Textile PEST & PORTER Analysis

Textiles have an assortment of uses, the most common of which are for clothing and containers such as bags and baskets. In the household, they are used in carpeting, upholstered furnishings, window shades, towels, covering for tables, beds, and other flat surfaces, and in art. In the workplace, they are used in industrial and scientific processes such as filtering. Miscellaneous uses include flags, backpacks, tents, nets, cleaning devices, such as handkerchiefs; transportation devices such as balloons, kites, sails, and parachutes; strengthening in composite materials such as fibre glass and industrial geotextiles, and smaller cloths are used in washing by "soaping up" the cloth and washing with it rather than using just soap.

Textiles used for industrial purposes, and chosen for characteristics other than their appearance, are commonly referred to as technical textiles. Technical textiles include textile structures for automotive applications, medical textiles (e.g. implants), geotextiles (reinforcement of embankments), agrotextiles (textiles for crop protection), protective clothing (e.g. against heat and radiation for fire fighter clothing, against molten metals for welders, stab protection, and bullet proof vests. In all these applications stringent performance requirements must be met. Woven of threads coated with zinc oxide nanowires, laboratory fabric has been shown capable of "self-powering nanosystems" using vibrations created by everyday actions like wind or body movement

PEST Analysis:

Political Factor:

Uneven political conditions, deteriorating law and order situation and instability in gas and electricity prices are adversely affecting the textile sector, while government has hardly taken any step to give some relief or incentives to the mill owners.
Textile mill owners and exporter have strongly denounced the recent 31 percent increase in the gasoline prices and demanded from the government to withdraw the recent increase and take serious steps to help textile industry survive through difficult times
According to the sources, if prices continue to increase at current rate, the textile industry would find it difficult to survive as the recent increase has already proven deadly and many mills have started to shutdown in the wake huge price increase.
It was also witnessed that due to prices increase in gas has not only adversely affected the productivity of the textile industry but has also caused sudden increase in the production cost and has badly affected the economy of the country.
On the other hand, textile and the other exporters also facing a lot of challenges due to increase in the production cost of the specific export goods, while such hurdles badly affected the Pakistani exporters to meet the challenges and compete in the local and international markets. Exporters are demanding that government should give them facilities to cope with the existing challenges and not get involved in favoritism.
The main political factors which are attracting the industries and as well as for the whole world are
 Musharaf’s Seat
 Arrested Judiciary
 Benazir Bhutto murdered

The murder of Benazir Bhutto was infuriated matter. Number of people came out with a great anger and numbers of textile companies were burnt by them, just like in Karachi happened. The other issue was neat & clean elections of 2008. no doubt that elections were being held neat and clean but the opposition did not accept the results and new government is still try to control the factors which are creating disturbance. As it is mentioned above that the govt. of Pakistan increased the prices of Gasoline and petroleum, which are the basic needs for the textile industries. In July 2008, the textile companies in Faisalabad shutdown their companies against the 31% increments in prices of Gasoline, also increased the prices petroleum by 10 rupees. Still no satisfied procedure has not been implemented by the Govt. of Pakistan
Tight monetary policy also creates a lot of hurdles for textile sector and exporters, and rapidly growing interest rates of the banks is causing the shut down the power looms, and it also crushing down the textile industry and exporters, added sources.
The industrialists rejected the imposition of 10 percent withholding tax on electricity bills, small and medium industries, and power looms, while they demanded withdrawals of 10 percent withholding tax immediately for the survival of the industrial sector of Pakistan.
Then again, the government is failed to decrease the every day increasing trade deficit. Textile sector of Pakistan contributes huge amount in the economy of the country serious measures are needed for its revival.

Economical Factor:

Economical factors are also disturbing the all industries of Pakistan as well as the textile industry.
From 1999 to 2008 the inflation rate has been increased by 100%. The last and current Government has been failed to control the economy. As the prices have been increased, the suppliers try to get and save more profit from their investments. That’s why prices are decided and put with a high return in terms of profit.

Before 2008, textile industry was getting number of incentives from the government just like R&D (Research & Developments) and subsidies on the utilities. But some companies misused these opportunities and unfortunately Govt. pulled back these types of incentives.
The main problem with the textile industry is shortage of electricity, gasoline and petroleum, due to which Textile industry is bearing too much cost that why they have to increase their prices to earn profit or for break-even. There are some companies which have their own electricity plants but they have to spend a lot of money to run them.

Other problems which are facing by the textile industry of Pakistan are
 Non-availability of skilled labors.
·      Labors cost is increasing rapidly
·      Loosing quality of its products in both markets domestically and internationally
·      Poor monitory and Fiscal policies of the Govt. of Pakistan         Uneducated people
·      Investors are pulling out their capital from the market quickly
·      Foreign Investments are not coming towards Textile industry

These are the factors which are disturbing the textile industry strongly economically.

Sociological Factors:

Textile industry affecting the society and environment in number of ways, some of them are mentioned below.
·  ¾ Polluting the air by pushing out ruins of chemicals. Different gases in air react with these ruins which become dangerous for human beings.
·  ¾ No proper system to throw out the useless materials and chemicals.
·  ¾ Most of the useless materials and acids are thrown into the fields which are react or disturb the agricultural products seriously.
·  ¾ Since the cost of the production and labor cost are increasing day by day. That’s why the final product cost is also increasing that’s why people are buying low quality products and not spending too much to purchase.

¾ Textile companies are firing the labors and employees as well because of high production cost and salaries that’s why the unemployment rate is increasing day by day which is not good for the industry as well as for the country.

Technological Factor:

The technology has been improved and updated in the textile industry of Pakistan and some of the companies in textile industry are acquiring these technologies. By using new technology not only they improve their quality and efficiency but also improve their production as well as reducing the cost of production

PORTER Analysis:

Bargaining power of Buyer:

It has been seen from last 3 years that buyers are becoming anger and having problems to purchase the desired products from textile industry of Pakistan. There are several issues which are affecting the textile industry seriously and industry is bearing losses since 2005.
The bargaining power of buyers is increasing day by day. The buyers are demanding more and improved quality in very cheaper prices, whether customers are from foreign or are from local markets. The competition at international level has been increased too much. If we look at a glance to USA exports of textile industry from all over the world and especially from Asian countries then we can easily found that Pakistan is offering most less export prices to USA which is 0.91 US dollars per meter. But other countries are getting more than these prices and in these countries; Bangladesh is top

Although Pakistan is offering the lowest prices but due to poor quality and present condition of the textile industry as well as of Pakistan present condition are the main reasons that Pakistan is loosing its customers.

Bargaining power of Suppliers:

Bargaining power of suppliers is increasing of textile industry day by day. The Govt. of Pakistan is playing very important role in this activity. As we all know that inflation rate is running upwards like a rocket and utility costs are also increasing day by day. Couple of days ago, Govt. increased the prices of Gas by 31% and all textile mills of Faisalabad strike against this huge increments. Now the cost of petroleum has also been increased due to which affecting the manufacturing costs of the companies.
The costs of Yarns and chemicals which are used to dye the cloth and for sizing process have also been increased. Textile companies are bearing too much manufacturing costs, if they come to increase their prices then there is a major threat that customers can move to other companies weather it is foreign marker or local market.

Threats of new Entrants:

There is no threat of now entrance. If some one wants to enter in this industry, that company has to face number of competitors which are the big giants of that industry. On the other hand they have to purchase the latest technology, Fuel prices, high labor costs, opportunity cost etc. and major issue is that inflation is increasing day by day and instability of Pakistan Govt.

Threat of Substitutes:

There is no threat of substitute. Because Textile products and cloths are the basic necessity of the human life and customers cannot move to other products by leaving textile products.
Textile PEST & PORTER Analysis Textile PEST & PORTER Analysis Reviewed by Janet D'Suza on April 16, 2018 Rating: 5

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