Assignment Sample on A Critical Analysis of the Industry Environment
Activity 4- Analysis of industry environment
| Environmental factor | Issues pertinent to the industry | Implications for the industry |
| Political factor | Liberalization
Domestic political instability Political regulations
|
Recent changes in regional clothing and fashion trading practices, as well as the resulting changes in trade trends, can be a threat to the industry.
The consequences of political instability after Covid-19 hit can directly affects the international consumers (Export Entreprises SA, 2021). The political regulations after lockdown can affect the supply chain of the firms in the clothing industry. |
| Economic factor | Economic recession
Trade stress Sluggish export |
The uncertainty can lead towards higher rate of raw material that can affect the financial flows of the industry.
Due to weak exports, weak domestic production, as well as the trade tensions between the US as well as China can affect the demand and supply chain for the clothing manufacturers and the firm (Hamid and Aslam, 2017). For the quality production of clothing items, skilled workers are required, but there is low skilled worker percentage in the region that can consequence the quality performance of the firm. |
| Social factor | Changes in consumer demand
Lack of engagement with consumers |
The quality issues matter the most along with the prices in the clothing industry and that can affect the demand in the industry. Consumers in the competitive market demands for high quality products in reasonable price range.
Low engagement can affect the trust and loyalty of the consumers and also have significant impact on the profitability. This can be due to low presence on different social media platforms and digital campaigns. |
| Technological factor | Impacting the cost structure
Security and privacy issues Investment issues |
Advancement in technologies and higher demand of adoption of cutting-edge technology can create consequences on the cost structure.
Higher integration of technological system can impact the security and privacy and consequence in leaking important data. This can have direct impact on the brand image and supplier-customer relationship (Boonthon and Ratanaolarn, 2019). Technological adoption requires high level of investment and that can affect the cost of the firm in the market. |
| Porter’s force | Strength | Justification/Reasons |
| Bargaining power of buyers | High | The bargaining power of buyer is high for Atelier Chiang Mai as the shifting cost of them is low (Haseeb et.al. 2020).
Different suppliers in the field providing similar options to the consumers such as VT Garment, Amarisas International Co., Ltd. |
| Bargaining power of suppliers | Low to moderate | Atelier Chiang Mai is high end clothing manufacturer and they source their raw materials considering the high quality and reasonable prices and, in the region, there are vast suppliers that make the strength low. |
| Threat of substitute products | Low | There is indeed no substitute of clothing items that makes the power low. |
| Threat of new entrants | Low to Moderate | Entering in the premium clothing manufacturing field requires a huge investment, experience and time to reach the level.
However, the small manufacturers and their own outlets affecting the overall demand of consumers. |
| Competitive rivalries | High | In the clothing manufacturer and supplier field, the intensity of competition is high.
There is top brand available in front of Atelier Chiang Mai such as Amarisas International Co., Ltd. Austhai garment co. Ltd, VT Garment, Sugini, etc. These competitors offering either more diversified range of products or in much more affordable range that can be a threat for the firm (Chinaimportal, 2019). |
| Identification of the industry in questions | History of industry, growth of industry, specific government regulations related to the industry, etc. |
| Industry stage in the lifecycle | The development, rise, maturity, as well as decline processes are the four stages of the business life cycle (Piyathanavong et.al. 2019). From the four lifecycle stages, the clothing industry is on rise stage where a lot of opportunity exist considering the high demand of clothing products, range of brands and a vast trend. |
| Implications | This can be opportunity for the firm regarding growth an expansion for new product development and region expansion. |
| Issues | Survival factor | Success factor |
| Environment-related issues | The firm can strict the policy of ethical and sustainable fashion manufacturing and include it in the vision so that employees and the consumers have awareness of the initiative | The firm can increase the use of reuse, recycle process for garment manufacturing that will reduce the water consumption and increase the brand image.
It is important to modify the production process, factory layout so every operation fulfil the sustainable standard. |
| Privacy and security issues | It is important for the firm to consider health and safety laws and ensure every equipment are provided to the producers and labors | The firm can integrate big data analytics and information technology tools for encrypted data sharing process that will help in managing information with considering the privacy norms (Fu et.al. 2018).
Technological adoption and integration might affect the cost but it important in the advanced world that will speed-up the process of production, operation and engagement with the consumers. |
References
Fu, B., Shu, Z. and Liu, X., 2018. Blockchain enhanced emission trading framework in fashion apparel manufacturing industry. Sustainability, 10(4), p.1105.
Hamid, M.F.S. and Aslam, M., 2017. Intra-regional trade effects of ASEAN free trade area in the textile and clothing industry. Journal of Economic Integration, pp.660-688.
Haseeb, M., Kot, S., Hussain, H.I., Mihardjo, L.W. and Saługa, P., 2020. Modelling the non-linear energy intensity effect based on a quantile-on-quantile approach: The case of textiles manufacturing in Asian countries. Energies, 13(9), p.2229.
Piyathanavong, V., Garza-Reyes, J.A., Kumar, V., Maldonado-Guzmán, G. and Mangla, S.K., 2019. The adoption of operational environmental sustainability approaches in the Thai manufacturing sector. Journal of Cleaner Production, 220, pp.507-528.
Chinaimportal, 2019. List of Clothing Manufacturers in Thailand: Top 11 Suppliers. [Online]. Accessed through <https://www.chinaimportal.com/blog/thailand-clothing-manufacturers/>. [Accessed on 9th April 2021].
Export Entreprises SA, 2021. THAILAND: ECONOMIC AND POLITICAL OUTLINE. [Online]. Accessed through <https://santandertrade.com/en/portal/analyse-markets/thailand/economic-political-outline>. [Accessed on 9th April 2021].
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