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Authors
Advisor(s)
Abstract(s)
Context of study: The rise of China’s labor costs, and the fact that lower-wage
countries have now manufacturing capacity, has pushed domestic apparel
manufacturers to emphasize on two more profitable sectors: product development,
and retail. This reflects a shift from Original Equipment Manufacturer (OEM) to
Original Brand Manufacturer (OBM), which brings challenges for the Chinese
apparel companies, since domestic apparel manufacturers didn’t invest much in
product development and design ability. Chinese fashion retailers do not play a
leading role in the global industry, having only a few influential international
brands. However, efforts have been made in order to innovate their merchandise
distribution channels and improve promotion policies, to frame the domestic retail
networks, appealing to consumers’ attention, and attain market share (Li 2002).
Statement of Purpose: The aim of this paper is to firstly identify the difficulties
that these private labels can face due to the typical Chinese consumer profile that is
characterised by high spenders in haute couture in foreign markets rather than in
the domestic market. Secondly, this phenomena might influence these private label
brands to expand to international markets, which creates new difficulties due to the
world’s perception of the low quality of products manufactured in China. Finally,
how these Chinese private-label companies will create a brand equity, in domestic
and foreign markets, in order to positioning themselves in the fashion market.
Methodology: A multiple case study involving three Chinese apparel companies
was employed. The information collected had as final aim, to apply each company
to a Porter’s framework, and realize if they gathered the sustained competitive
advantage factors necessary to succeed according to its strategy adopted.
Contribution: This study has attempted to contribute to the research field of types
of strategy and firm performance within an industry recent trend. Hence, the
findings in this study should provide a criticism to Porter’s theory of sustained
competitive advantage factors and firm’s type of strategy, in the sense that companies can perform well, even when they pursue more than one type of strategy,
or when they don’t accomplish all necessary factors, stated by Porter, to achieve
competitive advantage.
Description
Keywords
Apparel industry China Fashion retailers Porter’s diamond model