Factors behind the Success of International Competitiveness of Apparel Industry in Sri Lanka with Special Reference to Vertical Integration Strategy

Abstract

Textile and apparel industry occupies a prominent position in the Sri Lankan economy as the main export income earner. However, the imported raw materials for apparel industry is recorded as the second largest import of the country, while most of the apparel manufactures do contract manufacturing for world renowned brands . Accordingly, it is a challenge for the apparel producers in Sri Lanka to increase total value addition in both downstream and upstream. With this background, the study aims to identify factors behind the international competitiveness of Sri Lankan apparel industry associated with the vertical integration strategy. The secondary data were initially gathered from reliable sources, and the primary data were collected using semi-structured indepth interviews with the industry experts. The gathered data were transcribed and then analysed using the thematic analysis. As per the findings, the two main apparel producers have successfully implemented the vertical integration strategy while other companies do not focus on such strategy. When analysing the findings, it is revealed that the sub codes, codes and themes that were found through data analysis are quite relevant to the famous theory of “Michael porter’s diamond model”. As such researchers were able to theorize the Porter's Diamond Theory as the complement to achieve a successful vertical integration strategy.