Exploring how garment firms choose international sourcing‐ and sales‐country markets

Abstract

PurposeThe purpose of this paper is to explore how firms that do both sourcing and selling choose which countries to source from and to which countries to sell. It also looked at the role of competitive strategy, vertical integration, and foreign involvement in the decision‐making.Design/methodology/approachA survey instrument that was designed based on personal interviews with 20 German garment industry executives was administered to 750 German, Austrian and Swiss garment manufacturers. In total, 93 questionnaires were usable. Factor analysis was employed in evaluating the data.FindingsThe results indicate that firms that both source and sell at the same time have more complex decision making than normative models suggest. These decisions tend not to be isolated decisions. The factors that are considered in sourcing are different in the decision as to where to sell. Foreign involvement, competitive strategy, and vertical integration influence the firms' decision making.Research limitations/implicationsThe study is exploratory in nature and it is limited in its application. Moreover, the disproportionately large number of German respondents may skew the results. In addition, the total number of respondents is relatively small. The study may also suffer from any or all of the following deficiencies: lack of reliability and validity test, having only one executive per firm respond to the survey, not considering country‐specific characteristics, and lack of control for the market‐entry strategy and market size variables.Originality/valueMost research in this area focuses on either the sourcing or the selling side. This study looks at how sourcing and selling decisions are made by firms engaged in both activities. Additionally, the roles of competitive strategy, vertical integration, and foreign involvement in relation to the decision making are investigated.