SociologyStudyISSN21595526 May2012,Volume2,Number5,337350

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DevelopmentofCompetitiveAdvantagein ApparelIndustryinKenya
AnneMastametMasona,MichaelOgemboKachiengab
Abstract The Kenyan apparel industry has played a major role in the countrys economic development; however the sectors competitivenesshasdecreasedduetoinadequateindustrialstrategyandlossofglobalmarketsresultingfromeliminationof quotasin2005.Chinaandother Asiancountriesabilitytoproducequalityproductsefficientlyatlowercomparativecosts hasbeenthreateningapparelmanufacturersinmostdevelopingcountriesinAfrica.Thepurposeofthisstudyistoanalyse Kenyasapparelindustryscurrentsituationandtorecommendsomestrategiesforregainingbusinesscompetitivenessinthe apparel sector. This paper examines how apparel firms could develop competitive advantages in both local and global markets.ItusesPortersdiamondandbusinessvaluechainmodelsasabasisofanalysisforinterpretingcompetitivefactors withinKenyasapparelindustry.Inadditiontoextensiveliteraturereviews,thepaperprovidesindepthoverviewofKenyas apparelsectorbusinessdynamicsanditsrelationshipswithlocalandglobalmarkets.Conclusionsaredrawnbasedonthe analysesofPorterstheoreticalmodelsinrelationshiptoKenyasapparelindustrybusinessdynamics.Takingintoaccount the global apparel business factors, recommendations are made on how the Kenyas apparel industry can regain business competitiveness. Keywords Competitiveadvantage,apparelindustry,Kenya

The economies of most independent countries in the sub-Saharan Africa remained heavily dependent on technological imports from developed countries, after political independence in the 1960s. Kenyas economic development also took a similar pattern as other countries in the sub-Saharan Africa, mostly relying on imported equipment and products. Soon after independence, Kenya took a dual approach to development, promoting economic growth and social change in tandem. The government supported farmers, small business owners and cottage industries. The approach was aimed at generating economic growth, employment and social change in the productive communities. By default, apparel sector benefited from the government initiative because at the

independence apparel industry had already a business network consisting of factories as well as dispersed but collective cottage enterprises. Most of the cottage industries were and continued to be driven by low technology such as indigenous hand looms (used for traditional weaving), silk and stencil screens used for printing, and tools used for tie-dye and batik. The

Polytechnic University College, Kenya; Tshwane UniversityofTechnology,SouthAfrica bUniversity of Pretoria, South Africa; Kenya Polytechnic UniversityCollege,Kenya CorrespondentAuthor: Anne MastametMason, P.O. BOX 5242800200, Nairobi, Kenya Email:amastamet@gmail.com;masona@tut.ac.za

aKenya

338 apparel industry exploited the political support to entrench itself as strategic economic sector in the national economy. Apparel sector is a developmental power house because it links rural economics and stock exchange economics in Kenya. In the first decade following the countrys independence in 1963, manufacturing output in Kenya increased immensely, with notable expansion in the textile and garment production. Textile and clothing industry developed into a leading manufacturing activity in Kenya, both in terms of size and employment, employing about 30 percent of the labour force in the national manufacturing sector (Mangieri 2004; Omolo 2006). The textile and clothing sector in particular was identified by the Kenya government, as a core industry with the potential for inducing rapid economic development. The economic and political centrepiece of this expansion was the domestic manufacture of kanga and kitenge both as the foundation for industrial development and powerful aesthetic symbols of independent Kenyan identity. Kanga and kitenge fabrics are authentically East African, as women throughout East Africa generally wear them. Both fabrics are colourfully printed and are made from cotton fibres. Kanga are sold as conjoined identical pairs, which must be cut and hemmed to form two pieces. The underlining rationale of the study is to investigate technological trends, investment and market dynamics in the apparel industry in Kenya since the 1960s. Furthermore, to establish the channels of productivity flow constraints in the sector negates competitive pricing of products in the marketplace. Recommendation provided in the study is designed to take into account technological trends and advance technology uptake, investment and market innovations in the industry with the aim to improve the allocative and productive efficiencies of the business value-chain. The strategy of the study is to unlock the productivity potential of apparel industry in Kenya through

Sociology Study 2(5) advance technology uptake and optimisation of productive services.

CHANGINGTRENDSINTHEGLOBAL APPARELMARKETS
In early 1980s, the global apparel businesses witnessed major changes in the division of industrial labour. The apparel sector was one of the major examples of industries where comparative advantages shifted in favour of developing countries, mainly to take advantage of cheap labour (Fitzpartrick 1983; Dickerson 1995). One of the issues of concern to developing countries was to access to textile markets in developed economies for the expanding manufactured exports. The textile industry has been a major example of industrial competitiveness on most developing countries. Their exports of textile grew at real annual average of 20% between 1970 and 1978, while their exports of clothing grew at 30% per annum. These trends have lead to sharp conflicts of interest between the developing exporters and the developed importers (Fitzepatrick 1983). For the developing countries, such changes in the international division of labour reflect their legitimate desire to industrialise, while for the established economies, these trends are accompanied by fears of severe adverse effects on their domestic economies in terms of market share and employment.

HISTORICALTRENDSOFTEXTILEAND CLOTHINGMANUFACTUREINKENYA
The Kenyan print-cloth industries particularly Rift Valley Textiles (RIVATEX), Kisumu Cotton Mills (KICOMI) Textiles and Mount Kenya Textiles (MOUNTEX) were once the backbone of post-independence apparel manufacturing firms and celebrated as thriving symbols of Kenyas independence. By 2001, domestic manufacture of

MastametMasonandOgemboKachienga kanga and kitenge declined in Kenya. Local woven and print cloth production in Kenya was undermined, in part, by the importation of cheaper Asian kanga and kitenge, crises in domestic cotton production, poor management and the importation of second-hand clothing from the developed countries. It was also affected by an emerging movement toward the local manufacture of western-style clothing for exports promoted by Export Processing Zones (EPZs), Manufacture Under Bond (MUB) schemes and later on, African Growth Opportunity Act (AGOA) initiatives. The popularity of African print cloth, the significance of its African aesthetic, and its economic importance, while not completely wiped out, were nevertheless distorted by articulations with second-hand clothes, Asian clothing and an emergent export-clothing strategy (Mangieri 2004). While some clothing for local retail stores was produced in Kenya, the vast majority of goods sold in Kenya were from foreign sources (Mason 1998). In Kenya, currently cotton industry exists only at the subsistence level and production is not sufficient to sustain a robust textile and apparel industry. As a result, countrys cotton industry continues to decline with almost all fabrics, threads and yarns used in Kenyas apparel industry manufacture continue to be imported (McComic et al. 2002; Mangieri 2004). Kenya government initiated two major incentives, namely EPZs and MUB, which were later supported by American Government initiativeAGOA, purposely to spur industrialization of apparel industry. The strategy was to enhance employment creation, technology transfer, foreign exchange earnings and international market penetration, consequently reducing the poverty levels in the country. The original legal-economic and techno-economic framework for EPZs and MUB was aimed to promote technology transfer, generate competitive foreign exchange from apparel exports, and enhance cross-industries technological exchange to spur

339 industrialization of Kenya. The economic mechanics EPZs and MUBs operations are analysed in the next section to provide deeper insights into their business value chains and linkages to apparel industry.

EPZSANDMUB
Kenyas economy was liberalized in 1993 and prior to that, the textile and clothing sector was highly protected. As a result of liberalization, domestic textile and clothing industries had to compete with imports. In attempt to enhance the competitiveness of the domestic industry, Kenya government shifted its policy on textile and clothing trade from inward to outward approach of marketing strategy of apparel products. EPZs and MUB were established in designated areas of the country, as a result of the changes. EPZs objective has been export promotion and stimulation of foreign direct investment. Its main characteristic is the removal of import tariffs on production inputs and it offers export-oriented firms a site allowing full import duty exemption, often adding income tax breaks among other specific incentives (Rolfe et al. 2004). Kenya governments aim of establishing the EPZs and MUB schemes was to generate local employment, foreign exchange earnings, technology transfers and enhance industrialization in the sector. Expert industry analyst supports the view that foreign investments in EPZs and MUB have the potential to yield positive benefits for host countries, although most countries seldom achieve all the objectives set for establishments of these schemes (Easterly 2002: 146-151). Easterly (2002: 146-151) observed that in Bangladesh, local firms learnt from foreign investors and revitalized manufacturing through skills and technology transfer. With African countries now given quota-free and duty free access to United States (under AGOA), Kenya apparel manufacturers need to use these opportunities to industrialize the sector through

340 new advance technologies uptakes and exploitations of incremental technological innovations in manufacturing processes. In addition, there is a need for human capital training and skills development to enhance manufacturing efficiency and business competitiveness.

Sociology Study 2(5) focussed to provide opportunities for cottage, boutique specific manufacturing (custom-made) and mass customization. Kenyas strategic steps toward apparel trade should be characterised by networking with relevant industries, institutions and negotiations on normalisation of tariffs amongst regional trading blocks. Networking and collaboration with universities and research institutions will assist the apparel industry in exploiting new technological uptake and manufacturing process innovations in improving apparel industrys competitiveness. Since the clothing industry is still labour intensive, it has become truly global, as it has migrated from the high wage developed world to developing countries (Dickerson 1995; Parish et al. 2006b). Nevertheless, developing countries like Kenya will need to have high-skilled personnel, efficient manufacturing technologies and efficient logistical and operational processes, if they are to achieve flexibility and competitiveness in the apparel sector. Some of the strategies open to Kenya as a developing nation are: technological entrepreneurship, and identification of niche markets domestically, regionally and internationally. Technological entrepreneurship is defined as making business sense of technology. In the case of the apparel industry, technological entrepreneurship means re-alignment of manufacturing technologies and enhancing operations processes through exploitation of modern technological innovations in the sector. The aim is to reduce production time and costs, while enhancing intelligent use of technology in the business processes. From apparel industry business point of view, technological entrepreneurship leads to identification and assessment of core businesses of different stakeholders within the sector, in order to exploit economy of scale and firms intellectual properties profitability. Technological entrepreneurship promotes collaboration between firms through integration of capabilities to achieve profitability and competitiveness.

TEXTILEANDCLOTHINGSIGNIFICANT CONTRIBUTIONSTOKENYAS ECONOMICGROWTH

In todays world, the textile and clothing industry make a significant contribution to many national economies especially in the developing world (Dicken 1998; Jones 2002; Dickerson 1995). An increasing number of countries, including India and Kenya are investing this industry for reasons of economic growth (Dicken 1998; Dickerson 1995; Jones 2002). In 2004, the manufacturing sector in Kenya accounted for over 20 percent of Kenyas gross domestic product (GDP), provided employment to about 300,000 people in the formal and 3.7 million persons in the informal sector (Omolo 2006: 4). It is therefore, one of the key sectors targeted under the countrys strategy for economic recovery as outlined in a number of policies such as Economic Recovery for Wealth and Employment Creation (2003-2007) and Investment Programme for the Economic Recovery Strategy among others (GOK 2003). Kenyas initiative of industrialization through textile and clothing sector has had mixed success, but largely remain un-exploited, despite of evident potential. Therefore Kenya has to strive to reinforce its role as a preferred supplier to local and regional (East Africa), and duly aligning itself for global niche markets. Textile and clothing entrepreneurs with innovative business proposal are likely to get favourable support from the government through promotion of joint ventures at EPZs and AGOA initiatives. Apparel industry in Kenya should be customer-

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341 productiona provision provided to Kenya until end of 2007 (Mangieri 2004). Gibbon (2002) reported that China and India established off-shore production facilities throughout sub-Saharan Africa as a way of circumventing country-based quota restrictions placed on clothing. As these restrictions end, Africa will prove less attractive to the Asian investors particularly that apparel production costs in Kenya which has been reported to be higher than in Asia (Mangieri 2004), and that China and India currently have direct access to American market (Hurreeram and Little 2004). Furthermore, it should be noted that EPZs and MUBs production for export only enhances weak backward linkages to the local economy (Warr 1987a, 1987b). Din (1994) compared EPZs to an intermediate goods-producing sector, where capital inflow had no direct effect on national income. Mexicos EPZs and MUBs growth success, for example, was promoted not only by manufacturing textile and apparel for export, but also by using some of the local materials for the production and by supplying some apparel products to the local markets (World Bank 1998; Hanson 2002). Africas EPZs and MUBs have been criticized for attracting short-term footloose investments that result from short-term direct investmentsnot rooted in the local economy through supply or demand linkages (Caves 1996). Bond (1981) found evidence of firms entering into EPZs simply for the lucrative incentives such as the tax holiday and only to exit after the period ends. It may be argued that EPZs and MUBs should balance their supply of clothing, both for export and domestic niche markets. The EPZs and MUBs incentives should also be structured not only to attract foreign exchange and create jobs, but also to facilitate development of skills and technology transfer that can be used for the production of clothing products for different markets needs. The EPZs and MUBs should be integrated into the local industry in terms of business structure and integration to the local industry to facilitate long-term sustainability and promotion of industrial

REEXAMININGTHEEPZSANDMUB BUSINESSSTRATEGYINKENYA
The model of EPZs in Africa has been seen as a stimulant for industrialization and economic growth. As observed in other developing countries, such as Costa Rica and Malaysia, these countries rely on low taxes (tax holidays), infrastructure, liberal regulatory climate, and other incentives to attract foreign direct investment (Rolfe et al. 2004). Ultimately, manufacturing activities create not only opportunities for technology transfer, but also environment skills and knowledge development, which can be adapted in other industries to promote productivity that could lead to inventive competitive edge. As export potential increased with market-opening initiatives like AGOA, Kenya government provided enabling environment for local manufacturers to penetrate foreign markets through economical incentives and political support. However, export markets were falsely regarded as profitable due to incentives provided by the government and not because of business acumen and competitiveness. The Kenya government has been too supportive on exports as means of earning foreign exchange and job creation. Employment potential and labour market conditions of EPZs and MUB plants are reported to be strong in some parts of developing world, but generally limited in Africa (Jauch 2000, 2002; Mangieri 2004). Jauch (2002) reported that EPZs offered no solution for African economic development, as employment creation in the sector had been scanty noted. Jauch (2002) noted that Kenyan government spent millions of dollars on EPZs promotion, but the sector could only create about 2,800 new jobs in five years. In Kenya, a majority of Indian investors own and manage most textile and apparel firms (RATES, 2003), while only 11 percent of the EPZs and MUBs are wholly Kenyan (Omolo 2006). India lobbied Kenya to form partnerships under AGOA by which India provided raw materials for textile and apparel

342 competitiveness.

Sociology Study 2(5) global competition should act as catalysts for re-organization and re-orientation of local manufacturing to focus on specific niche markets due to low cost of doing business locally, rather than focusing on the competitive export markets alone. It is also imperative that skills developed in EPZs and MUDs and technology transfer should be adopted for manufacturing of apparel products for local niche markets. Teplensky et al. (1993) defined niche marketing as an emphasis on a particular need or geographic, demographic or product segment. Niche market is also considered as a small market consisting of an individual customer or group of customers with similar characteristics or needs. Simply, it is a narrowly defined group of consumers seeking a distinctive mix of benefits, which requires specialization rather than mass productions (Dalgic and Leeuw 1994: 280; Kotler 2003: 280). This therefore demands that apparel manufacturers in Kenya need to restructure their markets into segments (niche) based on special needs of each segment. A study carried out in Kenya indicated that career women were not satisfied with the fit of ready-made apparel available, in terms of suitable and presentable clothing in appropriate sizes (Mastamet-Mason 2008). This niche market of career women could be tapped based on their fit preferences.

DEVELOPMENTOFINDUSTRIAL COMPETITIVENESSINAPPAREL INDUSTRYINKENYA

After six decades of independence, most African countries have failed to establish viable industrial base for manufacturing apparel products and continues to rely on the importation of fabric and clothing compared to Asian countries. Kenya is no exception. One of the many reasons for Kenyas economic under-performance in comparison to Asia is its failure to industrialise and establish sustainable export and domestic markets by developing the manufacturing capability to compete both locally, regionally and in global markets. From the outset, the Asian tigers pursued an export-oriented economic strategy, supported by technological innovations, skilled workforce, prudent financial policies and increased public-private investment, including attracting foreign direct investments (Jin and Moon 2006). New dispensations in global apparel markets and changes in World Trade Organization (WTO) policies should now trigger major business re-organizations and re-alignments in developing countries, like Kenya (Parrish, Cassill, and Oxenham 2006a). According to Porter (1998), mature industries were prone to increased competition and price depression due to congestion in addition to a reduction in the number of firms. Firms in the mature markets start to look for measures to stay active in a rather sluggish market, and as the stages of the product life cycle change, so do the success features (Aaker 1998). To remain successful in the maturity stage, companies need to look for strategies to differentiate themselves from other firms normally, through incremental innovations in manufacturing processes and market innovations. A market innovation is achieved through incorporating special features in products or focusing on specific niche markets. The

APPLICATIONOFPORTERSFOUR DETERMINANTSINCREATIONOF BUSINESSCOMPETITIVEADVANTAGES

Porter (1998) observed that a nation succeeded in a particular industry if it possessed a competitive advantage relative to the best worldwide competitors. Determinant factors for the competitive advantage are reported to be: factor conditions, demand conditions, related and supporting industries, and firms strategy, structure and rivalry. These factors (see Figure 1) are hereby discussed in relation to apparel industry.

MastametMasonandOgemboKachienga

343

Change

Firm Strategy, Structure, and Rivalry

Factor Conditions

Demand Condition

Related and Supporting Industries

Government

Figure1.PortersDiamondModel.Source:Porter(1998:127).

FactorCondition
Factor conditions refer to the factors of production that are necessary to compete in a given industry, which includes basic factors and advanced factors. Basic factors are passively inherited such as, climate, unskilled and semi-skilled labour, while advanced factors are conditions that a country creates such as highly educated personnel or human capital (Porter 1998). Porter (1998) observed that advanced factors were necessary for sophisticated form of competitive advantage. Human capital is concerned with the capabilities made available to a company through human skills and knowledge of employed people. Kachienga (2008) pointed out that human capital was the cornerstone of business competitiveness and

sustainability. It has been reported that apparel industry in Kenya as in other developing African countries was characterized by unskilled labour force (Mason 1998; McCormick et al. 2002; Hurreeram and Little 2004). Advanced or specialized factors can be created through factor-creating mechanisms such as public and private educational institutions. Nations succeed in industries where they are particularly good at creating and upgrading the needed factors. In Kenya, it has been observed that the quality of apparel design programs offered in most institutions do not meet international standards, most institutions operate with outdated technology and hence substandard skills (Mastamet-Mason 2008). Porter (1998) stressed that standard for what constituted an advanced or specialized factor tended to improve continuously as

344 the states of knowledge, research and practice improved. In the case of Kenyas apparel industry, it is imperative that competitive advantage is linked to the advanced or specialized factors. This can be achieved by improving the skills of the designer trainer facilitators and equipping the design studios with modern technologies such as computer-aided design systems, modern sewing room systems as well as size and fit equipment and tools necessary for achieving high quality apparel that can meet international standards. Institutions of higher learning are also required to re-develop their curricula to include global factors as well as consumer aspects. Apparel success stories can be observed and borrowed from highly recognized creative designers in France and Italy, while staff training on quick response technologies can be done in the USA and UK.

Sociology Study 2(5) As an industry evolves, domestic consumers demand upgrades to higher levels of specific needs, such as creative and unique designs or services along with competitive prices. Mastamet-Masons (2008) study on career womens perception of fit with Kenyas ready-made apparel showed that the imported, custom-made and second-hand apparel categories were perceived to have the best fit, as indicated by 74%, 70%, and 65% of responses, respectively, while domestic apparels fit scored only 30%. Consumer reports of 2007 also indicate that consumers of all walks of life in Kenya purchase second-hand clothing because they are sophisticated and unique, and not necessarily because they are cheap. Jin and Moon (2006) observed that as the industry advanced, domestic buyers demanded a higher of design quality to suit their tastes as well as various items that were needed in their diverse lifestyles. Kenya manufacturers must develop technological flexibility to manufacture high quality products for domestic niche markets currently served by imports. The demand for textile products in the Kenya is estimated to be growing at 3.8% annually (KEPZA 2005a: 7; Omolo 2006).

DemandConditions
Demand condition refers to the nature of home-market demand for an industrys product or service, which is viewed in terms of the size of the home market and sophisticated and demanding buyers. If the home demand size is large, firms will invest to reap economy of scale (Porter 1998). Kenyas apparel industry supplies only 45% of the domestic market, while 55% are imports (RATES 2003; Mangieri 2004). The sound traditional custom-made industry as well as the imported new and second-hand ready-made apparel is an indication that consumers consumption pattern would soon lean toward apparel items that are likely to satisfy their special needs (Mastamet-Mason 2008). Fifty five percent of import market indicates that there is a demand for satisfactory clothing in Kenya and therefore calls for domestic apparel industry to understand the needs of the consumers and become proactive to local market demand. Therefore Kenyas apparel manufacturers should focus on the design and manufacturing of products that meet niche market demands presently dominated by imports.

RelatedandSupportingIndustries
National success of an industry can be achieved if supported by a number of related industries. The presence of supplier and related industries within a nation, which are internationally competitive, could contribute to innovation, upgrading, information flow and shared technology development (Porter 1998). As stated earlier, Kenyas EPZs as well as the MUB schemes are house industries that manufacture clothing exclusively for export and hence qualify as internationally competitive industries. Unfortunately, there have not been any network or linkage agreements between EPZs, MUBs and the local apparel industries. Furthermore clothing manufactured under these schemes does not trickle down to the domestic market. Kenya Investment Authority (KIA),

MastametMasonandOgemboKachienga as a government body, should act as an intermediate entity that facilitates negotiations and establishments of linkages and collaborations between the local industries, local Universities, and the EPZs and MUDs, for the purposes of sharing technological innovations and market research that would ultimately be beneficial to the industry. The network of apparel industries and universities should take advantage of the AGOA that is currently revitalizing the cotton industry in the country, for the purposes of raw material supply for apparel manufacture.

345 demands of the new markets. As observed in other African countries such as Ghana and Nigeria (Rolfe et al. 2004), if restrictions on local sales were removed, capacity utilization could increase, while the unit costs were lowered. The government must therefore enhance its support for the apparel industry holistically through scholarship awards, research and innovations. The ministries of trade and industrialization should promote cottage industries within the apparel sector to join mainstream manufacturing industry.

FirmStrategy,Structure,andRivalry
Firms strategy, structure, and rivalry refers to the conditions in the nation governing how companies are created, organized and managed as well as the nature of domestic rivalry (Porter 1998: 107). Porter (1998) further pointed out that management practices and modes of organization favoured by the nation were well suited to the industries sources of competitive advantage. Jin and Moon (2006) asserted that firms that employed focus strategies, avoiding standardized products and operating in small niches were likely to succeed. At the national level, firms strategy and structure collectively transforms into sartorial industrial strategy and structure. As earlier stated, Kenyas governmental support to local industry has been negligible, while government assistance to export-oriented apparel businesses has been substantive. EPZs and MUBs contributions to Kenyas economic development have not been fully met as initially expected. Studies on apparel industry in Kenya (Rolfe et al. 2004; Mangieri 2004; Omolo 2006) have shown that EPZs and MUB business strategy were geared toward quick profits and exclusive protection, rather than long-term investments and economic development of the country. Since the market changed from multi-fibre regime to non-quota market, these changes therefore compel and demand that the apparel industry should rise to undertake changes geared toward meeting the

APPLICATIONSOFPORTERSBUSINESS VALUECHAINFORDEVELOPING INDUSTRIALCOMPETITIVENESS

To understand the industry competitive strategy, it is necessary to understand the business value chain of the particular industrial sector. Every industry performs a set of discrete tasks related to designing, producing, marketing, delivering and supporting its products and services. Industrial business value activities are physically and technologically distinct. A generic apparel industrial business value is depicted in Figure 2. Industrial business value is adapted from Porters (1985) business value chain. The industrial value chain has two important components: support (secondary) activities and primary activities. Supporting activities create competitive values in the infrastructure development and repositioning of industrial assets, facilitate advance technology uptake or development, human capital development and strategic procurement of structural equipment and systems. The business goal is to increase industrial allocative efficiency through cost-effective utilization of structural resources. Allocative efficiency structurally stimulates production factors to move from low-productivity (low value manufacturing) to high-productivity (high value manufacturing) platforms. Effective integration of structural activities and resources drives generation of high allocative

346

Sociology Study 2(5)

Industrial Infrastructure Allocative Value Creation

(Restructuring and capitalisation of industrial assets)

Allocative efficiency Productive efficiency

Human Capital Development & Management

(Skills development & training, intellectual property management)

Figure2.CompetitiveIndustrialValueChainforKenyasApparelSector.

efficiency which positively contributes to industrial competitive margin. Primary services focus on productive efficiency, which is geared toward increasing productivity and quality, lowering production costs and shortening time to market for products. The productive efficiency drives productive forces in the manufacturing environment. Effective management deliveries of raw material and semi-manufactured products, prior supplier contracts contribute to positive productive efficiency. The strategic convergence of primary and secondary factors creates industrial competitive margin in apparel sector. In the global apparel

Support Activities Primary Activities

Technology Development
(Advance technology uptake & technological innovations management)

Strategic procurement and Support

(Computer system interface with major suppliers & strategic business partners) (Distribution systems and networks, sizes and labels, garment care, brand & quality) (Market innovation, targeted advertisements, promotions and sales, call centre/helpline)

Industrial Competitive Margin

Production Value Creation

(Computer added designs/ marking and cutting, consulting services to other firms)

(Call centres, helpline & other support services)

Marketing and Sales

(Sizing and fit systems, demand characteristics, electronic data interchange)

Outbound Logistics

Inbound Logistics

Operations

industry the cornerstone of business competitiveness resides in technology. New advanced technology uptake generates higher allocative efficiency, while incremental process innovations generate higher productive efficiency and simultaneously reduce production costs.

RECOMMENDATIONS CompetitiveBusinessStrategy
Historical facts and various studies on Kenya apparel industries (RATES 2003; Rolfe et al. 2004; Mangieri 2004; Omolo 2006; Mastamet-Mason 2008) form the

Service

MastametMasonandOgemboKachienga basis of the underlying recommendations for enhancing future competitiveness of apparel firms in Kenya. The conceptual approach is that firms activities collectively become industrial activity of the sector. Given all the aforementioned business and market factors, the researchers of this study have developed a long-term strategy for apparel firms in Kenya. The four key elements of the strategy include: (1) Corporate structuring to enhance advanced technology uptake and to exploit relative technological innovation advantages Advance technology investment strategy should be designed, not only to make technology generate revenues, but also to reduce costs. The aim is to make process technology play far more central as the fulcrum for providing the source of competitive advantage at structural and productive levels. Technology applications must be imbedded in business strategy as a source of new competitive value; (2) Innovative application of technology and automation to work in an environment of small production runs Innovation in process design is to make advanced technology affordable for the justification of automation. Kenyan firms in fact can successfully implement innovative schemes for deploying automation efficiently for domestic and global markets demanding flexibility and short production runs of speciality products. One of the key factors to this strategy is for the firms to recognize which of all the manufacturing operations performed in apparel production are the most repetitionfor example, pocket setting, fusing, sleeve setting, hemming and others. Recognizing these clusters of operations, firms can rearrange their production facilities to group the operations into single pre-manufacturing department to facilitate automation. Services of automated departments can also be outsourced to other specialized firms to enhance efficient utilization of

347 industrial assets and generation of revenues of manufacturing facility; because the majority of apparel styles sold in market place have common features. The automated department can afford to be furbished with most advanced automation facilities such as the selective conveyor belt, unit production, quick response sewing room systems and the automated computer cutting; (3) Developing a marketing scheme that focuses on exploiting technological strength and capacity Integrating technological capability into the marketing strategy in response to increasing cost pressure due to quota-free global markets, Kenya firms need to develop unique marketing strategy that exploits industry technological capability and engineering know-how. Kenya firms can gain competitive advantage by developing capability to offer complete customer service from apparel illustration, pattern engineering, providing prototypes all the way through sewing and shipping of the final product. The firms need to structurally unbundle themselves to offer services for hire to other firms in the sector. Due to low profit margin, hiring out services to the other firms encourages to continually sweat their industrial assets to generate revenues from underutilized equipment and facilities; (4) Focusing on developing technical competence within firms and industry The purpose of human capital development is to facilitate cost-effective utilization manufacturing and business resources. Building competitive apparel industry with motivated human capital base should be an integral part of Kenyas industrialization strategy. Employees education and training need to be encouraged and supported to facilitate the uptake of advanced technology in the industry. To encourage innovations and high productivity, economic incentives need to be embedded into the pay and salary structures of the industry. Technical capabilities must be the basis of a business competitiveness and price optimization.

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Sociology Study 2(5) high labour cost western countries, but the low labour cost Asian countries which have made enormous investments in high response manufacturing technologies and computer-aided design and cutting systems, and skills development of their workers. In modern global apparel business competition, exploitation technological innovations and skilled industrial intellectual capital are the new sources of competitive advantages.

CONCLUSIONS
Competitive industrialization of Kenyas apparel sector has been on progressive growth since independence in 1963. Segmented networks of low technology cottage industries, and the historical abundance of skilled workers from indigenous traditional African garment industries have traditionally driven the growth in the apparel sector in Kenya. Kenya is centrally placed for apparel manufacturing and distribution in both regional African and global markets. In addition, the on-going negations to standardise custom duties in the regional trading blocks, which will further open regional markets. This study suggests that Kenyan apparel industry can regain its competitive advantage in both domestic and global markets through investments in advanced technologies, re-structuring manufacturing processes and developing industry cluster collaborations. The study is the first attempt to analyse Kenyan apparel industry using Porters (1998) diamond model and Porters (1985) business value chain in analysis of Kenyas apparel sector. In his models, Porter indicated that a nation succeeded in industrial endeavour if it combined some broadly applicable national advantages with industry-specific factors or a cluster of industries (Porter 1998: 147). With this theoretical understanding, this study provides a benchmark platform for Kenyan apparel industry to re-position itself domestically and globally through new competitive strategies. Due to pervasiveness of global apparel markets, the study suggests that Kenyan apparel industry should focus on strategic expansion of domestic and regional market shares, and niche international market share to regain industrial competitive advantage. The goal should be to broaden domestic and regional markets through customer-focus productions and targeted marketing. The Kenya apparel manufacturers must know that their competitors are no longer the

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Bios
Anne Mastamet-Mason, Ph.D., associate dean/head, School of Creative Arts and Technologies, Kenya Polytechnic University College; guest professor, University of Pretoria, Tshwane University of Technology, and Bahir Dar University; she also serves in the Ready Made Garments Technical Committee at the Kenya Bureau of Standards (KEBS); research fields: product development in fashion (sizing and fit issues),

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environmental concerns in the manufacture, consumption and disposal of textiles and clothing, and promotion of small clothing enterprises. Michael Ogembo-Kachienga, Ph.D., professor, Graduate School of Technology Management, University of Pretoria; head, Division of Research, Innovation and Enterprise, Kenya

Sociology Study 2(5)

Polytechnic University College; international business columnist for Financial Journal, and a frequent contributor to Financial Mail, and Engineering News; a member of IEEE and New York Academy of Sciences; research fileds: power economics, business management, technological entrepreneurship, biomedical engineering, enterprise financing.