SWOT Analysis for Sri Lankan Apparel Industry

Last Updated on 23/02/2021

SWOT Analysis for Sri Lankan Apparel Industry

Harshani Wijendra
Sri Lanka Institute of Textile & Apparel Technology (SLITA)
Email: harshani_bipasha@yahoo.com


SWOT Analysis:
SWOT analysis is an analytical method/tool which is used to identify and categories significant internal (Strengths and Weaknesses) and external (Opportunities and Threats) factors faced either in a particular arena, such as an organization, or a territory, such as a region, nation, or city.

Sri Lankan Apparel Industry
Fig: Sri Lankan Apparel Industry

It provides information that is helpful in matching the firms’ resources and capabilities to the competitive environment in which it operates and is therefore an important contribution to the strategic planning process.

It should not be viewed as a static method with emphasis solely on its output, but should be used as a dynamic part of the management and business development process.

Sri Lankan apparel industry is the most significant and dynamic contributor to Sri Lanka’s economy. Sri Lanka has since become a world class apparel manufacturer supplying to global super brands for over three decades. The apparel industry of Sri Lanka employs about 15% of the country’s workforce. In this article I will discuss SWOT analysis for the Sri Lankan apparel industry.

Effect of SWOT on Sri Lankan Apparel Industry:

The product quality level for the current market segments is considered high Reputation as a country which follows labor laws and good working conditions. The product price ranks second with large customers confirming that price quality relation of Sri Lanka is good on time delivery is the third best strength with effort towards reducing lead-times. Availability of skilled labor, educated and trainable work force and management of production capacity and ability to handle high volume orders are also considered strengths the Sri Lankan apparel industry presently possesses. Apart from those the geographical size of the country facilitates easy movement within the country serves a further advantage.

The weaknesses in the Sri Lankan industry can be listed down as follows;

  1. Lack of marketing skills with over dependence on buying officers, and allocation of quotas.
  2. Low level of marketing information, and knowledge about export marketing with hardly any marketing activities.
  3. Lack of fabric base and over dependence on input suppliers with long lead times
  4. Lack of a strong work ethic along with high absenteeism and labor turn over.
  5. Warm climatic condition of the country which reduces productivity
  6. Increasing cost of labor and availability of employment in other industries and foreign employment opportunities

To overcome the loss of orders due to the expiry of Multi Fibre Arrangement after year 2005, the position in the traditional export markets in the USA and UK by should be strengthened by establishing a strong relationship with distributors and buyers and developing an expansion strategy for the markets with good potential. Thereafter the opportunity exists to gain a higher market share by implementing an aggressive marketing strategy in the markets, where Sri Lanka has a weak positioning. Further there is a very good opportunity to capture a bigger market share in the EU: As at present Sri Lanka is not within first 15 exporters to the EU.

Further opportunities exists in capturing the South Asian Market especially the High Price garments with designer wear and Intimate garments, a market where Sri Lankan Manufactures are now experts in producing and marketing. The available free trade agreements should be exploited in trade between India and Pakistan to export finished garments and to import fabric and accessories. It is also important to establish and identity for of Sri Lanka as a destination, which manufactures very high quality garments

The threats to the present Garment Industry are as follows;

  1. An intensification of the competition, especially from the sub Asian member countries, before and after the phasing out of the MFA.
  2. Improvement of the former socialist economies, who have a good textile industry and a large domestic Market which are highly potential and geared to meet the quality and delivery requirements especially from EU.
  3. The arrival of new competitors in the Asian sub-continent such as Vietnam, Cambodia, Myanmar and Laos.
  4. Special advantages created for the USA market by the NAFTA, consolidation and other regional economic cooperation
  5. The increase in Sri Lanka’s labor costs at a faster pace than productivity
  6. The necessity to reduce lead time from the manufactures to the shop, and the distant suppliers’ inability to deliver the value added garments on time
  7. Successive government has not addressed the issue of low productivity, and even at this stage a government funded garment manufacturing and production management training institute has not been established and this possess a threat to the industry’s future
  8. Geographical location of the country. Sri Lanka is located at the furthest end of the Indian Ocean, when compared with other competitive garment exporting countries, which export to the USA, EU and other wealthy nations. Almost all the countries, which are geographically located close to Sri Lanka, are under developed and, low income countries struggling to survive.

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