SWOT Analysis of Bangladesh Apparel Industry

The apparel sector is the biggest export-oriented industry and earns 65% of foreign currency. The apparel industry not only produces garments for export purposes, but also here in Bangladesh we have a huge market of a large population. RMG sector is contributing a huge value to our GDP through creating employment, earning foreign currencies, and also creating skilled manpower through training and development. Here in Bangladesh, there are about 4 million people directly engaged with this industry activity directly; on the other hand, one core person of the total country is engaged with his activities. Here we are presenting SWOT Analysis of Bangladesh Apparel Industry.

In the RMG Sector, 95% of woven & 90% of knit exports are directed to foreign trade markets. In the fiscal year 1984, RMG export was 0.16% over GDP. After 10 years, in 1994, it became 4.60%; after 20 years, in 2004, it became 10.05% & finally, in 2018, the RMG export % over GDP was 11.16 %. So, the last 35 years’ overall average RMG share % in GDP was 8.35 %, which is incredible.

The apparel sector passed many ups & downs, finally reaching its present condition. In accordance with global changes, the Bangladesh RMG sector needs to improve technologically, need to modify traditional methods, enhance marketing strategy & business policy, ensure standard safety & compliance policy, Precise costing & planning, use supply chain strategy, business process excellence technology, training & implementation, research & development, Multi-skilled management systems, practicing TQM, LEAN, etc. Directly or indirectly, the RMG sector is related to so many economic & social sectors, so it is really an important field to focus on for the government. This sector has a vision with objectives to support the sustainable growth of the pioneer industry of the emerging economy & to create employment opportunities to strengthen the macro-economic position.

Though the economy of Bangladesh is now experiencing about 80% export contribution from textiles & Readymade Garments (RMG), the skills shortage at all levels of the industry from operator to owner tend to lower efficiency, high logistics cost, competitive product pricing, delay in sourcing & shipping, which make it critical to cope up with the global competition. Moreover, about 30 percent of the top label position is held by foreigners (Mostly from India, Sri Lanka & Pakistan). Factory owners hire them due to a lack of knowledge to run the factory effectively & efficiently. Bangladesh loses around 200 billion USD every year. Competitors like India, Vietnam, Sri Lanka, Indonesia, Cambodia, and Ethiopia are getting more facilities in the US & China trade war in 2019 & lower Lead Time. Vietnam is just waiting to replace Bangladesh’s position. The following discussion is on the SWOT Analysis of Bangladesh Apparel Industry.

SWOT Analysis
SWOT stands for Strength, Weakness, Opportunity, and Threat. SWOT analysis is a planning technique for a person or an organization to assess its capabilities and shortcomings.

SWOT Analysis of Bangladesh Apparel Industry

Strength:

1. This is a good image of garment exports for almost 50 years.
2. Comparatively lower Manpower cost than other countries.
3. Good planning and Supply chain team for keeping a good amount of material stock.
4. Exclusive fabrics & sample development capacity.
5. Ability to produce all kinds of knit, woven, denim, and other items.
6. The latest technology of machinery is available in factories in Bangladesh.
7. Strong Quality management team to work for self-inspection.
8. The latest IT system (MIS) involves all our supply chain areas.

Weakness:

1. Short lead time orders sometimes take longer lead times.
2. Infrastructure is not up to the mark.
3. Some factory storage capacity is not sufficient; that is why housekeeping is not up to the mark.
4. Material sourcing, especially fabrics, is a concern as most of the items need to import from overseas.
5. Lack of substantial development to labor productivity and managerial efficiency through effective training efforts.

Opportunities:

1. ability to quick Product development.
2. Always prepare any kind of style, execute new development as per buyer standard.
3. Within a short time, going to start rotary (AOP) with reactive and others AOP support will be available.
4. Any critical style can do with good quality.

Threat:

1. Low price competition to chase supplier to supplier.
2. Political unrest and worker unrest are big threats.
3. Huge infrastructure deficiency.
4. Continuous High inflation in the country.
5. Shortage of foreign currency.