Competiveness of Sri Lankan Apparel Industry and Diamond Model Analysis
Sri Lanka's apparel industry is renowned globally for producing high-quality ethical fashion apparel. It is a vital contributor to the economy, accounting for a significant portion of exports. This industry has seen remarkable growth and success, leveraging factors like skilled labor, strategic location, and governmental support. However, challenges such as low local demand conditions pose obstacles to competitiveness. The Diamond Model is used to assess factors contributing to the industry's competitiveness.
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Competiveness of Sri Lankan apparel industry PGDBFS 202-FSG 1
Sri Lankan apparel industry Sri Lankan Apparel Manufacturers & Suppliers are reputed worldwide for producing top quality ethical fashion apparel trusted by the iconic global fashion brands. Sri Lanka s apparel export industry is the most significant and dynamic contributor for Sri Lanka s economy. The industry has enjoyed epic growth levels over the past four decades and is today Sri Lanka s primary foreign exchange earner accounting to 40% of the total exports and 52% of industrial products exports. This industry, entirely privately owned has successfully exploited the opportunities in the international market. PGDBFS 202-FSG 2
Assessing the Competiveness of Sri Lankan apparel industry using diamond model Factor Conditions HR- Cheap labor is no longer being crucial for achieving competitive advantage Skill level labor is positive factor Most apparel plants now have JCC rather labor unions which resulted good employee relationship Physical Resources- 12 EPZ s Removal of GSP+ of EU on 2012 has enables apparel companies to think alternative methods to improve their productivity to reduce the cost PGDBFS 202-FSG 3
Knowledge factors SL government universities provides knowledge workers for apparel sector Infrastructure: Advantage of Strategic location The efficiency in customs procedures complement each other in minimizing transit periods for shipments involved in international trade have made Sri Lanka more internationally competitive Zero VAT for export Industry Focus to improve speed on delivery using strategic location advantage, coupled with the conducive business friendly environment within the country. PGDBFS 202-FSG 4
Demand Conditions Local apparel industry the demand conditions are not up to the level required to be competitive in the apparel manufacturing industry. Sri Lanka does not have much fashion conscious/ brand conscious consumers when compared with its export markets such as EU or USA. The standards or the quality level is not very high when compared with the foreign consumer in US and EU. Local demand condition makes very low level of input to market information about the consumer requirements in newproduct development. PGDBFS 202-FSG 5
Related And Supporting Industries The growth of local raw material suppliers as well as equipment suppliers in recent years due to foreign direct investments can be given as a positive initiative SL has good accessories suppliers like lace, elastic, bra wires, hooks, bottons are all made locally. PGDBFS 202-FSG 6
Firms Strategy, Structure, And Rivalry Apparel giants Brandix, MAS & Hidramani in Sri Lanka focus on differentiation strategy through the continuous innovation of products and the constant maintenance of stringent quality standards that the company is renowned for. Focus eco-friendly apparel production facilities. Hidramani- Mihila (the world s first custom built eco-friendly apparel factory,) MAS- Thrulie (the world s first clothing factory powered solely by carbon-neutral sources.) Brandix- Brandix casualwear -Seeduwa Green Plant-(world-first Platinum rated Green Factory) PGDBFS 202-FSG 7
Intense local competition between apparel giants Brandix, MAS, Hydramani to capture renown brands such victoria secret, M & S, Nike both companies to improve their quality, production procedures which improve overall success of apparel sector in Sri Lanka which enables PGDBFS 202-FSG 8
Government Government propose separate AL subject call fashion design under technological stream 2017 Budget proposal suggest a formation of textile cluster to include sizing, dying & finishing units by private sector 300Mn allocated for vocational training for scholarships to generate trained workers for apparel & textile sector PGDBFS 202-FSG 9
