The Impact of Instability in the Business Environment on the Competitiveness of Enterprises Using the Example of the Apparel Industry

Abstract

Recently, many disruptions have occurred in the environment of companies, mainly caused by the COVID-19 pandemic, but also, for example, by the war in Ukraine and by the sharp increase in fuel prices. The aim of the article was to present the competitive strategies of chosen companies from the garment industry and the impact of environmental instability on the competitiveness of enterprises using the example of the clothing industry in Poland. The author has been conducting comprehensive research in Polish clothing companies since mid-2017, using, first of all, the method of interviews with company management. This article presents partial results of these studies concerning the competitiveness of companies, especially in terms of the instability of the environment. On the basis of the conducted research, it can be concluded that the instability in the environment has a significant impact on the competitiveness of clothing enterprises. In the initial period, the COVID-19 pandemic had a negative impact on the level of logistic customer service. Because of this, availability of clothing in some stores and quality of deliveries to online customers deteriorated. The war in Ukraine also caused a temporary deterioration of the availability of clothing in the case of companies that outsourced production to Ukraine. Instability in the environment resulted in an increase in logistics and production costs, which in many cases resulted in an increase in the price of clothing for the end customer. The COVID-19 pandemic and the increase in fuel prices have reduced the efficiency of outsourcing clothing production in low-cost countries, but in the surveyed companies, this had not caused a shift of production from global to local. The problems resulting from the instability of the environment were more quickly overcome by those companies that were more flexible and that earlier on had diversified their sales channels (i.e., sold both in the stores and via e-commerce customers) and the sources of supply (production not only in low-cost countries but also in the local sewing factories). The research confirmed the significant impact of instability in the environment on the ability to compete with the level of logistic customer service and price. The instability in the environment did not affect the ability to compete with the quality of clothing in the surveyed companies.