ASSESSING THE DETERMINING FACTORS OF COMPTETIVNESS IN ETHIOPIAN TRADITIONAL CLOTH MANUFACTURING SECTOR

Abstract

The objective of this study was to assess the determining factors of competitiveness in Ethiopian traditional cloth manufacturing sector. For this purpose, a mixed approach, that is to say, both qualitative and quantitative approach was employed to perform an in depth investigation of the case. Porter’s diamond model, that is to say, factor conditions, demand conditions, related and supporting industries, firm’s strategy, structure and rivalry, and government attitudes were the basic variables which used as a theoretical framework for data collection and analysis. Semi structured questionnaire was designed and were applied to gather needed information from one hundred eleven hand loom weaving, small and micro level enterprises. The findings of the study revealed that related and supporting industry is the most determinant factor of competitiveness in the sector, while, the demand conditions and role of government follow respectively. The result also shows that the factor conditions do not have a relationship with competitiveness in the sector. The findings of the study have practical implications for existing and new entrant firms in the sector to put emphasis to the factors and means of competiveness, which later guide to development of strategies both in firm and government level. Based on the findings, it is also recommended that strategies must be designed and implemented by all stakeholders to overcome the existing problems especially focusing on to the issues of production technology, skills, product distribution and promotion of products. Future studies can be done by using modified model which includes more explanatory variables. Furthermore, it can be studied by encompassing all participant groups in the sector to investigate the situation deeper.