Fashion Made in China, the leverage to succeed or the doom to fail in the globalized world

Abstract

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.

Date of Award	2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Debbie Harrison (Supervisor)