Variables of Study in the Textile Industry of Pakistan: A CASE of Soorty
In
the context of export marketing, it is to be certain that some factors should
be undertaken while moving your business from one country to another. These
factors have to be well researched and kept under consideration to have a
successful business setup especially in the textile industry of Pakistan. Since
Soorty aims to launch its textile unit in the developing market of Pakistan;
therefore, the following variables should be studied in-depth to understand the
right placement and targeting to the new market. These variables include raw
material, labor, market, culture, climate, and government/political policies in
Pakistan. Though there is a downturn in the present textile industry of
Pakistan for many years still this industry is operating by those
industrialists having enough capital and developed infrastructure. Currently,
this market is solely captured by the capitalist in Pakistan (Reddy and Patkar,
2004) hence Soorty have to face tough competition. Capital plays a key role in
deciding either the industry will be going to liquidate or profitable (Rehman
& Nasr, 2007). It (working capital) has a direct effect on the profitability
of large, medium, and small-sized industries and entrepreneurs (Juan &
Martinez, 2007). In the case of Soorty, it is very essential to launch their
business setup in the textile industry in Pakistan by undertaking the current
market saturation. They should have to adopt a working capital management
strategy that can lead it towards profitability instead of liquidation
(Padachi, 2006). Following are the factors that have to be studied thoroughly
before going to operate in the Pakistan textile industry:
1. Raw
Material
2. Labor
3. Market
4. Culture
5. Climate
6. Government/legal/political
policies
We
will highlight the importance of each variable from various research studies
that are conducted in the textile industry of Pakistan. The effects of all
these variables with being proven from the literature review and the previous
studies in the textile sector concerning Pakistan.
Raw Material
There are mainly four sources of raw material
used in textiles that are from mineral, animal, plant, and synthetic. This
includes glass fiber, asbestos, silk, wool, jute, flax, cotton, polyester,
nylon, and acrylic from all of these sources accordingly. Amongst all, the
largest segment of textile production is cotton. Cotton spinning is one of the
most important raw materials used in the Pakistan textile industry having 550
units are currently operational and installed.
The prices of cotton and other raw material are rapidly fluctuating in the textile industry in Pakistan. Any increase or decrease in the prices of raw materials directly affects the cost of production. Inflation and unstable internal conditions of Pakistan have a bad impact on the price fluctuation (increase) of raw material (Arshad and Arshad, 2019). Therefore, there is a rapid increase in the cost of production and a decrease in export and in-home demand for textile products. This has been resulted in the liquidation of most of the textile firms in Pakistan and survived are those having maximum utilization of working capital (the capitalists) (Eljelly, 2004). The government of Pakistan should have to take serious measures for the survival and growth of the textile industries. They should have to decrease the cost of raw materials to increase their production capability. For this, there is a need to introduce the international system of Cotton Standardization in Pakistan can enhance the quality and value of cotton through the technical services of the Pakistan Cotton Standard Institute.
Market
The overall textile market of Pakistan is under substantial loss for the last decade due to the reasons of electricity shortage, inflation, poor governance, and so many other reasons. A Market is defined as the area where businesses ought to be operated with their marketing and production skills having potential customers to target. It is further divided into sub-segments according to the preferences and needs of the targeted potential customers. It does contain a competitive rivalry among different forces dealing in the same businesses. As far as the competitors of Pakistan textile industry are concerned, they have been enjoying the benefits of subsidies with other basic needs like gas and electricity from the government; that is the main cause that puts the majority of the textile exporters of Pakistan in a very inconvenience position before the global market industry (Lall and Wignaraja, 1995). According to the textile policy from 2009 to 2014, this industry should have to be free from the load shedding and exempted from the gas shortage like the fertilizer industry of Pakistan (Amin 2012). Hence Soorty has to undertake all these market conditions while launching their textile unit in the Pakistan textile industry. They must know that there is already a monopoly of the capitalists therefore the competition is huge. They will have to follow the market development and global strategy (thinks global and act local). They will have to face the challenges to capture the share of the market through market penetration strategy. In this case, they will be successful in the local textile industry of Pakistan.
Labor
Among the factor of productions, labor is one of the major factors. It plays a vital role in the smooth continuation of the textile industry in Pakistan. We are known for providing cheap labor all over the world due to the weak economic system in comparison with other developed countries in Asia and subcontinents. Still, labor has always remained the main backbone of the economy of Pakistan. More than 80% of our economy is solely dependent on the labor that is an important part of the production unit of any textile industry. It is to be said that a cheap and ample supply of the labor workforce strengthens the agricultural and the industrial sector of any country especially the developing countries. There are around 40% of laborers who are working in the textile sector of Pakistan. According to Karl Marx, it is only the army of labor that takes the country towards better productivity. Hence, abundant and cheap labor makes it easier for the low cost of production. As far Soorty case is concerned, they will have the advantage to utilize the hardworking, experienced, and cheap labor to produce better output in comparison with the existing competitors in the textile industry of Pakistan.
Culture is another most important factor that represents the profound values, norms, customs, beliefs, and lifestyles of the people of any country. It differs from one region to another. So while moving or expanding your business in international markets, the strategists have to work on and study the culture of the residents and their target customers. Pakistan enriches with multi-cultural and multi-ethnic groups of people having the greatest population, a nuclear state, and strategically very important due to its geography. Still, it has not been studied in management and marketing research. There are only a few researchers (Khilji 2001, Khilji 2003, Yasmin 2008) who have talked about the dynamics of marketing research in context with Pakistani culture. Most of these studies have been initiated in other sectors of Pakistan mainly the banking sector. Thus, there is a need to conduct marketing research in the textile sector of Pakistan. Pakistan is the main hub of textile production therefore Soorty will have a greater chance to initiate and grow its business unit that best suits the cultural aspect of Pakistan.
Climate
Amongst other factors, the climate is also considered an important factor for international businesses. The performance of the textile industries is also dependent on climate density in Pakistan. The more safety culture and climate, the better will the chances for survival and growth. The researchers like Bowander (1987), Gupta (2002), and Chouhan (2005) collectively agreed upon the safety plans, procedures, occupational health, climate, and policies in Pakistan and India. Safety climate and culture do influence the performance of the textile businesses (Mearns, Whitaker, Flin, (2003); Zohar. (1980) and Brondino, Silva, and Pasini (2012). Though there is no consensus evident on the dimension of safety culture (Cox and Cheyne, 2006) and safety climate (Silva and Pasini, 2012); there are widely predictions about the safety outcomes (Zohar, 1980); (Cooper and Phillips, 2004) and (Siu, Phillips and Leung, 2004). There are only a few researchers that have considered climate as a one-dimensional variable Neal, Griffin, and Hart. (2000), while others argued about multi-dimensional variables Zohar. (1980); Cooper, Phillips (2004); Mohamed, (2002) and Zohar, Luria, (2005). However, safety climate does guarantee better performance specifically in textile organizations. Therefore, Pakistan is a viable option for Soorty to start its business operations in the textile sector.
Government/legal/political policies
The government / legal and political policies of the country are certainly very important where businesses are going to be operated. It does influence the business while functioning in the local market. Most of the developing countries including Pakistan are politically capable enough in articulating and promoting creative industrial policy that goes beyond the mantra of more liberalization to produce a better business environment. Pakistan is still following the economic strategy of the 1960s, where performance conditions are attached to the subsidies and large industrial firms are capable enough in making alliances with the powerful political factions in preventing such subsidies. So the role of political and legal forces is mostly inclined towards the wealthy industrialists. Khan & Blankenburg (2006) stated that the government of Pakistan should try to recreate the political conditions to stop supporting such policy interventions just like the Republic of Korea. They should have to form and implement such policies that have to benefit all the small and big industrialists in the Pakistan textile industry. These political preconditions are normally defined under six components. These are small elite class have the power to determine senior politicians, weak civilian society, the autonomy of the state is for only special interest groups, legitimacy is only given to a single-minded person, the intervention of bureaucracy in politics and independence from rural interests and international capital. This is all that should not be going to happen in the Pakistan textile industry (Leftwich, 1995). Soorty will be having an edge to follow and adopt the current governmental and legal policies in the recent scenario of Pakistan where there are no foreign investments and fewer subsidies. They will be supported by the government of Pakistan due to COVID 19 where every investor is reluctant to invest in the textile industry of Pakistan.
References
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