Harvard Center for Textile & Apparel Research

B.Tan Overview of the Turkish Textile and Apparel Industry 48
Retailer
Distributor
Brokerage
Ready Wear
Fabric Producer
Yarn Producer
Cotton Producer
$2.6
$1.4
$1.5
$1.6
$0.3
Figure 5. Allocation of the money paid by a customer in the supply chain of an apparel
product.
As the previous section shows Turkish textile and apparel industry is losing its cost
competitiveness. Namely, there are now competitors with cheaper labor costs, cheaper
cotton, and cheaper electricity prices. Given those, it is not viable for Turkey to compete
on price alone for basic items. Similarly the lead-time advantage can be matched in the
European Market by the countries in Eastern Europe and Northwest Africa.
The industry has realized the need to compete with other features in addition to the
cost. Service quality and due-date performance have been considered as very important to
compete in the markets. Furthermore, some companies are following the route to expand
the supply chain exposure to retailing, especially, by branding. Given the textile
infrastructure, another possible way is to develop specialized products and compete in the
markets by differentiation. This route requires substantial investment in research and
development. Until now, the research and development has been neglected in the industry.
The total research and development expenditures of the companies in textile and apparel
$6.3
$0 $5 $10 $15 $20 $25
$11.3
USA
Turkey