Competitiveness of Bangladeshi RMG industries in global markets - an analysis on TURAG garments

Abstract

The ready-made garments (RMG) sector of Bangladesh has been one of the major driving forces of our national economy. Our RMG sector has gained global recognition, competitiveness and has a significant contribution towards national economy. This paper aims to investigate the factors that lead towards the creation of its competitiveness in the global arena by using Porter's Diamond framework of national competitiveness. The paper also scrutinized the competitive advantage of TURAG Garment and Hosiery Mills Ltd, a renowned apparel industry in Bangladesh. In the process of study, the paper reviewed a number of existing literatures and data sources using primary and secondary data for qualitative evaluation of the national diamond and competitiveness. Porter's Five Forces Analysis and SWOT analysis were done to identify the competitive advantage of RMG sectors as well as the garment industry under discussion. The paper found that cheap labor cost is one of the strong factors behind the success of global competitiveness but it will not last long as the cost of production is going up. Government policy support including cash incentives, duty exemption can help the sector remain competitive in the export destinations. It was found that existing low labor cost helping RMG sector to remain competitive but other factors like national demand conditions, related supporting industries, firm structure and management are not very active to cope with the global competitiveness. After Porter's Five Forces and SWOT analysis, this paper concludes with some recommendations which may be helpful for RMG sectors as well as TURAG garment to achieve the competitive advantage in global markets.