Revamping The Value Chain of Tirupur’s Hosiery Industry in the Context of Global Competition

Dr.M.Bina Celine Dorathy

Abstract


The value chain provides a tool for understanding the sources of cost advantage. Successful cost leaders draw advantages from throughout the value chain by optimizing the linkages and by operating in close coordination with suppliers and channels. Value chain also exposes sources of differentiation. Differentiation results from the way a firms’s product, associated services and other activities affect its buyers activities. The value chain also allows a closer look at the role of competitive scope in gaining competitive advantage. Scope shapes the nature of firm’s activities and by choosing a narrow target segment a firm can tailor each activity precisely to suit the segment’s needs and thereby can achieve lower cost or differentiation. On the other hand choosing a broad scope can lead to competitive advantage if the firm can share the activities across industry segments or even while competing in related industries. Firms gain competitive advantage if they choose a different scope than their competitors. This article analyses the structure of the value chain of the hosiery units in Tirupur. Tirupur a small town in Taminadu, India, became a major exporter of hosiery products to most of the developed countries of the world after 1985. The industry suffered a set back when the Quantitative Restrictions (QR) on textile trade was totally phased out by the WTO in 2005. This article sheds light on the areas that need to be revamped in the supply chain inorder to sustain Tirupur ‘s status as  a town of Export Excellence.

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