Swot Analysis Of Cotton Industry

INDUSTRY ANALYSIS BASED ON PORTER’S FIVE FORCES MODEL

Rivalry among Existing Firms
Rivalry among existing firms in Pakistan’s Textile made-up sector is high and intense because there are a large number of firms producing the same products and the made-up sector has been experiencing a rapid growth since the last Five years. If the industry is growing rapidly, then each firm tries to capture larger market share which causes the rivalry to increase. Moreover, the switching costs are low because the products produced by the manufacturers are more or less the same such as bed wear, towels, tents and canvas, readymade garments, synthetic textiles, Knitwear, cotton cloth etc. And when switching costs are low, the customers can easily switch from

Lack of research and development has led to low quality cotton compared to other Asian countries, which directly affects the made-up sector. The market needs good quality cotton at reasonable prices. Therefore, in order to improve the quality of our cotton, the industry should ponder over ways to improve and enhance the quality of the cotton to be used with the help of research & development institution. Because once the quality of cotton is improved, we can easily compete at international level through our high quality value-added products and

Due to high interest rate, financing cost increases, which directly has a serious impact on production. There is around 14% high markup rate coupled with around 20 percent of inflation, e to which the cost of production increases. This can lead to non-competitive product prices and thereby reduces the market share. The private sector in Pakistan has a stable need for working capital which is provided by the commercial banks on the basis of the policy rates announced by the central bank.
Prices of Raw material
Prices of raw materials used in the made-up sector fluctuate rapidly. This fluctuation badly impacts the cost of production. This increase or decrease in prices is either due to inflation or unstable internal conditions of the country.
Other External Factors
There are certain historical external factors that have affected the growth of the sector. One of such factors was the quantitative restrictions by the major importing countries of the world. The growth based on competitive advantage of lesser cost of production, sufficient supply of labor and home-grown cotton, has been restricted by the quota regimes. Quotas actually increased the export of raw material and semi-manufactured good, but at the same time limited the access for high end products including