Factors Affecting Governmental/Trade Disparities Among Nations

Abstract

As globalization takes hold in international trade, companies are impacted by factors that are often beyond the scope of their influence. These trade factors directly impact the competitiveness of companies in global markets. Global markets are becoming the norm as communication, technology, and infrastructure within developing countries improve. Textile and apparel companies are searching for the optimal locations to produce various products so that they will have the proper balance of quality and cost, in an attempt to increase profitability. This research focused on the bottom weights and bed/bath markets. These markets were selected because they have a significant manufacturing presence in the United States, and they possess different supply chain structures.

This study used a two-phase mixed methods approach in order to gain secondary data from available resources and primary data from in-depth interviews with industry executives. Eighteen leading companies in the bed/bath and bottom weights markets were interviewed with 33 respondents whose average experience was 25 years in the industry. Comparisons and contrasts were analyzed regarding the two markets.

The five trade factors that were analyzed in this research were: 1) currency exchange rates, 2) environmental and social compliance, 3) Intellectual Property theft, 4) federal government subsidies, and 5) employee benefit plans. All of the trade factors influence companies in international markets. American companies are at a competitive disadvantage with offshore companies in these markets due to these five trade factors. Government policy and regulations put tremendous strain on domestic textile and apparel companies to remain competitive in the dynamic global textile industry. This study is one section of a three part research project regarding economic competitiveness in the global textile and apparel industry. The three studies are:

• "Factors Affecting Governmental / Trade Disparities Among Nations," by Michael A. Jones.

• "Market Competitiveness in the Global Textile Supply Chain: Examination of Supply Chain Configurations," by C. Hope Nowell.

• "Economic Competitiveness in the Global Textile Supply Chain: An Examination of Logistics Cost Structures," by Lynsey A. Cesca.