IB SectionA Group2

8/7/2019 IB SectionA Group2

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IB PROJECTPreliminary report about the Top 10 countries

which Eco Friendly Fashion CAN Target

Submitted By:

Asmita Karanje13012

Deepika Dholkheria13014

Nikita Doshi13024

Rupali Varshney13040

Section A

Group 2


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Contents

Product that We have chosen:................................................................................................................ 3

Reason for selecting this product: .......................................................................................................... 3

Screening Process Used By Us : Four Module Model ............................................................................. 4

Europes External Environment with regards to Textile Industry........................................................... 5

Countries that we have chosen: ............................................................................................................. 6

Reasons to select Germany ..................................................................................................................... 7

Reasons to select Poland ........................................................................................................................ 8

Reasons to select Turkey ........................................................................................................................ 9

Reasons to Select UK ............................................................................................................................. 10

Reasons to select Italy .......................................................................................................................... 11

Reasons to select Spain ......................................................................................................................... 12

Reasons to select Ukraine ..................................................................................................................... 13

Reasons to select France ....................................................................................................................... 14

Reasons to Select Netherlands ............................................................................................................. 15

Reasons to select Romania ................................................................................................................... 16

Conclusion ............................................................................................................................................. 17


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Product that We have chosen:

Product Portfolio ofEco Friendly Fashion consists of various types of eco-friendly organic

and bamboo T-shirts such as polo shirts, sweat shirts, denim shirts, etc. T-shirts are a staple of

almost everyones wardrobe men, women and children. Unfortunately, most T-shirts are

made in the cheapest way possible and are quite bad for the environment and your health. A

conventional 100% cotton t-shirt is made up of 73% cotton and 27% chemicals used to

grow and make it So for eco-conscious people the alternative t-shirt that we have come up with

is organic bamboo-cotton blend tees. Also the differentiating factor would be technological

upgradation in the manufacturing of textiles; also adding to it we shall introduce a range of t-

shirts which shall have multi colours embedded in 1 fabric. Also there are various benefits

such as ultra soft and light fabric that makes this clothing comfortable and non-irritating,

protects from harmful UV rays, has hypoallergenic properties, Anti-bacterial, anti-fungal and

anti-odour, Non-clinging and anti-static, environmentally friendly uses no pesticides and issafely produced.

Reason for selecting this product:

The above mentioned benefits are quite evident and reason enough for our foraying into

international markets with this product. Also with growing concerns around the world about

environment friendly products, it is opportune time for us to go global with this niche product

portfolio.


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Screening Process Used By Us : Four Module Model

The screening procedure of the international market is on the basis of the 4 Module Model.

1) Preliminary Screening ( Countries reviewed 30) Population 3 million and above GNP per CapitaUS $ 2400 Urbanization60% and above.

2) General Country Indicators ( Countries reviewed 20) Political StabilityStable for at least 4 years before 2008 recession Economic Stability - Stable for at least 4 years before 2008 recession Economic Growth(Minimum 2%)

Income Distribution. ClimateModerate, Cold Export Risk lower or equivalent to B Grade.

3) Product Market Indicator (Countries reviewed 15) Import Restrictionsno restriction on garments. Age DistributionAt least 50% between 15 to 60 years. Clothing Expenditureper capita >= US 5 Market Growth- 2 to 4% p.a.

4) Infrastructure (countries reviewed 10) People/ TVDesired 20% People/ Telephone- Desired 60% Literacy Rate- Desired 60% CompetitionPresence of key competitors should not be less than 8.


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Europes External Environment with regards to Textile Industry

The sector is an important part of the European manufacturing industry. It plays a crucial role on the

economy and social well-being in numerous regions of the EU-27. According to the latest structural

data available, in 2006 there were 220,000 companies employing 2.5 million people and generated aturnover of 190 billion. The textile and clothing sector accounts for 3% of total manufacturing value

added in Europe.

The EU textile and clothing sector is one of the two biggest players in the world market . It

represents 29% of the world exports, not including trade between EU Member countries, after China

which occupies the first place with 40% of world exports. The textile and clothing industry is a very

global industry, with constantly increasing trade flows all over the world.

Despite the huge labour cost differential between those countries and Europe, EU industry remains

competitive due to higher productivity, and competitive strengths such as innovation, quality,

creativity, design or fashion. While, on their home market, EU operators are faced with intense (and

increasing) competition from all over the world, many export markets remain virtually closed due to a

wide variety of tariff and non-tariff barriers.

Imports show a constant increase, reaching 79.2 billion in 2008. The EU's main suppliers were China

(39% of all imports in terms of value), followed by Turkey (14%), India (7.7%), Bangladesh (6.3%)

and Tunisia (3.6%).

The increasing importance of the markets in emerging economies together with the development of

new uses and applications for textile fibres and products in many different areas such as aerospace,

medicine, construction and architecture, automobile, transports, personal protection, show the need

for solid steps on a better access to third country markets.

Further to tariff barriers, technical regulations, standards and conformity assessment procedures may

be obstacles to trade development. The Commission carries out bilateral dialogues in industrial policy

and related regulatory issues with third countries in order to facilitate industrial and trade relation.

The end of the textile quota regime was a major step towards overall trade liberalisation. Much of the

European Union (EU) industry have make the necessary adjustments, resulting in significant

productivity gains and a gradual concentration of production on high value added content. These

actions have allowed the EU Textile and Clothing (T&C) sector to remain a leading player on the

global market, especially in the medium-high range of textile, clothing and footwear products.

The task of doing away with trade barriers is still far from complete. However, many countries

maintain very significant non-tariff barriers as well as complicating and harmful internal legislations.

There is a need for convergence in market legislations and standards with the view to develop level

playing field in and transparency in international trade.


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Countries that we have chosen:

1. Germany2. Turkey3. France4. United Kingdom5. Italy6. Spain7. Ukraine8. Poland9. Romania10.Netherlands


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Reasons to select Germany

1. It is a major power with the world's fourth largest economy by nominal GDP and the fifthlargest by purchasing power parity. Also it has a high standards of living and per capita

income.

2. It is the third largest importer of goods.3. It holds a key position in European affairs and maintains a multitude of close partnerships on

a global level

4. Germany has a social market economy characterized by a highly qualified labour force, adeveloped infrastructure, a large capital stock, a low level of corruption, and a high level of

innovation.

5. Germany had a savage recession as manufacturing orders dried up, but its economy has sincebounced back strongly, expanding by 3.6% last year, far faster than most other rich

economies.

6. The country did not experience a property or credit bubble, and that it has kept its publicfinances admirably under control.

7. Germany has a cheaper-labour hinterland right on its doorstep in central Europe that hashelped companies raise efficiency and hold down pay.
http://en.wikipedia.org/wiki/Great_power#Aftermath_of_the_Cold_Warhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/List_of_countries_by_importshttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/Great_power#Aftermath_of_the_Cold_War


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Reasons to select Poland

1. It is the 9th largest nation in Europe. Poland has a population of over 38 million people,which makes it the 34th most populous country in the world

2. Poland is the only member of the European Union to have avoided a decline in GDP duringthe late 2000s recession. In 2009 Poland had the highest GDP growth in the EU.

3. Before 2009, GDP had grown about 5% annually, based on rising private consumption, ajump in corporate investment, and EU funds inflows.

4. According to a Credit Suisse report, Poles are the second wealthiest (after Czechs) of theCentral European peoples, this in turn makes Poland an attractive destination for foreign

companies seeking investment opportunities in terms of setting fully owned subsidiaries ,

joint ventures , etc.

5. Also Polands currency being independent of Euro helped to keep Polish productscompetitive on world markets and insulating Poland from the effects of the sovereign debt

crisis.
http://en.wikipedia.org/wiki/List_of_countries_by_populationhttp://en.wikipedia.org/wiki/List_of_countries_by_population


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Reasons to select Turkey

1. The shopping centre market in Turkey has seen significant development during 20072008.2. Asian products, especially those from China, found a place in both the clothing and footwear

markets. But the drawback with these Chinese products is that they are of lower quality than

others and this pain point can be used as a major opportunity to provide high quality goods at

competitive prices.3. The textile and apparel sector has been the backbone of the Turkish economy with a vital role

to play in the industrialization process and market orientation of the economy in the last two

decades and as such there has been a huge support from the Government providing various

incentives and subsidies to promote this sector.

4. Turkey also ranks among the top ten global producers of wool cloth, carpets, syntheticfilament and fiber, polyester and polyamide filament

5. Low labor costs, a qualified workforce, relatively cheap raw materials have played animportant role in the significant growth of the sector; as well as a liberalized economic

environment and export-led policies in the last two decades.


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Reasons to Select UK

1. The economy of the United Kingdom is the sixth-largest national economy in the worldmeasured by nominal GDP and purchasing power parity (PPP) and the third-largest in Europe

measured by nominal GDP

2. The UK's GDP per capita is the 20th highest in the world in nominal terms and the 17thhighest measured by PPP.3. The UK is one of the world's most globalised countries. London is the world's largest

financial centre and is home to the headquarters of more than 100 of Europe's 500 largest

companies.

4. The UKs strong financial system, political stability and business-friendly regulation make ita location of choice for investors from around the world.

5. The UK market for clothing and footwear was worth an estimated 52billion in 20096. There are approximately over 12,000 clothing businesses and 156,000 people employed in

the fashion and design industry in the UK. Approximately 20,000 people work as designers

across the fashion and textiles sector (Skillset 2010).7. Britain has one of the best climates for doing business in the world, with tax, trade and labour

market policies conducive for the textile industry

8. The UK offers acompetitive tax environmentwith lower corporate tax rates than many keycompetitors and one of the lowest personal tax rates in the EU.

9. The UKslabour environment and skills basemake it easy for companies in all sectors tosource high-quality staff.
http://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/107014.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/107014.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/107014.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/106983.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/106983.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/106983.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/106983.htmlhttp://www.ukti.gov.uk/pt_pt/investintheuk/whytheuk/localisation/107014.html


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Reasons to select Italy

1. Italy has the fifth highest population density in Europe, with most of those residing in itscapital, Rome. The population in just over 58 million: 4 million of which are immigrants.

2. Italy belongs to the Group-of-Eight (G8) industrial nations, the European Union (EU), andthe Organisation for Economic Cooperation and Development (OECD). The currency usedin Italy, along with fellow EU members, is the Euro.

3. Climate in the Mediterranean region, which includes all the southern areas of Italy, rainfallis often in the winter months, leaving the summer months arid and hot.

4. The geographical position of Italy (at the centre of the Mediterranean and the infrastructurallinks with the countries of Europe) allows it to form a crossroads for international trade, anatural bridge between Europe and Africa.

5. Italy, particularly the prosperous north, has one of the highest per capita incomes in Europe.6. Italian consumers are sophisticated and demanding, particularly in terms of quality.7. Traditional, high-quality consumer goods often do very well, and designer items or

recognised fashion brands are also very popular.8. Advanced technology, equipment and components have a good reputation, and innovative

high-quality products are always of interest.


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Reasons to select Spain

1. Spain has a population of 46,489,0002. The economy of Spain is the ninth-largest economy in the world, based on nominal GDP

comparisons, and the fifth-largest in Europe.3. The casual/streetwear style of clothing has increased its presence in the Spanish market

year on year, as new consumption patterns, new habits, a gradual relaxation of workplace

dress codes and improvements in the quality of products supplied by large firms all

provided the opportunity for its sales to grow.

4. The level of imports in this sector, especially from South East Asia, increased considerablyduring 2007, and especially in 2008, because of the economic crisis. These products are of

lower quality but also have lower prices, so they meet the current pattern of consumer

demand. As a result, the domestic manufacturing industry for clothing is experiencing a

major crisis, with the loss of nearly 20,000 jobs in 2008.

5. In addition, the Spanish textiles market is highly fragmented, with more than 4,000companies involved, which makes it very difficult for the various businesses to unite to

fight for common interests.


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Reasons to select Ukraine

1. Ukraine's economic growth has been very stable over the few past years, with an averageGDP growth rate of 12%. The GDP per capita was $6,300 in 2004, the GDP was $299,1

billion, and the inflation rate was 12%.2. The import and export of goods plays a huge roll in Ukraine's favorable economy figures.3. Ukrainian foreign trade grew almost continuously in the 1990s and the early 2000s4. The annualised real growth rate from 2000 to 2008 exceeded 7%5. Severe recession in 2009 (15% GDP decline), but Ukraines GDP is projected to grow by

2.5%-3% in 2010.

6. In 2008 Ukraine joined the WTO. This resulted in a further reduction of import customsduties, and post-entry audits are expected to become more frequent. There is huge demand

for textile in Ukraine.

7. It is possible for a foreign company to establish a representative office in Ukraine. Arepresentative office can carry out marketing, promotional, and other auxiliary andpreparatory functions on behalf of the company. The establishment of a wholly-owned

company in Ukraine would be recommended if the company intends to carry out

manufacturing or other significant local commercial activities. There is no prohibition for a

foreign legal entity to have both a representative office and to establish a wholly-owned

subsidiary at the same time.
http://www.ukraine.com/economy/http://www.ukraine.com/exports/http://www.ukraine.com/exports/http://www.ukraine.com/economy/


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Reasons to select France

1. France is 5th worldwide in GDP, with almost $3 trillion, and 3rd (why?) in militaryexpenditure with $61.6 billion, and 22nd in population, with 61 million.

2. France is the best-positioned of all the countries we will look at here to deal with theeconomic crisis facing the world.3. They have a beautiful geographic location, brilliant public transportation, excellent education

and one of the few growing populations in Europe.4. They have essentially 100% literacy, great schools, very productive workers,5. France has weathered the global economic crisis better than most other big EU

economies because of the relative resilience of domestic consumer spending, alarge public sector, and less exposure to the downturn in global demand than insome other countries.

6. The government has partially or fully privatized many large companies, banks,and insurers, and has ceded stakes in such leading firms as Air France, FranceTelecom, Renault, and Thales. It maintains a strong presence in some sectors,

particularly power, public transport, and defense industries.


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Reasons to Select Netherlands

1. Dutch prosperity is based on efficient industry, restructured in the 1980s, natural gas, rich andintensively farmed land and trade; around 60% of GDP consists of exports and imports,making the Netherlands one of the most trade-dependent economies in Europe. Chemicals,electronics and food-processing are prominent.

2. It offers an open and innovative ecosystem for industrial activities, with a long tradition ofsuccessful innovations.

3. The cooperation of companies and universities within the triangle of Eindhoven(Netherlands), Aachen (Germany) and Leuven (Belgium) is cross-border with a stronginternational focus.

4. Dependency on trade and great experience with consensus politics has made the Dutch naturalleaders in EU developments. The Netherlands is keen on much greater political and economicintegration and is likely to continue to play an important role as conciliator in EU affairs.

5. Government benefits and incentives: A range of government aids and subsidies are availableto investors in the Netherlands, whether Dutch or foreign.Investments incentives can be General, Regional and Special.

6. Its strategic location combines with quality infrastructure, trading culture, wide proficiency ofdifferent languages, and an open and outward looking economy, to make an attractiveGateway to Europe for New Zealand companies.

7. As a multilingual, internationally-focused, trading country with an excellent infrastructure,the Netherlands offers an excellent entry point for product launch in the EU.

8. Being such good traders, the Dutch will be keen to take up new, innovative products, forwhich they see market potential.


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Reasons to select Romania

1. Market Advantage: One of the largest markets in Central and Eastern Europe (ranking7th, with over 21 million inhabitants). It is EUs unique market gateway (access to

approximately 500 million consumers).2. Attractive location: It is situated at the turning point between EU, the Balkans and CIScountries, Romania is crossed by three important pan-European transportation corridors.

3. Resource Advantage: It has highly skilled labor force at competitive prices (solidknowledge in foreign languages, technology, IT, engineering, etc). It has rich naturalresources, including surface and underground waters, fertile agricultural land, oil and gas.

4. Political Advantage: Stability factor in the Area due to NATO membership. It also hasStability Guarantee in South Eastern Europe.\

5. International Relations Advantage: Bilateral agreements between Romania and other countries on investments

promotion and protection.

Bilateral diplomatic relations with 177 out of the 191 UN member states, plus theHoly See, the Sovereign Military Order of Malta and the Palestinian NationalAuthority.

Member of the UN and other international organizations, like: OSCE, Council ofEurope and International Organization of La Francophonie.

Free trade agreements with EU, EFTA countries, CEFTA countries. WTO member since January 1995.

6. Economical Advantage: It has Sustainable economic growth; Decreasing inflation;Increasing interest on behalf of Foreign Investorsleader destination for FDI in the region.It also has Sound fiscal policy (16% flat tax).

7. Social Advantage: Agreement between Government and major unions. The labor relationsregulated by the Romanian Labor Code.

8. Other Advantages: Continuously improving infrastructure (commitment to improve the highway

infrastructure to EU standards)\

Highly developed industrial infrastructure, including oil and petrochemicals. Well-developed networks of mobile telecommunications in GSM systems


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Conclusion

The top ten countries which can be targeted for our new product launch Eco Friendly Fashion

comprises of the European countries. The EU industry provides more responsibility for a large

number of medium-developed countries, especially from Asia. The EU industry plays a leading rolein the development of the new production in the field of making textile fibres and technical textiles.

The textile and clothing industry belongs to one of the most important global industries in the world.

It consists of important profit stocks and development of many countries in the world, and partly of

developing countries. It accounts for 5.7% of the production value of the world's production in US$,

8.3% of the value of producer goods and more than 14% of world's employment. Production and work

force are characteristic of the corresponding degree of the regional concentration within the

community.

Due to the geographical position of these countries, the EU manufacturers are able to change market

requirements and to control the contents by management and quality of expanded production.Investigations and technological development are also used by the EU countries as political means in

the process of integration. Associate members participate in the total budget and pay the annual high

membership dues, whereas their research institutes, universities, industry, small and medium sized

companies simply take part in projects under the same conditions as EU member countries.

The industrial policy of the European textile and clothing industry emphasizes the need for

promoting innovation and clothing sectors by means of research, development and innovation,

improvement of production quality and purchasing rationalization.

The primary object of high technology cluster for competitiveness and continual development of

the European textile industry is: to maintain research activities and development of newtechnologies, to define innovative strategies for better competitiveness and modernization of the

European textile sector, to ensure new transfer mechanisms of terminating the expansion,

compensation and application of thematic research network and technology, to increase the intensity

of fundamental European textile researches by combining expert knowledge into a unique harmony by

a connective project having a clear strategy.

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