The development of global companies within the UK clothing industry.
The concept of 'globalization' has nomlally been observed and researched in relation to hightechnology
sectors, and little rigorous work has been done in the clothing context. This research
attempts to fill the gap by replacing opinion and views with objective analysis, and to add to the
existing knowledge base by providing answers to the identified problems in a measurable form.
One of the major factors shaping the clothing industry's current position towards operations in
different countries is the level of labour costs and the labour cost gap between developed and
developing countries. The study has shown that despite technological development, labour costs
as a percentage of total costs in the clothing industry are still very high as compared with the
situation in the automobile industry and the electronics industry. Moreover, the considerable
labour cost gap between developed and developing countries has not closed over the years. The
statistical evidence has provided a new and objective perspective on the size of the above gap
and highlighted the continued relevance of the issue of labour costs to the clothing sector today.
The research has also illustrated how factors such as inflation rate and indirect charges can have
their impact on the labour cost level.
The 'globalness' of the UK based clothing sector was assessed at both the industry level and at
the company level. At the industry level, an extensive re-working of secondary data was carried
out. A study of various indicators of international involvement has shown that the UK clothing
industry's exports and outward investment are far from spread across the world's major markets,
instead, they are fairly concentrated in certain regions. In addition, previously unpublished data
on the use of outward processing traffic were collected and analyzed. Evidence suggests that
the UK clothing industry is only 'global' to a limited extent.
In order to develop an infornled understanding of the competitive strategies at company level
and to study whether companies with higher degrees of globalization achieve better performance,
a postal survey of 152 UK based clothing fimlS, followed by telephone and face-to-face
interviews, was conducted. The primary data collected by questionnaires and interviews were
subjected to rigorous statistical analysis. Four case studies were subsequently established to put
the analysis into a real-life context.
The surveyed experience of the UK based clothing companies has revealed that larger companies
tend to have higher levels of international involvement. However, based on the statistical
evidence, the thesis argues that a wider geographical presence does not equal globalization and
it does not lead to better performance. The interviews and case studies also highlighted
important strategic issues. Based on the infornlation from both the primary and secondary
sources, the thesis concludes that in the future UK clothing companies will further increase their
overseas manufacturing activities at the expense of the home production base. Only those
companies which restructure and invest in good time in preparation for further changes in
industry settings, and which have a close relationship with their clients, are more likely to
succeed or survive.