Change


(Jan-Oct, %)
2004 2005 Oct.2006 2005/04 2006/05
World 65,552 69,864 65,323 7.83 10.74
1 China 13,714 20,361 19,032 54.41 6.84
2 Turkey 9,348 9,776 8,365 6.94 1.4
3 Bangladesh 4,578 4,356 4,853 -5.85 33.37
4 India 3,020 3,992 4,048 33.74 17.65
5 Romania 4,572 4,287 3,495 -4.61 -3.32
6 Hong Kong 2,394 2,056 2,771 -30.67 103.91
7 Tunisia 3,215 3,059 2,527 -2.39 -2.49
8 Morocco 3,004 2,814 2,420 -5.32 2.58
9 Indonesia 1,637 1,468 1,487 -14.1 23.94
10 Bulgaria 1,300 1,331 1,226 3.74 10.49
11 Poland 1,432 1,242 1,036 -12.79 -2.97
12 Vietnam 757 820 1,021 3.02 52.61
13 Sri Lanka 1,002 986 997 -2.83 22.74
14 Pakistan 1,126 959 937 -10.87 13.98
15 Thailand 1,079 955 898 -13.37 14.78
16 Hungary 928 934 790 5.11 -0.24
17 Czech 884 602 576 -27.75 13.55
18 Cambodia 643 587 566 -10.32 19.77
20 Mauritius 636 550 499 -14.88 7.73
32 Madagascar 196 222 237 15.43 28.21
34 Myanmar 457 237 222 -49.45 10.75
- China and 16,108 22,417 21,802 -42.06 13.72
Hong Kong

Note: Knit and woven garments are defined as commodities with HS codes of 61 and 62.
Source of data: Eurostat in Yamagata (2007)

48
4.3. Major Competitors

China – China is the largest textile and clothing producer in the world. Its export has risen by

25% in the year 2006 and stand at $165 billion (Apparel Export Promotion Council-3, 2008).

The textile sector in China has grown at the rate of 15.6% from January to May 2007. This

Industry in China was deregulated in early 1990’s with major modernisation and restructuring

taking place between the years 1997-2000 (Report by ASSOCHAM, 2007).

Bangladesh – The exports from Bangladesh have been growing continuously at the rate of

20-25% (WTO, 2007). This is due to low manufacturing costs along with several incentives

available in the overseas market. The exports amounted to $7.8 billion in the year 2006 which

along with textiles total to 78% of their entire merchandise exports earnings (Report by

ASSOCHAM, 2007). It is feared that Bangladesh may overtake India in garment exports in

near future if adequate measures are not taken by them in order to boost the competitiveness

of Indian garment industry.

Indonesia – Indonesia exported textiles and clothing worth $8.67 billion in 2005 and $9.7

billion in the year 2006 (Report by ASSOCHAM, 2007). Among the ASEAN countries, it

has the largest share of spindles and looms and its capacity is fourth highest in the world

(Research and Markets, 2006).

4.4. Summary

To summarize, in this chapter, the exports from India and China to USA and EU15 have been

outlined and the major competitor suppliers of India have been mentioned. This was

necessary to know so as to identify the current position of Indian garment industry which

forms a base for the research conducted. Next chapter will analyse the reasons behind the

current position of the garment industry of India and China. Their competitiveness will be

49
highlighted from the information obtained from the interviews conducted, and from other

secondary resources.

50
Chapter 4

Analysis/Discussion/Recommendations

This research will investigate and bring out the competitiveness of Indian garment industry as

compared to China, followed by issues related to this industry in India. Further

recommendations for garment industry of India that are required to be taken both on domestic

as well as external front have been provided at firm and government level. With this research,

the firms in India could recognize its strengths and exploit them and find measure to

neutralize its threats and avoid its weaknesses (Barney and Hesterley, 2006). By considering

the internal and external environment factors that are further mentioned, businesses related to

garment and textile industry specifically in India can develop an effective and successful

strategy.

5.1. Factors determining Competitive Advantage of India and China

5.1.1. Labour: Training, Productivity and Laws

The availability of low cost and skilled man power in India and China provides competitive

advantage to them in garment industry. India comprises of highly trained managerial

workforce. However, it does not provide professional and adequate training to the workforce

at the lower level. Therefore, the skills are also limited to only the existing processes

available. The current training and educational infrastructure in the Indian textile and garment

Industry is insufficient. The requirement in the core technological work of production is 5

million trainees whereas the capacity is only 4 – 4.5 million people (Report by ASSOCHAM,

2007). It was also estimated that training is required to be given to over 1 million trainees

every year (Ministry of Finance-Government of India, 2008). Training is provided to people

51
working in few areas of work in the garment industry and the government does not take go

till the root level to provide training.

“Both countries have unskilled workers, they work and become skilled” – (Director, Firm C)

“Indian government only tries to train pattern makers or masters, or certain machine

operator” – (Director, Firm B)

“Government in China provides support for training of workers. In India there is a

government body but it does not go till the root level to train the workforce” – (Director,

Firm G)

“The firms in China provide more training facilities; therefore the people working there

have more technical knowledge” – (Director, Firm E)

The Chinese firms heavily invest in training of its workers in modern technology. It provides

training with its secondary and technical education programs which provide long term benefit

to the individual firms by imparting technical knowledge to the workforce. On an average,

the firms in China provide 70 hours of training each year to an experienced worker. On

contrary, firms in India provide only 10 hours of training in a year (Chandra et al., 1998).

The performance of an industry is significantly dependent on the performance of its

workforce. The efficiency and quality of labour force in India is not up to the mark. A key

reason for low productivity and high cost of manufacturing in the garment industry in India is

lack of discipline among the labour employed. A major problem this industry in India is

facing is labour unavailability which causes further numerous problems linked to it.

“The work force in India is not work oriented. They take work just for granted” – (Director,

Firm G)

52
“The main factor China is better is their manpower. It is much more productive, and

efficient. It is proactive” – (Director, Firm B)

“Due to large population in China, there is exploitation of workers. There are insufficient

jobs available in factories for intake as compared to the people requiring jobs” – (Director,

Firm F)

“Many migrant workers come for jobs... they are exploited by employers in China to work

more. They need to submit their ID’s and sometimes even deposit something” – (Director,

Firm C)

“Given a job to produce 100 garments to workers in China is completed without the need of

supervisors. But it is not completed in India even in 2-3 days until multi-layer management is

deployed” – (Director, Firm G)

China has an advantage due to higher labour productivity in manufacturing garments. This is

due to the fact that the current workforce available in China is much more than the jobs

available there. Therefore, the migrant workers are exploited to work more at the same wage

rate leading to higher efficiency and less cost of production. As these migrant workers do not

have full residency permits in cities, they, therefore, live in employer owned dormitories

which are very crowded and dirty. The cost of work visa is paid by the employer in advance

and thus in return the workers are in debt, even before beginning their contract. These

workers have to pay “deposits’ to the employer or hand over their documents of ID’s. This

results in enforcing excessive overtime and flexible hours by the employers. The report by

Oxam - “Trading Away our rights” found that the women in China employed in the garment

industry face 150 hours of overtime every month (Raworth, 2004). Out of them, 60% have no

written contract and 90% had no access to social insurance. However, the standard working

hours in China are between 10-12 hours which sometimes can extend up to 15-16 hours a day

53
with one or two days off a month (Wong, 2005). It was found by The All China Federation of

Trade Unions (ACFTU) that 62% of workers worked 7 days a week and about 25% of them

did not get their wages on time (Raworth, 2004). In addition, another major issue is non-

payment of wages to workers and also wages being withheld for a many months (Cooney,

2004). Wages in the garment industry are also lower than the other manufacturing industries

in China (Kurt, 1999).

“In China all the factories are in the suburbs. And all the big factories have very big area of

land. The labour works there, and sleeps there. When they work, they are really working. But

in India the factories are very close to the cities, and labour is all in a hurry to go home. In

India all labours are staying outside the factories. They might leave for house, and might not

turn up for 3 days. Indian labour is not very sincere to the job” – (Production Manager, Firm

H)

“In our country (India), everything affects this industry, there is holi, there is diwali, or any

other festival. Lot of holidays are there in India. When the crop season starts, most of the

labour goes to their places to work in this field, and in China this is not the case. They go for

only 1 New Year holiday. It is about 2-3 weeks or so, and that’s it for the whole year” –

(Director, Firm A)

This is not the case with this industry in India. As workers are exploited by manufacturers in

China to work more; In India, the workers exploit the manufacturers and cause huge

problems to them. The biggest obstacle for development of this industry in India is labour

problem. As the firms are small and located near the cities, the workers may take a leave for

few hours and not turn up for many days. Large number of holidays due to festivals, other

seasonal work such as in agriculture and lack of discipline cause a major problem for this

sector.

54
The labour laws play a major role in the reducing or increasing the manufacturing cost of

products which further determines the competitiveness of the industry. The development of

this industry in India suffers due to establishment of various rigid labour laws. A research

done by the World Bank scores the level of rigidity out of 100 of hiring and firing rules of

different countries. India has been rated amongst the most rigid countries with a score of 48.

Neighbouring countries such as China had a score of 30 (Basu, 2005).

“To change labour in China is easy. If they hire 50 workers today, they can fire 20 workers

the second day. It is up to you. But in India, it is not possible. There is no policy. If they are

not working efficiently, you cannot just let them go” – (Production Manager, Firm H)

There are three main provisions that have been given huge attention. They are Industrial

Disputes Act (1947) (Provisions related to retrenchment, layoffs and closure), Contract

labour Act (1970) and Trade Unions Act (1926) (Any 7 people can get together, form and

register a union) (Verma, 2002). The Industrial Disputes Act (IDA) (1947) mentions the rules

for hiring and firing of workers. This law has restricted the growth of India’s textile, more

specifically the garment sector where seasonal production is required. Flexibility is required

in the labour laws which would allow for contract labour in export oriented units to adjust

their work force according to the demand. For instance, a firm wants to manufacture a

product having seasonal or volatile demand. It wants to hire workers on contractual basis by

offering them higher wage than usual but also making clear beforehand that they could be

asked to leave by giving a month’s notice. This kind of contract does not have a legal

standing as the IDA mentions various situations through which a labour may or may not be

retrenched. The Contract Labour Act (1970) also restricts the textile units to outsource and

appoint labour on contractual basis (Business Line, 2007)

55
“The labour laws in India should be changed. The working hours should be extended from 48

to 60. China performs efficiently as their working hours are longer” – (Director, Firm C)

“The overtime charged by workers proves to be very expensive in India” – (Director, Firm G)

A modification was made in the IDA in 1980’s, which required a firm to gain permission

from the state government to fire a worker in an industry where more than 100 workers are

employed. This law is concrete even if the firm is consistently making losses. The prior

permission is also very difficult to obtain from the government regarding the same (Nair,

2008). Another law hampering the growth of garment industry in India is the restriction of

maximum working hours. According to this law, a worker cannot work for more than 48

hours a week (8 hours a day) even if he is willing to work more. On contrary, the labour laws

in China state that a worker can work 10 hours a day and 60 hours a week. The labour laws

present do not affect this industry on such an extent.

5.1.2. Structure

Structural challenges relate here to the operations of the entire textile industry as a single

entity. Garment industry in India is fragmented in structure which increases the cost as well

as lead time. It is dominated by small scale based unorganised sector. This is attributable to

lack of coordination between the industry and trade bodies that comprise the supply chain.

The whole process including different entities such as cotton producers, spinners, weavers,

dyers, finishers, knitters and apparel producers are interdependent in their growth. These

firms cannot compete individually but their competitiveness depends on how good their

supply chain is. A big challenge for the government of India is to consolidate this industry.

This consolidation was necessary due to various reasons as pointed out in the interviews.

They are to increase the efficiency level, overall size of the industry, controlling the cost,

realizing the benefits of economies of scale, reducing the problems of labour, raw material,

56
and also to expand the export market. Due to fragmented structure in India, production of

various components in its supply chain is done in scattered areas which lead to increase in

cost and other procurement problems. However, China on the other hand enjoys more

consolidated structure in its supply chain, consisting of fewer departments and therefore, less

paperwork involved. At the same time, the labour working in a firm stays at a far of place in

India where as in China, the worker stays in the factory premises and all the components

required for a garment manufacturing unit are produced at the same place.

"We have to deal with different companies for procurement of raw material. But it often

happens that our production (in India) schedule gets delayed due to late delivery of raw

materials from auxiliary suppliers. This causes higher lead time and increases the cost” –

(Director, Firm E)

“The lack of single window clearance from government (in India) causes delays in setting up

new facilities and exporting. But, turnaround time in setting up a facility in China is

comparatively very less. Same is true for exports” – (Director, Firm B)

“In India, labour is working at one place and living at other place. That consumes lot of time.

In China, all the labour of a company stay together, they work and sleep. They stay at the

factory premises” – (Production Manager, Firm H)

“In China, everything is produced in the same place” – (Director, Firm C)

Karandikar (2005) support this area of findings of the research. He said that the competitive

countries to India such as China, Korea, Mexico and Turkey have significantly consolidated

supply chains. Rousslang and To (1993), in general, mentioned that transportation costs such

as freight on imports and exports, complex logistics to coordinate the supply chain and

distribution network still pose a barrier to trade goods between countries.

57
5.1.3. Infrastructure

By comparing the two countries, the infrastructural facilities in China are better than that

available in India for the garment industry. In India, the transport and electricity constrictions

have acted as major obstacle for the growth of this sector. There are infrastructural

bottlenecks and efficiency constraints such as high transaction time at ports and

transportation time. This is due to capacity constraints. The shipping of a container consisting

of garments from India to the US is costlier as compared to the other countries in Asia. It was

also gained from interviews that the facilities such as manufacturing management practices,

process and product innovation, transport and handling equipments, and environmental

control systems are inferior in India as compared to other global competitors such as China.

The companies in China are benefited due to better infrastructure than India’s, thereby

reducing their cost and turnaround time. This view has also been supported by Silk & Malish

(2006: 106), Friedman (2005), and Porter (1985) who categorized infrastructure into

secondary activities in the value chain and value system.

“Ports in India are not equipped with fast handling of cargo. The cost is more. The lead time

is shorter in China because of better connectivity” – (Director, Firm I)

“The power facilities, the port facilities, the transport facilities, are cheaper and better in

China than in India” – (Director, Firm B)

“Buyers prefer China because their lead times are shorter, their infrastructure is much better

than India” – (Marketing Executive, Firm D)

“China is developing its infrastructure at a faster rate than India” – (Director, Firm G)

In accordance to the previous research, various facts and results have been found supporting

the findings from the interviewees. The Indian road network is largest in the world but still

58
the national highways constitute only 2% which carry approximately 40% of the total traffic

across the country. Karandikar (2005) found that China in comparison to India, benefit 13%

in the total cost of shipping garments from Shanghai to US East Coast due to efficiency in

handling of materials. This further brings disadvantage to the Indian economy by bringing an

additional cost during presence of “complex supply chains and just in time inventories”

(World Trade Organisation, 2007) in the world.

Another major problem faced by Indian textile and apparel industry is power shortage. This

industry is one of the most energy intensive in terms of power per unit of consumption.

“Running the factories on ‘generators’ (in India), increases the cost by 2.5-3 times. Power in

China is available subsidised and these problems of shortages and high cost are not there” –

(Production Manager, Firm H)

“Government in China has supported in the sense that their infrastructure cost is much lesser

as compared to India. The electricity cost is less over there” – (Director, Firm E)

“All the major companies of the world are in China today because the land is cheap, labour

is cheap, electricity is cheap, and automatically everything is cheap. That is the reason, the

production is cheapest” – (Director, Firm G)

Due to shortage of power and high tariff rate charged by state governments, the textile and

garment industry in India is rendered to be uncompetitive in the international markets. This

affects the most to the small and medium sized enterprises because the shortages in power

results in increasing the cost of production, and also failure to deliver the products on time. A

loss in the range of 10% to 30% in machinery utilisation in India is caused due to power cuts

every year (Report by ASSOCHAM, 2007). On contrary, China is equipped with good and

low cost power facilities, and thus having a higher competitive advantage. The power is

59
available at subsidised rates from the government, thereby benefitting this industry. Thus,

garments in China can be produced at lower cost than they can be produced in India.

5.1.4. Technology

India suffers from technological obsolescence that affects productivity as well as other

activities in the entire value chain. China is ahead in production technology as they

manufacture and export the highest number of machinery in the world. Most of the garment

machineries imported in India, are from China or from Taiwan. These are available at

significantly lower price, and are of appropriate qualities as available in Japan. The reason

behind low cost of Chinese machines is that they copy the advanced technology developed in

other countries and mass produces it. Therefore, the same technology is available to

industries in India a bit later and at higher cost as compared available to garment

manufacturers in China.

“The machinery used is not a major difference between these two countries. China makes and

India imports” – (Director, Firm F)

“As China is currently a developing nation and has limited financial resources, it does not

innovate” – (Director, Firm I)

“China is better in copying the technology rather than innovating. They mass produce the

copied technology and therefore manufacture the machinery involved for manufacturing a

garment at a cheaper cost” (Director, Firm B)

“China is not a good innovator. The research and development cost is also much less

because they do not involve too much resources for innovation. Their machinery

manufactured might not be as good as the best technology available like that in Japan but it

60
is very good at the cheap price it is available, so people buy it” – (Marketing Executive, Firm

D)

“Today all mass production of machinery is from China or Taiwan” – (Director, Firm C)

“China is using its own machines on itself. As they produce products, they know better than

you know, or I know” – (Production Manager, Firm H)

These statements and findings support the literature. Qian and Li (1998) said that firms

expand internationally to use the low cost resources available in other countries to exploit the

competitive advantage. India imports machineries from China in huge quantities so as to

exploit the competitive advantage possessed by them. Porter (1990) also said that technology

available is different in different nations. Competitive advantage can be gained by a firm due

to these national differences. These substitute machines which are developed in China by

copying the technology available in Japan or anywhere in the world at low cost makes it an

attractive product. Thus, it can be seen, China has an advantage as it is ahead in technology

from India.

5.1.5. Raw Materials

Indian has rich resources of raw material. After leaving behind USA in production of cotton

this year, India has become the second largest producer the world. It is rich in resources of

fibres such as polyester, viscose, and silk and is also one of the largest producers of natural

and man-made fibres. China on the other hand enjoys similar advantages with abundant raw

materials. It is the world’s largest producer of cotton, however it was gained through

interviews as well by findings of previous researchers that the quality of cotton produced is

better in India (Sud, 2008). However, by upgrading the mills in India would put it at par with

the Chinese output. China has an advantage on this aspect as the Chinese mill owners obtain

61
finance at a cheaper rate. They also have a larger marketing network. Due to use of

automated machinery, the quality of raw materials produced in China such as that of

polyester and silk is better and cheaper as compared to India. Handloom and powerloom

machines are used for the production of raw materials in India as most of the industries in this

sector are small scale.

“Cotton, you know, is much cheaper in China. Polyester, silk..... most of it is produced by

China. India also produces it in large quantities” – (Production Manager, Firm H)

“Quality is better in China because the machines are most of automatic. We still have

handloom and powerloom type machines. We have lesser number of automotive machines” –

(Director, Firm E)

“The variety of accessories available in China is not there in India. Buttons, cotton tapes,

different styles collars are imported. Their garments are pieces of attraction because of good

labelling and packing” – (Director, Firm A)

It was also gained that India is competitive in woven wear and cotton products where as

China is more economical in production of knitwear and non-cotton products. The Indian

garment manufacturers import from China various accessories required during the production

such as buttons, zips, and laces, as they are available at cheap prices. All the respondents said

that the fabrics available in China are of better quality and some of their types are not even

available in India. Most of the garment manufacturers import fabrics from China in huge

quantities. It is very important for firms for producing garments at low cost if the resources

are available nearby. Their ease of access results in creating competitive advantage between

different firms. This view is supported by various researchers such as Barney and Hesterley,

(2007) and Hooley et al (1998).

62
5.1.6. Economies of Scale

Economies of scale are necessary in today’s competitive environment in production as well

as in marketing of products. Majority of the garment manufacturing industries in India are

Small-Medium enterprises. They do not have sufficient finance to produce in large quantities

and therefore do not achieve economies of scale in production.

“If 216 pieces of garments are made of one pattern here (in India), the expenses is the same.

China manufacturers 10,000 pieces. If, we have to get 200kg of cloth dyed, they have to get

2000 kg. Then in every aspect, the costing differs” – (Production Manager, Firm H)

“Only those garments that are mass produced are made in China. All fashion and expensive

garments are made in India” – (Director, Firm B)

“The factories in China are larger in size and have huge production capacity. They produce

garments in extremely large quantities” – (Director, Firm F)

“China has an open market system which is nowhere of the same kind in the rest of the

world” – (Director, Firm E)

Barney and Hesterley (2006) said that economy of scale acts as a major factor to provide cost

advantage to firms. As the volume of production increases, the overhead costs are spread

resulting in low per unit cost. In case of China, there are large factories with high production,

which when combined with lower wages and high efficiency level of workers leads to an

excellent combination. This further leads them to achieve competitive advantage. This

difference in firms due to economies of scale factor has been supported by Porter (1990).

5.1.7. Foreign Direct Investment

63
China consists of more attractive industries than India for foreign investor to invest. As more

of foreign direct investment (FDI) goes to China, and due to availability of cheap labour, the

scale of production is high. This results in lowering the cost of production and therefore, has

also led Chinese economy to prosper a bit faster than India. While on the other hand, the

present government policy in India allows 100% FDI in this sector. Still, the foreign

investment is less, and the manufacturers have a lower scale of production. The reason has

been outlined further.

“Since the market (in India) is not organised and there are very small players with very low

turnarounds, they do not attract FDI” – (Director, Firm I)

As given in the literature and found out by many researchers, FDI plays a very important role

in determining the success of an industry (Kee, 2005; Alfaro et al, 2003). However, it was

found through interviews that in garment manufacturing firms, currently, FDI does not play

an important role in the Indian context.

“In garment industry we see, India and China already have the technology and resources.

There is no need for FDI from any other country” – (Director, Firm E)

“Foreign direct investment is not important for this industry in India” – (Director, Firm B)

This is because, largely, the garment manufacturing units are SSI. Moreover, these industries

can easily get loan from public sector banks. Most of the technologically advanced machinery

available in this sector is imported by India from China, which dominates the production of

machinery. Until the size of the garment manufacturing firms in India increases, FDI would

not play a significant role and the foreign investors would also not be attracted.

5.1.8. Export Finance and Subsidies

64
In India, financial assistance is provided by the banks during pre-shipment or post-shipment

stages. However obtaining these is extremely difficult due to presence of various

departments, documentations and other requirements. Approximately 10-10.5% interest has

to be paid by garment units in India to obtain the export credit where as only 6-6.5% has to be

paid by the exporters in China. In India, subsidies vary with the price of dollar. When the

price of dollar falls, the subsidies are higher & if the dollar rises, then the subsidy reduces.

“High interest rates acts as a constraint for us (India) as our Chinese counterparts get loans

at lower interest rates and thus can quote a lower price for a same product” – (Director,

Firm C)

“When the dollar price became 39 Indian rupees, the subsidy was 11%, now when it is 44

Indian rupees, the subsidy is 8% on all garments. It is also called duty drawback” –

(Director, Firm I)

“The firms in China enjoy many subsidies from its government. The government in India

also provides subsidies but not to the extent as provided by China” – (Director, Firm F)

Exporters from China get credit terms from ‘China Export Finance’ which removes the

financial strain on exports of garments as they receive immediate payment by providing

invoices and other shipping documentation. This helps them to sharpen their competitiveness

in export market as it opens vast potential in the global marketplace (China Export Finance,

2008). Thus, this factor of economic environment has a major impact upon the success of this

industry.

5.1.9. Growing Domestic Market

Both India and China are very diverse in size, manufacturing facilities, quality and quantity

of its output, cost and requirement for fabrics. The domestic market is extremely sensitive to

65
new and fashionable trends which further promote this industry in both the countries. They

have large, potential domestic as well as international market.

“India and China have advantages that same factories manufacture products for domestic

and export market” – (Director, Firm E)

“Lot of Multinational companies with big brands are coming up, so there are good prospects

for development of India and China” – (Director, Firm C)

Same firms in India and China produce garments for domestic as well as export markets. A

large number of famous brands are continuously expanding their market in both these

countries. Emerging retail industry and various malls also provide huge opportunities for the

apparel sector.

5.1.10. Iconic Brand

Buyers prefer to outsource their products from China for a variety of reasons that have been

mentioned earlier. The Indian garment industry lacks iconic brand image between various

segments within it which hinders the overall growth of this sector. India is famous for sectors

such as Information technology, auto and FMCG. Promotion of “Brand India” on basis of

garment industry is an important step required to be taken for strengthening this industry. As

India has a good fashion industry, it should be promoted more.

5.1.11. Competitor or Complement each other

It was gained through interviews that India and China are competitors as well as

complementors to each other. However, China is far ahead of India in many ways. Due to

66
higher efficiency in China and other factors discussed earlier, it has become the buyers

preferred choice which has resulted in lower sales volume for Indian manufacturers. Both

these countries are competing for exports to the same market. It is a great task for Indian

manufacturers to tackle the aggression posed by Chinese firms over the international market.

India and China are procuring products from each other that are cheaper or better available in

the other country. China imports from India the fine quality of cotton yarn used for

manufacturing garments. This is because the quality of cotton produced in India is better.

China has booked most of the good quality cotton yarn manufacturers in India for next 2

years. No other product was mentioned during the interviews. China complements India in

numerous things related to the industry such as garment manufacturing machines,

accessories, fabrics, packing material, laces, and collar tapes.

5.2. Future Prospects of India and China

It is believed by the executives that in future, the market of garments catered by both the

countries would focus on a different route. China will cater to the mass market and India at

the fashion market. China has an advantage of producing garments in larger quantities, due to

better infrastructure, and cheaper labour where as India has advantage to produce garments in

smaller quantities through multi-processes, and sampling.

“India and China will have a different market altogether. China will be more focused

towards the big stores and importing companies. India will have more for fashion industry,

more creative work, and smaller yarns” – (Director, Firm C)

“You can never see fashion wear in Chinese clothes” – (Director, Firm G)

“We can create good design in India, what used to be produced in Europe, are shifted more

or less to India. Moreover, a European or American customer wants an instigated design in

67
embroidery which only can be produced by India. China is also doing but they don’t do such

instigated” – (Marketing Executive, Firm D)

India is increasingly looked upon as a major supplier of high quality fashion apparels and

Indian apparels have been appreciated in major markets internationally. It comprises huge

number of fashion oriented design houses creating good designs. The products that used to be

produced in Europe have been shifted more or less to India due to the advantage of good

handwork facilities and trained labour in terms of tailors. The largest markets (Europe and

USA) want an instigated design in embroidery which can be produced better in India than

China. Thus, it can be seen that high rate of fashion and fickleness in this industry affects a

firm in number of ways. This view has been supported by Macmillan and Tampoe (2000),

and regarded it as an important factor.

The availability of cheap labour and high foreign direct investment has implanted China as

major powerhouse for manufacturing of garments. The diversity of population is higher in

China and everybody is looking for work. All the major machinery plants of the world have

their subsidy in China because of cheap labour. However, its growth can be limited due to

weakness in its legal system. A great concern for investors in China remains the possibility

for political instability. Moreover, it is also said that due to one child policy in China, the

labour force in few years from now would start shrinking because most of them would be

retired and the new population will be lower as per the requirement. Therefore, the

competition between labours in China for jobs will be reduced, which, further, will result in

less exploitation of workers, and therefore, reduction in efficiency, productivity, and higher

cost of production. This kind of political change in environment resulting in social and

cultural environment change have a direct impact on business behaviour and this view is

supported by many authors and researchers such as Morden (2007), Hitt et al (2003),

Macmillan and Tampoe (2000), and Luffman et al (1996).

68
“It is right that a garment was earlier manufactured cheaper in China, but the quality

produced was lower than India” – (Director, Firm J)

“Chinese goods are considered as inferior to Indian goods” – (Director, Firm B)

“The products in China are never considered to be of high quality” – (Director, Firm E)

“Garments produced in China are always considered use and throw” – (Director, Firm A)

“Before 4-5 years, companies such as Gap, Nike did not outsource the production of their

garments to India. Earlier they thought that India would not be able to provide the

appropriate quality. However, now if the two products are compared, the quality of the

garment produced in India would be better than produced in China” – (Marketing Executive,

Firm D)

“The buyers of garments now find it cheaper to procure goods from India than from China

due to currency fluctuation” – (Director, Firm C)

“China’s currency has risen and India’s currency has come down” – (Director, Firm G)

For big companies such as Gap and Nike, India was not recognised as the suitable sourcing

destination of their garments. However, now due to good quality of garments at low cost are

being provided by Indian manufacturers, the trend and production from China is shifting to

India. In addition, the currency of China has appreciated and that of India has depreciated.

Therefore, India is becoming a more attractive destination than China for procuring garments.

5.3. Government Schemes Issues - Indian Garment Industry

5.3.1. Bureaucratic Hurdles

A large number of schemes are launched for the different segments in the textile and garment

sector. However, the existing schemes are being continuously modified which not only

69
obstructs the pace of expenditure of the government but also creates a number of unnecessary

procedural formalities for the industrial units or the applicants. For example Scheme for

Integrated Textile Parks (SITP) was launched in 2005 after merging two schemes namely

Apparel Parks for Export Schemes (APES) and Textile Centres Infrastructure development

Scheme (TCIDS).

5.3.2. Technology Upgradation Fund Scheme (TUFS)

For upgrading the technology of existing domestic textile units and setting up new units with

“state-of –the-art technology” (idbibank.com) so as to enhance the competitiveness in the

international markets, the Technology Upgradation Fund Scheme was launched in India on

1st April 1999. It provides reimbursement of 5% on the normal interest charged on the term

loan or 5% of the exchange fluctuation from the base rate on foreign currency loans

(Ramakrishnan, 2005). It also provides additional incentive to the textile and garment units

to avail 10% capital subsidy for the processing machinery (Singh, 2008). With this, the

Indian textile and garment manufacturers would be able to overcome the burden of

technological obsolescence and thus compete with the rival countries having lower interest

rates. This burden is further borne by the government.

However, the amount sanctioned by the government in the Union Budget 2007-08 was

Rs.911 crore. This amount is highly insufficient as the government has to reimburse Rs.1000

crore for loans sanctioned in that year as against Rs.550 crore in the year 2006-07 (Report by

ASSOCHAM, 2007). This resulted to a significant problem of fund crunch to the textile

units.

To be more precise, the spinning and composite sub-segments of the textile industry have

received only 32.5% and 29% of the total amount being sanctioned by the government under

TUFS since the launch of the scheme. The processing and garment segments have received

70
mere 9% and 5% of the total amount (Report by ASSOCHAM, 2007). This shows that the

TUFS needs to concentrate on these segments as they are important products in the textile

manufacturing chains and earn the maximum foreign exchange.

5.3.3. Scheme for Integrated Textile Parks (SITP)

With an objective to provide world-class infrastructure facilities by creating new textile parks

of International standards at the potential growth centres on the Public-Private Partnership

model, the Scheme for Integrated Textile Parks was approved in July 2005. This scheme was

launched by merging the Apparel Parks for Export Scheme (APES) and the Textile Centre

Infrastructure Development Scheme (TCIDS) (Press Information Bureau - Government of

India, 2007).

The objective of APES was to create exclusive expert zones of excellence of apparel and

manufacturing which would help boost exports in this sector (Export Promotion Council,

2002). On the other hand, the objective of TCIDS was to modernize and fill in the gaps in the

current infrastructure at the existing major textile centres in order to remove the impediments

to production (Press Information Bureau - Government of India, 2003). These parks which

includes cluster of related firms are necessary for the success of the garment industry.

In order to implement the scheme, the Special Purpose Vehicles was created to provide

operational autonomy to protect it from various public sector evils. The support provided by

Government of India (GOI) to the scheme is limited to 40% of the project cost subject to a

ceiling of Rs.40 crore. This is provided by way of Grant or Equity (Apparel Export

Promotion Council-1, 2008). Each of the Integrated Textile Parks (ITP) would consist of

facilities such as testing laboratory, training centre, design centre, trade centres, display

centres, warehousing facilities, and raw material departments (Apparel Export Promotion

Council -2, 2008).

71
As many as 30 textile parks have been sanctioned by the government as per the X Five Year

Plan. The project cost estimated (for common infrastructure and common facilities) is Rs.

2893.42 crore and an estimated investment in these parks would be Rs. 15258 crore. These

parks after getting functional will generate employment to 5. 45 lakh people with annual

production of Rs. 24024 crore (Press Information Bureau - Government of India, 2007). This

scheme was provided Rs. 150 crore by the government for the Tenth Five Year Plan. This

amount was later revised to Rs. 545 crore. An amount of Rs. 3000 crore is set for the

Eleventh Five Year Plan (Report by ASSOCHAM, 2007). Thus, for the success of SITP,

there is a need to minimize the procedural difficulties in the project clearance which is rests

upon the government (Report by ASSOCHAM, 2007).

5.4. Summary

To sum it up, it can be said that the India (comprising of garment manufacturers and the

government) still needs to perform efficiently in huge number of areas outlined above.

Therefore, certain recommendations and suggestions have been outlined for the improvement

of garment industry in India. These were gained through interviews and from other secondary

sources. They are mentioned below:

5.5 Recommendations

5.5.1. Labour Laws and training facilities

The stringent labour laws in India hamper the competitiveness and growth of garment

industry in the international market. All the respondents supported the viewpoint that to

compete with the global level, liberalisation of the internal labour policies in India is required

by looking into the long-term vision for the textile and garment sector. These laws are rigid

72
for the special characteristics (seasonal production) and requirements of this sector. Labour is

required to be protected from exploitation but some of these laws prevent creating jobs for

them (Chatterjee, 2004). The government in order to refine these laws should work jointly

with industries and labour unions in a phased manner which would result in incorporating

development of industry as well as the workforce. The government should also learn from the

neighbouring countries and work towards developing the strength of low labour cost

possessed by India. Various researchers agree that the laws should be studied and reviewed

by the government in accordance to current situation as they play an important role in

affecting the structure and competitiveness of business (Morden, 2007; Macmillan and

Tampoe, 2000; Luffman et al, 1996).

“More transparency is required in Labour reforms. We don’t want any direct support, but

the bureaucratic issues like, you know, lot of involvement in labour by various government

departments, create problems for our units. These departments require lot of paperwork

requiring certain records to be kept on day to day basis” – (Director, Firm E)

Indian garment industry is facing huge shortage of professionals with technical knowledge

and trade aspects of this sector. It is believed by experts that more national level training and

educational institutes should be built up which would impart technical education to the

workforce of this industry. Extensive training would empower them with abilities to make

improvements in the firm’s productivity. These professional training institutes should also be

developed in rural and sub-urban areas of India. They should provide practical knowledge

through short term courses. It is important for firm as well as the government that the

industry constitutes well educated workers. However, financing and investment required is a

critical issue for the training programs. Investment should be made by both government and

the industries. The report by ASSOCHAM (2007) pointed out that, apart from training and

skill upgradation of workers at the factory or the shop floor level, the garment technologists

73
and the entrepreneurs should also be trained not only in the technical and managerial

disciplines but also in merchandising, evaluation and laboratory management, interpretation,

quality management, use of I.T. solutions, and other social and environmental issues. The

major training institutes in India are National Institute of Fashion Technology, Pearl

Academy of Fashion, and JD Institute of Fashion Technology (Albuquerque, 2007). Due to

huge capacity expansion and production increase plan in the textile and garment sector, the

intake should be increased by improving the infrastructure of these professional and industrial

training institutes.

“The new institutes should follow model of successful institutes that are already running such

as National Institute of Fashion Technology (NIFT)” – (Director, Firm G)

Various examples were reported by Levine (1995) through which productivity and

profitability of a firm can be increased. These are pay for knowledge, employment security,

sharing of gains, and employee ownership. Continuous investment should be made by the

firms for training their workers in order to gain strategic advantage for minimum of next 2-3

years after training. The importance of human resource and knowledge as intangible assets of

a firm that affects the competitiveness of an industry has been highlighted by many

researchers (Macmillan and Tampoe, 2000; Hooley et al, 1998, Barney, 1991).

5.5.2. Manufacturing Expertise

Along with various policy initiatives required to be taken, strengthening the production base

of garment industries is important measure to be taken by various firms. Most of the firms do

not follow any scientific approaches for shop floor planning and control. Various planning

tools such as Materials requirements planning (MRP) and Just in time (JIT) need to be

introduced in the Indian firms. These concepts if followed from procuring the raw material, to

74
production of garments till their delivery would tremendously enhance the competitiveness of

Indian Garment industry.

In order to reduce this problem, a garment manufacturer recommended a method followed by

them during the interview. A database connected through internet should be created by a firm

which links various entities in its supply chain. In this database he said, all the entities post

updates of their status of the products to the related industry in its supply chain. This helps

increase coordination between them which further helps in organising various decisions to be

taken across the chain. This method would also help in identifying weakness in the whole

supply chain. Along with this, another manufacturer recommended that a national technology

centre related to garment industry should be opened which would provide regular updates on

the computer screen of the latest technology available from whole world related to

machinery, production methods, the research centres, suppliers and buyers. They should also

provide solutions to various technical problems faced by garment manufacturing units by

charging a fee.

5.5.3. Infrastructure

As this industry is also involved in manufacturing fashionable garments which have limited

shelf life, it is extremely important to improve these facilities so that the products can reach

consumers in quickest possible time. This is related to building of adequate air and marine

transport, power, and logistics facilities. This is essential for the development of garment

industry. Efficient power management system is required to be put in place which can result

in less power cuts. States should also offer power at low cost to the new investments being

made in this sector. Improvement in infrastructure would further lead to improvement in lead

75
time in procuring and delivering the goods (Morden, 2007; Macmillan and Tampoe, 2000;

Porter and Miller, 1985, Porter, 1985).

5.5.4. Brand India

As the garment industry in India can produce customised products according to requirements

of buyers, it should be developed with image of a fashion-oriented destination. It should be

promoted by showcasing the ethnicity, designing and exclusivity of the Indian garments in

the global market. Various measures should be adopted jointly by private firms and the

government for enhancing the image of India as an attractive destination for international

marketers due to the availability of good quality low cost resources in manufacturing,

designing and marketing.

5.5.5. Trade Diversification

India’s exports are highly concentrated in the region of Europe and USA. The government

should encourage the garment manufacturers to export their products in other markets with

high growth potential that have not been tapped by the competitors. Early mover advantage

would help these firms to trade in these areas with bright long term prospects. Growth rates

of 3.6% and 3.3% have been forecasted in the regions of Middle East & North Africa and

Sub-Saharan Africa for the period of 2008-2030 by The World Bank in its report Global

Economic Prospects (2007). For the same period, they estimated that Euro area and the US to

have growth rate of 2.4%. The share of garment exports of India in Africa and Middle East

currently is only 1.3% and 8.7%. This indicates that these countries posses’ huge opportunity,

and India could strategically expand in these markets. However, this would require support

from Government. Therefore, in order to provide huge investment with nature of risk in

unstable economic conditions especially in the Africa region in a short period of time,

76
demands for special fiscal and monetary incentives to be given for new ventures being

established.

5.5.6. Changes in Existing Schemes and Establishment of Special Economic Zones

5.5.6.1. Bureaucracy reforms

A large number of schemes exist which are meant for various segments of the textile

industry. These schemes should be re-looked and brought together if relevant. This would

help realize their benefits by reducing the bureaucratic and procedural hurdles. The schemes

that are doing well should be given more focus by providing adequate provisions for their

budget. On the other hand, the schemes that are not performing well should be scrapped,

thereby reducing the preventable burden on the government. For clearing these projects and

schemes launched by the government, a large number of government authorities are involved

in multiple locations for obtaining the necessary papers, permits and so on, which leads to

further delay. Therefore, for the success of these schemes, the government should device a

system through which the projects can be cleared from a single location or entity. This would

help in reducing the huge cost and time involved.

5.5.6.2. TUFS

The amount sanctioned by the government under TUFS fall short of the amount to be

reimbursed to the various segments. Therefore, the amount allocation should be increased.

The spinning and composite sub segments have already received approximately one-third of

the amount. However, the processing and garment sector have been totally neglected under

this scheme. These segments earn maximum foreign exchange and also constitute important

value added products in the industries chain.

5.5.6.3. SITP

77
Timely completion of textile parks should be ensured by the government under the SITP. The

target in term of production and exports that have been set should be fulfilled. The

government should take certain measures for providing adequate power supply and thus

ensuring uninterrupted supply chains. This would result in reduction of manufacturing cost to

a large extent, thereby making this industry very competitive in the international market.

5.5.6.4. Special Economic Zones

The establishment of special economic zones have paved a path to converge large promoter

companies with the small and medium sized firms establishing themselves in these zones.

Government should provide additional incentives to the small and medium scale firms in

these areas who are involved in manufacturing and exporting of garments. This would help

these firms to harness to their full potential thereby enhancing their competitiveness in the

global markets. These zones should also ensure creation of integrated supply chains by

linking them with appropriate logistics support for exporting their products. These special

economic zones for textile and apparel products should be promoted for giving a boost

thereby strengthening the manufacturing sector of Indian economy. This would also hammer

the increasing competition prevailing in the international markets.

Textile and apparel parks are a great source to provide help to small firms to become more

efficient and competitive in the market. The problem of fragmented structure leads to high

inventories in the supply chain. As most firms focus on optimising the individual elements

comprising the chain such as raw material suppliers, intermediate goods supplier, dyeing

units, finishing units, manufacturing apparels, distributors and retailers, it leads to lack of

organisation between them. Along with this, lack of production plans, high inventory levels,

variability due to uncertain events such as unavailability of resources, breakdowns, or defects

in products intensifies this problem. Therefore, a strategy should be adopted that will help

78
reduce the variability and increase coordination across the chain. As mentioned in literature,

the business cluster approach has been recognised as an important strategy to help small

businesses compete successfully in the global markets. This view as explained earlier (in

Chapter 2) is supported by various authors (Lagendijk, 1999; Jacobson and Mottair, 1999;

McCormick, 1999; Feser, 1998; Brautigam, 1997; Schmitz, 1995a, b; Baptista, 1996).

Locating the related firm’s together leads to increase in output of a firm, which brings about

reliability, economies of scale, enables pooling of labour, reduces problems of raw materials,

reduces lead time, improves speed of delivery, and also helps in exchanging strategic

information between related industries (Kloosterman and Lambregts, 2001; Visser, 1999;

McCormick, 1999; Porter, 1998; Brautigam, 1997; Schmitz, 1995, a, b). By closely situating

and linking various units involved for manufacturing of garments, this industry can improve

tremendously. This approach would lead these units to gain economically, by increasing their

output and perform like a larger unit. The uncertainty possessed by a firm being operating in

a fragmented environment can also be reduced through clusters.

5.6. Summary

To summarize, India should make efforts to effectively capitalize its available resources with

the challenges it is facing. Further, the above mentioned changes should be made and

recommendations followed so as to enhance their performance and competitiveness in this

industry.

79
Chapter 5

Conclusion

It can be seen that the competitive position of the garment industry is determined by various

factors. These theories such as global competition; strategic management; PEST analysis;

five competitor force model; and resource based view are important as they enhance structure

of the analyses of internal and the external environment for the garment industry. An insight

into this industry was gained through interviews conducted of various garment manufacturers

in India. The relation of these theories in the practical environment was also realized.

However, out of all the factors, it was found that foreign direct investment does not play an

important role for this industry in India. This was due to the fact that the most firms in this

industry in India are small in size.

After the phase out of Multi Fibre agreement in 2005, and subsequent quotas and restrictions

applied to China’s exports to EU and US, competitor countries such as Bangladesh, Vietnam,

and Turkey were benefited. The exports from these countries grew as exports from China

were limited. High import duties reduced advantage this advantage for India. However, till

date, China is a major power in the garment industry with the maximum exports worldwide.

It is able to provide decent quality of garments at a lower price. In comparison to India, the

buyers of garment currently prefer to source from China than India. This is due to various

positive factors for China such as better infrastructure, shorter lead time, better trained labour,

favourable labour laws, higher labour productivity, abundant raw materials, and mass

production which lead to economies of scale.

The domestic policies in India have constrained its competitiveness and growth. India enjoys

certain advantages such as low labour costs, raw materials, and availability of all components

in the chain of textile industry and therefore, should make efforts to effectively capitalize its

80
resources with the challenges it is facing. The re-organisation and technology upgradation of

garment sector is required at three levels. These are Firm level, Industry level and

Government Level. Strategic thinking is required in devising new industrial policies for

improving the competitiveness of this sector. It requires high skilled technical workforce

which is not currently available. Investments in education and training of the workforce have

to be made continuously. Continuous Investments are also required for improving the

technology, manufacturing process and research and development of products. Improvements

in manufacturing practises have to be made by linking various entities in the supply chain.

Efforts from the government are also required for making adequate changes in the rigid

labour laws, improving the manufacturing expertise, infrastructure, promote India as a brand

for garments in the international markets so as to diversify its trade, reducing the bureaucratic

reforms, take adequate measures for the success of schemes such as TUFS and SITP,

development of special economic zones, promote the concept of clusters, and providing

special incentives to firms of global nature. These factors would help Indian firms to develop

the available potential thereby improving the whole process that would pave a way for their

success in the global market.

81
Appendix
Acronyms
APES - Apparel Parks for Export Schemes
ASSOCHAM - The Associated Chambers of Commerce and Industry of India
ATC - Agreement on Textiles and Clothing
CLA - Contract labour Act
EU15 – European Union Comprising of 15 countries
FDI - Foreign Direct Investment
FMCG - Fast Moving Consumer Goods
IDA - Industrial Disputes Act
ITP - Integrated Textile Parks
JIT - Just in time
MFA - Multi Fibre Agreement
MRP - Materials requirements planning
PEST – Political, Economic, Social and Cultural, Technological
SEZ – Special Economic Zones
SITP - Scheme for Integrated Textile Parks
SME’s - Small-Medium Enterprises
SSI - Small Scale Industries
TCIDS - Textile Centres Infrastructure development Scheme
TUA - Trade Unions Act
TUFS - Technology Upgradation Fund Scheme
USA – United States of America
WTO – World Trade Organisation

82
References
Albuquerque, U. (2007), “Smart Skills: Apparel Avenues”, The Tribune, from the
website: http://www.tribuneindia.com/2007/20071010/jobs/main2.htm Accessed on 30th
July 2008
Alfaro, L., Chanda, A., Ozcan, S.K., and Sayek, S. (2004), “FDI and Economic Growth:
The Role of Local Financial Markets”, Journal of International Economics, Vol.64,
pp.89-112
Amit, R. And Schoemaker, P.J.H. (1993), “Strategic assets and organisational rent”,
Strategic Management Journal, Vol.14, pp.33-46
Analoui, F. And Karami, A. (2003), “Strategic Management in Small and Medium
Enterprises”, Published by Cengage Learning EMEA
Anderson, E. and Gatignon, H. (1986), “Modes of Foreign Entry: A Transaction Cost
Analysis and Propositions”, Journal of International Business Studies, Volume 17, No.3,
pp.1-26
Andrews, K.R. (1971), “The concept of corporate strategy”, Richard D. Irwin,
Homewood, Illinois

Ansoff, H.I. (1965), “Corporate Strategy”, McGraw-Hill, New York

Ansoff, H.L. and McDonnell, I. (1990), “Implementing Strategic Management”, Pretice


Hall, Englewood Cliffs, NJ
Apparel Export Promotion Council - 1 (2008), “Apparel Park Scheme (SITP)”, from the
website: http://www.aepcindia.com/portal/sitp_3.asp Accessed on 28th July 2008.
Apparel Export Promotion Council - 2 (2008), “Apparel Park Scheme (SITP)”, from the
website: http://www.aepcindia.com/portal/sitp_1.asp Accessed on 30th July 2008.
Apparel Export Promotion Council (2008), “Country Reports in Garment Industry”,
Apparel House, Institutional area, India
Ashill, N.J. and Jobber, D. (2001), “Defining the Domain of Percieved Environmental
UNcertainity: An Exploratory Study of Senior Marketing Executives”, Journal of
Marketing Management, Vol. 17, pp.543-558

Autio, E., Sapienza H.J. and Almeida, J.G. (2000), “Effects of age at entry, knowledge
intensity, and imitability on international growth”, Academy of Management Journal, 43,
pp.909-924
Baier, S.L. and Bergstrand, J.H. (1999), “The growth of world trade: tariffs, transport
costs, and income similarity”, Journal of International Economics, Volume 53, Issue1,
pp.1–27
Bantel, K.A. and Jackson, S.E. (1989), “Top management and innovations in banking:
Does the composition of the top management team make a difference?”, Strategic
Management Journal, Vol.10, pp.107-124

83
Baptista, M.R. (1996), "Industrial Clusters and technological innovation." Business
Strategy Review, Vol.7, Issue 2, pp.59-64
Barney, J. (1991), “Firm Resources and Sustained Competitive Advantage”, Journal of
Management, vol.17, Issue 1, pp.99-120

Barney, J. And Wright, M., and Ketchen, D.J. (2001), “The resource-based view of the
firm: Ten years after 1991” Journal of Management, Vol.27, No.6, pp.625-641
Barney, J. B (2007), “Gaining and Sustaining Competitive Advantage”, 3rd edition,
Pearson Prentice Hall

Barney, J.B. (1995), “Looking inside for competitive advantage”, The Academy of
Management Executive, Vol. 9, No.4, pp.49-61
Barney, J.B. and Hesterley, W.S. (2006), “Strategic Management and Competitive
Advantage: Concepts and Cases”, First Edition, Pearson, Prentice Hall.
Barney, J.B. and Hesterley, W.S. (2007), “Strategic Management and Competitive
Advantage: Concepts and Cases”, Second Edition, Pearson, Prentice Hall.
Basu, K. (2005), “Why India needs labour law reform”, from the website:
http://news.bbc.co.uk/1/hi/world/south_asia/4103554.stm Accessed on 28th July 2008
Beard, D.W. and Dess G.G., (1981), “Corporate-level strategy, business-level strategy,
and firm performance”, Academy of Management Journal, Vol.24, No.4, pp.663-688
Berry, M. (1998), “Strategic planning in small high tech companies”, Long Range
Planning, Vol.31, Issue 3, pp. 455-466
Black, J. A. and Boal, K. B. (1994), “Strategic resources: Traits, configurations and paths
to sustainable competitive advantage”, Strategic Management Journal, Vol. 15, pp.131-
148

Bogdan, R. C., & Biklen, S. K. (1982), “Qualitative research for education: An


introduction to theory and methods”, Boston: Allyn and Bacon, Inc.
Bonoma, Thomas V. (1985), “Case Research in Marketing: Opportunities, Problems, and
a Process”, Journal of Marketing Research, Vol. 22, pp.199-208

Bowman, C. and Faulkner, D. (1997), “Competitive Corporate Strategy”, Irwin, London


Boyd, B.K. (1991), “Strategic planning and financial performance: A meta-analytic
review”, Journal of Management Studies, Vol.28, pp.353-374
Bracker, J. S., Keats, B. W., & Pearson, J. N. (1988), “Planning and financial
performance among small firms in a growth industry”, Strategic Management Journal,
Vol. 9, pp.591-603
Brautigam, D. (1997), "Substituting for the state: Institutions and industrial development
in Eastern Nigeria." World Development, Vol.25, Issue 7, pp.1063-1080.
Bridge, J. And Peel, M.J. (1999), “A study of computer usage and strategic planning in
the SME sector”, International Small Business Journal, Vol.17, Issue 4, pp.82-87

84
Browne, M. (1994), “The Evolution of Strategic Management Thought”, Background
Paper – Strategic Management Educators' Conference, Australian Centre in Strategic
Management QUT

Burgoyne, J. Hirsh, W. & Williams, S. (2001), “The Development of Management and


Leadership Capability and its Contribution to Performance: The evidence, the prospects
and the research need”, Research Report, No. 560, from the website:
http://www.dcsf.gov.uk/research/data/uploadfiles/RR560.pdf Accessed on 20th August
2008
Business Line, (2007), “Rigid Labour Laws god textile Sector”, Business Daily, The
Hindu Group of publications, from the website:
http://www.thehindubusinessline.com/2007/02/28/stories/2007022802171000.htm
Accessed on 28th July 2008

Byars, L (1991), “Strategic Management, Formulation and Implementation – Concepts


and Cases”, HarperCollins, New York
Calloway, D.W. (1991), CEO of Pepsico, as quoted in Fortune Magazine, March 11
Issue, pp.24 cited in Martin, J.V. and Moskin, J.R. (1994), “The Executive Book of
Quotations” Oxford University Press, US, pp.47

Capron, N, Glazer, R (1987), "Marketing and technology: a strategic coalignment’",


Journal of Marketing, Vol. 51, No.3, pp.10-21.
Cassell, C and Symon G. (1994), “Qualitative research in work contexts”, in Cassell, C
and Symon G, “Qualitative Methods in Organisational Research”, London, Sage
Chandler, Alfred. D. Jr. (1962), “Strategy and Structure: Chapters in the History of
Industrial Enterprise”, MIT Press, Cambridge, MA

Chandra, P., Ming X. Wang, J. Saha, and P.R. Shukla (1998) “Manufacturing
Management in the Primary Textile Industry: Some Assessments from a Plant Level Study
in Canada, China and India,” in Technology, Practices and Competitiveness: The
Primary Textile Industry in Canada, China and India, ed. P. Chandra, Himalaya
Publishing House, Mumbai
Chatterjee, U. (2004), “The need for labour reforms”, from the website
http://www.domain-b.com/industry/textiles/20041229_labour_reforms.html Accessed on
4th August 2008
Chenhall, R.H. and Morris, D. (1986), “The Impact of Structure, Environment and
Interdependence on the Perceived Usefulness of Management Accounting Systems”, The
Accounting Review, Vol.61, pp.16-35

Child, J. (1972), “Organisation Structure, Environment and Performance”, Sociology,


Vol.6, pp.1-21
China Export Finance, (2008), from the website:
http://www.chinaexportfinance.com/exporter_solution.php?id=94v Accessed on 20th
August 2008

85
Coff, R.W. (1999), “How buyers cope with uncertainty when acquiring firms in
knowledge intensive industries: Caveat emptor” Organisation Science, Vol. 10, pp.144-
161
Cooney, S. (2004), “China and the labour movement: Limitations and possibilities”,
International Union Rights, Volume 11, Issue 4, pp.8-9
Cragg, P.B. and King, M. (1988), “Organisational characteristics and small firms
performance revisited”, Entrepreneurship Theory and Practice, Vol.13, Issue 2, pp.49-64
Creswell, J. (1994). “Research design, qualitative and quantitative approaches.”
California: Sage Publications.
Dalkey, N.C. & Helmer, O. (1963), “An experimental application of the delphi method to
the user of experts in Management science”, Vol. 9, Issue 3, pp.458-67.
De Vos, A.S. (1998). “Research at grass roots. A primer for the caring professions.”
Pretoria: Van Schaik Publishers
Decrop, A. (1999), “Triangulation in qualitative tourism research”, Tourism
Management, Vol.20, pp.157-161.
Dhanabhakyam, M. and Shanthi, A. (2008), “Indian Textile Industry-An Overview”, from
the website: http://www.fibre2fashion.com/industry-article/2/104/indian-textile-industry-
an-overview1.asp Accessed on 29th August 2008
Dicken, P. (2003), “Global shift: reshaping the global economic map in the 21st century”,
Published by Sage
Dr. Carl Sagan (American Astronomer, Writer and Scientist) (1934-1996) from the
website: http://thinkexist.com/quotations/research/ Accessed on 18th August 2008
Duncan, R.B. (1972), “Characteristics of Organizational Environments and perceived
environmental uncertainity”, Administrative Science Quarterly, Vol.17, pp. 313-327
Ernst, D. And Connor, D.O. (1989), “Technology and Global Competition: The
Challenge for Newly Industrialising Economies”, Organisation for Economic Co-
operation and Development, OECD Publishing
Evert, G. (2000), “Qualitative Methods in Management Research” 2nd Edition. Sage
Publication Inc.
Export Promotion Council, (2002), “Guidelines for establishment of Apparel export
parks for exports”, Issue No.5, Vol.4 from the website:
http://www.pdexcil.org/news/36N0802/guideline1.htm Accessed on 27th July 2008.
Ferdinand, A.T. (1999), “Strategic Pathways toward Sustainable Competitive
Advantage”, DBA thesis, Southern Cross University

Feser, E.J. (1998), “Old and new theories of industry clusters”, in Steiner M (Eds),
Clusters and Regional Specialisation: On Geography technology and networks, London,
Pion Limited

86
Feurer, R. and Chaharbaghi, K. (1995), “Strategy development: past, present and future”,
Management Decision, Vol. 33, No. 6, pp. 11-21

Francois, J. F. and D. Spinanger (2001), “With Rags to Riches but then what? Hong
Kong’s T&C Industry vs. the ATC and China’s WTO Accession,” Fourth Annual
Conference on Global Economic Analysis Paper
Friedman, T. (2005), “The World is Flat: A Brief History of the Twenty-first Centaury”,
Published by Farrar, Straus and Giroux

Frisillo, D. (2007), “An analysis of a potential cluster in an energy sector in Albany, NY”,
Journal of Business & Industrial Marketing, Vol. 22, Issue 7, pp.508-516.
Gavetti, G. And Levinthal, D. (2000), “Looking forward and looking backward:
Cognitive and experimental research”, Administrative Science Quarterly, Vol. 45, pp.
113-137
Geer, J.G. (1988), “What Do Open-Ended Questions Measure?”, The Public Opinion
Quarterly, Vol. 52, No. 3, Oxford University Press, pp.365-371
Gephart, R.P. (2004), “From the Editors – Qualitative research and the Academy of
Management Journal”, Academy of Management Journal, Vol.47, No.4, pp.454-462
Gorry, G.A. and Scott Morton, M.S. (1971), “A Framework for Management Information
Systems”, Sloan Management Review, Vol.13, pp. 55-70

Grant, R.M. (1991), “The Resource-Based Theory of Competitive Advantage:


Implications for Strategy Formulation”, California Management Review, Vol.33, No.3,
pp.114-135
Grant, R.M. (1995), “Contemporary Strategy Analysis”, Maldem, MA: Blackwell
Grove, A.S. (1996), “Only the Paranoid Survive: How to Exploit the Crisis point that
Challenge every Company and Carrier” Doubleday, New York
Guerrieri, P., Iammarino, S. and Pietrobelli, C. (2001), “The Global Challenge to
Industrial Districts: SMEs in Italy and Taiwan”, Edward Elgar, Cheltenham, UK
Hafeez, K., Zhang, Y.B., and Malak, N. (2002), “Core Competence for sustainable
competitive advantage: A structured methodology for identifying core competence”,
IEEE Transactions on Engineering Management, Vol.49, No.1, pp.28-35
Halfpenny, P. (1979), “The analysis of qualitative data”, Sociological Review (New
series), 27, pp. 799-825
Hamel, G. and Prahalad, C.K. (1990), “The core competence of the Corporation”,
Harvard Business Review, Vol. 68, No.3, pp.79-93
Hamel, G. and Prahalad, C.K. (1989), "Strategic intent", Harvard Business Review,
pp.63-74
Hamel, G. and Prahalad, C.K. (1991), “Corporate imagination and expeditionary
marketing”, Harvard Business Review, Vol. 69, pp.81-92

87
Hamel, G. and Prahalad, C.K. (1994), “Competing for the future”, Bostom, Harvard
Business School Press
Hammersley, M. (1992), “What's wrong with ethnography?” London: Routledge.
Helfat, C.E. and Raubitschek, R.S. (2000), “Product Sequencing: Co-evolution of
knowledge, capabilities and products” Strategic Management Journal, Vol.21, Issue10-
11, pp.961-979
Henderson, R. and Cockburn, I. (1994), “Measuring Competence? Exploring Firm Effects
in pharmaceutical research”, Strategic Management Journal, Vol. 15, pp.63-84
Hitt, M.A. and Ireland, R.D. (2000), “The intersection of entreneurship and strategic
management research”, cited in D.L. Sexton and H.A. Landstrom (eds), “Handbook of
Entreneurship”, Blackwell, Oxford, pp.45-63

Hitt, M.A., Ireland, R.D., Hoskisson, R.E. (2003), “Strategic Management:


Competitiveness and Globalization”, Fifth Edition, Thomson, South-Western College
Publishing, USA
Hoepfl, M.C. (1997), “Choosing Qualitative Research: A Primer for Technology
Education Researchers”, Journal of Technology Education, Volume 9, Number 1
Holmes, O.W., in Wormeli, R. (2003), “Day one and Beyond: Practicle Matters for New
Middle-level Teachers”, Stenhouse Publishers, pp.166
Hooley, G., Broderick, A., and Moller, K. (1998), “Competitive positioning and the
resource-based view of the firm”, Journal of Strategic Management, Vol.6, pp.97-115
Hoque, Z. (2006), “Methodological issues in accounting research: Theories and
methods”, Published by Spiramus Press Ltd
IDBI Bank, (2008), from the website: http://www.idbibank.com/idbi/film_fin.asp
Accessed on 27th July 2008.
Jacobson D, Mottair Z (1999). "Globalisation and modes of interaction in two sub-sectors
in Ireland", European Planning Studies, Vol.7, Issue 4, pp.429-444.
Javidon, M. (1998), “Core Competence: What Does it Mean in Practise?”, Long Range
Plannning, Vol. 31, No.1, pp. 60-71
Jennings, P.L. and Beaver, G. (1995), “The managerial dimension of small business
failure”, Journal of Strategic Change, Vol.4, Issue 4, pp.185-200

Johnson G., Scholes K., (1993) "Exploring Corporate Strategy", Third edition, Prentice-
Hall, Englewood Cliffs, NJ
Karandikar, S.K. (2005), “Indian apparel Industry: Opportunities Unlimited”, from the
website: http://www.medcindia.org/cgi-bin/Mar05/Industry%20 Monitor.HTM Accessed
on 30th July 2008
Karmakar, A. (2007), “Overview of Indian Textile Industry with Respect to Dismantling
of Multi Fiber Agreement (MFA) and Arrangement on Textile and Clothing(ATC)” The

88
Management Accountant, Official Organ of The Institute of Cost and Works Accountants
of India, Vol. 42, No. 8.
Kee, H.L. (2005), “Foreign Ownership and Firm Productivity in Bangladesh Garment
Sector”, Seminar on FDI and Productivity in the Garment Industry, Development of
Research Group-Trade, the World Bank from the website:
http://qo.wprldbank.org/TTDFARE490 Accessed on 4th August 2008

Keim, G. (2001), “Business and public policy: Competing in the political marketplace” in
Hitt, M.A., Ireland, R.D., Hoskisson, R.E. (2003), “Strategic Management:
Competitiveness and Globalization”, Fifth Edition, Thomson, South-Western College
Publishing, USA
King, N. (2004), “Using interviews in Qualitative research, Essential Guide to
qualitative Methods in Organisational Research”, Edited by Cassell, C. And Symon, G.,
London, Sage
Kloosterman, R.C. and Lambregts,B. (2001), "Clustering of economic activities in
Polycentric Urban Regions: The Case of the Randstad”, Urban Studies, Vol.38, Issue 4,
pp.717-732

Kotler, P (1998), “Marketing Management – Analysis, Planning, Implementation and


Control”, 9th edition, Prentice-Hall, Englewood Cliffs, NJ

Kotter, J., & Schlesinger, L. (1991). “Choosing strategies for change.” Harvard Business
Review, pp.24-29
Krishnan, H.A. (2001), “Supplier selection practises among small firms in the United
States: Testing three models”, Journal of Small Business Management, Vol.39, Issue 3,
pp.259-271
Kurt Salmon’s Associates (KSA), (1999), “The Development of the China Apparel
Industry”, Report presented jointly by China Textile University & Harvard Center of
Textile and Apparel Research, Beijing
Kvale, S. (1996) “Interviews: An Introduction to Qualitative Research Interviewing”,
London: Sage Publications.
Lagendijk A (1999). “Good practices in SMEs cluster initiatives: Lessons from the
CORE regions and beyond”, Centre for Urban and Regional Planning Studies, University
of Newcastle Upon Tyne
Learned, E., Andrews, K., Christensen, C.R. and Guth, W. (1965), “Business Policy: Text
and Cases”, Richard D. Irwin, Homewood, Illinois

Leavy, B. (2003), “Assessing your strategic alternatives from both a market position and
core competence perspective”, Strategy & Leadership, Vol. 31, Issue 6, pp.29-33

Lee, T.W. (1999), “Using Qualitative Methods in Organizational Research”, Sage


Publications, Thousand Oaks, London, New Delhi
Levine, D.L. (1995), “Reinventing the Workplace: How business and employees can both
win”, The Brookings institution, Washington, D.C.

89
Li, E. (1997), “Perceived importance of information system success factors: A meta
analysis of group differences”, Information and Management, Vol.32, pp.15-28

Luffman, G., Lea, E., Sanderson, S. And Kenny, B. (1996), “Strategic Management: An
analytical introduction”, Third Edition, Blackwell Publishers
Maanen, V.J. (1998), “Qualitative studies of Organisations”, Thousand Oaks, Sage
Publications.

Macmillan, H. And Tampoe, M. (2000), “Strategic Management: Process, Content, and


Implementation”, Oxford University Press
Mangaliso, M. (1995),”The strategic usefulness of management information as perceived
by middle managers”, Journal of Management, 21, pp. 231-250

Marshall A (1920), “Principles of Economics”, London, in Baptista, M.R. (1996),


"Industrial Clusters and technological innovation." Business Strategy Review, Vol.7, Issue
2, pp.59-64
Mason, J. (2002), “Qualitative Researching”, London, Sage.
McCormick, D. (1999), "African Enterprise Clusters and Industrialization: Theory and
Reality", World Development, Vol.27, Issue 9, pp.1531-1551.
McKay, S. (2006), “Researching Second Language Classrooms”, Lawrence Erlbaum
Associates, Routledge.
Michalisin, M.D., Smith, R.D. and Kline, D.M. (1997), “In search of strategic assets”,
International Journal of Organizational Analysis, Vol. 5, Issue 4, pp.360-387

Miles, M.B. & Huberman, A.M. (1994). “Qualitative data analysis.” London: Sage
Publishers.
Milliken, F.J. (1987), “Three types of uncertainty about the environment: State, effect and
response uncertainty”, Academy of Management Review, Vol.12, pp.133-143

Ministry of Finance-Government of India, (2008), “Investment and Growth in Textile


Industry – Supplementary Report”, from the website:
http://finmin.nic.in/downloads/reports/repInvestment Growth.PDF Accessed on 29th July
2008
Ministry of Textiles (2008), “Annual Report 2007-08”, from the website:
http://texmin.nic.in/annualrep/AR07-08-01.pdf Accessed on 25th August 2008
Mintzberg, H. And Quinn, J.B. (1998), “Reading in the Strategy Process” Third Edition,
Pretice Hall Inc., New Jersey
Montanari, J.R. (1978), “Managerial discretion: An expanded model of organization
choice”, Academy of Management Review,Vol.3, pp.231-241

Morden, T. (2007), “Principles of Strategic Management”, Third Edition, Ashgate


Publishing Limited

90
Morden, T. (2007), “Principles of Strategic Management”, Third Edition, Published by
Ashgate
Nair, D.K. (2008), “Rigid labour laws are Counter Productive”, the Financial Express,
from the website: http://www.financialexpress.com/news/Rigid-labour-laws-are-counter-
productive/320261/ Accessed on 28th July 2008
Newell, R. (1995), ‘Questionnaires’, in Gilbert, N. “Researching social life”, Sage,
London

Nonaka, I. (1991), 'The Knowledge-Creating Company', Harvard Business Review, Vol.


69, No.6, pp.96

Nordas, H.K. (2004), “The Global Textile and Clothing Industry post the Agreement on
Textiles and Clothing” , Discussion paper No.5, World Trade Organization from the
website: www.wto.org/english/res_e/booksp_e/discussion_papers5_e.pdf
Nordas, H.K., 2004, “The Global Textile and Clothing Industry Post the Agreement on
Textile and Clothing,” World Trade Organization, Discussion Paper 5.
Oppenheim, A.N. (2000), “Questionnaire Design, Interviewing and Attitude
Measurement,” Continuum, New York.
Ottewill, R., Jennings, P.L., and Magirr, P. (2000), “Management competence
development for professional service SMEs: the case of community pharmacy”, Journal
of Education and Training, Vol.42, Issue4-5, pp.246-255
Patton, M. Q. (1987) “How to Use Qualitative Methods in Evaluation”, California: Sage
Publications, Inc
Patton, M.Q. (2002), “Qualitative Research and Evaluation Methods”, 3rd Edition,
London, Sage.
Penrose, E.T. (1959), “The theory of the growth of the firm”, Blackwell
Pitts, R.A. and Lei, D. (1996), “Strategic Management Building and Sustaining
Competitive Advantage”, West Publishing Company, Minneapolis, MN
Porter, M. (1990), “The Competitive Advantage of nations.” New York, The Free Press
Porter, M. (1998), "Clusters and the New Economics Competition", Harvard Business
Review, Vol.76, Issue 6, pp.77-90
Porter, M. And Miller, V.E. (1985), “How information gives you competitive advantage”,
Harvard Business Review
Porter, M.E. (1980), “Competitive Strategy: Techniques for Analysing Industries and
Competitors”, The Free Press, New York
Porter, M.E. (1985), “Competitive Advantage: Creating and Sustaining Superior
Performance,” Free Press, New York

Porter, M.E. (1990), “Competitive Advantage of Nations”, Macmillan Press Limited,


London

91
Porter, M.E. (1996), “What is strategy?” Harvard Business Review, Vol. 74, No.6, pp.61
Porter, M.E. (2008), “The Five Competitive Forces that Shape Strategy”, Harvard
Business Review, Vol. 79

Press Information Bureau - Government of India, (2003), “Growth of the textile sector in
India”, from the website: http://pib.nic.in/feature/feyr2003/fapr2003/f230420031.html
Accessed on 27th July 2008.
Press Information Bureau - Government of India, (2007), “Several Relief Measures
Announced to Strengthen Textiles Industry”, from the website:
http://pib.nic.in/release/release.asp?relid=34234 Accessed on 27th July 2008.
Proctor, T. (2000), “Essentials of marketing research”, Second Edition, Harlow, England
Qian, G. and Li, J. (1998), “Multinationality, global market diversification, and risk
performance for the largest U.S. firms”, Journal of International Management, Vol.4,
Issue 2, pp.149-170.
Ramakrishnan, N. (2005), “Government Resolution on TUFS on Techno-Operational
Parameters”, Ministry of Textiles, from the website
http://www.txcindia.com/html/tufsbookletsection1.pdf Accessed on 27th July 2008
Raworth, K. (2004), “Trading Away Our Rights: Women working in global supply
chains”, Oxfam International, Information Press
Report by ASSOCHAM (The Associated Chambers of Commerce and Industry of India),
(2007), “Indian Textile: Weaving a global spin”, ASSOCHAM Corporate Office, New
Delhi, India
Research and Markets (2006), “Indonesia’s Textile and Clothing Exports were worth
US$8671 million in 2005, representing 10.1% of the country’s total exports”, Business
wire, from the website:
http://findarticles.com/p/articles/mi_m0EIN/is_2006_Sept_12/ai_n26983104 Accessed on
25th August 2008.
Riley M, Wood R.C & Clark M.A (2000), “Researching and writing dissertations in
Business and Management”, Thomson learning

Robbins, S., Bergman, R., Stagg, I. and Coulter, M. (2000), “Management,” Prentice
Hall, New Jersey

Robinson, R. B. (1982), “The importance of outsiders in small firm Strategic planning”,


Academy of Management Journal, Vol.25, Issue 1, pp.80-93
Rousslang, D.J. and To, T. (1993), “Domestic Trade and Transportation Costs as Barriers
to International Trade”, Canadian Journal of Economics, Vol. 26, No.1, Blackwell
Publishing, pp.208-221
Rubin, H.J. and Rubin, I.S. (1995), “Qualitative Interviewing: The art of hearing data”,
Thousand Oaks, CA: Sage publications.
Sapsford, R. And Jupp, V. (2006), “Data Collection and Analysis”, Sage Publications,
London, Thousand Oaks, New Delhi

92
Schmitz, H. (1995a), "Small shoemaker and the Fordist Giants: Tale of a super-cluster",
World Development Vol. 23, Issue 1, pp.9-28
Schmitz, H. (1995b), "Collective efficiency: Growth Path for Small scale industry",
Journal of Development Studies Vol. 31, Issue 4, pp.529-566
Schofield, W., (2006), Chapter 2 – “Survey Sampling” in Sapsford, R. And Jupp, V.
(2006), “Data Collection and Analysis”, Sage Publications, London, Thousand Oaks,
New Delhi
Schraeder, M. (2002), “A simplified approach to strategic planning,” Business Process
Management Journal, Vol. 8, No. 1, pp.8-18

Seale, C. (1999), “Quality in Qualitative Research”, Qualitative enquiry, Vol.5, pp.465-


478
Senge, P. (1990), “The Fifth Discipline: the Art and Practice of the Learning
Organization”, New York: Doubleday.
Sewell, M. (2008), “The use of qualitative interviews in evaluation”, Cyfernet
Evaluation, The University of Arizona, from the website:
http://ag.arizona.edu/fcs/cyfernet/cyfar/Intervu5.htm Accessed on 23rd August 2008.
Shimane, Yoshie [2006], “Garment Industry in India: Study of Firms in Delhi Region,”
in Mayumi Murayama ed., “Employment in Readymade Garment Industry in Post-MFA
Era: The Case of India, Bangladesh and Sri Lanka, Chiba”, Institute of Developing
Economies, 27, pp.103-122

Shrader, C.B., Mulford, C.L. and Blackburn, V.L. (1989), “Strategic and operational
planning, uncertainty and performance in small firms”, Journal of Small Business
Management, Vol.27, Issue 4, pp.45-60
Silverman, D. (2000), “Doing Qualitative Research”, London, Sage Publications
Simon, H. (1996), “Hidden Champions”, Boston, Harvard Business School Press
Singh, J.N. (2007), “Indian Textile and Clothing Sector posed for a leap”, United Nations
Economic and Social Commission for Asia and the Pacific, (UNESCAP), Trade and
Investment Division, from the website:
http://www.inescap.org./tid/publication/tipub2500_pt1chap6.pdf Accessed on 20th
August 2008
Singh, S. (2007), Joint Textile Commissioner, “Technology Upgradation Fund Scheme
(TUFS)”, Circular no. 2, 2007-2008 series, Ministry of Textiles, Government of India,
from the website: http://www.texprocil.org/enews/circular2_2007-08.pdf Accessed on 4th
August 2008
Smith, J.A. (1998), “Strategies for start-ups”, Long range planning, Vol.31, Issue 6,
pp.857-872
Specht, P.H. (1986), “Job Characteristics as indicants of CBIS Data Requirements”, MIS
Quarterly, September, pp. 271-285.
Spulber, D. F (2007), “Global Competitive Strategy”, Cambridge University Press

93
Stone, B. (1999), “Ergonomics and the small to medium sized organisation”, The Safety
and Health Practitioner, Vol. 17, Issue 7, pp.15-16
Strauss, A. and Corbin J. (1990), “Basics of Qualitative Research: Grounded Theory
Procedures and Techniques” Newbury Park, CA: Sage Publications

Sud, H. (2008), “India to challenge China in textiles”, from the website:


http://upiasiaonline.com/Economics/2008/02/12/India_to_challenge_china
_in_textiles/9797/ Accessed on 4th August 2008
Tampoe, M. (1994), “Exploiting the Core Competences of Your Organisation”, Long
Range Planning, Vol.21, No.4, pp.66-77
Teece, D. J., Pisano, G. and Shuen, A. (1997), “Dynamic Capabilities and Strategic
Management”, Strategic Management Journal, Vol. 18, No.7, pp. 509-533

Teece, D.J., Pisano, G. and Sheun, A. (1992), “Dynamic Capabilities and Strategic
Management”, Berkeley, University of California
Teece, D.J., Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic
management”, Strategic Management Journal, Vol. 18, No.7, pp. 509-534
The World Bank (2007), “Global Economic Prospects: 2007” from the website:
wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2006/12/06/000112742
_20061206155022/Rendered/PDF/381400GEP2007.pdf Accessed on 4th August 2008
The World Bank (2008), “Qualitative Methods” from the website:
http://go.worldbank.org/GTVJ55EPY0 Accessed on 23rd August 2008.
Thomas, T. (2005), “Can India dress the world”, Business Standard, from the website:
http://www.rediffmcom/money/2005/aug/26guest.htm Accessed on 4th August 2008

Tsiakkiros, A., & Pashiardis, P. (2002a). “Strategic planning and education: The case of
Cyprus.” The International Journal of Educational Management, Vol.16, pp.6-17
Vanhaverbeke, W. (2001), "Realizing new regional core competences: Establishing a
customer oriented SME network", Entrepreneurship and Regional Development, Vol.13,
pp.97-116
Verma, S. (2002), “Export Competitiveness of Indian Textile and Garment Industry”,
Working Paper 94, Indian Council for Research on International Economic Relations,
New Delhi, India

Visser, E.J. (1999), "A Comparison of clustered and dispersed firms in small-scale
clothing Industry in Lima", World Development, Vol.27, Issue 9, pp.1553-1570
Watts, L.R. and Ormsby, J.C. (1990), “Small business performance as a function of
planning formality: A laboratory study”, Journal of Business and Entrepreneurship,
Vol.2, Issue 1, pp.1-8
Wernerfelt, B. (1995), “The Resource based view of the firm: ten years after”, Strategic
Management Journal, Vol.16, pp.171-174

94
Williamson, Oliver E. (1981b), “The Modern Corporation: Origins, Evolution,
Attributes”, Journal of Economic Literature, pp.1537- 1568
Wolff, J.A. (2000), “Internationalisation of small firms: An examination of export
competitive patterns, firm size and export performance”, Journal of Small business
Management, Vol. 38, Issue 2, pp.34-48
Wong, M. (2005) “Moving beyond the MFA, Regulating Business Practices through
Strengthening labour”, Hong Kong Christian Industrial Committee
World Trade Organisation (2007), “Trade Policy Review of India”, from the website:
http://www.wto.org/english/tratop_e/tpr_e/g182_e.doc Accessed on 30th July 2008
WTO (2007), “Merchandise trade by product”, from the website:
http://www.wto.org/english/res_e/statis_e/its2007_e/its07_merch_trade_product_e.pdf
Accessed on 20th August 2008
Yamagata, T. (2007), “Prospects for Development of the Garment Industry in Developing
Countries: What Has Happened Since the MFA Phase-Out?” Discussion paper 101,
Institute of Developing Economies, from the website:
http://www.ide.go.jp/English/Publish/Dp/pdf/101_yamagata.pdf Accessed on 27th July
2008
Yin, R.K. (1994), “Case Study Research: Design and Methods”, Second Edition,
London, Sage

95