The following extract is taken from an essay produced on the topic of Management
One of the key competitive conditions in the fashionretail clothing sector has been the growth of outsourcing between firms and with moving their manufacturing operations to low labour countries like China or India (see Bruce and Daly, 2006). The competition of prices between clothing retail players has been an important factor for influencing the consumers’ choices of purchase. Companies are able to reduce their operational costs by importing good quality material often at half of the cost from what they would have to pay if they were to be produced in their own country (Moore and Fairhurst, 2003). By reducing labour costs firms are able to offer clothes at more competitive prices and hence strengthen their competitive advantage to consumers.
A second condition of the clothing retail sector has to do with the pace with which clothes are manufactured and delivered to the retailers. Mattila, et. al. (2002) argue the fast changing pace of fashion becomes increasingly important for whether consumers are able to find the latest designs and prices they seek (Doherty and Alexander, 2003). The lead times required for clothes to be produced until the time they are delivered means that retails are not able to respond to changes in the market. Bruce and Daly (2006:330) argue that: “Companies in the fashion industry are increasingly using time as a factor for enhancing competitiveness. Development cycles are becoming shorter, transportation and delivery more efficient and merchandise is presented “floor ready” on hangers and with tickets attached.” Marciniak and Bruce (2004) argue that when firms try to reduce costs by importing clothes from countries like China, the time required for the shipping of the products, and by the time they are sold to consumers, means that retails often need to purchase a lot of higher quantities and without having knowledge for whether consumers will buy them or not.