Long Range Planning, Vol. 22, No. 4, pp. 63 to 71, 1989. 0024-6301/89 S3.00 + .OO Printed in Great Britain Pergamon Press plc zyxwvutsrqponmlk 63 zyxwvut Competitive Strategies in the Clothing Industry Patrick McNamee and Marie McHugh This article analyses the competitive position of the Northern Ireland clothing industry using Michael Porter’s methodology. Interviews were held with 77 out of the total 10 1 companies in the region. The objectives of the study were (7) to check the validity of Porteis theories in a sector of European industry, (2) to provide the industry and government with guidelines on how competitiveness might be improved and (3) to develop a generalmethod for analysing competitiveness which could be used in other industrial sectors. The issue of competitiveness has received much attention in recent years. A major stimulant of this interest has been the work of Michael Porter. However, in spite of the widespread knowledge of Porter’s theories on competitiveness there is little information published on the testing of these theories in a European context: indeed in discussions of Porter’s work managers often refer to the difficulty in applying the Porter’ concepts to their particular industry. The study discussed below examined the competitive structure of the Northern Ireland clothing industry using a Porter methodo- logy. zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA The Power of Buyers According to Porter, the more powerful buyers are in relation to a particular industry, the more adversely will the industry’s profitability be influenced. He also suggests that buyer power will normally be strongest when members of the buyer group possess certain characteristics. The Buyers are Concentrated or Purchase Large Quantities in Relation to the Sellers’ Sales Those manufacturers whose sales were most con- centrated would experience the most severe competitive pressure from their buyers and that consequently these manufacturers would have the The authors are at the Centre for Research in Management at the University of Ulster at Jordanstown. Porter’s Conceptual Framework The theoretical framework upon which this study is based is that provided by Michael Porter. In summary the core of this approach to strategic planning is that the competitive climate of any industry is not a matter of accident or luck, but rather it is determined by five fundamental competitive forces: b the Power of Buyers, Q the Power of Suppliers, * the Threat of Entry, b the Threat of Substitutes, b the Intensity of Rivalry of Existing Competitors, and that through following a generic strategy of either Differentiation, Overall Cost Leadership or Focus, a firm may be able to position itself, in relation to the five fundamental forces, so that it gains competitive advantage over its rivals which is reflected in superior long-run return on invested capital. The Study The study attempted to test the theoretical expectations of the Porter model in the context of the clothing industry. Competitiveness was assessed using respondents’ net profit before tax. In general it was assumed that those firms which enjoyed the highest net profit before tax figures were the most competitive.2 The results of the study are set out below in the following format: The theoretical expectations of major elements in the Porter theory of competitiveness are outlined.3 The research findings from the study are presented. Conclusions based on the match between the theoretical expectations and the results are drawn. Implications for practitioners in the clothing and similarly structured industries are provided. lowest levels of profitability. The validity of this expectation was assessed, through correlating the number of major buyers which respondents had with net profit before tax.