This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Few organizations are self sufficient and are capable to maintain their prominence in the market without having any kind of association with other firms, or using products manufactured by those firms. To function and to have a better market positioning organization often need to take support from suppliers for manufacturing of products or equipments. However, decision process to finalize the trading partner or supplier is not so smooth and easy. Decision making process, associated with the same in gaining access to these suppliers, is dependent on various factors. These factors are associated to the market or region in which the organization operates. However, there are some factors which are external, whereas few are internally associated to the organization (Webster and Wind, 1972).
When an individual buys a product, the buying activity is supported by a number of associated factors, like their need, product specification and prolific selection of suppliers (Bevilacqua and Petroni, 2001). In the same context, when an organization goes in search of a supplier for the manufacturing of their required product, the decision making process comprises of a number of factors. Here the two main concerns lies in finding a supplier who can make the required product as per the buyer's specification and are capable to manufacture the quantity required in time (Brennan et al., 2007).
As per Bevilacqua and Petroni (2001), buyer's decision making process for trading depends on the evaluation of some factors. This evaluation normally examines supplier's organization and the country apart from accessing the compatibility of the supplier's offer with the buying firm's product specification (Bevilacqua and Petroni, 2001; Rajan, 2005). The various factors, which are considered while making such decision, comprises of the financial stability of the firm and the country it is operational into. Apart from this production cost and technological compatibility along with delivery time, quality standards and flexibility of the firm play an important role in making such trading decision. Geographical location and cultural compatibility as well influences this to a great extent (Brennan et al., 2007; Stávková et al., 2008).
These are the factors which affects buyer's decision making process, in general. However, in this research, decision making factors are analyzed specific to European Buyers from Apparel industry.
Purpose of Study
The purpose of this study is to identify the various parameters, which influence European Apparel Buyers, and plays important role in their decision making for international trading. This is done specifically with respect to Indian Apparel Manufacturers' point of view. The study also seeks to and would suggest the factors, which are of the utmost importance in making such trading decisions.
The study aims to make an input into the prevailing literature, to study the buyers' decision making process, which in itself is a very broad research topic. However, to have a better insight, the research is targeted to European Apparel buyers and their decision making process in context to Indian manufacturers.
Significance of Study
It has always been a problem with firms to make decision on trading with a new organization at a different geographical location. It has been assumed that buyers often decide to move to a new location for trading due to cheaper manufacturing or service. However, there are various other aspects, which play a very important role in such decision making process (reference).
The significance of this study is to identify and formalize a set of factors, which influence the European Apparel Buyers decision making process for trading. This is specifically in context to the Indian Exporters. This research hopes to give some valuable insights to Indian Garment Exports, who seek to create a good long term business relationship with European Buyers.
1.4. Objective of Research
The research is mainly targeted to the European Apparel Industry and their trading with Indian Apparel Exporters. However, there was many a question, which was in my mind for analyzing on the basic factors which could be affecting the EU Buyers' decision making. Below are few of the questions, which are proposed as a part of the research work:
What are the basic advantages for EU Buyers for trading with Indian Garment Exporters?
Is there any restriction imposed due to the European Law for trading with India?
How are the performances of Indian Garment Exporters with respect to European traded products?
How important is the supply chain in any business decision making?
What is the impact of Quality and Flexibility in having a better business relationship?
To what extent is the physical location and transport facility important in making outsourcing decision?
What role does the technology play while deciding on manufacturing partners?
Is cheap manpower and lower wage the only reason for shifting of garment production from European Nations to Asian countries like India?
What are the most important criteria, on which European Apparel Buyers make decision on getting their garment manufactured from Indian Exporters?
The ultimate objective of this research is to get a better understanding of the factors, which affect the European Apparel Buyers' decision making process, for trading with Indian Garment Exporters. This would help them in deciding on outsourcing production facility form Indian Exporters. Overall this study would hope to attain the below mentioned objectives:
To determine the relationship and impact of various factors identified above in influencing the buyers from European Union in making their trading decisions.
This would help in a way to have an in-depth understanding of the European Buyers' decision making process and the same could be useful for the Indian Exporters to have a better trading relationship with their European counterparts.
1.5. Scope of Study
This academic research is conducted on a selected set of Buyers, specifically within European Union. The Industry targeted was from the Apparel and Clothing Industry, having their businesses spread over Asian Sub-Continent, like India and China. These Apparel Buyers are getting their production outsourced from India and other Countries. The respondents were selected from this Industry who are either the owners of the firm or are at the senior management and marketing position within the firm. However, to get a data from varied perspective, responses were taken from both European Buyers as well as from Indian Exporters. The instrument used for the survey was in the form of questionnaire, which was used to gather data from the various respondents. A total of 75 questionnaires were sent electronically, to the pre-selected respondents, all of whom being from the apparel trade only. Apart from questionnaire 6 face to face interviews were also conducted with the European Buyers to have a better understanding of the factors giving an impact on their decision making process for international trade.
The research study outcome would be of acute importance to the Indian Apparel and Clothing sector people, as the final outcome would throw light on the various aspects, which are seen as important from European Apparel Buyers perspective. This would help them in understanding their requirements and performing better in their trade with European Buyers.
1.6. Organization of Study
The structure of this research study is divided into five sections.
Section 1 gives the introduction along with the background of the research, highlighting the general Buyers decision making process. It will give an overview of the criteria and factors, which influence the decision making of the buyers, which has been studied by researchers in the past. Besides that, this section would provide the significance of the study along with the basic objective of the research. Furthermore, this section discusses on the scope of the research before finally concluding with giving a framework and organization of the study.
Section 2 covers the literature review, which gives a thorough discussion on the research question, related to European Apparel Buyers' decision making process. This section highlights the various terminologies, aspects and factors, which will be used in the study as well, will critically discuss the existing literature significant to this study.
Section 3 provides a thorough Research Methodology for the study. It will highlight on the overall research design and the various hypotheses considered for the research work. It, as well, provides a thorough explanation and discussion of the various instruments used for the research vis-a-vis sampling methods and data collection processes along with the various processes and analysis techniques used to interpret the collected data.
Section 4 will have a depiction and discussion of the results obtained from the data analysis. This section will highlight the key statistical analysis and finding with respect to various hypotheses. At the end it would summarize the overall findings and would give a discussion on the final research findings.
Section 5 will conclude the research with giving a final remarks on the key finding and providing the implications of the factors obtained from the study. It would also highlight on the key factors, which are contributing towards buyers' decision making process for international trade. It will also discuss on the findings, which will be useful to the buyers as well as to the Indian Exporters in having a better trading. This would conclude with providing recommendations and shortcomings of the research along with the scope for future research in the concerned area.
Apparel has always been an integral part of human life. Due to the ever changing world scenario, there is always a pressure for betterment. Changes in customer requirements and increase in purchasing power of retailers often results into need for advancement of technology, modification of production facility and cost reduction. This, as well, created an impact over the European Apparel Sector and gave a reason for the constant change in the structuring and modernization of Industry (Eurostat, 2006).
As an effect of Multi-Fibre Agreement (MFA), there had been a restriction on the textile and apparel trading since 1962 till 2005. MFA has been governing on the international trade and abidance over the barriers imposed on the acting nations. But post January 2005, after the expiry of MFA, it became easier for the economies to trade internationally and with much lesser disruption (Ramaswamy and Gereffi, 2000; EMCC, 2008) . However, this created a more competitive atmosphere for the trading economies, as well, created a pressure on them to improve on their performance and thus positioning in international trading market. In context to Indian economy, it is a matter of fact that it has performed well so far, in apparel trading, but whether they would be able to sustain the same in future, would depend on their relationship with their biggest buyers from European Union (EU) (ICRIER, 2010). They have been trading with various economies across the globe, European Union being one of the biggest trade partners (Chandra, 2006; Yamagata, 2007; Raihan, 2010).
The apparel industry is a highly labour intensive sector, which could not be replaced by any kind of machine. Due to this reason there has always been a shift of production to countries having low wage, efficient production and developed transportation, infrastructure and communication capabilities. This creates this sector as one of the most vibrant sectors in global trade. This shifting of production started in the period of 1950s, which later on took a pace in 1980s and 1990s, when the sector's production was shifted into three main regions later known as "Big Three". The three main locations being mainland China, South East Asian countries (Indonesia, Thailand) and South Asian countries, viz. India, Bangladesh and Sri Lanka (Pfohl and Shen, 2008).
With the passage of time, due to cheaper labour and availability of raw material, India has now secured the second position in apparel trade after China as the largest producers of Apparel and Textile in the world. With a total workforce of 35 million, Apparel and Textile sector is the second largest industry for employment after agriculture for India (Bharatbook.com, 2006; Intexfair, 2010). After the abolition of MFA in 2005, India along with China has expanded a lot into the European market. The growth rate for India is at 33.74% for the year 2009 (Yagamata, 2007). The current global apparel trade is at around $360 billion, which is expected to reach up to $800 by 2014 (MFA-Conference, 2008). This boom in the sector opens up the opportunity for Indian exporters to enhance their market share in European Market from current share of 3.5% to 8% (Texmin, 2005; Roy, 2009). However, this would further depend on the decision making process of European Apparel Buyers, for International Trade with Indian Exporters. The driving force being the sustainability of factors associated so far, as well as, whether the same could be improved further by the Exporters for future trading (Ramaswamy and Gereffi, 2000; Roy, 2009).
The current trends for fashion are forecasted based on the market research of the consumers and analyzed fashion trends. Buyers conduct this research, and based on the same, decisions are taken for International trade with the best equipped supplier in the particular segment of apparel product. As a result of this awareness among the consumers and buyers decision making behavior, it becomes important for the manufacturing nations to have a thorough understanding of the market requirements and quality measures (Vij, 2009). The important aspects have to be considered for the same.
Organization and Structuring of Industry
In general, apparel sector is mostly fragmented, as there is a prominence of sub-contracting and job working. This, as compared to textile is a bit less sophisticated, technologically. As a matter of fact, for buyers, location and production chain becomes an important aspect, making this trade much more buyer driven (Schmitz and Knorringa, 2010). Due to this reason, shifting of production base to India may not be decided only based on low cost of manufacturing. However, there, as well, are aspects of uncertainty in demand and product abundance, which affects the decision making process (Gereffi and Memedovic, 2003b).
There has been lots of significance given to supply chain in the sector, which has been highlighted by Schmitz and Knorringa (2010), quoting this as a result of their research. The emphasis has been given on the link between a better supply chains as a means to ensure good quality and timely delivery of product and services (Schmitz and Knorringa, 2010). With this traders often prefer dealing with vertically integrated firms, which are mostly larger firms (Gereffi and Memedovic, 2003a;Guercini and Runfola, 2010;Schmitz and Knorringa, 2010).
Advancement of Technologies
In the current competitive business scenario, there has been a stiff competition between various fashion brands. This is due to shorter lead time associated with wide range of products. As an effect of this, buyers are getting more demanding from their counterparts for a better and efficient production. To cope up with this ever changing and demanding business arena, apparel firms often are required to move onto newer technologies, rather than relying on the conventional methods and sources (Abernathy et al., 2004). In earlier days most of the manufacturing functions were performed in Europe only. But later on due to higher production cost the production facilities were shifted to other developing nations to reduce cost. However, the European buyers always emphasized on the usage of newer technologies and being in the buyer driven field, the importance and use of technology remain of utmost importance to be in the market for the trading nations (Commission, 2003a).
In recent times, with the introduction of advanced technologies, the manufacturing process has become much automated and computerised. These advanced technologies have been considered as a means for improving the pace and quality of manufacturing process. This also gives an option for the mass customization as the industry has got a very fast moving fashion trend. Thus, the technological advancement offers scope for faster and efficient production in mass scale, fulfilling individual and customer's requirements. To have an edge over the competitors, EU buyers often focus on usage of the same (EMCC, 2004;Hilger, 2008). Apart from this, the newer fabrics and materials often are more suitable to the latest machinery and technologies for easy and efficient processing (EMCC, 2004;Hilger, 2008).
Information and Communication Technologies
Supply chain plays an integral part in a business. To have a better supply chain it is important to have a sustainable Information and Communication Technology in the organization. Having this assures a better service and reduced lead times. This sector has undergone some drastic advancement in real past with the introduction of CAD/CAM systems. With the help of this and the internet technologies, EU buyers often create their design and prototypes at their premises. These prototypes are planned and programmed in India and other Asian countries, where the manufacturing takes place (EMCC, 2004;Hilger, 2008) .
As the prototypes are computer based, it is more accurate and gives a better customization in garment.
Innovation and R&D
To be in the competitive market, continuous Innovation is an essential aspect. European Industry has been emphasizing on the aspect, as well, it is very essential for them to be in the business. This innovation has come into apparel industry either from the new developed technologies or are the ones, which have been taken from some other industries. One such example is the bar codes' usage in the industry, concept of which has been taken from food industry (Commission, 2003a).
With the intensification of industrial revolution, manufacturers from India and other Asian countries started capturing a bigger market share in European Union. As the European counterparts were more inclined towards usage of latest technologies, some of these manufacturers started to collaborate with their European counterparts to gain access to the technologies to increase on their performance and have an edge over their competitors (Gereffi, 2002). On the other hand there are many SMEs which could not take much benefit from new technologies due to inadequate skills and lack of awareness (EMCC, 2008).
Apparel industry is often considered as a labour intensive sector. However over the past few years, it has become quite a capital intensive. Due to this, there is a steep decline in the employability and employee turnover in the sector. People are often leaving and moving out of the industry. To mention such a case can be that of China, which have almost reduced to 50% of their total manpower from the sector since 1990s. Contrary to this the sector still remains much labour intensive as the jobs related to cutting and sewing operations still could not be automated to a great extent and need labour force to do so (Ganesh and Petit, 2009). Apart from this there are many an operations in the sector, which requires semi skilled operators. Due to these factors, Buyers prefer shifting to low wage nations, so that the job could be performed at a much lower cost, developing nations like India being one of the most suitable for the same (EMCC, 2008;Polaski et al., 2008).
As an effect of the increase in competition at an international level, the sector has got a diverse kind of reaction from the manufacturers. Some of the manufactures have reduced on their wages and thus have reduced on their working atmosphere also to attract new buyers. Contrary to this there are others, which are more committed to their high level of service. This segment puts emphasis on skilled labour and thereby a better wage and working condition (EMCC, 2004).
The sector is, thus, giving more emphasis on improving their technological capabilities. On the other side, there is a dearth of technologically competent people in the sector due to the old fashioned image of the business as well as the low wage rate.
Determinants of location decisions
The decision making process for trading with other countries often is considered as complex and consists of various aspects. To decide on the country for manufacturing process basically depends on assessments on factors like initial capital investment required along with production, product and labour cost. However, productivity and other aspects like transport facilities, insurance and export capabilities of the firm also play an important part in the decision making process. Getting information and knowledge about the prospective market along with the prolific suppliers and workforce also helps in taking such trading decisions (Abernathy et al., 2004).
Moreover, while taking trading decisions, Buyers also consider the external factors, which may influence trading with their target nations. The political scenario and stability of government being one of the most important aspects along with quotas, legislations, exchange rate and other tax and tariffs play an important role while making such decisions (EMCC, 2008;EU-India, 2009;Saini, 2009).
Nordas (2004) has emphasised on the above aspects in his studies, where he gave the perception of buyers before taking any decision on the location for manufacturing. As per him, some of the aspects, which play an important role in such cases, are associated cost factor, quality of service, transport facility and on time delivery. With this, the aspect of proper supply chain comes as an important aspect for any decision making process, as the chances of better results are prominent if all the activities are properly located. (Nordas, 2004a).
Relocation of production activities to low-cost countries
European Apparel industry has been attracted towards low cost countries for a long time now. The outsourcing phenomenon is centred to labour intensive low cost countries where the EU buyers have been trying to relocate their production facilities. This at the beginning was focussed to the eastern and central part of Europe but later on shifted to countries in Asian subcontinent due to availability of cheap labour (Heymann, 2005;Eurostat, 2006).
This relocation of manufacturing led the buyers from EU to trade with countries from Eastern Europe, and with those from North Africa and Turkey. These were one of the largest manufacturers for the European apparel industry till 2005. As soon as the MFA was dissolved in 2005, these manufacturing started to shift more toward much lower cost developing nations from Asian sub continent, mainly India and China (Heymann, 2005).
Determinants of outsourcing
Manufacturing at different locations started as a result of increase in market competition as well as to catch up with the advancement of technologies. This outsourcing has been basically targeted to the overall value chain, but to the jobs, which are at the end of it. The planning and other marketing processes are done at the buyer's location, whereas the end activity of production and operations are outsourced (Ponte and Gibbon, 2005; Tanksale, 2010).
There has been a misconception that the reason for trading with India is due to the low wages. However, this cannot be termed as the only basis behind taking outsourcing decision. There are various other aspects which influence buyers for their decision making. As per Ecorys (2005), one such example can be seen from the case of Netherlands apparel industry, when they made a decision to outsource production from other Asian countries. Apart from low wages the other prominent aspects, which analysed before taking any decision, were that of the geographical location and ease of trading; apart from reliability, capability, technological competencies, flexibility to perform in pressure situation, and the probability of various sizes of garment, which they could provide (Jain, 2004; Ecorys, 2005).
As the current communication technologies are getting advanced day by day, both in the field of telecommunication and in internet technologies, this makes it easier for the buyers to get the production components internally and get the manufacturing at a much suited cheaper location. However, the transport linkages, as well, act as an important aspect, as this would incur the extra cost, which could be incurred in the transportation of material to these locations and thus increasing the inventory management and manufacturing coordination (EMCC, 2008).
Time factor is a very significant aspect in Apparel industry. As this sector gets input from textile industry, so a proper synchronization becomes very important between the two industries. Any delay in one industry would affect the time line for the other industry. This whole sector is thus more concerned about shorter turnaround time (Gereffi and Memedovic, 2003b).
Thus, with this increased significance of shorter turnaround time and fast changing consumer market, there is an undue importance of time, location distance and flexibility in manufacturing. This all plays important role in production planning and location decisions. European Apparel industry is a very fast changing business as the fashion cycle is short lived, which creates a sudden change in requirement. There is swift change in design and fashion, which makes it important to have a short production cycle. Furthermore, as the fashion cycle is short, thus there has to a very flexible and fast production process (Gereffi and Memedovic, 2003b;EMCC, 2008).
High Value added Activities
Apparel industry caters to a high segment market, where design plays a very important role and so does the R&D. As the products are more fashion centric, so a good R&D conforms an innovative product range. This practice has been an intimate part in European buyer's strategy to move towards high value added and innovative products (Eurostat, 2006;Abecassis-Moedas, 2007).
As a matter of fact, for high value added products, human resource and skills become a prominent aspect for firms in making their location decisions. Buyers prefer to have their trade partners from the location, where they can easily get human resource with high skills, which can fulfil their requirement for high quality and value added product (Ponte and Gibbon, 2005). In the fashion industry, the one, who captures the latest fashion trend and provides the same to their market segment on time at a cheaper cost, gets an edge over their competitors. Human resource is widely used from design and marketing to production and operations. The market segment, like sportswear, needs technologically better garment, as well as, has to have a better design. Here both skilled manpower and R&D becomes an important aspect to consider. Apart from this the same is also true in case of other categories like hi-fashion garments to industrial textile or from winter wear to home furnishing (Nordas, 2004b).
The Apparel sector comprises of basically three stages in its production process, Pre-assembly, assembly and post assembly. As most of the R&D and innovations are done at the pre-assembly phase, firms often do this at their location. Here basically all designing and specifications are finalized. Assembly is the phase, which is more labour intensive and is targeted for low wage manufacturers. Here the garment is manufactured at a location decided by the buyer, which meets up with their costing and other targets. Finally, the post assembly comprises of marketing and distribution, which is handled by the buyer. All these three phases have got different capital and manpower requirements (EMCC, 2008)
To meet up with the requirement of the high value added product, best quality and precision in production becomes very important. To whatever extent the production process could be modernized, it would always be labour intensive, thus, at the end it is production process, for which buyers mostly move towards low cost companies and thereby does trading with those nations (Abernathy et al., 2004).
It is possible to do a research without acquiring a full knowledge of different methods of academic research. However, getting a thorough understanding of the various research methods increases the understanding level of the literature as well makes it easy to carry out a research study (Bell, 1999). As per Baker (2003), the basic objective of any research study is to identify and understand the world scenario in a better way (Baker, 2003).
This section will discuss on the various factors which affect the decision making process of European Buyers for trading with Indian Exporters. This section would elaborate on the methods used to analyse the various aspects, which are considered before deciding on any outsourcing or trading decisions, either it is the low cost of production or technology or any other aspect. Above all, the main purpose of the study is to identify the main factors, which influence the European Apparel Buyers decision making process, which is done from Indian Apparel Exporters' perspective.
In this research, I have used both quantitative as well as qualitative methods. It is quite good to have a mix of both these approaches (Rudestam and Newton, 2001). Quantitative method gives you a valid population based numerical data, which could be analysed using statistical tools. On the other hand, qualitative method gives a valid and detailed data providing thorough understanding of the research question (Jick, 1979;Nummela and Welch, 2006).
In this research, questionnaire survey provided quantitative data and on the other hand semi-structured interviews provided a rich qualitative data (Collis and Hussey, 2003).
As per Collins and Hussey (2003) triangulation can be defined as the method of research where various approaches, techniques and methods are used to do the same research study. This basically helps to overcome the problem of biasness of a approach where only one method is used (Rudestam and Newton, 2001;Collis and Hussey, 2003).
Triangulation approach empowers the researcher to do the study from different perspectives, which in this research is based on methodological triangulation as both quantitative and qualitative approaches are used for collection of data. The three perspectives of research used are of literature review, questionnaire and interview supporting the case study. This helps in attaining a reliable and valid data (Collis and Hussey, 2003)
Research Instrument and Data Collection Methods
The instrument used for the research is a three page self made questionnaire, with a separate covering note giving an introduction to the respondents with the purpose of study. The survey method is a very popular method for research in the field of management (Saunders et al., 2003). In the research, the survey contains a combination of both Open and Closed questions to give a free hand to the respondents to answer in their own words. However, closed are taken to have a better comparability of the research answers (Chauvel and Despres, 2002).
Apart from these two, 5 point Likert scale question has also been included, on interval format. In this the respondents are required to mark an "X" in the section, which they find appropriate. These questions were designed in numeric response format, where scores of 5 means Strongly Agree, 4 means Agree, 3 means Neutral, 2 means Disagree and 1 means Strongly Disagree (Copper and Schindler, 2006). Items evaluated in the questionnaire are mentioned below: (See TABLE 3.1 for details of items and sample of questionnaire in Appendix A)
Section A: Organization and Structuring of Industry
Section B: Advancement of Technology
Information and Communication Technology
Innovation and R&D
Section C: Human Resource
Section D: Location
Determinants of Location Decisions
Section E: Location Trend
Relocation of Production to low cost countries
Determinants of Outsourcing
Value Added Activities
Apart from questionnaire, six in-depth semi-structured interviews were conducted to get further information on the context. This was done to give opportunity to the interviewee to respond to open ended questions in their own words (Qee, 1999). However, there are chances of biasness in interview, which was avoided by seeking clarification, wherever needed and restricting any kind of leading questions (Sekaran, 2000).
The interviews conducted were face to face and voice to voice interview. This technique helps the interviewer to have thorough understanding of any specific question, if required, as well as gives the interviewee leverage to explain their answers in detail without any time constraint (Collis and Hussey, 2003; Saunders et al., 2003).
The inputs for the survey questionnaire and interview were taken from the literature of the past studies done in the field. Based on the studies, the questions were identified from the literature and were modified as per the requirement of the research topic. Few questions in the questionnaire and interview were linked to each other; however, they were arranged and asked in a random manner to prevent the respondents and interviewee from getting any lead.
Case Study method is used to do an in-depth investigation of a particular phenomena or circumstances to have a better understanding of the context (Allison, 1996). This method helps the researcher to have a better study in lesser time span, thus giving a chance to the researcher to have initial observation, which could be verified at a later stage during the research (Gill and Johnson, 1997). Case Study uses a varied variety of data collection methods, a few of them could be observation, interview or questionnaire (Saunders et al., 2003). The main advantage of using this method is the opportunity, it provides to the researcher to obtain rich data for analysis and interpretation.
As the timeline for the research was less, so instead of taking a larger sample and out of scope target, I have considered a single case study method, giving focus to the European Apparel Buyers decision making process from Indian Apparel Exporters perspective.
Development of Hypothesis
The hypotheses have been developed based on the literature review of the past studies done by different authors. The various concepts of organization structure, technology, human resource and location has been considered in deriving the below hypotheses.
Various concepts and factors have been classified as dependent and independent variables.
The framework used for the research is displayed below (see Figure 3.1):
European Buyers Decision Making for International Trade with Indian Exporters
Figure 3.1: Proposed framework of the present study
Studies in the past have shown that structure of organization has been given a due importance in decision making as many buyers prefer dealing with vertically integrated firms (Gereffi and Memedovic, 2003a; Guercini and Runfola, 2010; Schmitz and Knorringa, 2010).
Hypotheses 1: Organization and Structuring of Industry are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
There has been much emphasis on the production facility for long in the sector. Buyers often look for trading partner, who has got good production facilities. (Commission, 2003a; Abernathy et al., 2004; EMCC, 2004;Hilger, 2008).
Hypotheses 2: Advancement of production technology is positively related to the European Buyers decision making factor for international trade with Indian Exporters.
A good and sustainable Information and communication technology base helps in a better supply chain (EMCC, 2004; Hilger, 2008)
Hypotheses 3: Advanced Information and Communication technology are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
Innovative approach and better R&D helps the firm to be in a better position in the market. This, as well, is considered as a tool to improve performance by adopting new approaches and technologies (Gereffi, 2002;Commission, 2003a;EMCC, 2008).
Hypotheses 4: Innovation and R&D are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
Low wages and costing has been a major reason for the movement of manufacturing bases in India and other Asian countries (EMCC, 2004; EMCC, 2008; Ganesh and Petit, 2009).
Hypotheses 5: Low wage rate and overall cost are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
A better political scenario helps in making a better decision before venturing into a new market for trading (EMCC, 2004; EMCC, 2008; EU-India, 2009; Saini, 2009).
Hypotheses 6: Political Stability in the trading country positively related to the European Buyers decision making for international trade with Indian Exporters.
Geographical location helps a better logistics enabling better movement of material and saving time as well as money (Jain, 2004; Ecorys, 2005).
Hypothesis 7: Geographical location, better transport and logistics are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
It has been seen from the researches that quality of work and precision has been a very important aspect and affect any decision making for trading (Ponte and Gibbon, 2005; Eurostat, 2006)
Hypothesis 8: Good quality and precision are positively related to the European Buyers decision making factor for international trade with Indian Exporters.
Sampling Method and Key Informant
The sampling method used is Snowball Sampling, where the selected respondents and interviewees are the people, who have experience in the field of study. Further on, from these respondents, more contacts are gained to increase the sample size (Bryman and Bell, 2007). However, apart from this, some feedback were taken using cluster sampling. This is used to save time by reducing travel time by taking the respondents from the same geographical location. This method is useful for face to face interview (Collis and Hussey, 2003).
TABLE 3.1: Sampling Method- Summary Information
European Apparel Buyers and Indian Garment Exporters
Questionnaire and Interview
51 respondents (of the total 75 issued)- Questionnaire, 6 Interviewees
1 month (12 June 2010 to 12 July 2010)
The sample consisted of the Apparel Buyer firms, which are dealing with Indian Garment Exporters from Europe. Apart from that, some Indian Garment Exporters were also included into the sample. The questionnaires were sent to the senior management employees of the companies, who further gave contact for more respondents from their respective firms. In all, 22 firms (including 10 Indian Garment Exporters) were selected for the study.
Data Collection Procedure
As more than 80% of my respondents were from different locations in Europe and India, the questionnaires were sent through mails and were collected back in the same manner. Efforts were made to make the questionnaire format as user friendly as possible, which was done by usage of MS-Word functions. The companies and respondents were contacted through mails and after their consent the questionnaire were sent. The total collected responses within a period of 1 month were 51 out of total 75. However, 3 incomplete questionnaires were discarded, resulting into a final sample of 48. Response rate achieved is 69%, which is quite satisfactory.