An analytical approach to assessing the competitiveness in the textile industry

Abstract

PurposeThe purpose of this paper is to measure the competitive performance of four major Iranian synthetic fiber‐manufacturing companies, as one of the main sectors in the textile industry, using an analytical approach. The results presented assist in evaluating the competitive performance of a company, while developing recommendations for improving competitive strategy of the firms.Design/methodology/approachThe proposed approach is based on Porter's diamond of competitive advantage (including four main determinants, namely factor conditions, demand, related and supporting industries and firm strategy and rivalry, plus government as an external factor). This approach is based on five determinants, each one consisting of two to six elements, with each element including a number of variables, i.e. 55 variables in total, which were confirmed by the interviewees as important factors affecting the competitiveness of a firm. Accordingly, the results obtained from the interviews confirmed the validity of the proposed approach to assess the competitiveness of a company. In addition the proposed approach is applied to assessing the competitive performance of four companies which manufacture synthetic fibers, in terms of each determinant as well as the overall competitive performance of each company. The data used in this research were obtained from both face‐to‐face interviews and a questionnaire completed by the key managers and engineers at the companies studied. The validity of the results obtained by means of the proposed approach was also correlated by comparing the results with the Export Value and Relative Comparative Advantage index of the synthetic fiber industry in Iran.FindingsThe results reveal that the competitiveness of the four companies is significantly low. Furthermore, of the five determinants, factor condition yielded the highest performance for the firms. The paper also identifies some of the shortcomings affecting the local manufacturers, and provides recommendations on how to improve the competitive performance of the firms.Practical implicationsThe proposed approach provides a good basis for assessing the competitive performance of the companies. This can also help both researchers and practitioners in deciding how best to improve the competitive performance of a company.Originality/valueThe research proposes an analytical method for measuring the competitiveness of companies. This also helps in developing recommendations for improving competitive strategy. In addition, the method evaluates the competitive performance of four companies which play an important role in the Iranian synthetic fiber industry. Recommendations are also made on how to improve the performance. The findings should prove useful for both researchers and practitioners.