Oceania is made up of:
Australia and New Zealand
Political systems:
democracies, communists, kings, sheiks and sultans
most populated countries
China and India
APEC
Asia-Pacific Economics Cooperation was established to facilitate economic growth, cooperation, trade, and investment in the Asia-Pacific region21 countriesalso called the Pacific Rimheavy in apparel and textile trade47% of all global tradedo not make treaty obligations or binding commitmentsattempt to reach a consensus and make commitments on a voluntary basisGoals: free and open trade, encourage investment and create jobs
most developed countries
Japan and Australia
China
largest country in size and largest population2nd largest economy and 4th largest trading nation
India & China
Industry makes up 4% of India's GDPIndia went from agriculture to service based industriesChina went from agriculture to manufacturing based industries
Four Groups
East Asia (China, South Korea, Taiwan, Japan)Southeast Asia (Hong Kong, the 8 ASEAN countries)South Asia (India, Pakistan, Bangladesh)Oceania (Australia, New Zealand)
Australia
2nd largest in Asia with relatively small population
India
3rd largest with the 2nd largest population
East Asia
Three countries are developed (Japan, Hong Kong, and Taiwan)Two are nearly developed (Macao and South Korea)One is developing (China)
Southeast Asia
One country is developed (Singapore)Six countries are newly developed (Cambodia, Indonesia, Malaysia, Philippines, Thailand & Vietnam)The rest of countries are newly developing (Bangladesh, India, Pakistan, Sri Lanka)No least developed countries
With the MFA eliminated, countries compete for sourcing with other factors:
Tariffs schedulesSocial ResponsibilitySecurity of shipmentsThe country's business climateInfrastructureProximity and access to major marketsAvailability of low-cost, skilled laborEffective managementProduct qualityAccess to competitive suppliersReliable deliveryService
ASEAN
Association of Southeast Asian NationsMembers: Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, VietnamGoal: to enhance the trade of its members by establishing ASEAN as a single market and production base with open trade among its members by 2020
Singapore
One of the wealthier nations ($23,700 GNP)Low unemploymentHigh literacy rateAfter HK became a part of China, they have seen an increase in financial and marketing activitiesLimited free trade with the US
Malaysia
Improving productivity with technology, developing skilled labor and encouraging better qualityWorking toward providing product development and branded merchandise195K employed in the T/A complexThey deal with illegal immigrantsHas been declining T & A industries in recent yrs and will probably continue due to higher rising labor costs
Philippines
Has had problems with economic growthTextile production remains smallApparel employs 400K workersAvg manufacturing costs $6.60/hr as compared to China with $3.00/hrNo domestic raw materialsTUKAweb.com - receive emarkers, print them and distribute through FEDEX to the Asian producers
Indonesia
Group of islands about 3X the size of Texas3rd largest democracy between the US and IndiaPolitical and social responsibilityHave had problems with intellectual propertyLargest producer of T&A in SE Asia1.2 Mil work in TA complex
Thailand
DemocracySeveral border issuesIllegal drug distributionWell development textiles industryApparel seems to be of better quality with short lead times than many other SE Asian countriesInfrastructure is poorNegotiations are underway with the US for a free trade agreement
Vietnam
Has developed a large apparel industryBegan with lesser quality products, today has developed a better quality environmentFree trade agreement with the USThree types of organizations in TA industries: -All state owned (Vinatex)-Private and family owned-Foreign owned
Cambodia
Growth as an apparel producer in the last few yrs75% of their exports are apparelHighly vulnerable to china
India, Bangladesh, Pakistan, Nepal, Sri Lanka
Textiles and apparel are the largest employer of manufacturing jobsIndia, Pakistan, Bangladesh have productivity of 20-25% less than ChinaProblem is distance from major marketsEU therefore is their biggest marketplace
Sri Lanka
One of the poorest in the worldProlonged civil warApparel industry has been driving force to increase their economy particularly lingerie and accessories300K employmentLittle textile industry which causes longer lead timesFree trade India and Pakistan
India
Population increasing at 2% per year, may soon become the largest population in worldStrength in trade is competency in English (British Rule)Major cotton producer30% of exports are textiles (3rd largest cotton producer)Textiles is the 2nd largest employerFashion culture - produce looks that are not ethnic but different70% of the apparel is made for domestic consumptionIncreasing middle classHigh import duties (15-35%)Infrastructure problemsRigid labor laws regarding layoffs and government bureaucracyWell educated workforce including managementApparel is focused on higher-value goodsDesire to capitalize on design, accessories, embroidery, and details
Pakistan
Like India, high cotton producer especially in home furnishing markets4th largest cotton producerDoing business can be more difficult than IndiaDrug issues
Bangladesh
Poor infrastructureLow productivityLow communicationsChild labor issues62% of exports are apparel-decreasing -to China40% unemployment-lowest per capita GNP in Asia
Low wages are not the only consideration to sourcing to Asia - Others to consider:
Rate of productivityCultural work habitsAvailability of production equipmentAvailability of cost- competitive, high-quality fabrics and trimmingLever of service
Australia
Highest GDP in the southern hemisphere or AsiaMoved from production to consumptionFTA with the US in 2004Produces larger quantities of wool fiber and fabricApparel is small and focused on fashion goodsMost apparel is imported
New Zealand
Limited domestic productionWhat is produced is high value, high quality primarily for their domestic marketLike other developed countries - consumption vs production of apparelRetail markets like to operate a season behind the US and Europe - Purchase end-of-season goodsHeavy internet users, but hesitant with buying apparel online
Japan, South Korea, Taiwan
Have developed economies and therefore outsource most of their apparel productionHave no domestic supply of natural fibersFocus has been on R&D of synthetic materials
Japan
Imports 90% of their apparel consumptionImported $19.5Bil apparel products in 2003Consumers look for high quality and fashion goodsEuropean luxury brands do well thereThey consume 41% of the worlds luxury brands
South Korea
After the Korean war, SK used a government business approach to growing their economyGovernment regularly intervenes in the marketplace - more than most countriesOutsources most apparel except for the high-end, high-valueThey like to own the factories where they outsource
Taiwan
Like SK, major supplier of man-made fiber and fabricConsider the leader in syntheticsLike other developed countries, what they do make is high-end fashionChina does not recognize them as a sovereign country but one their territoriesUS now does not recognize them as a separate nation either, but treats them as separate
Hong Kong
3rd largest exporter of textiles and apparel (UK and China)After the MFA and the return to China, HK's quota advantage disappeared and began to compete with ChinaUse of brokers - outside vendors who can coordinate product development to shipping
Li and Fung (Top broker in world)
Source products in over 40 countries$5.5B annuallyUsing over 6,000 factories worldwide
China
Late 70's, China began moving toawrds a socialist-capitalist economyToday, 100 mil people are considered middle class - at a fraction of the cost of a US middle class familyFrom 1976 to 1996, urban area's population grew from 19% to 30%100 cities have more than 1 mil peopleChongquing - Largest city in world (31 mil)11 mil apparel employmentIssues they are having to deal with; infrastructure problems, rising raw material costs, rising labor rates and land3rd largest importer of textiles (after the EU and US) reflecting both apparel for export and domestic consumptionImport cotton but have abundance of other raw materials for soft goodsToday, the largest producer of man-made fibers and competitive in yarns, fabrics and trimmingsMore than 110K apparel factories with 10% employing more than 5K people40% of produce is recognized as high quality Self-contained cities - living accommodations, with service industriesUnemployment rate - 10%- migration of people from rural areas to the cities 23% of all global trade in textiles and apparel $79BConcern: threat of saturating the world with manufactured products -69% of Australian apparel market-77% of Japanese apparel marketWTO in 2001 - meant elimination of quotas
China Retail
2004 restrictions of retail foreign investment were liftedUp-scale retailers openedMass-market retailers also such as WalMart - 1% of the country's GDPIncreasing in product development including technical and creative designEnrollment in university level apparel programs is growing to meet that demand
China Currency exchange
Held as a percentage of the US dollarConsidering some deregulation which would increase the costs of China's exports
Social Responsibilty
A crucial element of international efforts to foster sustainable and equitable development worldwideTwo-faced capitalismCorporate Fads
Social Responsibility:
Influences on morals and ethics
FamilyFriendsReligionEducationTVInternet
Social Responsibility:
Codes of Conduct
Corporate response to include social responsibility in the business decision-making process
Social Responsibility:
Ethics
A code of morals or a person, group or profession and its application to decisions and issues of conduct
Social Responsibility:
Morals
Degree of conformity with generally accepted or prescribed standards of goodness, fairness, or rightness in character or conduct
Social Responsibility:
Maslow's Hierarchy of Needs
Physiological: very basic needs such as air, water, food, sleep, sexSafety: establishing stability and consistency in a chaotic worldLove and BelongingnessEsteem: self-esteem which results from competence or mastery of a task and the attention and recognition that comes from othersSelf-actualization: the desire to become more and more what one is, to become everything that one is capable of becoming
Social Responsibility:
Labor Exploitation
Gender
Men get paid about 20% more than womenLess women in executive roles38% of companies are owned by womenWomen are more likely to develop power and influence through relationships, teams etc.Men are more self-confident than women
Social Responsibility:
Labor Exploitation
Age
211 mil children worldwide from the ages 5-14 workMost countries have laws to protect children
Social Responsibility:
Recommendations for companies to use as Codes of Conduct
Statement of the values and goals of their firmMust be top downClearly communicated to all employeesIndustry-wide should be developed to lessen confusion and used as a model for smaller organizations
Social Responsibility:
Human Rights Organizations
Labor Unions - AFL-CIOSocial ActivistsTrade Associations - AAFA