In last week’s article, we discussed the present state of the fashion industry in Trinidad and Tobago. This week, we take a look at increasing the competitiveness of our designers in the global market. There are two ways in which this can be done strategically:
- To be a low-cost player – operating with sustainably lower costs
- To be a differentiator – differentiate your business by offering a significantly better product or service
Through the analysis of the data provided and dialogue with the Consultative Group that comprised key stakeholders of the fashion industry, five strategic possibilities for increasing competitiveness were developed as presented below:
Upon review of these options, Possibility 4 was selected – Integration of New External Elements – since it speaks to creating differentiation by combining external elements with the elements of the local industry. This strategy also provides the greatest opportunity for the Fashion Industry to address the current decline in competitiveness, strengthen the capacity of players to participate in the international market and increase growth and revenue at the national and firm level. In summary, this strategy is considered to be most favoured because the likelihood of achieving the benefits, outweigh the probable risks by the greatest extent.
Further, the Consultative Group also agreed to integrate a component of Possibility 3 namely, the Development of a Unique Brand into the strategy. The general consensus of the Consultative Group was to focus on and develop a brand that was anchored in the “Caribbean Aesthetic”. It was agreed that it would be more difficult to compete on the international market with a Trinidad and Tobago brand versus the much more established and/or easily recognizable Caribbean Brand.
The Strategy Formulated: Objectives, Advantages, and Scope
Objectives
- Over the next five (5) years, two (2) firms in the Fashion Apparel sector will be internationally recognized through their sales volume of more than TTD $10 million (currently the largest annual sales volume for an individual firm is approximately TTD $2 million).
- The Fashion Apparel Sector would have a strengthened base that has an improved local and regional sales of collectively approximately TTD $75 million (up from its currently approximated value of TTD $57 million).
- In addition to increased sales volume, the industry would have increased the pool of companies that have increased their level of company maturity.
- Trinidad and Tobago will be a regional fashion hub on the basis of an aligned Fashion Industry where developments of the sectors and support organizations and events are coordinated in systematic way.
- Trinidad and Tobago will increase its local and regional impact, as well as its local, regional, and international visibility by branding the developments in the Fashion Industry as being part of and promoting a Caribbean Aesthetic. The end results that will be achieved are increased foreign exchange and an increase in sustainable & meaningful employment.
Advantages
- Brand Recognition
The Caribbean, as a region, has high brand recognition around the world, but this potential has not yet been captured or utilized for the Fashion Industry. The strategy seeks to enable two (2) firms to become noted Fashion Industry participants outside of the Caribbean.
The strategy therefore seeks to utilize all of the brand capital that has been, and continues to be, built up for the Caribbean and to add a specific fashion dimension to it, by creating the category of “Caribbean Aesthetic” which is intentionally broad enough to capture the diversity that is the essence of the Caribbean and at the same time to add an authenticity and pride dimension that captures the imagination of international market players.
- Outsourcing
A key feature of the global market system is the fragmentation of the value chain. Fashion Industry players in the Caribbean have made use of outsourced production for local or regional consumption on occasions where higher volumes are needed. The strategy seeks to utilize the untapped potential of sourcing in Latin America, creating and designing locally and then producing and fulfilling orders through outsourcing in Latin America. This concentrates local efforts on the highest value adding parts of the value chain and allows larger orders to be produced and shipped, meeting production quality and order fulfillment expectations of international buyers.
The initial driving force towards increased competitiveness is achieved through outsourcing and utilizing the Global Value Chain[1], leading to a higher value proposition (quality at better price and terms). Increased success of firms leads to increased local and regional visibility as well, coupled with lower priced high quality products available locally (due to higher volumes and lower production costs) demand is stimulated and coupled with the “Caribbean Aesthetic” brand campaign, and aligned or coordinated industry players, Trinidad and Tobago is becoming the regional fashion hub and the local Fashion Industry firms will benefit – as do other sectors like Mas, Carnival and Music. Creating strong brand visibility locally, regionally, and internationally is important in order to “harness” the ‘pull factor’ that the larger international volume firms will create for other members of the industry.
The core strategy contains three interdependent and one enabling factor(s): differentiated support for and investment in the three fashion sectors, branding for visibility that spans all three sectors but where the focus is on Fashion Apparel and Accessories internationally (and local awareness), support for firms and associations. The key enabling feature of the strategy is effective good governance of the sector.
The strategy is not to grow the industry through artisanal or export zone production growth. Instead, the artisanal part of the sector will grow as a result of leading designers and producing through company brands that are internationally known with sales several orders of magnitude larger than currently possible.
Scope – The niches for industry to operate in:
In the first instance, the focus is the same markets that have been targeted thus far (Caribbean, USA and Europe). The differences are only:
- on the differentiators used to compete in those markets (higher volumes, tighter production and quality specification, at lower prices, with increasingly stronger collective brand presence and individual authentic stories);
- channels through which sales are being sought – moving from direct sales to an increased utilization of intermediaries so as to achieve higher volumes and keep the focus on the highest value part of the value chain: design
In next week’s article, we will look at three essential strategic components that must be addressed in order for this strategic plan to be successful.
The complete strategic plan for the Fashion Industry of Trinidad and Tobago can be found at www.fashiontt.co.tt/strategy.
Intellectual property rights including copyright (with all data supplied) are assigned to the Trinidad and Tobago Coalition of Services Industries.
[1] Specifically, when activities must be coordinated across geographies, the term global value chain (GVC) is used in the development literature. Simply put, the global value chain includes all of the people involved in the production of a good or service. Source: https://en.wikipedia.org/wiki/Global_value_chain