aditya jain maiba 09 10 dissertation on competitive advantage of indian clothing industry
TRANSCRIPT
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Dissertation submitted in partial fulfilmentof the requirements of the
MA International Business Administration
in the
Newcastle Business School
at the
University of Northumbriaat
Newcastle
NAME Aditya JAIN
COURSE: MA INTERNATIONAL BUSINESS ADMINISTRATION
SUPERVISOR Dr. Diane Sloan
TITLE The applicability and rationale of Competitive advantage for Organizations in the Indian Apparel Industry
DATE 23 SEPTEMBER 2010
CAMPUS Newcastle
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DECLARATIONS
I declare the following:
(1) That the material contained in this dissertation is the end result of my own work and that due acknowledgement has been given in the bibliography and references to ALL sources be they printed, electronic or personal.
(2) The Word Count of this Dissertation is 15874
(3) That unless this dissertation has been confirmed as confidential, I agree to an entire electronic copy or sections of the dissertation to being placed on Blackboard, if deemed appropriate, to allow future students the opportunity to see examples of past dissertations. I understand that if displayed on Blackboard it would be made available for no longer than five years and that students would be able to print off copies or download. The authorship would remain anonymous.
(4) I agree to my dissertation being submitted to a plagiarism detection service, where it will be stored in a database and compared against work submitted from this or any other School or from other institutions using the service.
In the event of the service detecting a high degree of similarity between content within the service this will be reported back to my supervisor and second marker, who may decide to undertake further investigation that may ultimately lead to disciplinary actions, should instances of plagiarism be detected.
(5) I have read the UNN/NBS Policy Statement on Ethics in Research and Consultancy: UNN/NBS Ethics in Research and Consultancy: Guidelines and Procedures for students undertaking Postgraduate research methods modules and dissertations and the Policy for Informed Consent in Research and Consultancy and I confirm that ethical issues have been considered, evaluated and appropriately addressed in this research.
SIGNED:
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ABSTRACT
‘The applicability and rationale of competitive advantage for the organizations
in the Indian apparel Industry’
This dissertation research project attempts to identify the importance and rationale of
competitive advantage in strategic management for Indian apparel industry. It
examines and explores various academic literature that involves theories and
frameworks surrounding competitive advantage, its sources and the building
process. Further, the research project attempts to explore and investigate the
organisations in Indian apparel industry providing an insight into its working,
strengths, weaknesses and finally competitiveness. It examines the working of three
organisations that have developed drastically over the years and gained market
advantage through collection of primary data and information through the mode of in-
depth qualitative interviews, which helps in providing an insight into the strategic
nature and behaviour of these organisations, thus, helping to provide suggestions
and recommendations for other organizations to learn from and develop their
strategies for attaining and sustaining competitive advantage.
The findings indicate that the cost, differentiation and focus form the base for
developing and framing strategies to attain competitive advantage. Further, the
unique and valuable resources and knowledge management helps in complementing
the process of building and sustaining competitive advantage. Furthermore, since
the consumer is getting smarter and trendy, market trends are swiftly changing and
there is a need for adapting accordingly. It is recommended that emphasis on
differentiating oneself with the help of up-gradation in quality, innovation, creative
designs and technology will help produce goods and services that are distinct thus
attracting customers. Lastly, a continuous effort towards bringing efficiency and
effectiveness of operations and internal management should be made as well so that
the competitive advantage can be attained and sustained in the long run.
Keywords: Competitive advantage, sustainable competitive advantage, Indian
apparel industry, Strategies, Resource based view, Knowledge management.
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ACKNOWLEDGMENT
It is a pleasure to thank those who have helped me make this dissertation research
possible. I am heartily thankful to my supervisor, Dr. Diane Sloan, whose guidance,
encouragement and supervision has helped me in developing and building this
research from an idea to a final substance. I also would like to thank my parents and
friends who gave me ideas for the research and supported me during tense
situations. Lastly, I would like to thank God for showering his blessings and guiding
me towards right path.
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TABLE OF CONTENTS
Title Page 1
Declaration 2
Abstract 3
Acknowledgment 4
Table of Content 5
List of figures 8
Chapter 1: Introduction 91.1 Background 9
1.2 Rationale for the research 10
1.3 Global apparel industry: Overview 11
1.4 Indian apparel industry: Overview 12
1.5 Rationale for sustaining competitive advantage in Indian apparel Industry 12
1.6 Research aims and objectives 13
1.7 Structure of the study 14
Chapter 2: Literature Review 162.1 The process of building competitive advantage 16
2.2 Theoretical concepts 17
2.3 Resource Based view 19
2.4 Knowledge Based view 21
2.5 Porter’s Generic Strategy 24
2.6 Choice of Strategy 26
2.7 Sustaining competitive advantage 28
2.8 Competitive advantage in Indian apparel industry 29
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Chapter 3: Research Methods and Methodology 313.1 Introduction 31
3.2 Research Philosophy 31
3.3 Research Choice 32
3.4 Research Strategy 33
3.5 Research Approach 36
3.6 Data Collection 37
3.7 Analysis 40
3.8 Ethical Issues 40
3.9 Limitations and potential problems 41
Chapter 4: Findings, Analysis and Discussion 434.1 Findings and Discussion 43
4.1.1 Industry competitiveness 43
4.1.2 Organizational differentiation 44
4.1.3 Generic Strategy 44
4.1.4 Resources 45
4.1.5 Knowledge 46
4.1.6 Organizational planning and operations 46
4.1.7 Barriers 47
4.1.8 Competition from International market 47
4.1.9 Sustaining Competitive Advantage 48
4.2 Analysis 49
4.3 Evaluation of findings 53
4.3.1 Validity and reliability 53
4.3.2 Generalisability 54
Chapter 5: Synthesis, Conclusions and implications 56
References 59
Bibliography 68
Appendices 72
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Appendix 1: Reflective learning Statement 72
Appendix 2: Cover letter and Interview questions 73
Appendix 3: Interview 1 Notes 75
Appendix 4: Interview 1 consent forms 78
Appendix 5: Interview 2 Notes 80
Appendix 6: Interview 2 consent forms 83
Appendix 7: Interview 3 Notes 85
Appendix 8: Interview 3 consent forms 88
Last Page 89
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LIST OF FIGURES
Figure 2.1 A systematic model of competitive advantage
Figure 2.2 The resource based approach to business strategy
Figure 2.3 Relationship between the knowledge and strategic gap through
Visualization
Figure 2.4 The relationship between knowledge and sustainable Competitive
Advantage
Figure 2.5 Porter’s Generic Strategies framework
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CHAPTER 1: INTRODUCTION
“When an organization sustains returns, that exceed the average for its industry, it is
said to possess a ‘competitive advantage’ over its rivals in the given marketplace”.
- Yolles, 2009, p. 95
1.1 Background
In the modern day’s hypercompetitive markets, where the business world is rapidly
transforming and product life cycle is getting shorter, the difference between the
success/failure is determined by the ability and positive effectiveness of developing
unique competitive advantage which helps one position, at a superior position from
its competitors. Emphasizing on the corporate environment, an organization must
possess skills and be able to deliver something that makes it stand out from the
crowd besides doing what it is meant to do. These distinct features or competencies
as pointed by Baghai, Coley and White (1999) helps spell out the difference between
success and failure, and allows the growth and development of an organization not
only financially but also by bringing value and matter to the work it does by further
capturing and extracting new opportunities. Further, as pointed by Drobis (1991),
understanding customers and competitors along with delivering value and setting
competitive features forms the elements of a successful business strategy in the long
run, non existence of which leaves organisations with not having a profitable and
sound business.
To develop and work towards an effective and competent business strategy it is
important to understand the marketplace and then look for sources of competitive
advantage so that the organization is able to fit itself in today’s hypercompetitive
market. According to Corrigan (2004), a successful competitive strategy should
compile business processes, defining its boundaries and redefining the competition
basis through development and innovation, to create an organization which has the
capability of successfully adapting to unpredictable markets. Further he advocates
that strategy that addresses elements such as choosing the future, redefining
competition, converting ideas into action and accelerating competitive performance,
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forms the basis and provides framework for a successful competitive strategy for
sustaining competitive advantage. In the long run, this process of successful
development and implementation of the competitive strategy is what acts as the
cornerstone of a successful strategy and helps create sustainable competitive
advantage (Peteraf, 1993). Thus, as Barney (1991) cited by Clulow et al. (2003,
p. 221) suggest, “a firm is said to have a competitive advantage when it is
implementing a value creating strategy not simultaneously being implemented by
any current or potential player.”
Smith and Flanagan (2006) further summarise that, competitive advantage is
something which distinguishes one by doing something that its competitors can’t
match and the consumer values, further separating an organization from others and
helping in becoming a market leader.
This whole idea revolving around the superiority in the marketplace, has thus
attracted a huge interest for research in the concepts and applicability of competitive
advantage which has been carried out by various scholars since past four decades,
which also highlights the position of the whole concept in the strategy. Supportively,
as pointed by Passemard and Calantone (2000), with the successful integration of
competitive advantage in the strategies and planning process, an organization will be
able to outperform its current or potential competitors.
In short according to Smith and Flanagan (2006, p.4), “it’s the reason you are in
business”. Further, Mckee and Varadarajan (1995, p.77) state that, “Competitive
advantage is the cornerstone of strategy, and enacted knowledge is the essence of
competitive advantage”, thus making it important to highlight and reflect on from the
learning.
1.2 Rationale for the Research
Though, the topic of competitive advantage has been widely researched and talked
about since last four decades, there has been a limited source of literature and
investigation talking about the applicability of competitive advantage concepts in the
Indian apparel industry. The literature currently present is limited to the talk about the
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advantages and weaknesses of the Indian apparel industry and sources which can
lead to competitive advantage in the long run. However, there have been very few
researches, where strategies of different companies have been compared to each
other to know how organisations reach and retain the level of competitive advantage
in today’s hypercompetitive market. Moreover, there has not been enough empirical
investigation and discussion about the applicability of theoretical concepts and
frameworks that various scholars have devised, into the organisations in the Indian
apparel industry. The following research thus, by highlighting the need for an
appropriate strategy to attain competitive advantage in the market provides a
learning foundation for organisations who wish to learn from, both the loopholes and
positive compatibilities of various organisations that have been successfully
performing in the industry.
However, to take the research further, it first becomes essential to reflect upon the
current scenario of Global and Indian apparel industry to understand the need and
applicability of concepts of competitive advantage applicable to the industry.
1.3 Global Apparel Industry: Overview
Kalantaridis (1996) reports that, the apparel and clothing industry has been
considered as ‘an exemplifier of globalisation’. There has been an increase in access
to non standardized global market off lately due to the phasing out of the Multi Fibre
Agreement (MFA), established in 1974, which prevented apparel industries of
developed economies from the competition with apparel industries in developing
economies (Dicken, 1992 and Dickerson, 1991). Abernathy et al. (1995) highlights
the rising competition in the respective home or domestic markets at the same time.
Further, there has been growing challenge and competition due to the existence of
intensive labour nature of the industry, which has consequently leaded to
outsourcing of different process, locally or globally (Taplin, 1994 and Gereffi, 1994).
A study by Padhi, Pauwels and Taylor (2004) reports that the, productivity, labour
costs and quality will determine the future of firms in the apparel industry. However,
as Abernathy et al. (1995) state, there has been a rise in challenges faced by
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traditional industry players due to global competition, market volatility and changing
technology, thus highlighting the need for an empirical study to find the determinants
of competitive advantage. Additionally, Nordas (2004, p.3) point that, “The
competitive advantage of firms in this market segment is related to the ability to
produce designs that capture tastes and preferences, and even better – influence
such tastes and preferences – in addition to cost effectiveness”.
1.4 Global apparel Industry: Overview
With total revenue of $28,103 million in 2009, the Indian apparel industry
represented a compounded annual growth rate (CAGR) 9.9% for the period
spanning 2005-2009. However, according to the forecast for the period 2009-2014,
the industry performance is expected to decelerate with the predicted CAGR of 7.6%
taking the industry to a value of $40,587 million by 2014 (Datamonitor, 2010).
With, Agreement on Textile and Clothing (ATC) in 2005 by World trade Organisation,
the restriction on the apparel firms in developing economies (such as India) has
cleared the previous quantitative restrictions and has thus opened up the market.
This agreement signifies the both the opportunity and threat as well with the rise in
competition and no guaranteed markets (Ramaswamy and Gereffi, 2007; Verma,
2002 and Abernathy, 2006).
1.5 Rationale for sustaining competitive advantage in Indian Apparel Industry
The competitive advantage in apparel firms of India branches out from their ability to
produce a wide range of products along with comparatively low cost labour force and
very strong, extensive domestic production of cotton and other fibres and diverse
base of domestic supply of raw materials and fabric for manufacturing. (USITC,
2004; The Economist, 2008). Further, Ananthakrishnan and Chandra (2005)
highlight India’s advantage in textile and spinning which covers the entire supply
chain and competitive advantage of Indian apparel firms lies in its high degree of
vertical integration as Indian firms operate in all segments of the textile and clothing
supply chain, entrepreneurship and managerial experience, versatile design skills
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and capabilities and huge domestic market which mitigates the export risk.(The
Economist, 2007; The Economist, 2008 and Padhi, Pauwels and Taylor, 2004).
However, use of obsolete technologies, poor supply chain management, vastly
unorganized and decentralised sector, bureaucratic red tape, power supply and
transportation, high channel margins, unfavourable government policies, rising prices
of the retail properties and an increase in global competition post the abolishment of
quotas along with the rising competition from other Asian neighbours such as China,
Bangladesh, Pakistan and others has highlighted the need for getting the gaps filled
with appropriate strategies. (Ananthakrishnan and Chandra, 2005; Upadhyay, 2006,
Chandra, 2006 and Nagappan, 2009).
1.6 Research aims and objectives
The key aims and objectives of this research project are:
Identifying:
Importance and rationale of Competitive Advantage in Strategic Management
Exploring:
Existing academic literature and key academic theories underpinning concepts
surrounding competitive advantage
The process of building competitive advantage
Sustainability of competitive advantage in Indian apparel industry
Investigating:
The strategies applied by successful domestic organisations to gain competitive
advantage and fight competition.
Their views on the competitive advantage paradigm in the Indian Apparel
Industry
The performance and challenges faced by different organisations to attain and
sustain competitive advantage
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Evaluating:
The findings from investigation undertaken, to analyze the applicability of
concepts of competitive advantage in practical working of firms in Indian apparel
industry
The loopholes and the causes of depletion of competitive advantage to provide a
base for organisations to learn from.
The ways in which competitive advantage can be sustained in the Indian apparel
industry in the long run.
1.7 Structure of the Study
Chapter 1: Introduction
This chapter provides a background and highlights the competitive advantage
terminology along with highlighting the need for the research in this area specifically
with regards to organisations in Indian apparel industry. Further, it provides a brief
overview to Global and Indian apparel industry and rationale for sustaining
competitive advantage in Indian apparel market.
Chapter 2: Literature Review
This chapter explores theoretical contribution and relevant theories that revolve
around the competitive advantage paradigm. The sources to attain competitive
advantage are critically discussed along with the critical evaluation of major theories.
Further, the process of attaining and sustaining competitive advantage along with the
relevance of issues surrounding the Indian apparel industry is discussed.
Chapter 3: Research Methodology and Methods
This chapter revolves around the different research methods and methodologies that
have been adopted for carrying out, the investigation and evaluation of organizations
in the Indian apparel industry which would lead to establishment of the relation
between the theoretical concepts and processes explored in the literature review
above, with the activities and practices carried out by the organisations in the Indian
apparel Industry.
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Chapter 4: Findings, Analysis and Discussion
This chapter revolves around the discussion and evaluation of the qualitative data
and information extracted from the interviewees who are part of the Indian apparel
Industry. This chapter involves the application of research techniques adopted above
in the above chapter along with the critical analysis of findings against the applicable
theories and frameworks identified and explored in the literature review.
Chapter 5: Synthesis, Conclusion and Implications
This chapter revolves around the summarising of findings and analysis that have
been done in the above chapters. Further, conclusions are drawn by supporting the
findings with the literature explored and furthermore relating them back with the
research objectives. The chapter also highlights the limitations that were established
during the research and the scope and implications for further research is identified
and discussed.
CHAPTER 2: LITERATURE REVIEW
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According to Christensen (2001), some competitive advantages rooted in market
positions are associated with the economics of scale and scope while others are
rooted in business models and finally some in the process of how distinctively an
organization works which help create value and provides competencies to an
organization. In other words, the theories revolving around competitive advantage
revolve around resources, organisational working, capability of applying and the
uniqueness of all the above in the attainment of competitive advantage.
2.1 The process of building Competitive Advantage
Smith and Flanagan (2006) highlight that, identification of competencies of an
organization which are the most important to customers along with channelizing its
significance should be the main concern in the whole process of competitive
advantage. According to them, the process starts from establishing the
competencies which leads an organisation to stand out from the crowd, followed by
ensuring that the competitive advantage identified is channelized appropriately to
customers. Lastly, they point, that there is a need to continuously build new and
improve the existing competitive advantages, to keep themselves distinct from the
competition and maintaining the interest of the customers.
Porter (1985) highlights that, rather, only being an outcome of secluded activities, the
process of competitive advantage is a systemic outcome. Supportive to the systemic
process emphasized by Porter (1985), Rindova and Fombrun (1999) talk about a
systematic model of competitive advantage defining the process cycle of competitive
advantage. According to which, there is a strategic synergy between actions taken
by organization and those taken by its components in response, in the material and
interpretational domains. Further, these actions affect the results in all the four
domains and as shown in Fig. 2.1, these actions are interconnected forming a cyclic
chain of activities which signifies continuous construction and reproduction of the
four domains.
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Figure 2.1: A systematic model of competitive advantage
Source: Rindova and Fombrun (1999)
Thus, the framework proposed by Rindova and Fombrun (1999) highlight that
competitive advantage is a cyclical process and it is not originated from just any
single source emphasizing that there is a specific function and level in an
organisation which manages each process in the cyclical framework of competitive
advantage.
2.2 Theoretical Concepts
DiMaggio and Powell (1983) advocated the role of social acceptability and
institutional environment in determining the organization’s activities and behaviour
thus giving a social edge towards the resources, used by an organization to develop,
achieve and sustain competitive advantage (Oliver, 1997).
Hunt and Morgan (1995) focussed on physical, organizational, human, financial,
legal, informational and rational resources as important determinants or sources of
competitive advantage. Prahalad and Hamel (1995), talk about bringing together
skills and resources to bring superior competencies. Luo (2000) also talked about
dynamic capabilities that can hold and allocate unique resources. Further, individual
factors also form an integral part as sources to competitive advantage, as
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emphasized in various studies such as corporate reputation (Ljubojevic, 2003),
corporate philanthropy (Porter and Kramer, 2002)R-132, ethics capability (Buller and
McEvoy, 1999), diversity in workplace (Lattimer, 2003) and culture of organization,
trade secrets, databases and intellectual property rights (Hall, 1993)R-128.
Giving an organizational context, according to Zuckerman (2005), an organization’s
in-house capabilities and the environment’s competitive forces drives it to achieve
competitive advantage through differentiating itself from the rest and by continuous
product development. Conversely, Grandy and Wicks (2008) argue that competitive
advantage is a process derived when an organization makes efforts to develop what
consumers want and there is an interaction between the organization and various
other constituents rather than the result of just exogenous pressure.
According to D’Aveni (1994), the organizational structure has an important and a big
role to play in the development of competitive advantage. Further, he points that an
appropriate organizational structure would endorse employee prudence, de-
emphasize specialisation and finally make the communication or sharing of the
information among its members easier would help facilitate the competitive
advantage of an organization. However, Rindova and Fombrun (1999) point that, in
addition to operational skills there are three other classes of resources: privileged
assets, growth enabling skills, and special relationships useful in gaining competitive
advantage.
Strategic investment procedure including projections and plots also help
organizations to develop competitive forces in the marketplace (Rindova and
Fombrun, 1999). However, Adner and Zemsky (2006) emphasize particularly on
quality regarding the resources used in the product, its process, its timing and lastly
innovation which helps in value creation and consequently competitive advantage.
Yolles (2009) describes the development of competitive advantage concept over the
years, rather than just highlighting one theory. According to him, competitive
advantage has been the result of development of the strategic management
paradigm which started with SWOT analysis and developed towards porter’s five
forces which dictated the external factors for being competitive until the evolution of
strategic management paradigm into porter’s generic strategic framework, resource
based theory and knowledge management came out and developed subsequently
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which also took into consideration the importance of internal factors or sources in
achieving competitive advantage.
2.3 Resource-Based View
Dierickx and Cool (1989), indicates that firms that are able to accumulate resources
and capabilities that are valuable, non-substitutable and difficult to imitate will
achieve a competitive advantage over the competing firms. Further, Barney (1991)
asserts that sustained competitive advantage derives from the capabilities and
resources that a firm controls are valuable, rare, imperfectly imitable and not
substitutable. Supportively, (Peteraf, 1993) states that the resource based view
implies focussing on the firm’s perspectives and its critical resources and the value
of these resources in terms of highlighting competitive advantage that is reflected in
the superior performance of the firm. Furthermore, Collis and Montgomery (1995)
states that the resource based view analysis identifies characteristics which can
create competitive advantage for the firm such as value, rareness and competitive
superiority.
Additionally it is highly essential for a firm to adopt a resource based approach as
through it, a firm is able to focus not only to promote specific products of the firm but
to match the preferences and needs of the consumers with the resources of the
organisation (Anderson, 2010).
Wade and Hulland (2004) highlight, that rare and valuable resources can also
become the source of competitive advantage. Supportively, Mahoney and Pandian
(1992) point that these allow organizations to take over the prospects of a market
and neutralizes the effect of the threat it possesses from competitive forces in the
corporate environment. According to Wilk and Fensterseifer (2003), in order to
categorise the resource based view in terms of the resources employed it can be
classified into three main categories. Firstly, physical resources which are tangible
and can be observed and evaluated with clarity. Secondly, human resources which
is again tangible includes the productive, technical and managerial workers and
thirdly, organisational and financial resources which are formed by the routines that
co-ordinate the human and physical resources in a productive way as stated by
(Barney, 1991).
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Yolles (2009) indicates a resource-based view of the business strategy to gain a
competitive edge in Fig. 2.2, adapted from Wade and Hulland (2004), where the
resources which have value, are distinct, unique and rare, lead to the conversion of
short term competitive advantage into sustainable competitive advantage thus
emphasizing that if an organization is able to develop and maintain the new and the
already existing resources and capabilities with being receptive to changes in the
hypercompetitive market, it leads to the sustainability of competitive advantage of the
organization.
Figure 2.2 – The resource based approach to business strategy
Source: Based on Wade and Hulland (2004) cited in Yolles (2009)
Supportively, Dutta et al. (2005) and Kor and Mahoney (2005) highlight the
importance of unique resources, competencies and capabilities of the firm,
implementation and finally performance which forms the basis of the resource based
view of a competitive strategy.
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Further, McKee and Varadarajan (1995) also point out that the resources forms and
provides foundation for learning which further helps the organization to gather
supplementary resource.
Limitations to Resource based view
The resource based view requires identifying and measuring resources and assets
that lead to high performance, but according to Dyer (1996), few empirical studies
have attempted to identify and measure the specialized assets only, that lead to high
performance. Moreover, Spyropoulou, Skarmeas and Katsikeas (2010) assert that
resource based view literature underscores the importance of identifying specific
resources and capabilities that are valuable in a particular research context.
Further, Priem and Butler (2001) criticise the resource based view as it assumes that
the product market is stable and it ignores the real value of the resources thus
scholars have to take into consideration the combined value and demand to enhance
the status of the theory. Furthermore, Clulow, Barry and Gerstman (2007) also
criticise the resource base view theory as being limited in application as it indicates
the strategic role of management to be a process rather than from the operational
aspects of the firm’s resources.
2.4 Knowledge based view
According to Itami and Roehl (1987), the knowledge assets which constitute
experience and information represent the true feature of being distinctive and
attaining sustainable competitive advantage as these are inbuilt or inherent and
difficult to imitate. Supportively, as noted by Zack (1999), knowledge which is
developed from experience, is tacit or inherent and rooted in complex routines of the
organization and is context specific cannot be traded or is not a disposable utility
which makes it hard to imitate, thus bringing out that it is one of the most important
strategic resource in attaining competitiveness.
Moreover, visualising and identifying the areas where an organization is ahead of its
competitors because of its unique knowledge, and if applied and placed profitably
leads to sustainable competitive advantage. Supportively, Hamel and Prahalad
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(1989) point that clearing, defining and articulating an organization’s strategic intent
helps in elucidating the role of knowledge in strategy. Further, after identifying this
required knowledge, it should be compared to organization’s actual strategy which
would help bring out the strategic gap that should be covered to attain sustainable
competitive advantage (McKee and Varadarajan, 1995).
Fig.2.3 demonstrates how visualising and identifying helps create synergy which
leads an organisation to find the strategic and knowledge gaps in their current and
intended operations and knowledge respectively.
Figure 2.3 – Relationship between the knowledge and strategic gap through
visualization
Source: Developed from Zack (1999) cited in Yolles (2009)
Further, according to Parthasarthy and Sethi (1992), when an organization’s
employees who are well equipped with knowledge of different subjects and are
technically competent, interact among each other in various contexts, the synergy
thus created helps the organization to create competitiveness as the organizational
knowledge on the whole rises as well.
Johannessen et al. (2001) emphasize that, development of individual and the
corporate knowledge helps an organization to reach towards innovation leading
towards continuous up-gradation or advancement and competence development,
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consequently leading to attain sustainable competitive advantage. Supportively,
Furlong (2005) emphasize the importance of management’s ability to facilitate the
knowledge among the different channels of the work environment such as it creates
knowledge and fosters learning, sharing and re-use of organisational and individual
knowledge, so that an effective strategy leads to attainment of competitiveness.
Figure 2.4 – The relationship between knowledge and sustainable competitive
advantage
Source: Yolles (2009)
As demonstrated in Fig 2.4, competitive advantage is the result of the synergy
between intrinsic and extrinsic knowledge through the channels of performance and
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innovation. Further, Sustainability of competitive advantage is the result of the
continuous improvement through the synergy created though.
2.5 Porter’s Generic Strategy (1985)
Though, there have been much developments and advancements in the theories
revolving around the whole competitive advantage concept, the ideas and work of
Michael Porter (1985), that strategies can be classified into generic categories
namely, cost leadership, differentiation, focus or a combination has been the most
influential over the years compared with any other writers in considering and
selecting company strategies. The theories developed thereafter, though different,
but do come out or takes the Porter’s theories generated, as a base and could be
termed more as the result of the evolving cycle of the concepts of strategy and
competitiveness. Supportively, Bowman and Johnson (1992) state that it is very
unusual to find managers in today’s time who talk about strategy and do not include
‘cost leadership’, ‘differentiation’ and ‘focus’ in their discussion. According to Porter
these generic strategies if used efficiently are capable of attaining above average
industry results among the competitors. Drobis (1991) points that with the movement
of organisations into hypercompetitive markets and engaging with new competitive
era, the continuous need to innovate and communicate becomes harder and thus
there is a need to adopt one of the specialised generic strategies to reach out to
customers differently and gain competitive advantage.
The three generic strategies are as follows:
Cost Leadership Strategy
This is based on acquiring competitive edge through channelizing a low cost
structure in the industry where an organization must institute a low cost edge to all its
activities, be it manufacturing, distribution, replenishment, workforce or even the
leadership mindset. Moreover, an organization should be able to remove or change
all its activities which do not provide it with a cost advantage, rather they must find
ways to reduce cost or even look for ways like mass production, input cost,
economies of scale, raw materials access, input cost, technology, utilization of
Broad Scope
Narrow Scope
Sources of competitive advantage
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resources, product design and even can look to outsource its activities to other
organizations that could then help it achieve cost advantage (Akan et al., 2006).
Focus Strategy
This is based on acquiring competitive edge through channelizing a narrow or a
specific market segment such as a particular product range, customer group,
geographical area or service line. Akan et al. (2006) highlight that a focus generic
strategy is aimed to acquire and grow market share by operating in a niche segment
and directing its resources to certain activities of the value chain, more effectively
and in a better way than its market competitors to build competitive advantage.
Differentiation Strategy
This is based on acquiring competitive edge by channelizing its product or service in
a ‘different’ way such that they are able to set apart their offering in comparison to its
competitors and the organization is able to tailor the products or service in a way
such that the consumers need is fulfilled. Akan et al. (2006, p.46) state that “the
differentiation strategy appeals to a sophisticated or knowledgeable consumer
interested in a unique quality product or service and willing to pay a higher price for
these non-standardized products”
DIFFERENTIATION OVERALL COST
LEADERSHIP
Figure 2.5: Porter’s Generic Strategy Framework
FOCUS
26
Criticism
Though Porter’s Generic Strategy matrix laid the foundation for a lot of strategies to
achieve competitive advantage, it does have criticism its way. According to Miller
(1992), specializing in a specific strategy could lead to inflexibility and narrowness of
the organization’s vision in the long run as it might create gaps in the organization’s
ability to offer different products and ignore the important needs of the customer.
Further he states that “companies that are too single-minded often open themselves
up to a single critical fault, to a weak link in an otherwise exemplary chain” (Miller,
1992, p.37). Study by Schul, Davis and Hartline (1995) outlines that where, low cost
generic strategy is inclined towards pushing profitability and sales and further is
inclined to alleviate effect of supplier power and rivalry, differentiation is inclined to
push sales only. Study by Wright, Kroll, Pray and Lado (1995) highlight that
competitive advantage can be achieved by considering both, internal and external
factors in strategy. Miller (1992) further highlight that there is a danger of imitating
the strategy and products and services of organizations who specialize in a particular
thing and it might be difficult to differentiate itself again from others after imitation by
others who take advantage of the market by getting creative and mixing strategies.
Moreover, obsessive specialization in cost leadership might result in outdated and
sub-standardized products which a customer would never like to have.
2.6 Choice of Strategy
According to Porter, most of the companies are not loyal towards a particular
strategy and gets ‘stuck in middle’ and thus low profitability is almost guaranteed
according to him. However, strategies these days are a combination of all the
generic strategies, and differentiation is the central issue in all of them.
Conversely, Miller (1992) points that a mixed strategy, in which characteristics of
both cost and differentiation strategy are merged would help in decreasing the risks
of specialization and also lead to the positive synergy from each strategic
perspective to combine which might bring overall profitability to the organization.
Further, diligent research and up-gradation in market and along with attention
towards quality, convenience, price, reliability, service and style all together and not
just attention on few things, would lead towards achievement of competitive edge.
27
However, excessive innovation might also lead to over costing of the product that
might also not be in the league table for competition in market. Supportively Parnell
(2006), suggest that successful integration of various strategic components is the
key to success rather than just low cost, differentiation or focus.
Drobis (1991), emphasize that there is a need to answer on as to how an
organization stands out in the crowd and becomes different from competitors to gain
advantage and the superficial value of the product and service offering to customer
must be increased. Further, he states that the organizations providing commodity
products, which are surrounded by close substitutes, might emphasize on cost
based strategy but in reality each product and service according to him can be
differentiated in the way it is marketed or offered to the customer. Supportively,
Sashi and Stern (1995) indicate that adopting a differentiation strategy will lead to
the goods made to order rather than made for stock goods which might block the
capital in the long run. According to Akan et al. (2006), though there is a need for a
number of factors to follow generic strategy, they identified, innovation in marketing
technology and methods, fostering of innovation and creativity and focus on building
high market share as three tactics which are related to the overall managerial and
organizational performance that could lead towards competitive advantage when
following the differentiation strategy. Further, organizations that do not differentiate
themselves are more exposed to face the price competition and thus lose the
advantage of non-imitation by close competitors.
Finally, as Pretorius (2008) asserts that, since generic strategies alone do not meet
the need for competitive advantage, there is a growing concern that leaders and
managers of corporate world must construe their position in the complex turnaround
circumstances. Thus, “the requirements of success in this new era will be vastly
different than those of the past decade. Market leaders will be those that shape and
adapt to the new rules” (Corrigan, 2004, p.48).
28
2.7 Sustaining Competitive Advantage
Smith and Flanagan (2006, p. 8) point that, “for most companies, competitive
advantages are subject to imitation and thus are not sustainable over long time
periods”. Thus, smart companies are those which regularly keep a check on the
external and internal environment developments and promote new competitive
advantages. Supportively, Baghai, Coley and White (1999) emphasize that
accumulation of combinations of those capabilities which are difficult to imitate bring
in lasting and sustainable competitive advantage to an organisation. Further, he
points the importance of distinguishing an organisation’s capabilities for influencing
corporate success and value growth of the business in the competitive arena as this
successfulness of accumulation process of distinctive capabilities determines
positional advantage of an organization. Since these are critical to an organization’s
success, distinguishing them from business strengths is crucial (Smith and
Flanagan, 2006).
Collis and Montgomery (1998) argue that these distinctive capabilities or resources
develop as a source of sustainable competitive advantage after complying to the
following conditions: First, it must be competitively superior and valuable in the
product market. Second, it must be difficult to imitate. Third, it must not be easy to
replace by an alternative capability. Fourth, it must be durable and finally, it must be
difficult to trade.
Drucker pointed that an organization, to be sustainable needs to be open to changes
and adapt itself with the changes in both the internal and external environment.
Further, there is a need for merging the existing competitive advantage with the
process of continuously learning, advancing, evolving, and collaborating
organization. According to him, forming the key to success, competitive advantage
can be sustained in the long run if an organization is responsive and adaptable to the
wants and the needs of hypercompetitive market. Supportively, Mariotti (1997, p.18)
state that, “Achieving sustainable competitive advantage is an endless journey-
along a road that always seems to be under construction”.
29
2.8 Competitive advantage in Indian apparel industry
Chandra (2006) points that the domestic organisations have been ignoring the large
domestic market base off lately and are not taking the advantage that they can gain
by large economies of scale which can help deliver cost advantage and mitigate the
risk from the global market.
According to Rao (2004), Competitive advantage by apparel firms in India can be
sustained by competitive pricing, quality, better product development and quick
production and delivery. He further emphasizes the importance of specialization and
complying with buyer standards as this would differentiate an organisation from
others and consequently lead to competitive advantage.
As highlighted in Nagappan (2009), with the rise in global competition, emphasis has
shifted on quality products and looking towards creation of a niche for their products
along with strengthening of the back end of supply chain. Further, he highlights the
country’s skilled manpower and designing capabilities to get above other Asian
competitors. Furthermore, Ramalingam as cited in Rao (2004), highlight that, product
development is an important area to focus to stand out in the crowd and get
competitive advantage in the apparel industry in India. Supportively, Ramaswami as
cited in Nagappan (2009, p.2), state that they “try to make something that is far
superior to what is available in the market, with value added treatments like flame
resistant, acid resistant, high visibility, anti-static or even a combination of all
these. And we differentiate ourselves with the comfort value of our technical
garments”.
Up-gradation or change in technology by innovation leading to a flexible production
process along with speeding it and reducing the wastage of materials and lowering
skilled labourers demands would term apparel industry’s work as competitive in
today’s time (Essletzbichler and Rigby, 2001). Further, usage of quick response
system which could lead to an efficient and effective integration of components
between production and retail network would also help in the process of creating
competitive advantage.
According to Dana, Hamilton and Pauwels (2007), the cost and differential factors
which though are momentous, may not be able to meet the rising competition alone.
There is a growing concern about the importance of product quality considerations,
30
both actual and perceived, and minimising delivery risk and adapting to new trends
swiftly which helps in complementing the cost and differential factors.
Supportively, Gereffi (1999) point that advances in high-value research, design,
sales, marketing, and financial services have taken over and become more important
than the traditional scale, volume, and technological advances in the apparel
industry.
Further, they point that; those operating domestically might find it much easier to
deal with the problems faced when trying to target competitive advantage.
Furthermore, it must be noted that apparel industry of a particular country overall,
does play a major role and the development of the industry as a whole helps in the
development of each organisation under it. This highlights the need to tap the large
domestic market efficiently.
Recent report by Bharatbook (2009, p.1) projects that, in the face of diversified
global competition, “apparel organisations who invest in capabilities such as total
quality management systems, modern design facilities, logistics and transportation
functionality and information technology (IT) infrastructures stand to gain valuable
competitive advantages in being able to offer more to their customers”.
Finally, as Kaplinsky (2000) highlight, that a transformation process is driven by the
organisations, holding leadership or superior market positions as these organisations
that acquire superior position are able to upgrade their activities and thus formulate
efficient strategies to win in the hypercompetitive markets.
31
CHAPTER 3: RESEARCH METHODOLOGY AND METHODS
3.1 Introduction
This chapter revolves around the different research methods and methodologies that
have been adopted for carrying out, the investigation and evaluation of organizations
in the Indian apparel industry which would lead to establishment of the relation
between the theoretical concepts and processes explored in the literature review
above, with the activities and practices carried out by the organisations in the Indian
apparel Industry. This chapter starts with explaining the research philosophy that
surrounds this research followed by explaining the research choice undertaken to
relate theories with this process of research. Further, the research strategy that is
applied is explained, which helps in formulation of a framework for gathering and
analysing data collected subsequently during the research process. Furthermore,
research approach, weather qualitative or quantitative is discussed followed by the
tools and techniques used and applied in the research, further followed by defining
the way it would be analysed and evaluated. Lastly, the ethical issues considered in
the research along with the limitations that were identified to the research process
undertaken are stated.
3.2 Research Philosophy
Saunders, Lewis and Thornhil (2007) highlight the importance of understanding of
the theoretical terms and background to today’s managerial research philosophy as
they influence the relationship between knowledge and its progression. Further,
these theories enlighten us about the research process or the way it is conducted
(Crowther and Lancaster, 2009). Two of the earliest and main approaches to the
research are ‘Epistemology’, which is based on organising and emphasizing
knowledge in the form of theories, and ‘Ontology’, which is based on suggestions
about the nature of phenomena or philosophy without relating it to a knowledge
32
base, and rather concerned with nature and structure of existence and reality
(Tadajewski, 2004).
Further, Tadajewski (2004, p. 312) defines epistemology as “the branch of
philosophy concerned with the nature of knowledge, specifically how knowledge
about knowledge is possible and concerns the study of the criteria that delimit what
does and does not constitute warranted knowledge”.
Branching out of the epistemology are two main research philosophies: Positivism
and Interpretivism/Phenomenology. The researcher(s) considering information on
the resources relates itself to the positivist mind-frame towards the development of
knowledge, where the reality is supported with empirical evidences such as theories
(Jankowicz, 2005). Further, according to him personal beliefs, emotions, feelings and
intuition are not considered in a positivist philosophy. Conversely, the researcher(s)
considering information on the feeling relates itself to the interpretivist mind-frame
towards the development of knowledge, where there is no need to seek and apply
theories thus focussing on a socially agreed understanding. Here, behaviour itself is
the theory and knowledge comes by identifying the target participant’s mind-frame
and considering what they see, as evidences.
The research philosophy for this research project is Interpretivism as it involves
interviews with people rather than objects, and the findings are interpreted on the
basis of behaviour, beliefs and thinking of participant’s involved rather than objects
or resources. Supportively, Saunders, Lewis and Thornhill (2007, p.106) state that
interpretivism “advocates the differences between conducting research among
people rather than objects such as trucks and computers”.
3.3 Research Choice
The choice of research lies in two contrasting base of theories which lie in the
methodology of theories and development of knowledge base. These theories,
according to Sekaran (2003), help in knowing, realizing, understanding and
forecasting the whole research investigation phenomenon. These two choices of
theories are, ‘Deductive theory’, which characterizes the normal and regular relation
between the theories and the research, and ‘Inductive theory’, which characterizes
the experience rather than the relation of theory and research (Remenyi et al., 1998).
33
In a deductive choice of research, development of theories and hypothesis takes
place first, followed by tests through empirical findings or observations on these,
leading to a logical conclusion by simplifying already available facts (Sekaran, 2003
and Crowther and Lancaster, 2009).
On the other hand, in an inductive choice of research, development of theories and
hypothesis takes place in the reverse order, after the observation of data and
information to explain them (Sekaran, 2003). In other words, based on the facts
derived from observation of certain phenomenon, establishment of suggestions
takes place which could be in the form of theories as well. The biggest advantage
according to Crowther and Lancaster (2009), an inductive research holds in
comparison to the deductive is its ability to be flexible as all categories of information
can be used to establish the resulting theories.
With regards to this research project, an inductive approach is used to carry out the
research process, wherein, the findings are extracted or collected from different
sources and then the implications or suggestions are inferred for the theory that lead
to the whole research project (Bryman and Bell, 2007). In comparison, the deductive
approach which is very linear and follows a particular process, step by step, could
have restricted our thinking to the available theories only. Whereas because of the
nature of different kind of people operating in the apparel industry, thus having
different thinking and mindsets, requires us to analyse a new theory based on the
findings, and hence can be only met by an inductive approach (Bryman and Bell,
2007 and Remenyi et al., 1998).
3.4 Research Strategy
Bryman and Bell (2007) report that the research strategy helps in formulation of a
framework for gathering and analysing the information and data collected
subsequently during the research process. Further, they highlight the importance
attached with the correct choice of research strategy as it helps to reflect upon
different research dimensions and processes. Furthermore, the importance of
selecting the appropriate strategy lies in “expressing casual connections between
variables; generalizing to larger groups of individuals than those actually forming part
of the investigation; understanding behaviour and the meaning of that behaviour in
34
its specific social context and having an over-time appreciation of social phenomena
and their interconnections”(Bryman and Bell, 2007, p.40).
However, as pointed by Saunders, Lewis and Thornhill (2007, p. 135), it must be
noted, that there is no one strategy that can be kept on a superior position than the
other. Further, “right choice of strategy institutes from research question, objectives,
existing knowledge, availability of time and resources and own philosophical
underpinning”.
An organization can select from a vast no. of research strategies’ options. The most
commonly used of all of them are surveys, experimental Strategy, historical
research, ethnography, action research and case study.
The in-depth relative study and analysis of scenarios which are alike in different
organisations and which have similar nature of problem to address the research
question and objective of the research project is termed as a case study (Sekeran,
2003). Supportively, Robson (2008, p. 178) states that it is “a strategy for doing
research which involves an empirical investigation of a particular contemporary
phenomenon within its real life context using multiple source of evidence”. Further,
according to Morris and Wood (1991), a case study strategy provides one with an
opportunity to investigate the in-depth concepts, activities and problems of an
organisation which is relevant to the research in the current scenario.
The research strategy that is used to work upon in this research project is a case
study, wherein a comparison is made between three different organisations from the
Indian apparel industry. A total of five random companies were selected based on
their hold on the apparel industry’s market in India out of which three responded
positively for the interview and the other two were not accessible because of the time
and availability factor. Supportively, Yin (2003) establishes that multiple cases, i.e.
investigation of more than one case can also be used if there is a need to establish
and compare findings with the first case to provide the researcher with empirical data
to analyse.
Moreover, considering the diversity of products and services offered by each
organisation, type of ownership, geographical positioning within the country, an
emphasis was laid on differentiating companies from majority of the above aspects,
so that the findings are not influenced by a single organisation or different
organisations having similar set of functioning (Crowther and Lancaster,2009) .
35
Supportively, as highlighted by Bryman and Bell (2007), consideration of more than
one case which will highlight the comparison and contrasting of organisations also
has helped in considering the unique and common findings among the cases, which
subsequently will help reflect the theoretical part on the findings more frequently.
However the decision to choose five as the no. of companies being investigated was
based on the practical consideration of time constraints that prevailed for the
successful completion of my dissertation. Further, to be able to do a qualitative
analysis, which stems out from the research objectives, strategy and the data
collection technique applied. There was further, a specific need to keep the no. of
respondents to appropriate no, and rather extract qualitative data from them to be
able to synthesise the findings in an efficient and effective way. However, it was
taken care that there is not just only one respondent’s involvement as it would have
lead to the mind-frame and problems surrounding around only one organisation and
the problem of being biased would have occurred (Remenyi et al., 1998).
Conversely, taking a large number of respondents for this study would have provided
with a large amount of data that would have made difficult to comply within the word
limit constraint for the Masters Dissertation project. Thus taking three respondents
have made it practical to compare three different strategic thinking and working
styles that prevail in the same industry.
Instead of choosing other research strategies such as “survey, which is used when
you are seeking representative views; experimental strategy, which is required when
you are interested in casual relationships; and historical research, which is used for
events that occurred in the past, the case study approach was chosen as there was
a need to seek an in-depth investigation study” (Biggam, 2008 cited in Coates and
Sloan, 2008, p.135).
The rationale for choosing a case study approach lies primarily in the objectives of
the research project wherein, there is a need to investigate the strategies applied by
different successful organisations and the threats and opportunities they face in the
process of achieving and sustaining competitive advantage. Supportively, Bryman
and Bell (2007) highlight that, the researcher’s views and ability to give a logical
stand towards the reliability, replicability and validity, of the case study provides it
with a rationale. In this case, it was found that the organisations chosen for
investigation are operating in a diverse genre of product of Indian apparel industry
36
which allows gathering data from all different yet closely related segments of market,
which consequently helps to consider all segments of the market in the analysis.
Further, this can be done when there is a specific concentration on the in-depth
strategic behaviour of the organisations operating in this industry which can be best
answered by people who have been spearheading the strategies of these
organisations. Furthermore, the literature review just provided with theoretical
frameworks devised and preached by different authors along with the understanding
of the basic understanding of the concepts and working of the whole competitive
advantage process. Thus, emphasizing the need to analyze, as to how different
organizations work in reality for the attainment of the competitive advantage.
3.5 Research Approach
The distinctions between Quantitative and Qualitative approaches are the centre for
the evolution of research methodologies, philosophies, strategies and data collection
methods applied. Bryman and Bell (2007) state that, the distinction helps in
formation of an umbrella comprising of different business research practices and
issues.
The main theme of distinction lies in the nature of numeric or non-numeric data or
information that has to be collected and analysed.
Quantitative
Where the research philosophies, methodologies, and methods involve collection of
numerical data or emphasizes on its quantification it is referred as a Quantitative
research (Saunders, Lewis and Thornhill, 2007). Further, as Bryman and Bell (2007)
point, it associates itself with a deductive approach and a positivist epistemological
orientation.
Qualitative
Where the research philosophies, methodologies, and methods involve collection of
non-numerical data or emphasizes on the nature of quality of data collected
(Saunders, Lewis and Thornhill, 2007). Further, as Bryman and Bell (2007) point, it
associates itself with an inductive approach and an interpretivist epistemological
orientation.
37
Furthermore, where the quantitative approach is associated with practices, a
qualitative approach is associated with the assumptions (Baker and Foy, 2008). The
distinction between qualitative and quantitative as stated by Murphy et al. (1998,
p.72) is that “the former investigates the naturally occurring settings, while the latter
is restricted to phenomena that are artificially created by the researcher”.
Emphasizing on the importance of selecting the appropriate approach, the approach
that most associates itself with the research question(s) and objective(s) should be
selected. Additionally, Saunders, Lewis and Thornhill (2007) point that, the
researcher should also ask his inner self or use his imagination for the same and
consider the research as a highly creative process.
With regards to this research, qualitative approach associates itself with the in-depth
situation and helps investigate a lot of issues which could not have been identified by
quantitative approach. Attention to less obvious situations which could not have been
identified just with the quantitative approach towards data collection, rather the in-
depth interviews with the executives has helped in extracting information about the
real problems and challenges they face (Jankowicz, 2005). Furthermore, each issue
came through the medium of expression which helped in understanding them better,
and unlike quantitative approach which identifies variables but ignores those which
are not applicable, using a qualitative approach helped identify the appropriate
variables along with those not appropriate with the logical reasoning behind them
(Jankowicz, 2005 and Baker and Foy, 2008).
3.6 DATA COLLECTION
Data collection forms an integral part of the whole research cycle as it links the
theoretical underpinning of the concepts with the research objectives by analysing
the findings, which is the result of the investigation that takes place (Crowther and
Lancaster, 2009). There are a variety of tools and techniques available to use for the
data collection process namely, sampling, observation, questionnaires, examining
secondary data, focus groups and interviews.
Collection of data can be done by either the primary resources or the secondary
resources. Where, ‘primary data’ are concerned with the collection of firsthand data
and information by the researcher, ‘secondary data’ is concerned with collection of
38
data and information which had already been published or is in the records or
gathering information from the resources, which is the result of the research or study
by someone else (Sekaran, 2003).
With the regards to this research, primary data has been collected by conducting in-
depth interviews has been chosen as the mode to access the qualitative data, which
will allow to extract the data which roots deep into the organisational working as the
interviewees would be people, holding high positions in different apparel
organisations, consequently helping to achieve the aims and objectives of this
research project.
The rationale of choosing interview as the source of data collection is considered
keeping various factors in mind, highlighted by Sekaran (2003), such as availability
of facilities, the degree of accuracy required the expertise of the researcher, the time
span of the study and other costs and resources associated for gathering
information. In this case, time factor played a crucial role in selecting qualitative
interviews as the mode of collection. Further the degree of accuracy or the depth of
information required could have been extracted from individual interviews rather than
questionnaires or surveys as interviews which involves the direct interaction with the
interviewees thus avoiding the casualness nature of respondents which is more
prevalent in other tools of data collection. Furthermore, holding interviews served as
a cost saviour, which otherwise could have been high in case of questionnaire or
surveys as it involves a lot of overhead costs such as stationeries and travelling.
Moreover, in a personal interview the interviewer is able to explain the problems,
issues or questions asked more clearly and elaborated if required by the interviewee
along with helping the interviewee to think through the issues, whereas, a
questionnaire or a survey which ideally involves a large set of samples makes this a
more complex procedure (Sekaran, 2003).
Talking about the participants, since the major focus of this research is to gain a
deeper understanding of how organisations act and react in the competitive domestic
market, the executives who hold high and elite positions in these organisations and
would have been able to share their view of the market have been selected as these
are the people who manage and closely experience, working in the strategies they
themselves formulate or compete in. Supportive to the points highlighted by
Crowther and Lancaster (2009), selecting the interviewees was further not just based
upon their power and position in the organisation but, time and availability of actual
39
people to be interviewed in the organisation also lead to selection of people that
have been chosen to be interviewed in one instance.
The mode of interview was a combination of email and telephone. Firstly, an email
with the interview questions was sent out to the intended participants after confirming
the same through a telephonic conversation, where the aims and objectives of the
research were communicated to them and importance of their role was discussed
(Baker and Foy, 2008). An option to reply through email or rather have telephonic
conversation was given to them so as to provide flexibility to the participating
interviewee. Most of the participants were comfortable in having a telephonic
conversation rather than typing and sending back replies through email. The major
advantage that the mode of telephone or email provided over face to face or others
was primarily the swiftness of the whole investigation process, as all the
organisations which were geographically diversified could be covered in short span
of time (Sekaran, 2003). However, one of the interviewee found it comfortable to
participate through video conferencing with the help of video conference software
‘Skype’. This method of online interviewing gave further advantage of exchange of
expressions which otherwise, was not being possible through the telephonic
interview (Baker and Foy, 2008).
In order to establish a framework and structure to the interviews and to keep the
interviews flexible, the interview questions were selected beforehand and were
framed in a semi-structured format, so that in-depth information could be extracted
and further questions be moulded in a way to suit the interviewees with the basic
focus on adapting with the different mind frames of the interviewee and situations in
which the interview takes place (Saunders, Lewis and Thornhill, 2007). This also
helps the interviewer to be open to new ideas and issues which might not have been
emphasized had the interview questions would have been rather in a structured
format (Jankowicz, 2005). Furthermore, it also encourages meaningful responses as
it involves those replies as well, the questions to which could have been missed, had
it been a structured interview framed solely on the interviewer’s discretion. To check
the validity of the interview structure, a pilot study was conducted with colleagues
and friends that helped re-define the structure (Bryman and Bell, 2007). However,
since the participants in the pilot study were not part of the apparel industry and they
could not relate to the questions directly, self intuition and belief came in place to
finalize the structure of the interview.
40
The following people were to be interviewed:
1. Mr. Akhil Jain, Creative Director, Madame, India
2. Ms. Ruchi Agarwal, Director, Dcot retail-Donear Ind Ltd.
3. Mr. Sachin Lamba, Deputy Manager (Merchandising), Vishal Retail India pvt
ltd.
4. Mr. Saumar Sharma, Business Head, Camaro, India
5. Ms. Ritu Chabbra, Manager (Merchandising), Koutons Retail India Limited
Since the issue of competitive advantage is related to the strategic view point of the
management, it was essential to interview people who formulate these strategies.
The above people represent a diversification of participants from Indian apparel
industry which allows providing information from the perspective of people who
formulate strategies at high management level such as Director, Creative Director as
well as the people from Upper-middle level of management, who assist in
formulating strategies, such as Manager and Deputy Manager of Merchandising, and
Business heads who hold a key position in defining the planning and strategic
decisions.
3.7 Analysis
After the collection of data, the analysis of data is intended by using the discourse
analysis approach, as highlighted in Coates and Sloan (2008), whereby data and
information collected is deconstructed in a way, so as to interpret the real or further
hidden implication, in what people have said, during the process of data collection.
Further, help of background assumptions is taken in order to do a close scrutiny of
the data provided to help in firming the base of analysis and conclusion thus
provided.
3.8 ETHICAL ISSUES
There has been a growing importance of ethical considerations while undertaking a
research project and respecting the research participant’s participation by providing
them confidentiality, anonymity, privacy, objectives of the research along other
41
important issues, wherever required (Baker and Foy, 2008; Bryman and Bell, 2007;
Sekaran, 2003; Robson, 2002 and Remnyi et al., 1998).
While conducting this research, confidentiality and privacy has been considered as
the top priority while investigating and involving other people. The participants were
well informed about the research objectives and the purpose of this research in the
initial telephonic conversation and the cover letter sent while contacting them
through emails as well. A clear statement of the research purpose along with their
consent to be part of this research was sent out and thus specific care has been
made to communicate the information about the true nature of the research. The
consent form also acknowledged the option of participant’s confidentiality and a
statement with option to hide the identity was provided, if required by the participant,
in the consent form.
Further, it was made clear that the participant’s involvement is completely voluntary
and they can opt out at any point of time of the research if they wish so. It has also
been taken care that the research doesn’t violates self determination rights and any
act or question does not cause harm to the participant in any form be it be physical
or mental such as self esteem and self respect. The total no. of people contacted for
the interview were five, where only three participant’s agreed to be part of the
research, thus taking care that the other two participant’s are not forced to be part of
the research and their individual desires were respected. Moreover, it has been tried
to the best efforts not to misrepresent the knowledge or information shared in a
wrong sense and the information thus shared is not shared with any third party in
competition with the participant’s organization. Finally, the participant’s were given
an option to get the report and conclusion of this research so that it is acts a source
of mutual benefit to both the parties.
3.9 LIMITATIONS AND POTENTIAL PROBLEMS
Though there has been made a cautious effort to reduce the risk of the limitations
that arise from this research practice, there are possible limitations to this research
project which are important to take into consideration so that it provides a rationale to
a better further research in the future.
42
The primary limitation of the whole research project is the time constraint that
prevailed, because of which the depth of research could not be reached. Further,
since it was the research for Masters Dissertation, it limited the research writing to
only 15000 words which again acted as a barrier in extended research which could
have been helpful in providing more appropriate findings.
With relation to research strategy and design, only three participants’ agreed to be
part of the research which limits the findings to only a small no. of respondents and
not the industry as a whole. Since telephonic interviewing was the primary technique
to the data collection, the limitation prevailing to the same acted as a barrier as
better information and interpretation could have been gathered, had it been face to
face conversation or any other mode of data collection. Moreover, because of the
nature of research being qualitative, it took a long time to conduct the interview and
the participants’ are tend to get bored over this long duration of interview.
Regarding the methodology of the research, it is noted that only three participant’s
were involved in the research and the age of all the participants range between 24-
30 years. Further, since the apparel industry can be divided into various segments
there is a need to consider more segments such as organizations in kids wear,
menswear, accessories and other segments as well, in the further research so that
the research is not limited to just three segments of the whole apparel industry.
Furthermore, there are differences in the market orientation of the organizations
which the participants are associated with. Where one of the participating
organization is a single entity, another one is Pvt. Ltd Co. and the other one a
partnership firm, which leads to difference in behaviour because of the their market
orientation.
Furthermore, because the central nature of the research lies in strategy, participants
might have not shared the exact strategies because of the risk involved in sharing
the strategy, thus leading to only limited data for research. Finally, since there is
involvement of only one researcher and all the related work is carried out by self, be
it conducting interviews or synthesising them into conclusions, there is a possibility of
being biased to the results and interpretation in the mind of the researcher himself.
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CHAPTER 4: FINDINGS, ANALYSIS AND DISCUSSION
This chapter revolves around the discussion and evaluation of the qualitative data
and information extracted from the interviewees who are part of the Indian apparel
Industry. This chapter involves the application of research techniques identified in
the above chapter along with the critical analysis of findings against the applicable
theories and frameworks identified and explored in the literature review.
4.1 FINDINGS AND DISCUSSION
4.1.1 Industry Competitiveness
When asked about the general competitiveness that prevails in the Indian apparel
industry, Mr. Akhil and Mr. Sachin highlighted the nature of the industry as highly
unorganised sector because of which all the related activities become unorganised
and complex. Further, they stated that the supply and logistics forms an integral part
in the efficient working of an organization. According to Sachin, “Competitiveness in
this industry comes from how you manage or supply, not just production”. Ms. Ruchi
and Mr. Sachin both accept that the consumer today is getting smarter and there has
been a shift in the buying behaviour of the consumer thus making it is essential to
meet the needs of the consumers. Further, Ruchi said that there was a lot of
competition in the industry up till last year because of the sudden rise in the discount
format (40% + 50%) stores. However, brands that provide cheaper products have
started diminishing. Overall all of them agreed and voiced that there is a high degree
of competitiveness in the industry for now. Thus, implying the need to understand the
market and planning strategies accordingly, as the level and degree of
competitiveness defines and lays the framework for generating business strategies.
Further, this implies the importance of getting the competitive advantage in the
market and highlights its importance in the strategy building process which can lead
to getting returns that are more than the average market returns.
44
4.1.2 Organisational Differentiation
When asked about, what does their business do better than anyone else and how
their product and services stand out in the crowd, all the participants said that quality
is the key to succeed, and they have excelled in providing the best quality, which
makes them stand at a competitive position. However, a pattern of different
strategies and concepts was observed and it was evident that there was not one
particular common point to relate the strategies which may lead to one business
being better than other in different aspects.
For Akhil, the idea of keeping just a single warehouse in the whole country makes
their work easier, saves cost and allows them to regulate better inventory
management. Further, he says that “Designs and colours is our USP, which allows
differentiating our products from others, by tapping consumer’s varying tastes and
preferences”. On the other hand, for Ruchi, apart from their excellence in providing a
varied range of fabric quality, efficient supply chain and emphasizing on quick stock
turnover strategy along with their marketing strategy of associating a celebrity as
their brand ambassador is what sets them apart from others. According to Sachin,
pitching the products to lower income range customers, which everyone doesn’t do
along with their format of huge spacious hypermarket format stores gives them more
options to vary and pitch with. Further, they play with a range of offers to attract the
customer and earning in quantities of varied product line rather than just one
particular product which helps them differentiate themselves from others.
Thus, stereotype of differentiation that exists is that, every organisation is trying to be
different from each other by doing things that their competitors are not fully capable
of doing or have not tapped yet. Further, by differentiating their offerings, they
encourage the options for customers to choose from and the one which is able to tap
most of the customers’ needs win the market opportunities.
4.1.3 Generic Strategy
Comparison shows that, there has been a common generic strategy of ‘Focussed
Differentiation’, which prevails in the organisations in the apparel industry as all the
organisations compared here focus on different niches of the market. Where, Akhil’s
organisation, ‘Madame’, concentrates particularly on Western women wear segment,
Ruchi’s organisation, ‘Dcot’, targets the middle level income people as she states
45
that, “Our brand is neither a low income brand and neither a very high income brand,
it is an affordable brand”. Similarly, Sachin’s organisation, ‘Vishal’, focuses on the
lower middle class income segment of the consumers stating that “We have
maximum of our stores in backward or developing areas and very few of them are
near high streets, which helps us focus on the lower middle class income segment of
the consumers”.
Thus, it can be interpreted that ‘Focus’ on a particular market segment or product
line along with differentiating its products and services from others, is the generic
strategy that majority of the organisations have been following, which thus helps in
concentration of all the resources and forces of an organisation on a particular niche
segment of market. Further it can be interpreted that organisations which
successfully apply a ‘Focussed differentiation’ strategy are able to tap the market
opportunities in its chosen market segment and likewise be well prepared about the
threats that pertain in the market segment.
4.1.4 Resources
Resource building plays an important role and having distinct resources according to
the participants’ do provide them opportunity to distinguish themselves from others.
The importance of IT systems in today’s scenario is underpinned with all the
participants’ talking about its importance as a resource today. Akhil states that, “ERP
(Enterprise Resource Planning) software’s such as SAP allows them to manage all
functions from head-office which allows a better control and record of all the
functions”. This also helps them evaluate and analyse important review decisions to
be made such as which things went right, which went wrong, where there is a need
for more resources and where there are excess resources employed along many
others. Further, Ruchi and Sachin both point that, efficient human resource planning
plays a major role these days as it provides them with people, who lead them to a
competitive advantage situation. Financial resources play an important role as well
as Sachin provides an example about the raising of funds that they got by issuing
shares in the market. He states that, “Opening up shares for public to raise funds
was a breakthrough decision which helped them raise funds for their strategies”.
However, Akhil points that these resources can easily be imitated as they are
available to everyone and not only to them. Further there is a need to involve
resources that brings value as well apart from helping in the regular working of the
46
business, thus highlighting the need for resources that are unique and rare and
cannot be easily imitated for retaining competitive advantage for a long time.
4.1.5 Knowledge
It was evident that knowledge gained from experience provides the organisations
with the ability and sources to build up to new concepts and things that could further
continue to provide them with the new competitive advantages. All the organisations
taken for investigation in this case have huge experience in the apparel industry
which dates back to pa three decades as well. This implies that knowledge building
takes time and is an evolutionary process. Further it shall also be noted that there is
no limit to the knowledge.
Understanding the importance of knowledge in the organisational working, Sachin
states that “it is ensured that each employee knows about the products and services
being finally sold so that knowledge flows in the whole organisation and synergy of
feedback is encouraged to improve the knowledge sharing culture which
consequently leads to further development of product and services and hence
competitive advantage”. Further, the importance of identifying and visualising the
knowledge gap was evident as Akhil states that by “identifying the differences in the
Western and Eastern world’s apparel market they have found the reasons for
improvement” as they use techniques and procedure which they never heard of
before. This also has lead to innovation of techniques and ways for improving their
product. Supportively, Ruchi states that “Retailing is all about detailing” and further
points that analysing statistical information about the performances of their stores
and other factors has helped them in the knowledge creation of the gaps between
strategy and their operations and thus has helped in formulation of policies for future
planning and answering questions of ‘How’, ‘what’ and ‘where’. Furthermore, Akhil
states that there is “no one particular system to gauge information”, it is a continuous
and cohesive process, the benefits of which can be reaped in the long run.
4.1.6 Organisational Planning and Operations
The importance of planning in advance was evident from the discussion with all the
participants’ as it makes them well prepared and stand in a better position to
withstand any other irregularities. Akhil emphasises on the importance of Planning
Production control (PPC) system being in place. Further, the need to take
47
appropriate decisions at appropriate time is also highlighted in discussion with him.
For Sachin, there is a need to put right people in right place with appropriate
knowledge along with planning on as to how to improve the product quality without
losing the cost strategy factor or as in his words “The product should be worth its
money, because it degrades the brand image if it is not so”. Moreover, he points that
there is a need of proper hierarchical structure in the organisation so that the
decisions can be taken correctly and at the right time. Further, Ruchi emphasises
that they have realised the need for regular research as it helps them understand the
consumers better thus identifying the fact that “what consumer says and wants is
what sells”.
Thus, it is clear that the operational decisions are directly linked with the planning
and thinking process of the whole business cycle. The planning in advance for
operations helps lay correct policies and procedures. Furthermore, there is a need to
make important strategic decisions regarding each individual project so that specific
resources could be concentrated for achieving that future competitive advantage.
4.1.7 Barriers
Talking about the barriers in sustaining competitive advantage in Indian apparel
industry, Akhil shares a very interesting story of ‘crabs in a box’, wherein a lot of
crabs are placed in an open box, and whenever a crab tries to go out, the other tries
and pulls him down to reach on the top himself. Here, the different organisations in
the industry can be related to the crabs. Thus, he highlights the degree of
competitiveness in the industry and points that the major barrier is that of competition
and selfishness that is prevalent in the Indian apparel industry. Further, the problem
of imitability of designs and strategies also acts as a barrier as they can easily be
substituted with a lower cost alternative. All the participants voiced their concern over
the irregularities in the market conditions and the pricing of the resources such as
pricing of raw material that is very much volatile. Further, the governmental policies
that are majorly not in the favour of the organisations, act as a hurdle along with the
rising overhead costs, taxes, interest rates and the anti social happening such as
terrorism. However, Ruchi points that “the barriers are common for everyone and
thus doesn’t effect on the competitive advantage to that effect, although there is a
need to keep excelling in what you do best”.
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4.1.8 Competition from International market
Further, with respect to competition from other Asian countries, it was evident from
the discussion that apart from China, all others are not as strong as India is, because
they are still in developing stages and are much smaller as compared to the
traditional Indian apparel industry and its market. However, Akhil highlights that they
are much organised as compared to India because of the nature of various large
unorganised segments that prevails in India. According to him since they specialize
in particular segments such as Bangladesh for sweaters, Srilanka for lingeries, etc,
they stand much organised when compared with India.
4.1.9 Sustaining Competitive Advantage
However, the manpower and cheapness is still the key that India holds, which helps
it sail through the competitiveness from other countries. Though, it is important to
know how the other organizations in these other countries excel in particular
segment so that it helps us develop more. Further, the identification of barriers helps
in finding ways to tackle them, and the one who tackles them efficiently by employing
skills and more efficient thinking, wins the competitive race. Moreover, it is implied
that in-spite of the barriers that prevail in the industry, the market has been growing
overall and the competition level helps the organizations to perform better to get
more competitive advantage. The whole idea of innovation, as a result of cohesive
competitiveness thus comes in practice and results in reaching out to the masses
with a zest to perform better.
In the long run, sustaining the competitive advantage would form the key to success.
All the participants voiced their concern for sustaining quality and concentrate on
doing best what they do along with further development. Supportively, Ruchi states
that “wherever there is quality, the brand will succeed”. However, there is a need to
continuously upgrade one’s products and services.
From a country’s perspective Akhil states that, apart from the organizational and
strategic factors, “Our Country needs to have one institution, i.e. there is a need for
one common body which will lead to standardization of policies” and further goes on
to highlight the importance of strengthening the economy stating that, “there is a
49
need to have an exceptionally well person spearheading the economy of India”, to
keep attaining new heights.
Furthermore, Sachin highlights the importance of understanding and excelling in the
concept of business of BMQLC (Buying, Merchandising, Quality, Logistics and
Concepts). According to him, “the organisation that has mastered in BMQLC can
never be beaten, as it provides an organisation with a monopoly position”.
Overall, it is evident that the sustainability of competitive advantage lies in the right
mix of resource, organisational and knowledge management all together along with
adapting to new and developing market. Finally, the country’s overall development
leads to the development of its industries and vice-versa, thus there is a need for the
development of an industry as a whole and not just one organisation.
4.2 ANALYSIS
The literature review covered various concepts and frameworks surrounding the
whole competitive advantage paradigm, wherein theories and viewpoints of various
authors has been emphasized and highlighted to enhance and build up the
knowledge base surrounding each particular concept and issue. The literature review
depicts an evolution of the whole competitive advantage concept, from a traditional
view point, towards a more resource based concept and then finally knowledge
based. A lot of authors also considered various other factors such as organisational,
financial and legal angle for the competitive advantage. However, the generic
strategies laid by Porter were seen as the base in the whole evolution process of
competitive advantage, wherein pinches of cost, focus and differentiation was
evident in all the theoretical aspects. The rationale for this research, which lies in the
applicability of these concepts and theories in the practical and real working of Indian
organisations in apparel industry, was thus evident when three executives from the
organisations, under the apparel industry were interviewed, which provided empirical
data to compare and relate with the various concepts laid by scholars.
The high degree of importance of the concept of competitive advantage was evident
when the participants of this research agreed on the high degree of competitiveness
in the Indian apparel market. Further, knowledge and clarity of working with the
competitive advantage concepts will lead to getting them returns that are more than
50
the average market returns which is supported by Yolles (2009) definition of
competitive advantage to get more than the average returns. Supportively, as
pointed by Mckee and Varadarajan (1995), competitive advantage forms the
cornerstone of strategy. Further, all the participants highlighted the importance of
quality in the products and services they provide by producing something superior
than its competitors, which, consumers can relate to easily as supported by Rao
(2004) and Nagappan (2009). Moreover, by differentiating its activities from the rest,
an organisation is able to stand out from the crowd (Drobis, 1991 and Akan et al.,
2006) and helps spell out the difference between success and failure along with
capturing new opportunities (Baghai, Coley and White, 1999). Single warehousing
strategy and efficient and creative designing as emphasized by Gereffi (1999) and
Bharatbook (2009) for Akhil; quick stock turnover strategy and marketing its brand
for Ruchi and finally providing a lot of segments to choose from and offers to
customers to attract them, for Sachin, highlights that these organisations differentiate
their business and activities from others, to be in a superior position and strengthens
the customer’s rationale for choosing their product.
It was evident from the discussion with the executives that, focussing on a particular
market segment or a product line is the strategy that majority of them use with a
pinch of differentiation in the area of product development. Further, a combination of
cost and differentiation for Sachin suggests that a combination of two strategies is
also used in some organisations. However, as Sachin further pointed, there is a
need to specialize in one particular segment thus emphasizing on the ‘focus’ strategy
and supporting Dana, Hamilton and Pauwels (2007) as they pointed that the cost
and differential factors which though are momentous, may not be able meet the
rising competition alone. Furthermore, these evidences thus contradict the claims
made by Miller (1991) and Parnell (2006) who emphasize more on adopting a mixed
strategy. Hence, Porter’s claims of not being loyal towards one strategy which leads
the organisations being in the situation of ‘stuck in middle’ is justified from the above
findings.
The resources form an integral part for the development of any organisation and the
executives reveal that, focus on the resources was evident when all of them
highlighted, role that the resources they employ, play. As revealed, investment in IT,
supply chain and logistics, design facilities, transportation and application of total
51
quality management techniques help the organizations gain competitive advantage
which is also supported by the projections made by Bharatbook (2009).
According to them, the ability in managing their resources efficiently, brings in value
to their working and helps them build-up competitive advantage (Anderson, 2010)
along with laying foundation to learn further and help in the process of tapping
competitive advantage (Mckee and Varadarajan, 1995). However, the importance of
identifying and sustaining resources that besides having value are rare and difficult
to imitate as well is identified and is evident as Akhil points that, resources are
available to all and can be easily imitated (Wale and Hulland, 2004; Barney, 1991
and Collis and Montgomery, 1995). Thus a need for identifying unique resources is
established and along with the resources, importance of integrating other factors
such as knowledge and organisational expertise is identified. However, claims made
by Priem and Butler (2001) and Clulow, Barry and Gerstman (2007), that the
resource based view is limited only to a certain extent, could not be fully verified from
this research investigation as all the participants voiced that building unique
resources does lay the foundation for attaining competitive advantage.
It was identified that knowledge is perhaps becoming the most important component
in the whole competitive advantage paradigm. Supportively, the views of the main
authors, Itami and Roehl (1987) and Zack (1999) strengthen these findings. All the
participants agreed that, by identifying the knowledge gap they have tried and
established the ways to reach to a position where their operations are better than
what they did before, supporting the basic idea behind Zack (1999) framework of
knowledge acting as medium to fill in the gaps. This further helps these
organisations in planning their future strategies by comparing the competitive
position they can gain by identifying and filling gaps (Hamel and Prahalad, 1989 and
Mckee and Varadarajan, 1995). Further, as the participants highlighted, identification
of knowledge gap has also forced them to adopt new ways, innovate, upgrade
technology, be creative and finally differentiate their offerings by ‘detailing’ their
current operations, as emphasized by Ruchi. It has consequently leaded them to
gain competitive advantage (Parthasarthy and Sethi, 1992; Johannessen et al., 2001
and Furlong, 2005).
It is further established that, in the process of development of competitive advantage,
the role of operational planning is crucial. Discussion with the executives underpins
that planning in advance helps them in being prepared for standing at a better
52
position than their competitors and thus there exists a better flow of activities
involved in the whole process of building competitive advantage as framed by
Rindova and Fombrun (1999) and demonstrated above in the literature review,
where, the strategic plot is understood by the identification of competencies of an
organization that distinct them from others. These strategic plots thus help them
establish the connection between strategic investment of resources and knowledge
consequently leading to competitive advantage. Further, planning the targets and
projections allow define the success criteria and measure the degree of competitive
advantage attained. Further, as evident from discussion with Ruchi, who explains the
importance of continuously reviewing the current activities and policies and planning
accordingly to adjust and adapt with the changes in the market, considering the
volatility in the Indian apparel market (Ramaswamy and Gereffi, 2007; Verma, 2002
and Abernathy, 2006), it becomes essential to give substantial amount of time
towards efficient and effective planning the strategies to attain and sustain
competitive advantage.
Besides excelling in the ability to produce world class goods by their abilities such as
strong entrepreneurship and managerial experience, versatile design skills and
capabilities and ability to produce a wide range of products along with comparatively
low cost labour force and very strong, extensive domestic production of cotton and
other fibres and diverse base of domestic supply of raw materials and fabric for
manufacturing (USITC, 2004; The Economist, 2008 and Ananthakrishnan and
Chandra, 2005), the organisations operating in the Indian apparel industry faces
serious concerns over the issues that act as barriers in attaining and sustaining
competitive advantage. Evidences from the discussion with the executives, suggests
that traditional industry players also need to efficiently plan their strategy to withstand
barriers such as market volatility and changing technology (Abernathy, et al., 1995).
Moreover, all the interviewees agree on a common view that governmental policies,
high interest rates, taxes and a rise of anti-social elements overburdens the already
barriers that exist in the industry. Further, because of the existence of various rituals,
cultures and festivals, due to which the labour has unending demands, as pointed by
Akhil, it becomes necessary to regulate the organisations strategies well in advance
and consider these barriers while framing any strategy for the organization’s future
(Nordas, 2004 and Yolles, 2009).
53
Finally, it becomes essential to tap the various components discussed above that
helps in attaining, and more importantly sustaining, competitive advantage. However,
it is noted that each participant has their own mind-frame and ways to sustain
competitive advantage. Where, for some it is the country’s overall development that
leads to sustainability, some believe in improving and upgrading their current
practices and offerings by acquiring various methods and techniques. However, as
all the participants voiced their concern over the high degree of competitiveness that
prevails in the industry, it becomes evident that understanding marketplace and
customers, as emphasized by Drobis (1991) and highlighted by all the participants in
their discussion, along with continuously delivering what the consumers expect and
want, leads to sustaining of the competitive advantage.
Overall, it shall be noted that results of all the empirical discussion, with the
executives from Indian apparel industry, support the applicability of majority of the
theoretical frameworks advised by scholars. However, it shall be further noticed that
no one particular framework is appropriate and there is something from each
framework to learn and accept, highlighting its strengths and weaknesses and thus
making it important to integrate various strategic components rather than just
considering the cost, differentiation and focus factors (Parnell, 2006). Though there
was an inclination towards a focussed differentiation strategy by all the organisations
investigated, with regards to the strategies that will be successful in the long run, it is
again observed that no one particular strategy can be defined as the perfect one, as
the choice of strategy differs from organization to organization. Finally one should
continuously improve and find the gaps and try to fill them by investing better and
unique resources to sustain the competitive advantage in the long run.
4.3 EVALUATION OF FINDINGS
4.3.1 Validity and Reliability
With respect to checking the accuracy and precision of the data, it should be noted
that there are few observations which might not represent the data as fully
appropriate. Firstly, since there were only three organisations which replied out of
the five selected, there is a possibility of data being biased towards the working
nature of these three organisations only.
54
When talking about the questions that were asked, there were questions such as
‘What generic strategy do you use to gain competitive advantage?’, where the
interviewee was not able to get the meaning of the term ‘generic strategy’, however
they were explained what it was. Further, there were questions such as ‘what is your
view about competitiveness that prevails in the Indian apparel industry in the current
scenario’, where all the interviewees misunderstood the exact question and started
talking about the problems and barriers they face, rather than concentrating more
towards the degree of competitiveness. Furthermore, few questions like ‘what does
your business do better than anyone else and ‘what qualities do your product and
services have that makes it irresistible to customers’, got similar answers and were
found to be inter-related, thus could have been merged together. There was a
realisation that an additional question about ‘the ideal strategy, which the
interviewees think should be applied or used widely in the industry (single or mixed
strategy) for getting competitive advantage’, if added, could have allowed to
generalise further, the view of these organisations. However, it should be noted that
data from the questions about resources, knowledge, operational decisions/planning
and barriers in sustaining competitive advantage was able to provide ample data
which helped to relate the understanding of the practical working with the theories in
the literature review and rationale for getting competitive advantage was able to be
identified.
4.3.2 Generalisability
Focussed differentiation, which comes to be known as the strategy that all of these
organisations follow, may not be valid and be generalised to the whole industry
because the apparel sector consists of a lot of segments and further more product
lines which might lead to the difference in working and the strategies that
organisations adopt.
Further, it is shall be observed that all the executives interviewed were from the age
group of 24-28, which might have led to biasness of the data coming from just a
particular generation, which might have the same mind-frame and also lack
experience as compared to other senior executives in this industry since long.
Finally, though, it is observed that the strategy generally differs from organisation to
organisation and is hard to be generalised for the whole industry, until a huge
55
research involving a lot of participants is not done, still the information extracted as a
result of investigation is able to answer the rationale for choosing and applying
competitive advantage concepts in today’s scenario and can be partially generalised
as the importance of the same has been identified by a lot of researchers before and
its validity was extended in the organisations of the Indian apparel industry with the
help of this research.
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CHAPTER 5: SYNTHESIS, CONCLUSIONS AND IMPLICATIONS
With the rising need for developing strategies that could outperform competitors in
the current volatile hypercompetitive market of Indian apparel Industry, the overall
aim of this research, which was to find the rationale and applicability of the concepts
of the competitive advantage for the organisations in the Indian apparel industry, has
tried to investigate the whole idea by exploring academic literature, theories and
frameworks surrounding competitive advantage paradigm and evaluate the
competitive advantages and strategic behaviour of organisations in the industry. This
was intended to find the relation between the conceptual frameworks and practical
working and further evaluate the reason for loopholes in the system along with the
provision of recommendations towards sustainability of competitive advantage in the
Indian apparel market.
The exploration of literature, which provides an insight into the theoretical concepts
and frameworks, has highlighted the evolution of the competitive advantage in the
strategic management paradigm over the years starting from SWOT analysis to
Michael porter’s generic strategies to further a resource based view and furthermore
towards knowledge management paradigm in the current scenario. Also the cyclical
process of building competitive advantage and various sources of competitive
advantages, most of them which revolve around the organisation’s internal resources
and its structure, has highlighted the need for identifying the distinct capabilities and
further development of them, to attain and sustain market leadership.
The investigation of organisations has helped in relating the different frameworks
with the practical working of the organisations in the Indian apparel Industry.
Additionally, there has been an empirical discussion during investigation, to support
that it is essential to tap the various components that provide with competitive
advantage and thus develop organisational resources and knowledge base for the
attainment of the advantage factor. Moreover, the role of cost, differentiation and
focus on a specific market or segment forms the base towards the attainment of
competitive advantage as it helps them to stand out and deliver something that is
exceptional and differentiated from the traditional market players. It was found that,
57
providing quality goods and services should be emphasized while planning
strategies, as along with the other factors, it forms the key in today’s scenario and
this is what attracts customers towards a particular product, who is getting smarter
each day. Further, it is essential to restructure the organisations internal structure
and enhance managerial role and capabilities to produce a wide range of products
and services and develop the existing capabilities which are more concentrated
towards the technological up-gradation; designing and quality enhancement
techniques which will help differentiate from the crowd. The need for competitive
advantage, thus, calls for selection and adoption of an appropriate choice of strategy
which integrates various components so as to provide maximum advantage over
others. The trend as per the research, stands out to be that of a focussed-
differentiation strategy where products and services are differentiated by adding or
doing some special extra bit to it and pitching it in a specific niche market or segment
to gain advantage. Moreover, the low cost brands have started diminishing, as the
brands which have been playing with low cost margins and pricing strategy have
started diminishing and a lot of them are facing debt crisis, additionally because of
their poor managerial skills and change in consumer trends and preferences.
However, it is also established that no single framework can be appropriate for
planning strategies to attain competitive advantage, rather the decision lies in the
deep understanding of market and its trends along with the identification and
visualisation of gaps and strengths. The decision related with the appropriate
strategy thus differs on an organisation to organisation basis and a deeper
understanding of the concepts and frameworks of competitive advantage certainly
helps in the establishment of the appropriate strategy. Finally, the essence of
sustainability in the Indian apparel Industry lies in the excellence of BMQLC (Buying,
Quality, Merchandising, Logistics and Cost). Further continuous up-gradation in
innovation, technology, skills, quality, resources and knowledge will lead towards
sustainability of competitive advantage that will help the business flourish in the long
run.
Further, this research has highlighted that there is growing use and importance of IT
and related services in the industry. Software’s like SAP have been able to manage
and assist even the smallest operations that are part of the working and have been
influential in the overall enterprise resource planning concepts. Further, it also
contains records, which help in analysing the operations and thus can provide the
58
management with the reports to strengthen their abilities or work on the weaknesses
identified.
Though this research has the limitation coming out from the less no. of respondents
and the young age group of executives that have been interviewed, which might
have constrained the strategies that different organisations apply, it still provides and
justifies the rationale for understanding and applying competitive advantage
frameworks in an apparel organisation because of the similar nature of operational
and organisational behaviour and high degree of competitiveness that prevails in the
industry. This research thus, will be useful for organisations that have stepped in the
market recently or are looking to diversify and expand their current operations as it
gives an insight into how the organisations tackle the problems prevailing in the
industry. However, a further research in this area requires the researcher to do a
more extensive in-depth study which can involve more organisations considering the
nature of the diversified and unorganised industry which have a lot of segments and
market orientations to pitch on.
It is recommended that, besides developing and working towards the current
competitive advantages of skills, design capabilities, cheap resources, manpower,
and productivity it shifts its emphasis on quality products and organisational
capabilities as well which will help in making them distinct in the market and thus
attain profitability.
Finally, considering the high degree of competitiveness that prevails in the Indian
apparel industry and where organisations try to pull each other down by doing
something better every time, it shall be noted that the competitive advantage
frameworks, which drawn on paper might look more as implicit, can be made explicit
and used as a guiding source while framing of strategies and plans if knowledge and
resources are appropriately used. This will consequently, help an organisation sail
through towards capturing of market and sustaining that position in the long run.
59
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APPENDICES
Appendix 1
Reflective Learning Statement
This research project has helped me understand the concept and idea behind a
research. Coming from a background, where I have been studying books and giving
exams, it was very useful to learn how learning evolves from a research process.
The whole process of building an idea to a final substance while driving through
identifying, exploring, investigating and evaluating the concepts involved in the area
of competitive advantage, it has helped in understanding and development of myself
as a researcher and has enhanced my skills to be critical and be an evaluator.
Besides the conceptual learning in the area of research topic, I have been able to
enhance my skills towards time management and making efficient use of the
available resources. Moreover, communication and meeting with my supervisor and
people involved in the investigatory process has allowed me to reflect upon my
presentation and communication skills.
The availability of time has played a crucial role while doing this dissertation
research project. I believe that, had I been able to invest more time in my research, I
could have produced a better result and would have been able get a more in-depth
analysis as I was able to get only three interviewees from the selected five.
Finallly, my conceptual learning towards the competitive advantage concepts and
theories along with its applicability into apparel industry has helped me understand
the market situation that prevails in the current scenario and provides me a base for
my learning and further career development as I intend to be part of the Indian
apparel industry.
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APPENDIX 2
COVER LETTER
Dear Sir
I am a student of Masters in International Business Administration at Newcastle Business School of Northumbria University, U.K. I am currently pursuing research for my dissertation under the topic ‘Applicability of Competitive Advantage for firms in Indian Apparel industry’. Attached is a short series of questions that relate to your high experience and position as part of the Apparel Industry of India. The findings from these would provide me with a database to analyse the applicability of the theoretical concepts of competitive advantage in practical working and standing of the organisations in the Indian apparel industry. Further, these would enhance my base to advice ways to sustain competitive advantage for organisations in the Indian apparel industry in the long run with the help of the opportunities and problems that the organisations face to reach out to a competitive position.I assure that your identity will be kept confidential and will not be shared with any third party and the name of the organisation or your position will also not be revealed or used in my project, if you wish to do so. Further, findings and analysis from this research can be sent back to you, which might be helpful for designing and planning your strategies in the future.It should take you about 20-30 minutes to be part of this research project. I would be happy to know if you rather feel comfortable in providing me the data needed over a telephonic conversation or by replying me back your views and comments on each of the question through an email.I would be highly obliged if you could help and provide me with the qualitative data needed for my research project. If you have any questions or concerns about the questions being asked or about being part of this study, you may contact me via email ([email protected]; [email protected]) or via telephone (+44 7552098097).
SincerelyAditya JainStudentNewcastle Business SchoolUniversity of Northumbria, U.K.
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APPENDIX 3INTERVIEW QUESTIONS
1. What is your view about competitiveness that prevails in the Indian apparel industry in the current scenario?
2. What does you business do better than anyone else in the same industry?
3. What qualities do your product and services have that makes it irresistible to customers? What has been your organisation’s strategy to succeed and sustain competitive advantage?
4. What generic strategy (Cost, differentiation, focus or a combination of them) does your organisation use to gain competitive advantage over others? How do you apply the same in working?
5. How does the valuable resources such as physical, human and financial help you stand out from the crowd? Do they contain value, uniqueness and rarity that your competitors don’t have? Are they imitable or have substitutability?
6. How does the knowledge gained from experience and information lead towards competitive advantage? Does visualising and identifying the knowledge gap between the current and intended knowledge which is required to reach towards intended operations?
7. What strategic or operational decisions do you think should be made to create new competitive advantages that are important to your customers?
8. What according to you acts as barrier(s) in getting and sustaining competitive advantage? How do you cope up with those barriers? How do you rate the domestic competition in the apparel industry?
9. What is your view about the rise of competition from global competitors such as Bangladesh, Pakistan, China and others?
10.What according to you would be the best way to sustain competitive advantage in the domestic market in the long run?
Qualitative Interview: To assess the applicability of the theoretical concepts of competitive advantage in Indian Apparel Industry and suggest, ways to sustain competitive advantage by evaluating the current practices and opportunities and threats, which the organisations face.
Thank You for participation
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APPENDIX 3INTERVIEW 1 NOTES
INTERVIEWEE: MR. AKHIL JAIN, CREATIVE DIRECTOR, JAIN AMAR
CLOTHING PRIVATE LIMITED (MADAME), INDIA
1. What is your view about competitiveness that prevails in the Indian apparel
industry in the current scenario?
Two major problems for now- unorganised sector + unofficial imports from other countries.
Biggest Challenge- Supply and Logistics, Since everything is unorganised in this industry.
Transportation a major problem. Governmental problems- closing all ports in delhi due to commonwealth. Further, festivals, anti social elements and elections lead to workers going
back home. There is a need to have a good person spearheading economy of India.
2. What does you business do better than anyone else in the same industry?
One warehouse- makes work easier, saves cost, manpower, better inventory mgmt, control on inventory, stoppage of leaking.
Cost is the same in the industry. The cost is the same, what differs is the overheads.The biggest problem is leakage. The bigger the volume, every % is worth
saving.
3. What qualities do your product and services have that makes it irresistible to
customers? What has been your organisation’s strategy to succeed and
sustain competitive advantage?
Colours is the USP, the no. of colours is the largest compared to others. Concentrating on just one segment, ‘Western women’s Wear’ Disadvantage- Only women can buy for herself Women’s wear market is increasing, men’s wear market is saturating Competition is very high because of the nature of being unorganised sector
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4. What generic strategy (Cost, differentiation, focus or a combination of them)
does your organisation use to gain competitive advantage over others? How
do you apply the same in working?
Focus- By concentrating on the Western women’s wear segment solely Maximum stores are in backward areas and very few near high streets
5. How does the valuable resources such as physical, human and financial help
you stand out from the crowd? Do they contain value, uniqueness and rarity
that your competitors don’t have? Are they imitable or have substitutability?
Usage of ERP (Enterprise resource planning) software’s such as SAP, a computer program that manages all functions
IT system helps a lot
6. How does the knowledge gained from experience and information lead
towards competitive advantage? Does visualising and identifying the
knowledge gap between the current and intended knowledge which is
required to reach towards intended operations?
Yes, difference between western and eastern knowledge No system to guage right information
7. What strategic or operational decisions do you think should be made to create
new competitive advantages that are important to your customers?
Planning in advance- Biggest thing: What resources required, target, etc. Planning production control (PPC) system in place Decision to outsource when there is abundance of workload Project management- Each project is distinguished from others to concentrate
on that (new factory, requirement of funds, stores, etc)
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8. What according to you acts as barrier(s) in getting and sustaining competitive
advantage? How do you cope up with those barriers? How do you rate the
domestic competition in the apparel industry?
Story of Crab- In India, the open box of crabs leads to each crab pulling other’s leg down to get out of the box or reach at the top.
Everyone works for themselves- think of themselves, jealous of other’s success.
Imitability No norms in place because of lack of knowledge Power, transportation
9. What is your view about the rise of competition from global competitors such
as Bangladesh, Pakistan, China and others?
They are very organised in comparison to India because of the nature of small country, except China.
They specialize in different segments, Bangladesh: sweaters, Srilanka: Lingeries, etc
In India- not good labour laws-doesn’t help organisations In India- no social security; no standardization of policies (interest rate) However, Manpower and cheapness in India is still the key
10.What according to you would be the best way to sustain competitive
advantage in the domestic market in the long run?
Our Country needs to have one institution, i.e. there is a need for one
common body which will lead to standardization of policies.
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APPENDIX 4
INTERVIEW 1 CONSENT FORMS
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APPENDIX 5
INTERVIEW 2 NOTES
INTERVIEWEE: MS. RUCHI AGARWAL, DIRECTOR, DCOT RETAIL, INDIA
1. What is your view about competitiveness that prevails in the Indian apparel
industry in the current scenario?
Lot of competition uptill last year, majorly because of the rise of discount format (40 % + 50%)
There is a shift in buying behaviourBrands that give cheaper products have started diminishing because the
consumer is getting smarter
2. What does you business do better than anyone else in the same industry?
Apart from quality, strict on supply chain Believe on quick stock turnover-keeping in store, the amt. needed, not
excess, not less. Marketing- brand Ambassador-Celebrity
3. What qualities do your product and services have that makes it irresistible to
customers? What has been your organisation’s strategy to succeed and
sustain competitive advantage?
Quality Cheaper, because our parenting company, ‘Donear’ excels in manufacturing
of fabric which helps us increase our margin.
4. What generic strategy (Cost, differentiation, focus or a combination of them)
does your organisation use to gain competitive advantage over others? How
do you apply the same in working?
Focus- Not lower income brand, neither a very higher income brand- Affordable brand, particularly targeting ‘Middle Class people
’Differentiating- By regular differentiation in fabrics
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5. How does the valuable resources such as physical, human and financial help
you stand out from the crowd? Do they contain value, uniqueness and rarity
that your competitors don’t have? Are they imitable or have substitutability?
Donear, the parenting company provides with ample of fabric and raw material, that to at a lower cost.
Donear has goodwill Human resources cannot be imitated because they gove good incentives to
employees
6. How does the knowledge gained from experience and information lead
towards competitive advantage? Does visualising and identifying the
knowledge gap between the current and intended knowledge which is
required to reach towards intended operations?
Retail is all about detailing Analysing statistical information helps, which is then used to formulate
planning in the areas of how much, what, this is gonna work, not gonna work, etc.
7. What strategic or operational decisions do you think should be made to create
new competitive advantages that are important to your customers?
Believe on practical data rather than the gut feeling and what franchisees provide as a feedback
Started research on a regular basis, because what consumer says and wants is what sells.
Trying to introduce new brands for future planning
8. What according to you acts as barrier(s) in getting and sustaining competitive
advantage? How do you cope up with those barriers? How do you rate the
domestic competition in the apparel industry?
Popular in one part of the country, not other Government- Taxes (but that’s for everyone) Raw material pricing goes up anytime Some places like northeast-Terrorism
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9. What is your view about the rise of competition from global competitors such
as Bangladesh, Pakistan, China and others?
They can’t set such strong systems as we can do because of our tradional nature of the industry
Consumer loyality
10.What according to you would be the best way to sustain competitive
advantage in the domestic market in the long run?
Quality products- Wherever there is quality, the brand will succeed. Sustaining quality Giving franchisees incentives- will keep them happy and indeed give more
sales
APPENDIX 6
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INTERVIEW 2 CONSENT FORMS
84
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APPENDIX 7
INTERVIEW 3 NOTES
INTERVIEWEE: MR. SACHIN LAMBA, DEPUTY MANAGER (MECHANDISING),
VISHAL RETAIL LIMITED, INDIA
1. What is your view about competitiveness that prevails in the Indian apparel
industry in the current scenario?
People are very much conscious nowadays- Getting educated People go for brand name these days-Customer is the king, Customers
income a big factor Lots of divisions in the industry makes it hard Competitiveness comes from how you manage or supply, not just production The overall competitiveness is very high, but slum also came (evident from
GAP moving out its production from India)
2. What does you business do better than anyone else in the same industry?
Pitching the lower range customer class, which everyone doesn’t do. A large no. of spacious stores in all parts of the country selling a variety of
products Format of hypermarket gives them more segments to pitch
3. What qualities do your product and services have that makes it irresistible to
customers? What has been your organisation’s strategy to succeed and
sustain competitive advantage?
Cost margin is very low as compared to others A wide range of offers- Discounts, prizes and gifts, etc Earning in quantities and not in just one particular product
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4. What generic strategy (Cost, differentiation, focus or a combination of them)
does your organisation use to gain competitive advantage over others? How
do you apply the same in working?
Focus on the lower middle class segment with a view of lower costs
5. How does the valuable resources such as physical, human and financial help
you stand out from the crowd? Do they contain value, uniqueness and rarity
that your competitors don’t have? Are they imitable or have substitutability?
Hire such people that give/provide you with results Setting target helps Everyone knows and is cleared about their role, which helps IPO was breakthrough, which helped build its funds, however now it is huge
bad-debts.
6. How does the knowledge gained from experience and information lead
towards competitive advantage? Does visualising and identifying the
knowledge gap between the current and intended knowledge which is
required to reach towards intended operations?
Ensured that Knowledge about what product and services are sold is cleared to each department and segment (acnts, managerial, retailing, etc)
7. What strategic or operational decisions do you think should be made to create
new competitive advantages that are important to your customers?
Putting right people in right place with the product knowledge Need to be a monopoly in one department not all Improve product quality and use international standards to regulate a check
on them The product should be worth its money, because it degrades the brand image
if its not so.
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8. What according to you acts as barrier(s) in getting and sustaining competitive
advantage? How do you cope up with those barriers? How do you rate the
domestic competition in the apparel industry?
Financial- with regards to the company’s bad debts Ownership structure- proper hierarchal structure is not in place Labour cost is different in different cities Fabric prices Distance on transportation Interest rates-high
9. What is your view about the rise of competition from global competitors such
as Bangladesh, Pakistan, China and others?
All others are much smaller than India Competing with China is tough
10.What according to you would be the best way to sustain competitive
advantage in the domestic market in the long run?
Concept of Business today lies in BMQLC- Buying, merchandising, quality, logistics and concepts
‘the organisation who has masterd in BMQLC can never be beaten, as it provides with a monopoly position’
APPENDIX 8
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INTERVIEW 3 CONSENT FORMS
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