Competitive Advantage, Political Advantage and Alliances in the Global Textile Industry. 4 May 2001

4 May  2001

 

Competitive Advantage, Political Advantage and Alliances in the Global Textile Industry.

George Bowen, Templeton College, University of Oxford.

 

Thesis Abstract

This thesis incorporates government into the core theory of strategic management (SM). While the theory of competitive advantage is recognised as a core strategic management theory the effects of government on competitive advantage are only covered superficially in the literature yet competitive advantages may accrue from non-commercial, political sources, leading to “political competitive advantages (PCAs)”.  These PCAs may occur at local, national, regional and supranational levels.

Professor Michael Porter’s treatment of government is taken as the starting point of this thesis. While Porter’s industry level analysis recognises the importance of government, he fails to incorporate it satisfactorily into the theory of competitive advantage at national, industry or firm levels of analysis. Only at national level has this omission been rectified by the extension of Porter’s diamond theory of national industry level competitiveness into a double diamond theory of international trade where government is included as the “fifth determinant” (Rugman et al). This thesis rejects Porter’s national and industry levels of analysis in favour of an extended resource-based view (RBV) approach to firm specific advantage incorporating government.

This thesis also questions Porter’s earlier ‘five forces’ industry strategic positioning view of competitive advantage in favour of a firm level RBV approach, and builds on a synthesis of current strategic management, IB and microeconomics research, to extend the theory of firm specific advantages (FSAs) to include government.

The empirical background for this thesis is a detailed study of the global textile industry. The textile and clothing industry employs over 10% of the world’s manufacturing labour force, a total of over 200 million people. If a wider definition is used that figure increases towards 20%. In spite of its importance, very little academic attention has been paid to the global textile industry, with only two academic books having been published in the last 30 years.

This thesis demonstrates the powerful influence of government on the history, development and strategy of global textile industry.  A detailed study of Europe’s largest textile multinational textile enterprise, Coats Viyella, its subsidiaries, is used to test the thesis propositions at a firm and profit centre level.

The thesis demonstrates that non-commercial, politically, derived sources of FSAs, PCAs, can be identified, and estimated, at profit centre level. An analytic framework is developed for strategic management practitioners. Implications of this work for managers and for politicians are drawn out, and suggestions are made for further research.