Export marketing trend for textile and apparel industry in South Africa.
International business is much more complicated than domestic business because countries differ in many ways. Countries have different political systems economic systems. Cultural practices can vary dramatically from country to country, as the education and skill level of the population, and countries are at different stages of economic development. Moreover, development of multinational strategies involves consideration of threats, opportunities, key success factors, and strategy options and issues that do not appear when the analysis is restricted to operations within a single country. In particular, the evaluation of a market must take into account the political and economic risks associated with individual countries. Thus the external analysis becomes much more demanding. South Africa's trade and industrial policy has moved away from a highly protected, inward-looking economy towards an internationally competitive system that is able to capitalize on its comparative advantages. Enhancement of the competitiveness of industries on the domestic and international markets has consequently become a prime focus of the country's industrial policy. International trade in textiles and clothing is conducted on an immense scale. Textile and clothing producers were responsible for 9.3 per cent of world exports of manufacturers in 2001 . Barriers to entry for new firms and exporters are low, and consequently the degree of international competition is intense. Competitive advantage is very difficult to sustain for long periods of time. Newcomers speedily challenge successful exporters of basic products, and they must redirect their activities towards the production of higher value-added textiles and clothing in order to survive and prosper. Textile industry represents a main role in South Africa's economy. However, during the year of 2003 Department of Trade and industry has recorded 20,000 job losses due to significant increase in imports, largely from China, as well as a fairly noticeable decline in exports both facilitated by the strengthening of the Rand. South Mrica and Mauritius are the only countries in the region with established textile industries, but the cost of labour is relatively expensive and productivity is lower than in some competitor nations, such as China. The labour union - SA Clothing and Textile Workers Union (SACTWU) believes the root causes of the large-scale job losses was due to the South African government's rush to liberalise markets by cutting import tariffs in the mid- to late 1990s. During the 1980s the clothing and textile industry benefited from protectionist tariffs levied on imported goods. However, this changed when South Mrica signed the General Agreement on Trade and Tariffs (GATT). The government agreed that clothing and textile tariffs would be reduced, but the union contends that they were cut more quickly and aggressively than the World Trade Organisation (WTO) had expected. The industry was not able to cope with that, and what followed were enormous job losses. Multi-national organizations from South Africa have a choice to extend their global reach, due to the government export incentive programme, the mature companies can diversify their firms to emerging market in order to exploit their technological advantages and invest internationally. If a firm's primary goal is to maximize their shareholder's value, then they and probably the economy are better off if they invest or export where they can earn the best return. As they do so, change in the global macro-environment further confounds the choices inherent in building a strategic organization. Some understanding of the organization's external and internal environment always drives strategy, as an international organizational better choice. In the most general sense, the long-run monetary benefits of doing business in South Mrica are a function of the size of the textile and clothing market, the present wealth (purchasing power) of consumers in the market, and the likely future wealth of consumers. Also the South Mrican multi national companies can have the opportunity to gain export market in USA, Canada, Europe and other trade countries in South Mrica. In order to achieve economic growth and competitiveness In South Mrica, it is recommend that the several issues cutting across the textile industrial sector need to be addressed through knowledge transfer, training, investment and management. Innovative technologies need to be developed to strengthen the competitiveness.