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Evolving Business Models in the Textile and Apparel Industry
published in Issue 146, August 2010
As low cost manufacturing locations have emerged, and economic pressures have made manufacturing in Western countries less viable, more and more companies have turned to outsourcing and brand development as strategies for survival and growth. However, with strict delivery dates, high production volumes and low margins, this “new business model” has set a number of challenges. For manufacturers, strict delivery dates, high production volumes and low margins make effective resource utilisation critical. Brand owners who outsource production are dependent upon their suppliers to deliver the right product, at the right time and to the right quality standards.
Retailers—who tend to hold the bargaining power—are developing their own private brands and moving back up the supply chain. As they do so, they are finding that the complexity they have to manage is increasing. Furthermore, in Western economies, most textile and apparel markets are fairly saturated, so it is a challenge for retailers and brand owners to grow their market share. In many Asian countries, by contrast, consumer markets are continuing to grow, and in many cases they are growing rapidly.
Textile and apparel companies can adopt a number of different business models to grow their businesses and differentiate their products in the market place. Key elements to consider when building a new business model or evolving an existing one include: outsourcing production; sourcing strategically or opportunistically; increasing the number of collections in a year and having shorter product life cycles; extending the brand; expanding into retail; multichannel selling; offering fast fashion; vertical integration; increasing control of the supply chain and agility in reacting to changes; multi-sourcing; and building customer intimacy.
Innovative business models can offer textile and apparel companies a competitive advantage for at least a period of time. Often a textile and apparel company’s business model has core competencies embedded within it which are hard to copy. It is recommended, therefore, that all apparel and textile companies should regularly review their business models, seek and develop business models which differentiate their offering, and evaluate their use of technology and information systems.
Table of Contents
Evolving Business Models in the Textile and Apparel Industry
Business Models in the Textile and Apparel Industry
Six times a year, Textile Outlook International provides up to 200 pages of expert comment and analysis. A subscription provides an overview of the global fibre, textile and apparel industries. It is essential reading for senior executives in the fibre, textile and apparel industries – and for anyone who is not involved in the industry, but needs to quickly gain an understanding of the key issues.
Reports in Textile Outlook International include:
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company profiles – giving you the opportunity to learn from strategies employed by others. Companies profiled recently include retailers, manufacturers, innovators and sourcing companies involved in textiles and apparel as well as smaller companies which illustrate the opportunities for firms which are interested in selected sourcing locations.
trends in world textile and apparel trade and production – taking into account current issues facing the industry – such as global fibre prices; competition from China and other low cost countries; the elimination of quotas and imposition of selective new ones; relocation of production operations; the impact of economic factors affecting trade; international trade agreements; trade promotion agreements (TPAs); and much more.
trends in EU and US imports of textiles and clothing – providing comprehensive statistical data and analysis of the top ten supplying countries to the EU and US markets. These reports are updated each year and contain value and volume data as well as average prices and analyses of trends for up to 15 product categories.
innovations, technological developments, business development opportunities, individual sector analysis and political implications which affect players in the global fibre, textile and apparel industries. Some of the topics which have been covered in recent reports include: new innovations in the textile and clothing industry, such as environmentally friendly textiles, plant based fibres, and developments in textile colorants; innovations in textile machinery; and overviews of the European swimwear, hosiery and lingerie markets.
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