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Mexico’s Denim Industry’s Strategic Analysis Essay

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Updated: May 24th, 2021

Mexico's Denim Industry's Strategic Analysis

SWOT Table

Strengths Denim supplier. It is possible to consider Mexico a good choice as a country for supplying denim. Mexico has a strong textile and apparel industry (Montano), and the denim industry is particularly well developed. Mexico is stated to have already been the second largest supplier of denim to the U.S. as of 2015 (“Mexico Is Ready”). Because of its location (Mexico has common borders with the U.S.), Mexico has been the target of industry transitions from Asia, for transporting goods from Mexico is cheaper due to the proximity of this country to the USA (“Made in Mexico”). Also, thanks to the North American Free Trade Agreement (NAFTA), there are currently few tariffs on exporting and importing goods to and from Mexico to the United States of America (Jimenez).
Apparel manufacturing country. As a country for creating a children’s apparel manufacturing business, Mexico has a strong textile industry (Montano), which is especially well-developed for denim; this means that a business can easily find suppliers of textile, denim in particular. In addition, it appears likely that because of this, the prices on denim will not be high. It should also not be forgotten that the country has a welcoming business climate, plenty of well-trained workforce, and rather stable social and political environments. In addition, the workforce in Mexico is cheap (“Made in Mexico”).
Export port. It is possible to utilize the country of Mexico as an export port because the country has access to both the Atlantic Ocean (through the Gulf of Mexico) and the Pacific Ocean (directly). Also, Mexico has a rather strong marine transportation system (Jimenez), which might be viewed as a considerable strength, for transporting goods by sea is often cheaper than, for instance, by air. In addition, the country of Mexico has plenty of trade agreements, many of which are with the USA, so it is possible to employ these agreements for improving the effectiveness of the trade.
Weaknesses Denim supplier. When assessing the weaknesses of Mexico as a supplier of denim, it might be possible to state that there are few weaknesses in this area. However, importing goods from Mexico to the U.S. means that a certain number of legal regulations need to be complied with (“Documentation and Logistics”). In addition, the country has a rather weak infrastructure, which might pose a challenge to a business inside that country (Jimenez).
Apparel manufacturing country. When considering the disadvantages of Mexico as a country in which to open a children’s apparel manufacturing business, it should be noted that because of the well-developed apparel industry (“Mexico Is Ready”), the new business might face considerable competition from other manufacturers of this product. Therefore, a denim clothes company should be primarily aimed at export. In addition, there might be problems with suppliers, and it will be required to watch out for violations of agreements. In addition, the language barrier and the cultural specifics of the country might be another complication (Montano).
Export port. There exist a number of weaknesses of Mexico as an export port. For instance, as has already been stressed above, the country currently has an infrastructure that is not particularly well-developed (Jimenez). Therefore, there might emerge problems pertaining to the transportation of shipments from the factory to the ports, airports, or other centers from which to transport products. In addition, there exist several legal regulations which should be met while transporting goods via Mexican customs (“Documentation and Logistics”).
Opportunities Denim supplier. There are several opportunities in Mexico pertaining to the use of the country as the supplier of denim. For instance, the textile produced in Mexico, denim, in particular, is of high quality (“Mexico Is Ready”). In addition, this country has strong trade agreements with the U.S., so purchasing Denim from Mexico should be rather easy. Also, the manufacturers of textile in Mexico offer a wide range of products (“Made in Mexico”), so it is easy to find exactly what one needs. Finally, it should be noted that, while the textile industry of Mexico suffered a setback in 2005 when China joined this market, it is stated that the industry is currently growing (“Mexico Is Ready”), which also presents an opportunity.
Apparel manufacturing country. There are several opportunities related to the creation of a children’s denim apparel enterprise in Mexico. For instance, the country currently has a welcoming climate for businesses. The new government is rather friendly to the U.S., which is also a considerable opportunity. Furthermore, the location of Mexico permits for cheap and easy transportation of products around the world (Jimenez). In addition, there exist plenty of agreements between Mexico and other countries, which make the process of exporting apparel easier.
Export port. Using Mexico as an export port also involves plenty of opportunities. The agreements between Mexico and other countries have already been mentioned; in particular, it is stated that there exist 15 agreements about the possibility of free trade between Mexico and 45 countries around the world (“Made in Mexico”). The ease of transportation should also be mentioned with respect to using Mexico as a port. In addition, the international transportation systems in Mexico are currently developing and becoming a threat for the U.S. ports, which provides an opportunity for using the Mexican ports instead of the American ones in better conditions (Burnson).
Threats Denim supplier. One of the possible threats pertaining to the use of Mexico as a supplier of denim is the current situation in the United States, where the newly elected administration might considerably harm the relationships between Mexico and the U.S. and erect additional barriers to international collaboration.
Apparel manufacturing country. When considering threats to opening a children’s denim apparel manufacturing organization in Mexico, it is noteworthy that such a business is at risk of facing considerable competition from other manufacturers; in particular, when producing clothes for the international market, there is an abundance of international rivalry in this sphere (Antoshak).
Export port. As for the threats related to using Mexico as an export port, the shipments from Mexico are known to be under the threat of hijacking. Because of this, the costs of exporting might, in certain situations, be considerably greater than previously estimated; there exists a need for very effective risk management.

Works Cited

Antoshak, Robert P. AGOA. 2014, Web.

Burnson, Patrick. Logistics Management. 2015, Web..

Export.gov, International Trade Administration, U.S. Department of Commerce. 2017, Web.

Jimenez, Hector. United States of America Department of Commerce, 2015, Web.

Carved in Blue. 2016, Web.

“Mexico Is Ready to Dress the World!” Mexico News Network. 2015, Web.

Montano, Sylvia. Office of Textiles and Apparel, International Trade Administration, Web.

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IvyPanda. (2021, May 24). Mexico's Denim Industry's Strategic Analysis. Retrieved from https://ivypanda.com/essays/mexicos-denim-industrys-strategic-analysis/

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IvyPanda. 2021. "Mexico's Denim Industry's Strategic Analysis." May 24, 2021. https://ivypanda.com/essays/mexicos-denim-industrys-strategic-analysis/.

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IvyPanda. (2021) 'Mexico's Denim Industry's Strategic Analysis'. 24 May.

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