An examination of the sources of competitive advantage in the Wenzhou (China) footwear industry.

摘要

The purpose of this thesis is to explore the sources of competitive advantage in the Wenzhou, China footwear industry. China produces 52% of the world's footwear and Wenzhou is its most important production region accounting for 25% of the country's output. In addition Wenzhou's enthusiastic transition to a free market economy is well known in China as the Wenzhou Economic Model. These two facts, the industry's importance and the region's transition toward capitalism, make it an interesting subject for research on competitive advantage.; The research begins by applying Michael Porter's framework on the competitive advantage of nations to the case of the Wenzhou footwear industry. In addition to assessing the industry on each of the four factors comprising Porter's model: (1) factor endowments, (2) related and supporting industries, (3) the nature of demand conditions and (4) firm strategy, structure and rivalry, the research also discovered other factors only loosely considered by Porter. These included the role played by the local government and community leaders in such initiatives as the creation of a “Wenzhou” brand and the establishment of the annual Wenzhou Footwear Fair which helps to showcase the city as a world centre for the footwear industry.; The impact of China's recent entry into the World Trade Organization on both the footwear and supporting industries was also analyzed. The research concludes that elements of Porter's framework play a essential role in the region's competitive advantage. However it also concludes that role of the government in supporting the industry and creating initiatives such as the Trade Fair, industrial parks and the promotion of the Wenzhou brand is also critical.