Italian Textiles and China
Italy is known as the clothing giants and brand like Benetton was ruling the global arena in the clothing and footwear industry. The most important resources of Italy were the dense network of firms and the phenomenon that money was revolving inside the country. Wealth was created by middle-level businessmen and the cost of the labor was low. Capabilities of Italy include huge amount of experience in the field of clothing. Certain other capabilities include skilled laborers that were quite experienced in producing top-notch quality garments. Maintaining brand equity and developing a brand is the core competency of Italy’s garment industry and they are well versed in the phenomenon of developing a brand. Brand’s like Benetton, Armani and other famous brands are ruling the garment industry of the world. The element of brand recognition is quite visible in Italy’s brands and people all around the world prefer it as the powerful brands of Italy are becoming a fashion statement all around the world. Since the brands are recognized in the eyes of the people therefore “Made in Italy” tag is getting popular day by day. The biggest competency of Italy’s garment industry is its quality and the fact that Italy’s garment industry has positioned itself as the brands that are fashion-centered and they posses quality too. Besides the fierce global competition in the world Italy is catering to its specific niche market and the garment industry of Italy is milking its customers all around the world. Some people are reluctant in buying Italy’s garments just because of its price however many fashion-conscious and trend-oriented individuals prefer the quality of Italy’s garments and they rely on these brands only despite its high price. People are becoming more fashion-conscious with the rise in media and they are adopting trendy and fashionable clothes. Nowadays, it’s considered to be a status-conscious statement that when an individual is linked to a powerful brand like Versace or Armani. This trend is favoring Italy’s fashion designers to promote their designs and they are cashing this opportunity by selling their highly-priced fashion-oriented clothes.
The performance of garment industry is closely linked with its related aspects like production, designing, dyeing, tailoring etc. The clothing industry of Italy was once targeting a layman too but in the current era with the interventions of china the industry is solely targeting the niche market. The clothing industry of Italy operates in a slow cycle. There are numerous reasons for that like the industry has brands like Gucci, Armani, and Benetton etc. these brands heavily focused on the quality and that is the reason why whole cycle of operation is slow. Huge brands develop a design by a specific designer and the designer brainstorms and take hefty amount of time in coming up with a viable design. Similarly, top-notch quality is required by these organizations and usually these organizations outsource the production facilities like sewing and stitching to get the best quality. After such processes the brand is labeled in the retail outlets where it sells at a relatively higher price. These elements are mainly responsible for the slow operating cycle of Italy’s market. This would definitely influence the overall competitive environment of the industry because all the players work on the standard cycle or the fast one and chances are there that other producers might affect Italy’s export. But in real terms that’s not the case as Italy is catering to its own market and the brands are adult enough to stand on their own. Moreover, Italy is moving its production facilities to countries like China and Romania because the cost of labor is low and their production efficiencies are fast as compared to other countries.
Italy’s industry is changing drastically and elements like clothing and shoes were experiencing major changes. Competition due to China’s low-cost strategy was getting fierce and most of the people were shifting towards China’s brands. The chief competitive strategy that was implemented in this scenario was based on strategic decisions and they require proper strategic actions for their fulfillment. One of the most prominent decisions of Italy was to shift the production facilities outside Italy and outsource all the activities except marketing and designing. This decision favors Italy in terms of cost and in the attainment of long-term objectives. Thus, the chief competitive actions in this industry were of strategic nature and the customers responded positively by focusing on factors like brands, market positioning and developing a mindset for the people that Italy’s brands are more quality-focused and they are the trendsetters of the world. Most of the companies shifted their production capacities to countries like Romania and Eastern Europe.
Italy’s garment and clothing industry is facing fierce competition from China because of a number of reasons like low per-unit cost of labor, low production and operational cost etc. China is facing few barriers to tariffs which can easily be nullified because WTO has entered the international scenario and China can export its garments and shoes to nearly every part of the world. Italy is losing the market in the international arena, therefore, is very important to implement a proper strategy because if a proper business-level strategy isn’t implemented then it is very difficult and nearly impossible for Italy to survive in the international markets. Italy’s garment makers follow a simple strategy that they lower their costs by outsourcing work to countries like Romania and Eastern Europe. Thus in a nutshell we can say that Italy’s garment makers are following an effective business-level strategy of outsourcing and they are reducing their costs by developing their garments in countries where per unit cost of labor is extremely low. Moreover, they are focusing more on their design and the marketing processes to build their brands better and stronger. However, there are certain garment makers who are even manufacturing their clothing in Italy they believe that their brands are so strong that they won’t have to go anywhere else to achieve their desired profits.
China is becoming a serious threat to all the garment producers in the world. Their low-cost strategy and extremely cheap labor have produced results in no time. They have developed a brand identity of being quick and cheap. China has positioned itself in the minds of the consumers as a low-cost and price-effective substitute in the clothing and the footwear industry. The rivalry of Italy’s firms with their Chinese competitors is very intense. Both the countries are striving hard to clinch the markets by hook or by crook. The basic difference among them is that China is focusing on price and Italy I focusing on quality and on the phenomenon of building brands. In marketing terminology both producers are catering to their specific target markets. The preferences of the stakeholders in the industry like buyers and suppliers are wide and varied. Buyers and suppliers both prefer quality with effective price. However the bargaining power of buyers and suppliers in the clothing industry is great because they have the option to switch brands and they can quickly change their vendor. However the crux of the matter revolves around a simple phenomenon of developing and building brands. Italy has to cash on their image of trendsetters and they must promote cities like Milan which are known as the fashion capital of the world. Italy can reduce the effect of China just by making their brands powerful and focusing just on quality and marketing. This is the only effective strategy that can minimize the menace of China’s low-cost strategy.