Reference : International Trade and Business Practices: A comparative attempt in the apparel market
Scientific journals : Article
Business & economic sciences : Multidisciplinary, general & others
International Trade and Business Practices: A comparative attempt in the apparel market
Kavvadia, Helen mailto [University of Luxembourg > Faculty of Language and Literature, Humanities, Arts and Education (FLSHASE) > Identités, Politiques, Sociétés, Espaces (IPSE) >]
Review of of decentralization, local government and regional development
Hellenic Center of Decentralisation, Local Governance and Regional Development
[en] International trade ; Apparel ; Porter's five forces model ; Greece ; South-East Europe ; Competitiveness
[en] The apparel industry is an important branch of Greek manufacturing, with a significant contribution to production, employment and exports.
According to data from the Chamber of Commerce in the apparel industry in Greece includes some 437 companies. It employs 14,257 workers, i.e. 8.1% of the annual average employment of the aggregate Greek industry employment. During 1995-2002, the industrial production sector decay rate of 3.2% annually. Estimated, however, that the index of industrial production in 2003 was a much smaller decline of 0.7 %. It is worth noting that a significant share of the production industry has a system of outward processing (outsourcing), estimated that about 12% of the production is done with this method. In recent years, there is a significant reduction in the number of businesses operating in the production of clothing. More specifically, in 2002, companies reduced to 470. A similar trend followed the average annual employment, recording rate reduction of 8.3% annually. Despite the decline in employment, average wage in this sector increased by 8.7% per year on average, offsetting to some extent the general downturn in the industry.
Globalization has greatly influenced the clothing industry, and led to the development of subcontracting (façon), method by which the business units of the developed countries split the stages of their production process and outsource labor-intensive stages in companies operating in developing countries where labor costs are low.
Under pressure from labor costs, the Greek garment industry had since early 2000 to make moves that would allow it to maintain its competitive position. A path followed by quite a number of Greek companies was to establish production facilities in the Balkan countries. This offered a large production base at low cost. To date, a significant number of Greek companies have implemented all the labor-intensive activities (sewing-box) in the neighboring Balkan countries and their number is growing. It is estimated that today, more than 200 Greek businesses active clothing in the Balkans. To increase competitiveness, Greek apparel companies consolidated their activities both in terms of geographic location, as well as the object of their work. Greece is a country with a tradition of producing knitted garments, whereas constant wear has a rather limited activity. The overwhelming proportion of the apparel business is located in Northern Greece and especially in the area of Thessaloniki. The concentration of industry in northern Greece is also due to the incentives provided by the Greek government in the framework of the Development Laws, geographic proximity to the Balkan countries and availability of skilled work force.
The Greek apparel is a tough arena for Greek companies among themselves, but moreover, the industry as a whole faces fierce competition from multinational brands (brand name) with high recognition.
The strategies followed are based mainly on product differentiation through pricing and advertising. Distribution network enlargement plays also a significant role in strengthening individual company’s positioning in the industry. A number of companies expanded through branching and others through franchising. Some of them sought also cooperations with major international companies. The sales network expansion was both within the country, as well as in other Balkan countries.
The main problem hindering this evolution is that the industry is fragmented in many small businesses, mainly family owned with poor and inefficient administration (organization, planning, etc.), production plants are small and cannot develop scale advantages, and in some cases production lines do not consist of state-of-the-art equipment, due to poor investment rates.
Still, there is room for growth in the sector, even in this crisis period. Lessons can be taken from established international brands.

There is no file associated with this reference.

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.