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Competing with Manufacturers Overseas In this year’s politically charged atmosphere, the issue of overseas competition for jobs and merchandise contracts is on everyone’s minds. Jewelry manufacturing, like many industries, has been dramatically affected by foreign competition. How can you compete? Is it just a matter of time before designers in China and Thailand replace domestic brands altogether? |
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The answer is no. However, do not take this competition lightly.
New competitive forces mean that you must analyze your market
and adapt your business strategies accordingly in order to be successful.
One common technique used as a starting point for strategic analysis is a SWOT Analysis. SWOT stands
for Strengths, Weaknesses, Opportunities, and Threats. The following article will include a SWOT
Analysis of overseas designers’ and domestic designers’ competitive positions, as well as a discussion
and interpretation of the results. This article does not include any secrets or magic business plans;
but, hopefully it will help you to organize your thoughts and further refine your business strategies. Overseas Manufacturers Analysis
First, you must recognize the limitations of your position realistically. A small domestic designer cannot compete with overseas manufacturers on price alone. It is not sustainable in the long term. Materials and labor are so much cheaper overseas that you would have to price yourself out of profits to compete. When it comes to selling products, mass production factories have easier access to large scale retail buyers. You will have to work harder to get their attention; and, once you have it, you will have less negotiating power when writing contracts and sourcing materials. That is not to say you should lose heart; which brings us to the second point: Leave mass production to the mass producers. Let them have it! There is plenty of opportunity in the (often large) niches left unfulfilled by these companies. Mass merchandise is completely impersonal; it is one of the primary weaknesses of overseas suppliers. There is a market for mass produced goods; but, it will always leave market share for companies that cater to clients who want to define themselves by not buying exactly what everyone else has. This is especially true of fashion items, like jewelry. You notice people’s jewelry when it stands out. Make your designs stand out. You must identify your viable competitive advantages and leverage those into market position. What makes your designs different? What makes your company different? How can you brand your goods to speak to consumers on a personal level? Jewelry is usually a sentimental purchase. I could dump out my (very large) jewelry box and tell you exactly when and where I got each piece. Moreover, the vast bulk of the contents are very inexpensive items. Jewelry is bought or given on special occasions or as souvenirs from memorable travels. People want to buy special pieces to commemorate their special moments in life. The contents of this analysis are largely common sense. As business people, designers must be aware of their own positions and the relative positions of their competition. However, many designers do not follow through and use this knowledge in their strategic planning. Moreover, many choose to ignore or underestimate competitive forces only to succumb to a worthy adversary down the road. A SWOT Analysis is a useful tool to begin your business strategy. Use the above analysis as a jumping off point by adding details specific to your business. With savvy business management, those mass merchants should not slow you down a bit. Good luck! |
