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REPUBLIC OF BULGARIA
Bulgarian Small and Medium
Enterprises Promotion Agency
PROJECT BG161РО003 – 4.2.01-0001, “PROMOTION OF THE
INTERNATIONALIZATION OF THE BULGARIAN ENTERPRISES”
Проект № BG161РО003 – 4.2.01-0001, „НАСЪРЧАВАНЕ НА
ИНТЕРНАЦИОНАЛИЗАЦИЯТА НА БЪЛГАРСКИТЕ ПРЕДПРИЯТИЯ”
This project is financed by the European fund for regional development through
an Operational programme “Development of the competitiveness of the
Bulgarian economy” 2007 – 2013
Този проект е получил финансиране от Европейския фонд за регионално
развитие чрез Оперативна програма „Развитие на конкурентоспособността
на българската икономика” 2007 – 2013
EXPORT STRATEGY
Manufacture of wearing apparel, including leather apparel, tanning of
leather
June 2012
2
LIST OF ABBREVIATIONS
EU European Union
BSMEPA Bulgarian Small and Medium Enterprises Promotion Agency
MAF Ministry of Agriculture and Food
MEET Ministry of Economy, Energy and Tourism
MRDPW Ministry of Regional Development and Public Works
SME Small and Medium Enterprises
ITC International Trade Centre
NCEA National Classification of Economic Activities
NSI National Statistical Institute
OP Operational Programme
OTEA Office of Trade and Economic Affairs
3
CONTENTS
INTRODUCTION .................................................................................................................... 4
1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY .............................. 5
2. MAIN CONCLUSIONS OF THE ANALYSIS OF THE CURRENT SITUATION 11
3. SWOT AND LOED ANALYSIS OF SECTOR "MANUFACTURE OF WEARING
APPAREL, INCLUDING LEATHER APPAREL, TANNING OF LEATHER” ........... 33
4. VISION AND OBJECTIVES ........................................................................................ 37
5. STRATEGY FOR PROMOTING THE EXPORT OF SMES IN THE SECTOR .. 39
6. ACTION PLAN .............................................................................................................. 41
7. MONITORING AND CONTROL SYSTEM .............................................................. 51
4
INTRODUCTION
The export strategy for sector “Manufacture of wearing apparel, including leather apparel,
tanning of leather” has been developed under Project No BG161РО003 – 4.2.01-0001
“Promotion of the internationalization of the Bulgarian enterprises” under Priority Axis 4
“Strengthening the international market positions of Bulgarian economy” under Operative
programme “Competitiveness of the Bulgarian economy”, in the frame of Contract BG-
161PO003-4.2.01-001-C00001 for providing direct grants, in which the Bulgarian Small and
Medium Enterprises Promotion Agency (BSMEPA) is the institutional beneficiary.
The objective of the export strategy for sector “Manufacture of wearing apparel, including
leather apparel, tanning of leather” is to support the Bulgarian micro, small and medium-sized
enterprises in the sector, in order to enhance their competitiveness, internationalization level
and initial entering or expansion of the market share of Bulgarian products, in particular of
those with higher added value.
The Bulgarian state, represented by BSMEPA, MEET and other government bodies, has
recognized the SME sector to be extremely sensible and at the same time as having decisive
importance in the economic field, deserving special attention. The diversity in the
development of various industrial sectors, where the SME development has its place, as well
as national priorities, related to promoting the country’s export, require drafting of export
strategies for certain sectors, one of which is “Manufacture of wearing apparel, including
leather apparel, tanning of leather”. Focusing the support and defining of precise reference
points for State intervention through its institutions, as well as offering development options
for the rest of the participants in the process will strengthen in positive aspect the plan-based
principle in State activities and as a result will improve the sector functioning. The successful
realization of the Export strategy is expected to lead to the improvement of the process of
entering international markets and the active expansion and strengthening of the market
positions of Bulgarian small and medium enterprises, manufacturing wearing apparel.
At the strategy development, general consideration has been made of the findings and
conclusions of the carried out studies of existing strategic and legal acts. The “Methodology
of strategic planning”, drafted by the Council of Administrative Reform at the Council of
Ministers of the R. of Bulgaria has also been taken into account.
5
1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY
The export strategy is a strategic document, setting the mid-term objectives and priorities for
the export development of SMEs from sector “Manufacture of wearing apparel, including
leather apparel, tanning of leather”. It has been drafted on the basis of the strategic planning
approach, which adroit use has the following advantages:
Ensures good comprehension among stakeholders for the trends and what could bring
the future;
Creates general vision and consensus among stakeholders, by coordinating various
initiatives under the selected objectives;
Identifies the projects and actions undertaken or planned;
Strengthens the partnership among the government bodies, the business and other
parties for solving complex problems.
When developing such a strategic document it is extremely important to precisely formulate
the “owner” of the strategy, i.e. the institution or institutions responsible for the overall
implementation of the strategic documents, as well as the concrete phases of the strategic
planning.
Most commonly the phases of elaboration of the strategic document are:
Assignment
Preparation
Development
Coordination
Adoption
Implementation
Evaluation
Update
Each of these phases contains different activities, some of which, as assignment, preparation,
elaboration, coordination, adoption and update at a later stage, will be part of the project,
implemented under the contract, mentioned at the beginning. Consequently, the main “owner”
of the export strategy is the Bulgarian Small and Medium Enterprises Promotion Agency
(BSMEPA). For this reason, objectives, measures and various actions set in the strategic
document should first help BSMEPA to improve planning and implementation of activities,
related to export support of SMEs in sector “Manufacture of wearing apparel, including
leather apparel, tanning of leather”. This formal logic does not contradict to the fact that a
significant number of institutions, businesses and even the population are involved as
stakeholders and they might be influenced by means of different mechanisms, for example,
the state institutions – through the forms of coordination of strategic documents of such rank,
and the branch associations and the business – by providing incentives to increase their export
potential. It is of extreme importance for SMEs in sector “Manufacture of wearing apparel,
including leather apparel, tanning of leather” to be able to see a clear and predictable export
6
supporting state policy, which, though in the medium run, will allow them to decide whether
to benefit or not from the created opportunities.
Technology of strategic planning
The strategic planning process includes the following steps:
Identification of the stakeholders
Analysis of the environment
SWOT analysis
Vision
Definition of targets
Selection of alternative – development strategy
Action plan
Monitoring system
Each of these steps has certain peculiarities, namely:
Identification of the stakeholders. A stakeholder is any person or group, that requires
attention, that can influence certain decision, may contribute with resources or may be
affected by given decision. Involving stakeholders at an earlier stage of the strategic
document development may lead to better expressed consensus on the targets and greater
readiness to support the decision. The stakeholders of the Export strategy may include
different people and organizations: companies, government bodies, manufacturers’
associations, businesses, consumers of the products, NGOs and experts.
The specifics of developing business supporting strategies are that prepared documents shall
not favour some and/or discriminate other businesses. This is the reason why there was a
pursuit for equality when involving business organizations and different branch associations,
as well as a search for an opportunity that the majority of businesses could benefit from the
analysis made.
Analysis of the environment. The analysis of the environment (the conclusions of which
serve as a basis for the SWOT analysis) allows the formulation of goals and priorities which
shall align the efforts and shall not be dissociated from time and environment.
The analysis is focused at:
The current state of sector “Manufacture of wearing apparel, including leather apparel,
tanning of leather” in Bulgaria, trends, dynamics, growth;
Characteristics of export-orientated SMEs, including regional distribution;
Condition of the export of goods and services;
Analysis of the goods and services in sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”, having export advantages and export
potential;
Estimation of productions with the highest value added growth potential in the export
of goods and services, where Bulgaria has global market share;
7
Size of the international market;
Competitiveness of the export of goods and services for the existing and potential
foreign markets;
Share of the products made in Bulgaria;
Share of the Bulgarian export of analyzed product groups in the total volume of
imports on the global markets;
Leading importer-countries in sector “Manufacture of wearing apparel, including
leather apparel; tanning of leather”;
Values and volumes of the import on concrete external markets for certain product
group;
Main suppliers on the corresponding markets;
Identification of barriers to the internationalization of the companies in the sector and
measures for overcoming them.
Based on the prepared analyses, the current problems and achievements of the sector should
be identified, and prognoses, opportunities and prospects for development shall also be
motivated, such as:
Achieving significant growth of Bulgarian goods in general, as well as of goods with
higher added value;
Determination and priority setting of target markets by product groups;
Prognosis for the development of export and import of goods and trade balance for the
next five and more years.
The analyses are based on available analytical and programme documents, accessible
statistical information, as well as information from carried out surveys – interviews and focus
groups.
The analysis of the environment traces out the current condition of SMEs in sector
“Manufacture of wearing apparel, including leather apparel; tanning of leather” and the export
process; establishes the reasons, provoking problems in the development and sets the
guidelines for future development.
SWOT analysis. The SWOT analysis gives the opportunity to identify the main internal
factors, differentiated as “strengths and weaknesses” and the external factors – “opportunities
and threats”, helps formulating the strategic objectives, priorities and measures. The use of
SWOT protects from setting unreachable objectives and priorities for the export development
of SMEs in sector “Manufacture of wearing apparel, including leather apparel; tanning of
leather” within the Strategy period.
The use of SWOT analysis in developing the Export strategy has certain specifics, as the
“owner” of the strategy is the BSMEPA, but the analysis is focused on the export process of
SMEs in this particular sector and not on the institution itself.
LOED analysis. The LOED analysis is a tool, showing how to build on strengths and to
overcomes the weakness, how to use the opportunities and to protect against threats,
identified by means of the SWOT analysis.
Setting the targets. The strategic planning is focused on issues of critical importance,
opportunities and problems, faced by the export of SMEs in sector “Manufacture of wearing
8
apparel, including leather apparel; tanning of leather”. It helps to outline the really important
decisions from those decisions with temporary impact.
Setting the targets by making a hierarchical tree of goals is a working instrument that gives
the opportunity to work out in detail from the most common general objectives to the specific
ones.
The definition of the general strategic objective is extremely important for the future
development of exports of SMEs in sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather”. The general strategic objective is seeking to find answer to one
basic question: How do the main institutions and stakeholders in the process want the export
of SMEs in the sector look like in the long-term period?
Reaching the level of specific targets permits finding the answer of the questions about
“who”, “what” and “when”, so as to guarantee the achievement of the goals set higher in the
hierarchy.
Selection of alternative – development strategy. After objectives’ setting, the paths for their
achievement are sought. Practice shows that this may be done through different ways,
representing different alternatives for development and achievement of the objectives. At this
stage of the strategic planning, various alternatives are evaluated from different points of view
and criteria and as a result an alternative is chosen, which then becomes a development
strategy.
Action plan. The chosen strategy is to be supplied with certain activities and measures, bound
to deadlines, people in charge, performers and funding. The Action plan and the measures
provided therein transform this strategic instrument into everyday work and implementation
of the policy of supporting the export of SMEs in sector ‘Manufacture of wearing apparel,
including leather apparel; tanning of leather’.
Monitoring system. The last stage of the strategic planning process is monitoring and
evaluation of the progress of implementing the general and specific objectives, laid down in
the export strategy and in the action plan. Monitoring is important as it gives the possibility to
undertake corrective actions, if the progress is unsatisfactory or if the conditions are changed.
Reporting the progress in achieving the general objectives to the public and the business is
also important, as to grant them the opportunity to estimate the work of relevant institutions
and stakeholders in the implementation of the strategy. It should be noted that very often
impacts may not be visible or obvious which makes their measurability difficult. Moreover,
impact may often result in cumulative effect and it may additionally complicate the analysis.
This gives particular importance of the monitoring, which is closely related to all stages of
implementation of the Export strategy – preliminary (ex ante), current (parallel to
realization) or posterior (ex post) evaluation.
In order to monitor the implementation of the export strategy and to evaluate the results
achieved in terms of defined goals, it is necessary to use a set of indicators related to the
implementation of the strategic document, that are to be determined preliminary or early
enough, as to use the data obtained thereof. In most of the cases, these will be target values,
which in aggregate will correspond to the objectives of the strategic document.
Monitoring provides the feedback, helping to assess the success or failure of the planning
document.
In order to perform the monitoring process is it necessary to define:
Monitoring indicators (what is to be monitored);
9
Periodicity of monitoring and evaluation (when the corresponding reports will be
prepared);
Responsibilities related to monitoring and evaluation (who does what), and
competences for decision-making on changes (update of the strategic document).
INFORMATION SOURCES
In developing the export strategy the following main information sources have been used:
National Statistical Institute
Information, provided by the BSMEPA
Information from the Ministry of Economy, Energy and Tourism
Eurostat
International Trade Centre
Information, published in relation to international forums and meetings
Official electronic information sources
Information, published by branch associations in the sector
Information by the Bulgarian Industrial Association and the Bulgarian Chamber
of Commerce and Industry, and their regional divisions
Information from a survey, carried out in the period October 31 – November 28,
2011 with the senior management of 5 (five) small and 22 (twenty-two) medium
enterprises (total of 27), operating in the sector, and from a focus group.
Information is processed with the will for maximum objectivity of the findings. In many
cases, the analyzed information applies to sector “Manufacture of wearing apparel, including
leather apparel; tanning of leather” as a whole, i.e. the information covers both SMEs and
large enterprises, based on the assumption that if a Bulgarian company has been successful on
certain markets, the same could be expected for another company as well, incl. from the group
of SMEs. These specifics are explicitly underlined during the analysis.
10
STRUCTURE OF THE EXPORT STRATEGY FOR SECTOR “MANUFACTURE OF
WEARING APPAREL, INCLUDING LEATHER APPAREL; TANNING OF
LEATHER”
In determining the structure of the Export strategy for sector “Manufacture of wearing
apparel, including leather apparel; tanning of leather” the use of the strategic planning
approach is considered, which sets the general parameters of the strategic document. At the
same time, a study was made of the structure of other institutional strategic documents, using
the following estimation criteria:
- providing opportunity for relatively easy access to the document through
comprehensive and logical structuring of different parts;
- presenting the content in an attractive and easy-to-understand manner accessible to
non-professionals as well;
- providing information thematically, i.e. structuring the material in a way that allows
in-depth penetration into problems and analyzes only if desired by the reader.
The above mentioned criteria were met by several of the studied strategies and they contained
two clearly distinguished separate parts, namely:
1. A main document, in which the separate chapters are defined according to the above
described technology of strategic planning.
2. Appendices that contain the complete text of the analysis, including conclusions,
transferred to the main document.
This approach was preferred in structuring the Export Strategy for sector “Manufacture of
wearing apparel, including leather apparel; tanning of leather”. Following consultations with
the Assignor, the findings and conclusions in the main document were supplemented with
specific data and visualized by graphs and diagrams, thus increasing the information content
of the document.
11
2. MAIN CONCLUSIONS OF THE ANALYSIS OF THE CURRENT
SITUATION
This part contains the summarized conclusions of different analyses, included in “Analysis of
the environment”, being one of the main steps in the strategic planning technology. In
appendix to this strategic document, the complete text of facts and analyses is presented, on
the basis of which conclusions are drawn. The conclusions and the analyses themselves are
structured in 6 parts, as follows:
STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA
EXPORT ORIENTATION OF THE SECTOR
GOODS WITH EXPORT ADVANTAGES AND POTENTIAL
COMPETITIVENESS OF THE EXPORT OF GOODS ON FOREIGN MARKETS
EXPORT PRIORITY PRODUCT GROUPS IN THE SECTOR AND MAIN MARKETS
BARRIERS TO THE INTERNATIONALIZATION OF SMES AND MEASURES FOR THEIR
OVERCOMING
STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA
Generally for sector “Manufacture of wearing apparel, including leather apparel, tanning
of leather”
The ownership in the sector is entirely private and most of the companies are
micro, small and medium enterprises. This is a precondition for higher flexibility
of production and better adaptation to market trends.
The dynamics of production and turnover of companies in the sector, measured by
the indexes of industrial production and turnover, show similar trends to those in
industry total and in manufacturing in the period 2001 – 2010. The stable growth
is crushed after 2007 and in 2010 the pre-crisis levels are recovered in terms of
turnover on international markets, while the drop on the domestic market remains
unchanged.
The regional distribution of companies in the sector is uneven, as the biggest
concentration is observed in the South-Western region and South-Central region,
which is related to traditions in production.
SMEs in sector “Manufacture of wearing apparel, including leather apparel, tanning of
leather”
The sector is a leader in manufacturing in terms of number of SMEs and number
of employed. The sector is one of the largest employers in the country and in 2010
it provided employment to nearly 24% of the employed in SMEs in manufacturing
and over 6% of the employed in SMEs in industry total.
The percentage of decrease in the number of companies and employed in 2010
compared to 2009 is higher than the average in manufacturing and one of the
12
highest among the 18 analysed sectors, implying a significant impact of the global
economic crisis on the sector.
In inner-sector aspect, “Manufacture of outerwear, without working apparel”,
“Manufacture of other wearing apparel and clothing accessories” and
“Manufacture of footwear” account for the biggest number of companies in the
sector.
SMEs in the sector generate 9% of the turnover and over 14% of the value added
in manufacturing. The change in 2010 compared to 2009 in both indicators is
insignificant, and by these indicators the sector ranks second after sector
“Manufacture of food products”.
Notwithstanding the upward trend in labour productivity of SMEs in sector
“Manufacture of wearing apparel, including leather apparel, tanning of leather”, it
remains relatively low, making about 60% of average labour productivity of SMEs
in manufacturing and 49% of average labour productivity of SMEs in industry
total. Labour productivity of the sector is 4 times lower than that of the leading
sector in manufacturing, “Manufacture of pharmaceuticals products and
preparations”.
Estimations of workforce quality and the relatively low priority of measures for
raising the qualification of personnel allow concluding that the sector disposes of
qualified workforce able to apply traditionally good practices in manufacturing.
EXPORT ORIENTATION OF THE SECTOR
Generally for sector “Manufacture of wearing apparel, including leather apparel, tanning
of leather”
The sector ranks first among the 18 sectors with export potential. In the period
2001 – 2010, the total Bulgarian export of wearing apparel amounts to nearly 29,6
billion BGN and accounts for 14,54% of total national exports in this period and
for 23,9% of the export, realized by the 18 analyzed sectors.
The position of the Bulgarian products on the international market both in the
manufacture of wearing apparel and in the tanning of leather and footwear
manufacture is stable and records progress until 2007. The levels of 2007 are
restored by end-2010, before the world economic crisis, implying a recovery of
consumption on the foreign markets and increase in orders.
SMEs in sector “Manufacture of wearing apparel, including leather apparel, tanning of
leather”
In 2010, the sector ranks first in terms of “share of SMEs in total exports of the
sector” (more than 57%) and in 2009 it ranked second. This ranking is indicative
of the great importance of SMEs for the development and export capacities of the
sector.
The generally observed trend in export volumes in 2010 compared to 2009 is a
decrease in the export of SMEs, with an increase in the total export of the sector,
13
showing that small and medium enterprises are more significantly affected by the
global financial economic crisis, in comparison with large companies.
The largest export shares in 2010 are held by the companies in “Manufacture of
wearing apparel, excl. leather apparel” accounting for 93,36% of the export of
companies in „Manufacture of wearing apparel” and the companies in
„Manufacture of footwear”, accounting for 80% of the export of companies in
“Tanning of leather, manufacture of footwear and related leather products”.
In terms of the indicator “volume of exports per 1 employed” sector “Manufacture
of wearing apparel, without leather apparel” ranks third among the examined
sectors which is indicative for its strong orientation to foreign markets.
SMEs which participated in the company survey work mainly for export – for the
whole analyzed period the number of companies, exporting more than 60% of
their production is prevailing, and in 2011 their share reached 80%.
Companies in the sample export directly without the mediation of trade
companies, creation of joint trade activity with other companies, etc.
GOODS WITH EXPORT ADVANTAGES AND POTENTIAL
Generally for sector “Manufacture of wearing apparel, including leather apparel, tanning
of leather”
The product groups, manufactured and exported in sector “Manufacture of wearing apparel,
including leather apparel, tanning of leather” are extremely numerous. Therefore the selection
of product groups with export advantages and potential was done on the basis of several
criteria, namely highest relative share in the export of the corresponding product group,
increase during the studied period or realized big export volumes before the beginning of the
global economic crisis. The analysis includes also the product groups with relatively stable
exports during the studied period. These criteria were applied for the sector in total, as official
statistical information on SMEs is not available. The application of the selected criteria to
data of the International Trade Centre allows determining the following 13 product groups,
which have export advantages and potential:
„Articles of apparel and clothing accessories, knitted or crocheted”
1. Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided
skirts, trousers, knitted or crocheted
2. Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted
3. T-shirts, singlets and other vests, knitted or crocheted
4. Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or
crocheted.
„Articles of apparel and clothing accessories, not knitted or crocheted”
5. Women’s or girls’ overcoats, capes cloaks and anoraks other than those of
heading 6204
6. Men’s or boys’ suits
7. Women's or girls' suits
14
„Articles of leather; saddlery and harness; travel goods, handbags and similar
containers; articles of animal gut”
8. Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school
satchels, spectacle cases, binocular cases, camera cases, musical instrument
cases, gun cases, holsters and similar containers; travelling bags, insulated
food bags
9. Articles of apparel and clothing accessories, of leather or of composition
leather
„Footwear, gaiters and the like; parts of such articles”
10. Footwear with outer soles of rubber, plastics, leather or composition leather
and uppers of leather
11. Footwear with outer soles of rubber, plastics, leather or composition leather
and uppers of textile materials
12. Other footwear
13. Parts of footwear (including uppers, whether or not attached to soles other
than outer soles); removable in-soles, heel cushions and similar articles,
gaiters, leggings and similar articles and parts thereof
The main findings of the analysis of the ranking of Bulgaria in the world export, the export
dynamics, and the position of the country in terms of export of the selected product groups in
the sector are summarized in the table below:
Product groups Rank in
the world
export in
2009
Rank in
the world
export in
2010
Share in
the world
export in
2010
Share in
the export
of the
leading
world
exporter in
2010 to
2001
Share in
the export
of the
leading
world
exporter in
20101
Women's or girls' suits, ensembles, jackets, blazers,
dresses, skirts, divided skirts, trousers, bib and
brace overalls, breeches and shorts (other than
swimwear)
27 25 0.57% 4.21% 1.81%
Men’s or boys’ suits, ensembles, jackets, blazers,
trousers, bib and brace overalls, breeches and shorts
(other than swimwear)
32 29 0.67% 3.49% 2.61%
Women’s or girls’ overcoats, car-coats, capes
cloaks, anoraks (including ski-jackets), wind-
cheaters, wind-jackets and similar articles other
than those of heading 6204
25 17 0.74% 2.97% 1.52%
Women’s or girls’ blouses, shirts and shirt-blouses 14 18 2.19% 83.28% 21.24%
Jerseys, pullovers, cardigans, waistcoats and similar
articles, knitted or crocheted
37 34 0.28% 1.50% 0.74%
T-shirts, singlets and other vests, knitted or
crocheted
30 39 0.33% 3.76% 1.55%
1 Leading exporters by product groups are presented in Appendix, item 3 – Analysis of goods and services with
export potential.
15
Product groups Rank in
the world
export in
2009
Rank in
the world
export in
2010
Share in
the world
export in
2010
Share in
the export
of the
leading
world
exporter in
2010 to
2001
Share in
the export
of the
leading
world
exporter in
20101
Women's or girls' suits, ensembles, jackets, blazers,
dresses, skirts, divided skirts, trousers, bib and
brace overalls, breeches and shorts (other than
swimwear), knitted or crocheted
32 28 0.36% 1.48% 0.67%
Trunks, suit-cases, vanity-cases, executive-cases,
brief-cases, school satchels, spectacle cases,
binocular cases, camera cases, musical instrument
cases, gun cases, holsters and similar containers;
travelling bags, insulated food bags
32 32 0.10% 0.58% 0.22%
Articles of apparel and clothing accessories, of
leather or of composition leather
48 48 0.06% 0.08% 0.20%
Footwear with outer soles of rubber, plastics,
leather or composition leather and uppers of
leather;
33 36 0.21% 1.05% 0.95%
Parts of footwear (including uppers, whether or not
attached to soles other than outer soles); removable
in-soles, heel cushions and similar articles, gaiters,
leggings and similar articles and parts thereof
16 18 1.29% 17.51% 4.78%
Other footwear 9 22 0.56% 8.13% 0.97%
Footwear with outer soles of rubber, plastics,
leather or composition leather and uppers of textile
materials.
33 34 0.13% 0.57% 0.31%
Presented data show that in 2010 the best ranking among world exporters has the product
group “Women’s or girls’ overcoats, car-coats, capes cloaks, anoraks (including ski-
jackets), wind-cheaters, wind-jackets and similar articles other than those of heading
6204”, Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted” and
“Parts of footwear (including uppers, whether or not attached to soles other than outer
soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar
articles and parts thereof”. The latter two product groups hold leading positions in the
share of Bulgaria in world exports (respectively 2,19% and 1,29%). Among the most
successful product groups on international markets are goods with both high and low
added value.
The product groups women's or girls' suits and men’s or boys’, ensembles, jackets,
blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and
shorts (other than swimwear) are among the product groups with the largest export
volume. Huge demand and respective supply of this type of commodities determine their
more unfavourable ranking among the analysed products, regardless of their higher added
value.
Changes in the export volume of analyzed commodities over the studied ten-year period
are not unidirectional. The most significant growth in exports in 2010 compared to 2001
is observed in product groups “Women’s or girls’ suits, ensembles, jackets, blazers,
dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other
than swimwear), knitted or crocheted” and “Women’s or girls’ overcoats, car-coats, capes
cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles
16
other than those of heading 6204”, while the group “Other footwear” records the most
significant decrease in export volumes (respectively, the greatest loss of positions in the
ranking of world exporters).
Both at the beginning and at the end of the examined ten-year period the smallest share in
world exports is registered by product group “Articles of apparel and clothing
accessories, of leather or of composition leather” (also accounting for the worst ranking
of Bulgaria among world exporters). It should be concluded therefore that products from
the analyzed group do not answer the demand and preferences of consumers from
different foreign trade partner-countries of Bulgaria.
SMEs in sector “Manufacture of wearing apparel, including leather apparel, tanning of
leather”
The above presented data on the analyzed product groups relate to all companies in the
sector and not only to SMEs. The lack of sufficient statistical information prevents
determining the share of the export of SMEs in the export of analysed product groups.
Certain orientation is provided by the results obtained from the company survey carried
out in the period 31 October – 28 November 2011. Companies in the sample declare that
their main exports in 2010 include swimwear, underwear, overcoats, women’s and men’s
ready-to-wear clothing, footwear.
Nearly 93% of the interviewed managers of SMEs consider that the companies have
sufficient production capacity for the manufacture of export goods. Even part of the
companies, still not exporting, but willing to, declare such capacity.
In 96% of surveyed companies the management teams have the will to export the
manufactured products.
Due to the profile of surveyed companies, they export finished products with more
specific qualities (according the offered classifications – raw materials, semi-
manufactured goods and finished products) with high level of processing and respectively
high added value. It can be assumed that this is the niche, where SMEs might have
greater success in exports.
The above conclusion is further confirmed by the fact that managers of interviewed
SMEs consider high technology level and qualification of personnel of small and medium
enterprises factors of crucial (decisive) importance for the export success, which are the
main prerequisites for the creation of high value added products.
COMPETITIVENESS OF THE EXPORT OF GOODS ON FOREIGN MARKETS
The main markets of the analysed product groups in sector “Manufacture of wearing apparel,
including leather apparel, tanning of leather” are presented hereinafter and they are
determined on the basis of data on the Bulgarian export of each product group. All quantity
data are contained in Annex 4 “Competitiveness of exports of goods on foreign markets” to
the present strategy.
17
Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,
trousers, bib and brace overalls, breeches and shorts (other than swimwear)
o Main markets are Germany, France and Italy.
o The main product in this group with the largest export to the leading market
Germany is “Women's or girls' trousers, breeches, of cotton (not of cut
corduroy, of denim or knitted or crocheted and excl. industrial and
occupational clothing, bib and brace overalls, briefs and tracksuit bottoms)”,
i.e. product with higher added value.
o Main competitors on the leading market are China and Turkey, being among
the leading manufacturers worldwide, with established traditions in the
manufacture of this product.
o The significant trade balance deficit of Germany shows dependence on
imports, a factor enhancing additionally the importance of the German market
for the Bulgarian manufacturers.
Men’s and boys’ suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,
trousers, bib and brace overalls, breeches and shorts (other than swimwear)
o Main markets are Germany, Italy and Greece.
o The main product in this group with the largest export to the leading market
Germany is „Men's or boys' suits of textile materials, knitted or crocheted, of
wool or fine animal hair (excl. tracksuits, ski suits and swimwear)”.
o Main competitors on the leading market are again China and Turkey.
o The growing trade balance deficit of Germany (by end of examined period)
contributes to increasing the attractiveness of this export destination for the
Bulgarian manufacturers.
Overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters,
wind-jackets and similar articles other than those of heading 6204
o Main markets are Italy and Germany.
o The main product in this group with the largest export to the leading market
Italy is „Women's or girls' anoraks, jackets and similar articles, of synthetic
fibres (not knitted or crocheted and excl. suits, ensembles, jacket, blazers,
trousers and ski ensembles and swimwear)” – a product with high level of
manufacturing in Bulgaria.
o Main competitors on the leading market are China (one of the biggest and
established manufacturers worldwide) and Romania.
o The increasing trade balance deficit along with the growing share of Bulgarian
imports on the Italian market determine it as important and perspective
destination for the Bulgarian manufacturers.
Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted
o The main market of Bulgaria is Greece.
o The main product in this group with the largest export to the leading market
Greece is „Women's or girls’ blouses, shirts and shirt-blouses, knitted or
crocheted (excl. singlets and jackets)”.
o Main competitors on the leading market are Macedonia and Italy.
18
o Although the Greek market is not characterised by high level of dependence on
imports of the examined product group, Bulgaria is the main importer there,
suggesting that the efforts of the Bulgarian manufacturers should be aimed at
strengthening the strong market positions of Bulgaria.
Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted
o Main markets are again Germany and Italy, followed by Spain.
o The main product in this group with the largest export to the leading market of
Italy is “Men’s or boy’s jerseys, pullovers, cardigans, waistcoats and similar
articles, of wool, knitted or crocheted (excl. jerseys and pullovers, containing
>=50% with article weight >=600 g, and quilted jackets”, a product with high
level of processing in Bulgaria.
o Main competitors on the leading market are China (one of the biggest and
established manufacturers worldwide) and Tunisia.
o The increasing total imports of the examined product group in Italy, along with
declining exports over the analysed period, make the Italian market perspective
for the Bulgarian manufacturers.
T-shirts and singlets and other vests, knitted or crocheted
o Main markets are Germany, Greece and Italy.
o Our main competitors on the leading market are Turkey, Bangladesh and
China, which are among the leading manufacturers worldwide, with
established traditions in the production of this type of products.
o Bulgaria ranks 10th
among the main suppliers of T-shirts and singlets, knitted
and crocheted on the German market and in 2010 the Bulgarian import
accounts for 1,52% of total imports of Germany. The increasing trade balance
of Germany shows strong dependence on imports of the examined product
group. From this perspective, the German market is perspective for the
Bulgarian manufacturers and more efforts should be invested in promoting
national production with view to increasing our market share.
Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,
trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted
or crocheted
o Main markets are again Germany, Greece and Italy.
o The main product in this group with the largest export to the leading market of
Greece is “Women's or girls' skirts of synthetic fibres, knitted or crocheted
(excl. divided skirts) – a product with high level of processing in Bulgaria.
o Our main competitors on the leading market are Italy and Spain.
o The increasing trade balance deficit of Greece, along with Bulgaria’s ranking
among the leading suppliers of the analysed product group on the Greek
market, determines its primary importance and good perspectives for the
Bulgarian manufacturers.
Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle
cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters
and similar containers; travelling bags, insulated food bags
19
o The main market of Bulgaria is Italy. It is only on this market that we maintain
our market share in 2009 and 2010, while shares on the French, German,
Belgium and Romanian market decreased in 2010 compared to 2009.
o The main product in this product group with highest export of the leading
market Italy is “Handbags, whether or not with shoulder straps, incl. those
without handle, with outer surface of plastic sheeting”.
o Main competitors on the leading market are China and France.
o Both imports and exports of Italy of “Trunks, suit-cases, vanity-cases,
executive-cases, brief-cases, school satchels, spectacle cases, binocular cases,
camera cases, musical instrument cases, gun cases, holsters and similar
containers; travelling bags, insulated food bags” register growth in 2010
compared to 2006. The growth of imports (24.73%) exceeds export (19,58%)
which makes the Italian market promising for the Bulgarian producers.
Articles of apparel and clothing accessories, of leather or of composition leather
o The main market of Bulgaria is again Italy.
o The main product in this product groups with the largest export on the leading
market Italy is “Belts and bandoliers with or without buckles, of leather or of
composition leather”.
o Main competitors on the leading market are China and India.
Footwear with outer soles of rubber, plastics, leather or composition leather and
uppers of leather
o The main market of Bulgaria is Italy, followed by Hungary.
o The main product of this product group with the largest export to the leading
market Italy is “Women’s and girl’s footwear with outer soles of rubber,
plastics, leather or composition leather and uppers of leather, with insole of
length 24 cm or more (excl. those covering the ankle, with a
protective metal toecap; or a base platform of wood)”.
o Our main competitors on the leading market are China and Romania.
o The increasing total volume of imports of the analysed product group in Italy
over the studied period, along with the small share of the Bulgarian import in
the total Italian import in 2010, determines the high level of perspective of this
market for the Bulgarian manufacturers.
Parts of footwear (including uppers, whether or not attached to soles other than outer
soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and
similar articles and parts thereof
o Main markets of Bulgaria are Italy, Romania and Greece.
o The main product of this product group with the largest export to the leading
market Italy is “Footwear uppers and parts thereof (other than stiffeners)” –
product with low level of manufacturing in Bulgaria.
o Our main competitors on the leading market are Tunisia and Romania.
o The increasing total volume of imports of the analysed product group in Italy
over the studied period, along with the small share of the Bulgarian import in
20
the total Italian import in 2010, determines the high level of perspective of this
market for the Bulgarian manufacturers.
Other footwear
o The main market of Bulgaria is again Italy, followed by Hungary.
o The main product of this product group with the largest export to the leading
market Italy is “Footwear with uppers of leather or composition leather (excl.
those with outer soles of rubber, plastics, leather or composition leather, and
orthopaedic shoes)” – product with high level of processing in Bulgaria.
o Our main competitors on the leading market are China and Romania.
o The increasing total volume of imports of the analysed product group in Italy,
along with the increasing share of the Bulgarian import over the examined
period, determining the high level of perspective of this market for the
Bulgarian manufacturers.
Footwear with outer soles of rubber, plastics, leather or composition leather and
uppers of textile materials
o The main market of Bulgaria is again Italy.
o The main product of this product group with the largest export to the leading
market Italy is “Slippers and other house shoe with outer soles of rubber and
uppers of textile materials (excl. sports footwear, tennis shoes, basketball
shoes, training shoes and the like)”.
o Main competitors on the leading market are China and Vietnam, leading
manufacturers worldwide, with established traditions in production.
o The increased share of the Bulgarian import in Italy in 2010 compared to 2009,
along with the registered growth of total imports of the examined product
group on the Italian market, show that this market is perspective for the
Bulgarian export.
Traditional markets for sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather”:
Traditional markets for the goods produced by sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather” are the EU countries, mainly Greece, Germany,
Italy, Spain, and France.
Germany, Italy, France and Greece are traditional markets for the products of the sector.
Germany, Italy, Spain and France are in top 10 of the biggest consumers worldwide, an
argument in favour of their selection for priority target markets of the main product groups in
sector “Manufacture of wearing apparel, including leather apparel; tanning of leather”.
Markets with development potential for sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”:
The markets of the EU countries rank first among the potential markets where the Bulgarian
products are traded at present and will be traded in future as well. Other markets with big
potential are the East Asian markets and the markets of USA and Canada.
21
CONCLUSIONS:
Data on our main markets in the EU show that the export of analyzed product groups is
focused mainly on the markets of Italy and Germany – both markets are characterized by
huge number of consumers, substantiating their perspective from the point of view of the
Bulgarian manufacturers.
Regarding the predominating part of the analyzed product groups, the main competitors
of Bulgaria are China and Turkey, i.e. among our main competitors are big world
manufacturers with established traditions, with possibility to use a number of advantages
from viewpoints of export, for example cheap workforce (respectively, lower cost end
products) and economies of scale. Another important competitor is Romania, due to
similar production characteristics and development possibilities with this country.
Bulgaria usually ranks among the top importers on the Greek market, which is due
mainly to the relatively smaller scale of the market, its geographic proximity to Bulgaria,
and the established relationships between the two countries.
As a whole, the volume of Bulgaria’s export to non-EU countries is quite smaller
compared to that of our EU competitors, ranking usually Bulgaria to rear position among
the main suppliers.
The main reason for working CMT and not developing own collections (trademarks) is
the lack of state policy and support for the participation in fairs and shows in order to
demonstrate own collections and impose Bulgarian trademarks. The development of own
trademark is costly process, time-, funds and human resource consuming. A number of
years are necessary in order to establish a trademark on the market and to conquer stable
market positions, resulting in profits for the manufacturer. Imposing a particular
trademark on the international market means not only to develop a collection, but also
serious advertising, including: the organisation of fashion-shows on world platforms,
attraction of celebrities for the product advertising, aggressive advertising via all channels
(leading world fashion magazines, TVs, etc.). The Bulgarian manufacturers do not
dispose of free financial resources to be entirely designed for the development and
imposing of own collections. Moreover, they have small production capacity and are not
able to meet big orders. Therefore, at present it is more profitable for the Bulgarian
manufacturers to work as sub-contractors for leading world manufacturers. The
predominating micro, small and medium-size enterprises in the sector would difficultly
compete with already imposed world trademarks on foreign markets.
Estimates of development by 2015 are prepared for each of the analyzed product groups.
Simulations of the trend lay on establishing the analytical form of the function through
which regularities in the development of exports of each product group in 2001 - 2010 are
expressed, and estimating the values of the parameters of the function used. In modeling
exports, linear or logarithmic regression is used depending on the regularities manifested
in the output period. Regressions are calculated by using the values for each year, not just
in the first and last year of the period. The obtained results are presented on the following
figure.
22
Prognosis for the development of exports by product groups until 2015
0
50000
100000
150000
200000
250000
300000
350000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Women's or girls' suits
Men’s or boys’ suits
Women’s or girls’ overcoats
Women’s or girls’ blouses
Jerseys, pullovers, cardigans
T-shirts, singlets and other vests
Women's or girls' suits, knitted or crocheted
Trunks, suit-cases
Wear apparel and clothing accessories of leather
Footwear with uppers of leather
Parts of footwear
Other footwear
Footwear with uppers of textile materials.
Source: International Trade Centre and own calculations
23
SMEs in sector “Manufacture of wearing apparel, including leather apparel; tanning of
leather”
The available information for making informed management decisions for supporting
SMEs on perspective markets is extremely low. All analysis made for different product
groups and markets will remain just an intellectual exercise if no way is found in the
future, including through clearly formulated requirements to the NSI, for providing the
necessary information.
However, data from the survey of SMEs do not contradict to the analysed priority export
destinations – the main markets of the companies included in the survey are in EU
countries.
Main competitors of the interviewed SMEs are companies from China, Romania, Turkey,
Italy and France.
The main advantages of the EU competitors are related to two principle aspects:
first, the production process itself - low prices of competitors’ products (according to
88% of the respondents) and higher productivity of the competitors;
second, the support by the state for export orientated policy - in the range from more
general answers to concrete examples.
All listed advantages of the competitors should be considered as deficits for the Bulgarian
exporters.
The competitiveness of the Bulgarian wearing apparel is determined also by the fact that
most of the companies in the sector, according to the interviewed representatives of
companies with export potential, have clear and well grounded export strategy.
Unfavourable factors, leading to lower competitiveness and more limited possibilities for
export realization is the low developed research and development activity, the lack of local
raw materials, international certificates and own trademark.
The findings and conclusions give grounds to expect that in the next five years the
Bulgarian export of wearing apparel, including leather apparel; tanning of leather,
manufactured by SMEs will grow, although slowly, and at the beginning of the period it
will reach the 2009 level, while at the end of the five-year period exports of Bulgarian
SMEs in the sector are expected to exceed 1,6 billion BGN.
24
34.65%
12.43%
50.37%
2.55%
Bulgaria
Others
Turkey
China
EXPORT PRIORITY PRODUCT GROUPS IN THE SECTOR AND MAIN
MARKETS
The analysis of product groups in sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather” allows determining the leading product groups with export
priority and the concrete markets. The selection is made on the basis of the following criteria:
share in the export of the sector, increasing export in the period 2001 – 2010, share on the
global market and concentration of SMEs in the sub-sector.
The graphs interpret the data for the Bulgarian export in 2010, presented in detail in the
Appendix to the Export Strategy. Data used are taken from the International Trade Centre
(www.intracen.org).
For each of the selected product groups, the main market in 2010 in the EU and out of the EU,
the main suppliers and their market share are shown below.
Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,
trousers, bib and brace overalls, breeches and shorts (other than swimwear)
Main EU market
GERMANY
Main non-EU market
CANADA
25
26.05%
10.90%
10.26%
49.82%
2.97%
Bulgaria
Other
Bangladesh
Turkey
China
29.86%
12.38%
10.03%
45.04%
2.69%
Bulgaria
Others
Sri Lanka
China
Bangladesh
55.80%
11.33%
4.41%3.98%
20.85% Others
France
Bulgaria
Romania
China
Men’s and boys’ suits, ensembles, jackets, blazers, dresses, skirts,
divided skirts, trousers, bib and brace overalls, breeches and shorts
(other than swimwear)
Main EU market
GERMANY
Main non-EU market
TURKEY
Overcoats, car-coats, capes cloaks, anoraks (including ski-jackets),
wind-cheaters, wind-jackets and similar articles other than those of
heading 6204
–
Main EU market
ITALY
Main non-EU market
SERBIA
26
24.55%
18.19%
13.98% 9.03%
34.22%
0.03%
Bulgaria
Others
Cambodia
Indonesia
Vietnam
China
Women’s or girls’ blouses, shirts and shirt-blouses, knitted or
crocheted
Main EU market
GREECE
Main non-EU market
USA
Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided
skirts, trousers, bib and brace overalls, breeches and shorts (other than
swimwear), knitted or crocheted
– плетени, за жени или момичета
Main EU market
GREECE
Main non-EU market
USA
21.25%
13.91%
11.38%
8.67%6.97%
37.82% Others
Germany
China
Spain
Bulgaria
Italy
27
It is obvious from the graphs above, that the Bulgarian export of sector “Manufacture of
wearing apparel, including leather apparel, tanning of leather” is almost entirely designed for
the European Union, as our main markets are Germany, Italy and Greece. This puts us in a
strong dependence on the dynamics of markets in a small number of importer-countries and
any more serious shock and shrinkage in consumption in these markets affects extremely
negatively the national manufacturers. We have slightly bigger market shares in these
countries, which for various product groups vary from 2,5% to 39%, as our best positions are
in the groups of knitted and crocheted clothing.
The Bulgarian presence on non-EU markets is almost negligible.
Possible measures for promoting the export to existing and entering new markets would
include:
Preparing reports on the condition of respective markets and studies of the
consumption of certain products;
Support for the participation of foreign visitors (manufacturers and consumers) to
Bulgarian exhibitions and fairs;
Support for the participation of SMEs in the sector in international and national fairs
and exhibitions where the leading manufacturers and importers take part, such as:
Footwear fair, Riva del Garda, Italy, The fairs in Düsseldorf and Munich, Germany,
PREMIERE VISION, Paris, MICAM – footwear and leather articles, Milan; the fairs
in Guangzhou and Shanghai (leather and footwear), China;
Development and implementation of annual programme of fairs and exhibitions,
which are important for manufacturers in the sector;
Parts of footwear (including uppers, whether or not attached to soles other
than outer soles); removable in-soles, heel cushions and similar articles,
gaiters, leggings and similar articles and parts thereof
–
Main EU market
ITALY
Main non-EU market
Belarus
28
Development of a programme for presenting the manufacturers in sector “Manufacture
of wearing apparel, including leather apparel; tanning of leather” in specialized
exhibitions, organized in countries with perspective markets, such as the International
leather goods fair „Le Show”, Moscow; the International fashion fair CPM, Moscow;
International Fashion fair Kyiv Fashion, Kiev, Ukraine; Specialized leather goods fair,
Istanbul, Turkey; Istanbul fashion and prêt-a-porter fair, Istanbul, Turkey;
Creation of networks or clusters of Bulgarian manufacturers for easier entry and
establishment on new markets;
Creation and dissemination of information and advertising materials, analyses and
catalogues for promotion of sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather” abroad.
Organizing „Days of Bulgaria” in the embassies by countries and advertising of the
Bulgarian manufacturers in the sector.
BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM
ENTERPRISES AND MEASURES FOR THEIR OVERCOMING
The barriers to internationalization of SMEs in sector “Manufacture of wearing apparel,
including leather apparel, tanning of leather” and the measures preferred by companies for
their overcoming and export promotion are identified and analysed on the basis of the
company survey.
Estimation of the severity of barriers to the export of enterprises and the sector in
general in 2007 – 2011
For the company
Barriers (obstacles) Very
serious
obstacles
Serious
obstacle
Not a
serious
obstacle
Not an
obstacle
Number of
companies
Number of
companies
Number of
companies
Number of
companies
1. High production costs of goods and
services
2 10 11 3
2. High costs for exporting 0 12 8 6
3. Insufficient quality of goods and services 1 2 9 15
4. Lack of qualified personnel to ensure
quality in a longer period
3 5 9 9
5. Lack of experience in foreign trade 3 4 5 14
6. Language barriers 3 3 10 10
7. Unfavourable business environment in
Bulgaria
7 11 4 5
29
For the company
Barriers (obstacles) Very
serious
obstacles
Serious
obstacle
Not a
serious
obstacle
Not an
obstacle
Number of
companies
Number of
companies
Number of
companies
Number of
companies
8. High risk on different foreign markets 5 8 10 3
9. Customs and non-tariff restrictions from
other countries
2 5 8 11
10. Lack of support by the Bulgarian state
for exports
14 5 3 5
Source: Survey carried out with representatives of SMEs from the sector, 2011
It is obvious from the table that the most serious barriers to the export of SMEs in the
sector are the lack of support by the Bulgarian state for the export and the unfavourable
business environment in Bulgaria. Results do not differ significantly regarding the answers
of surveyed companies for the barriers to the sector in general.
Therefore, most of the proposed measures for overcoming the barriers to exports are
expected to be taken by the State. In general, the expectations of the companies are that the
state, in the face of its institutions, shall develop a purposeful and adequate policy for
promotion and support of the export of wearing apparel.
Most of the internal (to the enterprise) barriers to exports, related to technology level and
qualification of available human resources, are estimated to represent not a serious barrier
or not a barrier at all for the export of SMEs.
The analysis of proposed measures shows that companies address mainly external factors
which have to result in improvement of the situation. Proposals for technology
modernisation can be interpreted as internal for the companies.
The comparison of responses to questions related to the forms of support preferred by
companies in the current programming period 2007-2013 and in the next programming
period 2014-2020, however, suggests that technological level is also assumed as a factor
for which the state should take care of.
Prioritization of measures for promotion of small and medium enterprises 2007 – 2013 2014 – 2020
Priority Extremely high priority (very
large amounts of
funds must be
allocated)
High priority (large amounts
of funds must
be allocated)
Extremely high priority (very
large amounts of
funds must be
allocated)
High priority (large amounts of
funds must be
allocated)
Number of
companies
Number of
companies
Number of
companies
Number of
companies
1. Promoting exports of companies 8 15 12 11
2. Support for the technological
modernization of production
13 11 15 10
30
2007 – 2013 2014 – 2020
Priority Extremely high priority (very
large amounts of
funds must be
allocated)
High priority (large amounts
of funds must
be allocated)
Extremely high priority (very
large amounts of
funds must be
allocated)
High priority (large amounts of
funds must be
allocated)
Number of
companies
Number of
companies
Number of
companies
Number of
companies
3. Support for meeting standards of
the EU
7 11 10 10
4. Financing of innovative projects 6 10 9 8
5. Training and qualification of
employees in SMEs
6 12 7 9
6. Attracting direct foreign investment 11 5 11 9
7. Business cooperation and
participation in clusters
2 8 3 8
8. Consultancy and information
services
2 8 3 10
9. Improving access to funding 9 9 9 10
Source: Survey, carried out with representatives of SMEs from the sector, 2011.
Estimations of the importance of almost all priority measures for supporting SMEs in the
sector in the current programme period 2007-2013, identified by the survey, increase their
importance in the next programming period 2014-2020. This means that greater funds
should be allocated to implement these measures for the development of enterprises in the
sector.
Companies in the sector are entirely aware of the necessity in production modernisation in
order to be competitive, incl. on international markets, as well as of the lack of own
financial resources. This is further confirmed by the fact that measures with highest
priority in the next programming period 2014-2020 include the support for technological
modernization of production and, attracting direct foreign investments and improvement of
the access to funding.
Measures related to support for meeting the EU standards and funding of projects for the
development of new products and technologies are also considered high priority. This is
related both to the main markets where companies export their production (the EU) and the
necessity to answer their requirements, as well as to realizing the importance of
innovations for the presence of companies on international markets in future.
Companies in the survey gave the following answers regarding the information sources
these use and the additional information they need:
- Answers show that own investigations and Internet rank first as main and permanent
sources of information. Next come colleagues from the sector in Bulgaria and the
branch association. The information from state institutions is ranked last, as two-thirds
of the respondents answer that they do not use this information at all;
- The additional information needed by the surveyed companies is mainly in the field of
logistics and mechanisms for international trade payments.
31
Regarding estimations of the work of BSMEPA and answers to questions related to the
level of efficiency of various measures on exports, it is obvious that companies are
appreciating most the services of the Agency related to the organisation of participations in
international fairs and exhibitions, and the provision of information on international and
regional markets. In addition, different recommendations were made during the focus
group for improving the work of relevant the state institutions. More active involvement of
the branch associations in the process, better planning and timely organisation of the events
of interest to companies in the sector, were emphasized among the key factors of success.
On this basis, the following measures for overcoming the barriers to exports of SMEs can be
proposed, which are presented in detail in the Action plan:
Study of the non-exporting SMEs in the sector and analysis of their needs.
Development of a profile of export-orientated SMEs in sector “Manufacture of
wearing apparel, including leather apparel; tanning of leather”.
Development of annual programme for work with the non-exporting SMEs.
Supporting the participation in business delegations and business forums with
international participation with view to establishing contacts and attracting clients.
Providing access of SMEs to updated and useful information (market analyses,
distribution channels, custom and tariff regimes, etc.) in order to promote and support
the export.
Organization of specialized trainings, addressed at competitive enterprises, willing to
expand their export activity.
Support for introduction of the EU standards for quality management, working
conditions and environment management.
Support for the realization of products with own trademark.
Update of the strategy for development of sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”.
Development of working procedures of the Bulgarian trade representatives to assist
export-orientated SMEs in the sector.
Support for participation of SMEs in the sector in international and national
exhibitions and fairs, such as: the Shoe fair, Riva del Garda, Italy; the exhibitions in
Düsseldorf and Munich, Germany; PREMIERE VISION, Paris; MICAM – shoes and
leather articles, Milan; the exhibitions in Guangzhou and Shanghai (leather and
shoes), China.
Update of already established bilateral trade agreements.
Development of special programme for presenting manufacturers in sector
“Manufacture of wearing apparel, including leather apparel; tanning of leather” in
specialized exhibitions, organized in countries with perspective markets, such as: the
International leather goods fair „Le Show”, Moscow; the International fashion fair
CPM, Moscow; International Fashion fair Kyiv Fashion, Kiev, Ukraine; Specialized
leather goods fair, Istanbul, Turkey; Istanbul fashion and prêt-a-porter fair, Istanbul,
Turkey.
Development of models for entering new markets by SMEs in the sector.
32
Creation of networks or clusters for easier establishment of new markets.
Creation and dissemination of information and advertising materials, analyses and
catalogues for promotion and advertising of sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather” abroad.
Organizing „Days of Bulgaria” in the embassies by countries and advertising of the
Bulgarian manufacturers in the sector.
33
3. SWOT AND LOED ANALYSIS OF SECTOR "MANUFACTURE OF
WEARING APPAREL, INCLUDING LEATHER APPAREL, TANNING
OF LEATHER”
SWOT ANALYSIS
The SWOT analysis is based on the idea of separating the object of strategic analysis from the
environment in which it operates. The object of strategic analysis is viewed in its "strengths”
and “weaknesses”. The environment in which the object of the strategic analysis functions is
differentiated into "opportunities” and “threats”.
Strengths. The strengths are resources, skills or some other advantage, which SMEs in the
sector possess from the viewpoint of exports. The strength is a distinctive competence that
gives a comparative advantage.
Weaknesses. The weaknesses are constraints or lack of resources, skills and abilities that
seriously impede the development of exports of SMEs in the sector.
Opportunities. The opportunities are the most favourable elements of the external
environment. These are favourable external factors, of which SMEs in the sector could benefit
in their exports.
Threats. The threats are the most unfavourable segments of the external environment. They
put the biggest barriers to the present or future (desired) state of affairs.
Strengths Opportunities
1. Traditions in manufacturing and export. 1. The sector is defined as export-orientated.
2. Qualified workforce. 2. Financial and expert support provided by
BSMEPA.
3. Competitive labour cost. 3. Project funding under EU structural funds.
4. Favourable geographical location,
expressed in proximity to raw materials and
main markets (EU countries).
4. Public incentives for the formation of
clusters, incl. export clusters.
5. Good technological equipment. 5. Improvement of the image of Bulgarian
wearing apparel and footwear on target and
potential markets and increase in demand.
6. Good price/quality ratio of manufactured
articles.
6. Attraction of new clients and orders as a
result of the crisis in North Africa and the
Middle East.
7. Flexibility of SMEs in the sector and
adaptability of the production. Specialization
mainly in small series production.
7. Revision of already concluded trade
agreements with countries which are
perspective markets (for example, Russia).
8. Strong export orientation of sector
“Manufacture of wearing apparel, including
leather apparel; tanning of leather”. Good
export image, stable positions.
8. Availability of EU strategy for
preservation and development of the sector in
the member-countries, particularly these in
Eastern Europe.
34
9. Strong branch associations (Bulgarian
association of apparel and textile producers
and exporters, Branch union of the LFFHI)
with good representation in international
associations (for example, EURATEX).
10. Established stable trade relationships
with key EU market for the sector.
Weaknesses Threats Threats
1. Strong dependence on a small number of
clients .
1. Shrinking of global consumption and
deepening of the global economic crisis.
2. Few professionals with foreign trade
experience.
2. Increased competitive pressure.
3. Insufficient experience in the organization
and participation in national and international
exhibitions.
3. Strong dependence of imported raw
materials. Increase in prices of raw materials
and electricity.
4. Insufficient knowledge for products on
foreign markets.
4. Strengthening the import regulations on
non-EU target markets.
5. Small number of companies with
registered own trademark.
5. Inefficient policy regarding export
insurance.
6. Low labour productivity. 6. Lack of reliable information regarding
export for decision-making in SMEs.
7. Low level of certification of the
production of SMEs, decreasing their export
opportunities.
7. Reduction of the number of Bulgarian
trade representatives on the existing markets.
8. Difficulties in providing working capital
(VAT, inter-company indebtedness, difficult
crediting).
8. Deepening of the human resources crisis in
sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”.
35
LOED ANALYSIS
LOED analysis is an instrument that helps identifying how to strengthen the positive effect of
the examined process and to neutralize the negative effects. The word is an acronym from the
letters of words in English - lever, overcome, exploit, and defend. LOED analysis shows how
strengths can be levered, weaknesses – overcome, and how to exploit the opportunities and
defend against the threats identified by the SWOT analysis.
Build on strengths Use of opportunities
Study of non-exporting SMEs in the sector
and analysis of their needs
Actualization of already established bilateral
trade agreements (for example with Russia)
Development of profile of export-oriented
SMEs from sector “Manufacture of wearing
apparel, including leather apparel; tanning of
leather”
Creation of networks or clusters for easier
entrance and establishment on new markets.
Actualization of the strategy for development
of sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”
Support for participation of SMEs in the sector
in international and national exhibitions and
fairs, such as: the Shoe fair, Riva del Garda,
Italy; the exhibitions in Düsseldorf and Munich,
Germany; PREMIERE VISION, Paris;
MICAM – shoes and leather articles, Milan; the
exhibitions in Guangzhou and Shanghai (leather
and shoes), China
Organizing specialized trainings, addressed
at competitive enterprises, willing to expand
their export activity
Development of special programme for
presenting the manufacturers from sector
“Manufacture of wearing apparel, including
leather apparel; tanning of leather” in
specialized exhibitions, organized in countries
with perspective markets, such as: the
International leather goods fair „Le Show”,
Moscow; the International fashion fair CPM,
Moscow; International Fashion fair Kyiv
Fashion, Kiev, Ukraine; Specialized leather
goods fair, Istanbul, Turkey; Istanbul fashion
and prêt-a-porter fair, Istanbul, Turkey
Support for introduction of the EU standards in
quality management, working conditions and
environmental management
Overcome weaknesses Defence against threats
Development of annual programme for
working with non-exporting SMEs. Training
in marketing and participation in fairs
Development of models for entering new
markets by SMEs in the sector
Providing SMEs with access to updated and
useful information (market analysis,
distribution channels, custom and tariff
Organizing „Days of Bulgaria” in our
embassies by countries and promotion of the
36
policy, etc.) in order to promote and support
exports
Bulgarian manufacturers from the sector
Supporting the participation in business
delegations and business forums with
international participation with view to
establishing contacts and attracting clients.
Development of working procedures of the
Bulgarian trade representatives, in order to
assist the export-orientated SMEs in the sector.
37
4. VISION AND OBJECTIVES
VISION
The studies and analyses of the current state of sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather” show that the sector has the potential to maintain
its importance for the national economy, and in particular for the Bulgarian export, increasing
at the same time its effectiveness.
The vision for the future of the sector, which this strategy aims at, is the following:
Maintaining the relative share of the export from the sector in total exports of the country
Maintaining the relative share of the export would mean a significant increase of its value,
since certain revival and development is assumed in other export orientated sectors of the
Bulgarian economy as well. On the other side, the importance of the sector will be retained in
the creation of employment and income growth.
OBJECTIVES
To the ends of realization of the vision, efforts should be directed at the following strategic
and specific objectives:
1. Strategic objective 1 – Increasing the export potential of SMEs in sector
“Manufacture of wearing apparel, including leather apparel; tanning of leather”
One of the most serious challenges faced by national manufacturers in sector “Manufacture of
wearing apparel, including leather apparel; tanning of leather” is the considerable growth of
international competition as a result of the liberalization of global trade in the last years. The
situation in the new world economy order proves that being competitive on the international
market does not depend entirely on advantages stemming from cheap labor force.
Competitiveness depends on a wide range of factors, resulting in good quality of production
at reasonable prices and high flexibility of companies. On the other hand, the situation on the
international markets, although dynamic, shows a return of many West European assignors,
working until recently in the Far East, to the production on the Balkans and in Bulgaria,
particularly. Obviously, this trend will persist due to the need in prompt, precise and reliable
supplies, as well as of small series production. The EU policy for keeping this production in
Europe also favours the development of the sector in Bulgaria, promising good growth
chances in the following 7-10 years.
38
In order to realize this strategic object, the following specific objectives are formulated:
Specific objective 1 – Increasing the number of export-orientated SMEs in the
sector;
Specific objective 2 – Raising the competitiveness of exporting enterprises.
2. Strategic objective 2 – Increasing the market share of the products of SMEs in sector
“Manufacture of wearing apparel, including leather apparel; tanning of leather” on the
global market
Expanding the presence of the Bulgarian enterprises in sector “Manufacture of wearing
apparel, including leather apparel; tanning of leather” on the global market needs persistent
and purposeful actions. The approach to keeping existent markets differs from that for
entering new ones. While sub-contractor companies work traditionally for leading companies
mainly from the European Union, attracting investments and conquering new markets is
related to a number of difficulties, even political. To overcome these difficulties, the joint
actions are necessary of the Bulgarian manufacturers, branch associations and the state, in
observing the rules of fair competition. In this relation, actions are proposed for each of the
objectives that shall be undertaken at micro (SME), meso (branch associations) and macro
(state) level.
In order to realize this strategic object, the following specific objectives are formulated:
Specific objective 1 – Increasing the market share of the Bulgarian goods and services
on the existing markets
Specific objective 2 – Entering new markets
39
5. STRATEGY FOR PROMOTING THE EXPORT OF SMEs IN THE
SECTOR
There are different alternatives of development for attaining the objectives and in this case
two main scenarios were estimated, namely:
1. Maintain the present structure of state institutions supporting business, including the
existing relationships between them and with export-oriented SMEs in sector
“Manufacture of wearing apparel, including leather apparel; tanning of leather”.
2. Change the structure and transfer the functions of SME support to units and structures
dealing with financing of projects under EU funds and by the state budget, similar to
the model of Operational Programs or the Program for Rural Development.
These scenarios were assessed by the following criteria:
1. Possibility for implementation of the selected scenario within a 5-year period;
2. Practices of supporting export-oriented SMEs in other EU member-states;
3. Estimation of the efficiency of business supporting activities performed by established
specialized structures or by existing programs supporting SMEs on a project basis.
The carried out analysis shows that:
The transition from the presently existing system to a new one on a project
basis will take more than 5 years. Moreover, according to the existing rules for
the period till 2013, this is actually impossible, since all priorities and activities
of operational programs are clearly defined. Such an approach, if possible, for
the next programming period 2014-2020, should be put to negotiations, but in
practice it will again take several years for its actual launch, like the start of OP
in all EU countries for 2007-2013.
The Bulgarian model through BSMEPA is preferred by the major part of the
EU member-states and, although with varying success in different countries,
there is no tendency observed for changes in the near future.
Reported difficulties in the accomplishment of business projects under
operational programs, such as OP “Competitiveness”, indicate that the
efficiency of supporting export-oriented SMEs, regardless of being subject to
critics due to lack of funds and proper focusing, is at relatively much higher
level than the results achieved by business under project designed measures.
Considering the above conclusions, the first alternative was chosen, namely – the drafting of
Export strategy for SMEs in sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather” to be based on the understanding that all measures undertaken will
fall in the frame of the presently existing structures within their actual capacities.
In strategic perspective, the chosen alternative will require both general measures for the
whole system of supporting SMEs, as for example, raising the institutional capacity,
introduction of clear and measurable indicators and criteria for evaluation of their work
efficiency and support to the business, etc., as well as specific changes, related particularly to
sector “Manufacture of wearing apparel, including leather apparel; tanning of leather”, as for
example, sector oriented work approach. As far as this was not an object of analysis and study
of the present strategy document, it would be probably a part of the elaboration of institutional
strategy of the related public administrations.
40
The present Export strategy for SMEs in sector “Manufacture of wearing apparel, including
leather apparel; tanning of leather” provides for the following main steps, related to improving
the support of export orientated SMEs:
1. Creation of the basis for adequate and professional management of the processes of
supporting export orientated SMEs through determining their possible scope – number
and characteristics of export orientated SMEs, use of information from the developed
profile and information from the business in order to formulate precisely the needs of
the business in support, by both the especially created institutions and through other
forms, for example, the project principle, creation of a model for successful
communication with businesses to be supported, etc.
2. Elaboration of the necessary programmes, policies and measure for support SMEs to
export on foreign markets, through measures, designed on markets where existing
positions shall be kept or expanded, joint work with units, disposing of direct
possibilities to support export (for example, foreign trade representatives and MEET),
as well as measures with routine nature (for example), participation in fairs, missions,
visits, etc.;
3. Measures, directed at certain deficits in export orientated SMEs presenting barriers for
their development in export terms, for example: support for the technology
modernisation of SMEs in relation to improving their export positions, creation of
export companies to increase SMEs export; advertising campaigns for rising the
recognizing of Bulgarian products and improving the image of the Bulgarian business,
etc.
4. Measures, directed at increasing the capacity of SMEs, mainly through different
training programmes.
Considering the deadlines of the Export strategy for SMEs in sector “Manufacture of wearing
apparel, including leather apparel; tanning of leather” the envisaged steps are realistic and
could contribute to achieving real results in export supporting.
The political will to provide the funds necessary for implementing of the strategy is also an
important prerequisite for its successful implementation.
41
6. ACTION PLAN
Due to the mid-term 5-year horizon of the Strategy, measures in the Action Plan are
concretely formulated.
Envisaged financial resources are indicative, but they are consistent with the realistic
opportunities to increase the budget of BSMEPA. Estimated resources from Operational
Programs in the next programming period are rather contingent, as the allocation rules are not
yet finally adopted by the EU. At the same time, it is crucial that BSMEPA and MEET defend
fair requests for funds especially for this leading export sector of the country and for the
development of SMEs, which are the backbone of every economy.
In compliance with the selected model, for all envisaged measures specific actions are defined
to be implemented at micro (SME), meso (branch organizations) and macro (state) level.
On the basis of analysis of exports of different product groups, important and priority
markets for the sector are identified. However, as mentioned above, data is not available on
the participation of SMEs on those markets. Therefore, in order to suggest indicative
promotional measures on the identified markets, it is assumed that in crisis periods the efforts
should be directed both at preserving the existing market positions and entering new markets
as well but rather at conquering new markets. The fact that Bulgarian exports are already
made on the existing markets, allows assuming that this will be an advantage for SMEs which
orient to these same markets.
42
ACTION PLAN
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
1. STRATEGIC OBJECTIVE 1: Increasing the export potential of SMEs in sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather”
1.1. Specific objective 1: Increasing the number of export-oriented SMEs in the sector
1.1.1. Study of non-exporting SMEs in
the sector and analysis of their needs
12.2012 BSMEPA,
BAATPE and BU
of the LFFHI
5 000 BGN Budget of BSMEPA Prepared report
on SMEs in the
sector which
have not realized
exports until end-
2011 but have
such potential
Number of SMEs
to work with in
order to help
them enter
foreign markets
Micro level:
- providing of information
Meso level:
- encouraging and supporting companies to submit information;
- analysis of the needs of SMEs from the sector
Macro level:
- analysis of the needs of SMEs from the sector and overall coordination of the process, incl. preparing a report
1.1.2. Development of profile of
export-orientated SMEs from sector
“Manufacture of wearing apparel,
including leather apparel; tanning of
leather”
12.2012 BSMEPA 10 000
BGN
Budget of BSMEPA Developed
criteria to
determine
whether a SME
has export
potential
Published
criteria
Micro level:
43
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
- providing of information
Meso level:
- encouraging and supporting companies to submit information;
- assisting BSMEPA in the development of criteria for export-orientated SMEs
Macro level:
- development of criteria for export-orientated SMEs
- development, maintenance and update of the database for export orientated SMEs from the sector
1.1.3. Development of annual
programme for working with non-
exporting SMEs.
12.2012 BSMEPA,
BAATPE and BU
of the LFFHI
15 000
BGN
Budget of BSMEPA Elaborated
programme
Increased
number of
exporting SMEs
Micro level:
- participation in trainings in marketing and participation in fairs
Meso level:
- development, together with BSMEPA, of annual programme for working with SMEs
Macro level:
- development, together with the branch associations, of annual programme for working with SMEs
- organizing of trainings of experts from SMEs in the sector in marketing and participation in fairs
1.1.4. Supporting the participation in
business delegations and business
forums with international
participation with view to establishing
contacts and attracting clients
Permanent MEET, BSMEPA 100 000
BGN
per year
Budget of BSMEPA, OP
“Competitiveness”,
donors
Developed
annual
programme for
participation in
business forums
and delegations
Number of
organized
business
delegations and
forums; number
of participating
SMEs; number of
established
contacts as a
result of these
participations
44
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
Micro level:
-participation in business delegations and forums
Meso level:
- providing information to BSMEPA for the needs of developing annual programme for participation in business forums and delegations
- submission of opinions on the developed annual programme for participation in business forums and delegations
Macro level:
- development of annual programme for participation in business forums and delegations
- overall coordination of the implementation of the programme for participation in business forums and delegations
- maintenance of database for the programme, incl. carried out business delegations and forums; participating SMEs; contacts established as a result of these
participations
1.2. Specific objective 2: Raising the competitiveness of exporting enterprises
1.2.1. Providing SMEs with access to
updated and useful information
(market analysis, distribution
channels, custom and tariff regimes,
etc.) in order to promote and support
exports
Permanent BSMEPA, OTEA 50 000
BGN per
year
Budget of BSMEPA,
OP “Competitiveness”
Created internet
portal
Number of users
of the portal
Micro level:
- active searching of information to increase the export
Meso level:
- encouraging and supporting the companies to use the provided information
Macro level:
- development of internet portal and permanent update of the information on it
1.2.2. Organizing specialized
trainings, focused on competitive
enterprises, willing to expand their
export activity
Permanent BSMEPA, ABI 100 000
BGN per
year
Budget of BSMEPA, OP
“Competitiveness”
Developed
training
programme and
organized
Number of
trained
specialists;
number of SMEs,
which expanded
45
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
trainings their export
activity
Micro level:
- participation in the organized trainings
Meso level:
- submitting opinions on the materials, developed by BSMEPA and ABI
- encouraging the participation of SMEs in the organized trainings
Macro level:
- development of training programmes
- organizing trainings of experts from SMEs in the sector
1.2.3. Support for introducing the EU
standards for quality management,
working conditions and environmental
management
12.2013 BSMEPA, MEET,
BAATPE, BU of
the LFFHI
According
to
published
grant
schemes
OP “Competitiveness” Bulgarian SMEs
meet the EU
standards for
quality, working
conditions and
environmental
management
Number of SMEs,
which introduced
the EU standards
Micro level:
- participation in projects under OPC for introduction of the EU standards
Meso level:
- encouraging the participation of SMEs in projects for introduction of the EU standards
Macro level:
- providing of information about the available grant schemes and encouraging the participation of SMEs in projects for introduction of the EU standards
1.2.4. Support for the realization of
products with own trademark
06.2014 BSMEPA, MEET,
BAAPTE, BU of
the LFFHI
200 000
BGN total
for the
period
OP “Competitiveness”,
budget of
MEET/BSMEPA
Bulgarian SMEs
have developed
their own
trademarks
Number of
companies,
exporting own
trademarks; sales
46
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
on existing
markets; sales on
new markets
Micro level:
- development of own collections
Meso level:
- trainings in marketing and sales of products with own trademark
- promotion and support of the participation of SMEs in fashion shows and exhibitions on target markets
Macro level:
- Ensuring the assistance of OTEA by countries; for the next planning period OP “Competitiveness” should provide for schemes to stimulate companies, selling
and exporting products with their own trademark
2. STRATEGIC OBJECTIVE 2: Increasing the market share of the products of SMEs in sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather” on the global market
2.1. Specific objective 1: Increasing the market share of the Bulgarian goods and services on the existing markets
2.1.1. Update the strategy for
development of sector “Manufacture
of wearing apparel, including leather
apparel; tanning of leather”
On annual
basis
BSMEPA,
BAATPE, BU of
the LFFHI
15 000
BGN per
year
MEET/BSMEPA Updated sector
strategy
Micro level:
- providing information and opinions
Meso level:
- providing information, incl. by participation in sociological surveys,
- participation in discussions for identifying barriers to exports, SWOT analysis, objectives, measures, etc.
Macro level:
- overall coordination of the process of elaboration, updating and implementation of the export strategy of the sector
2.1.2. Development of working
procedures of the Bulgarian trade
representatives, aimed at assisting
12.2012 MEET, BSMEPA,
OTEA
20 000
BGN
Budget of BSMEPA and
OTEA
Developed
procedures
Number of
developed
procedures
47
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
export-orientated SMEs in the sector.
Macro level:
- study of the needs of SMEs in the sector in information and services to be provided by the Bulgarian trade representatives
- elaboration of working procedures of the Bulgarian trade representatives to the benefit of SMEs in the sector (incl. preparation of business forums,
assistance for meetings with business partners, acquainting SMEs with specific trade practices, etc.)
2.1.3. Support for participation of
SMEs in the sector in international
and national exhibitions and fairs,
such as: the Shoe fair, Riva del
Garda, Italy; the exhibitions in
Düsseldorf and Munich, Germany;
PREMIERE VISION, Paris; MICAM
– shoes and leather articles, Milan;
exhibitions in Guangzhou and
Shanghai (leather and shoes), China
Permanent MEET, BSMEPA,
OTEA by
countries
2 000 000
BGN per
year
Budget of BSMEPA, OP
“Competitiveness”
Developed
annual program
of exhibitions and
fairs, which are
important for
manufacturers in
the sector
Number of
participating
SMEs
Micro level:
- participation in organized international and national exhibitions and fairs
Meso level:
- submitting proposals for organization of exhibitions and fairs (incl. with regard to time and deadlines for informing participants, vision and organization of
the national stand, related events, etc.)
- encouraging SMEs to participate in the organized national/international exhibitions and fairs
- providing opinion on the developed annual programme of exhibitions and fairs which are important for manufactures in the sector
Macro level:
- development and implementation of an annual programme of exhibitions and fairs, important for manufactures in the sector
2.1.4. Updating of already established
bilateral trade agreements (for
example, with Russia)
Permanent MEET, BSMEPA
after proposal of
the branch
associations
Budget of BSMEPA Amended
bilateral
agreements,
adopted by the
Number of signed
updated
agreements
48
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
CM of the RB
Meso level:
- elaboration of proposals to MEET and BSMEPA for updating of already established bilateral trade agreements
Macro level:
- preparation of the processes on updating of already established bilateral trade agreements, incl. submission of proposals to the CM of the RB
2.1.5. Development of special
programme for presenting
manufacturers from sector
“Manufacture of wearing apparel,
including leather apparel; tanning of
leather” in specialized exhibitions in
countries with perspective markets,
such as: International leather goods
fair „Le Show”, Moscow;
International fashion fair CPM,
Moscow; International Fashion fair
Kyiv Fashion, Kiev, Ukraine;
Specialized leather goods fair,
Istanbul, Turkey; Istanbul fashion
and prêt-a-porter fair, Istanbul,
Turkey
Permanent MEET, BSMEPA,
OTEA by
countries
100 000
BGN per
year
Budget of BSMEPA, OP
“Competitiveness”,
donors
Developed
program for
participation,
identified SMEs
with potential to
enter perspective
markets,
developed vision
of the Bulgarian
stands
Number of
participating
SMEs; number of
concluded deals,
as a result of
participations
Micro level:
- participation in organized specialized exhibitions
Meso level:
- providing opinion on the developed programme for participation in specialized exhibitions
- encouraging SMEs to participate in the organized specialized exhibitions
Macro level:
- development and implementation of special programme for presenting manufacturers from sector “Manufacture of wearing apparel, including leather
apparel; tanning of leather” in specialized exhibitions in countries with perspective markets
49
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
2.2. Specific objective 2: Entering new markets
2.2.1. Development of models for
entering of the sector SMEs to new
markets.
10.2012 BSMEPA, OTEA 10 000
BGN
Budget of BSMEPA Elaborated
models, directed
at SMEs from the
sector regarding
the steps for
entering new
markets
Number of
developed and
adopted models
Macro level:
- elaboration of models for undertaking the necessary actions/steps by SMEs for entering new markets
2.2.2. Creation of networks or clusters
aimed at facilitating new market
entries.
06.2013 BAATPE, BU of
the LFFHI, SMEs
in the sector,
MEET
OP “Competitiveness”,
BSMEPA, own funds
Created
networks/clusters
aimed at entering
new markets
Number of
created
networks/number
of clusters in the
sector
Micro level:
- participation in export networks or clusters
Meso level:
- participation in the creation and development of networks or clusters
- encouraging the participation of SMEs in created networks and clusters
Macro level:
- participation in the creation and development of networks or clusters
- encouraging the participation in the creation and development of networks or clusters
2.2.3. Creation and dissemination of
information and advertising
materials, analyses and catalogues for
promotion of sector “Manufacture of
wearing apparel, including leather
apparel; tanning of leather” abroad
Permanent BSMEPA 60 000
BGN per
year
Budget of BSMEPA, OP
“Competitiveness”
Developed
information and
advertising
materials for the
sector
Number of
attracted new
partners
50
Objectives and measures Implementat
ion deadline
Responsible
institutions
Financial
resources Funding sources Expected results Implementation
indicators
Micro and Meso level:
- providing information for development of materials
Macro level:
- development and dissemination of information and advertising materials, analyses and catalogues, promoting the sector
2.2.4. Organizing „Days of Bulgaria”
in the embassies by countries and
promoting of the Bulgarian
manufacturers from the sector.
Once each 2
years
MEET, BSMEPA,
OTEA
Budget of MEET Developed
programme for
organization of
“Days of
Bulgaria” by
countries
Number of
inquiries by
foreign
companies;
number of
established new
partnerships
Micro level:
- participation in the organized events
Macro level:
- development and implementation of programme of thematic “Days of Bulgaria” by countries
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7. MONITORING AND CONTROL SYSTEM
It is of great importance for each strategic document, first, to be realized according to the
preliminary set objectives, deadlines and resources; second, to be sustainable over time and to
develop the laid down activities and effects. Therefore, it is recommended to supervise
(monitor) and evaluate the implementation of documents, as well as to outline adequate
actions, in order to correct and improve the activities set out therein.
Monitoring may be defined as: (a) inseparable part of the current project management (as is
accepted the realization of the export strategy for sector “Manufacture of wearing apparel,
including leather apparel; tanning of leather”, aiming at the achievement of certain change, in
the case - the improvement of export activity of SMEs in the sector); (b) an instrument,
helping to control the management and the decision-making process; (c) description of events
and conditions within a certain time period; (d) systematic collection of reliable, updated and
important information on the progress, changes and outcomes of the undertaken programme
activities. These essential characteristics of monitoring determine it as one of the most
important components of the management of strategic documents, programmes, projects, etc.
Evaluation on its turn represents a systematic review of concrete management activities to
provide information for the full range of short-term and long-term impacts on consumers. The
evaluation of a programme may include assessment of the workload, operating procedures or
personnel, but its main objective remains the effect and impact of the implementation of the
programme (the strategic document).
Therefore, monitoring shall establish the status and follow the progress made in the
implementation of different components and sub-components, and the strategy as a whole.
Monitoring shall also identify the emerging problems and the factors behind them, and
suggest the possible measures and solutions of these problems. The obtained information is
expected to be timely submitted at disposal of the responsible authority (mainly the BSMEPA
and MEET). The point is to allow these authorities and other competent state institutions, if
appropriate – undertake timely “corrective actions” to help achieving the objectives set in the
Strategy.
It should be underlined that if monitoring focuses on the observation of: (a) actions taken and
resources expended, (b) results achieved, (c) carrying out the process in time, (d) the effects
received, assessment is aimed at determining the extent to which the general and specific
objectives of the document are achieved and also includes a systematic review of specific
management operations to provide information about the full range of short and long-term effects.
The main points that should be observed in connection with the implementation of this Strategy
are:
Compliance with the schedule of activities;
Volume, speed and degree of resource use;
Achieved results;
Achievement of objectives and impact of the strategic document.
When the monitoring should take place? – The aim of current monitoring is to register the
effects and deviations from what was previously planned early enough, as to make their
correction possible before their consequences become too serious to overcome. It should not
be forgotten that monitoring has to be performed frequently enough to allow adjustment of
deviations from the plan.
52
Based on this methodology, the monitoring and evaluation of the implementation of this
Strategy involve the following sequence of actions:
1. Selection of criteria and indicators for monitoring and evaluation;
2. Monitoring of the implementation;
3. Comparison of achievements and targets;
4. Proposal and taking of corrective actions.
According to the adopted Strategy objectives and measures, the following basic monitoring
and evaluation indicators are proposed:
Number of SMEs to work with to the ends of their externalization;
Published criteria to determine whether a particular SME has an export potential;
Increase in the number of exporting SMEs;
Number of carried out business delegations and forums, number of participating
SMEs; number of established contacts as a result of such participation;
Number of users of the portal, containing updated and useful information (market
analyses, distribution channels, custom and tariff policies, etc.), aiming at encouraging and
supporting export;
Number of trained experts; number of SMEs, expanded their export activity;
Number of SMEs, introduced the EU standards;
Number of companies, exporting own trademark; sales on existing markets; sales
on new markets;
Number of developed working procedures for the Bulgarian trade representatives,
to help export orientated SMEs of the sector;
Number of SMEs in the sector, participating in international and national
exhibitions and fairs;
Number of signer updated agreements;
Number of SMEs participating in specialized exhibitions, organized in countries
with perspective markets; number of concluded deals, as a result of participations;
Number of developed and adopted models for entering new markets by SMEs in
the sector;
Number of created networks/number of clusters in the sector;
Number of attracted new partners as a result of the creation and dissemination of
information and advertising materials, analysis, catalogues, etc. for the sector;
Number of inquiries by foreign companies; number of established new
partnerships as a result of “Days of the Bulgaria” in the embassies by countries.
Progress surveillance and monitoring shall be carried out by BSMEPA, which is the “owner”
of the Strategy. To this end, it shall appoint an official from its administration, who will be
responsible for collecting information for the purposes of monitoring the implementation of
measures and who will prepare annual reports to the Executive Director of the Agency.
53
Annual reports will serve as interim evaluations of the implementation of the Strategy. At the
end of year 2020 a final report shall be prepared covering the entire period of the Strategy.
These reports are public. The results shall be disclosed to the public.