An Analysis of the Domain Name Industry - the US - Case Study Example

An analysis of the Domain name industry Student’ name Institutional affiliation Abstract The United States apparel and textile industry has undergone several transformations in the recent past. As it is discussed in this paper, there is a crisis that if facing the industry as a result of the trade liberalization policies and the global economic crisis. The industry analysis section will discuss some of the issues that have led to the growing crisis. Like any other industry, the apparel and clothing industry has a structure that determines how business is carried out as it will be discussed in the industry structure section. Later, the paper will discuss how the industry supplies its product in the market. The supply is products manufactured from raw materials which are either natural or synthetic as discussed in the raw material section. The paper will end with a conclusion that will summarize the issues surrounding the industry and how they can be addressed. Table of Contents Abstract 2 Table of Contents 3 1.0 Introduction 4 2.0 Industrial analysis 4 2.1 Industry structure 5 2.2 Supply 6 2.2.1 Raw materials 7 3.0 Conclusion 8 4. 0 References 10 1.0 Introduction The modern age has been associated with the design of new models of apparel and textile across the world. Majority of what people wore in the 19th century was made using hands or dressmakers. Later in the 20th century, the apparel and textile industry witnessed a tremendous growth as a result of the growing technology. Advanced technology resulted to the creation of factory systems that resulted to a mass production of clothing that is sold at certain fixed prices. According to Olsen (2006), the apparel and textile industry is an international trade whereby fabric is sourced from a country, manufactured in another country, finished in a different country and later shipped in the owner country for retail sale. This paper will analyze the case of the United States apparel and textile industry focusing on the following aspects: industrial analysis, structure, raw material, demand, prices and competition from similar products. 2.0 Industrial analysis United States depends on textile products from Asian countries for the manufacture of its clothing products. Currently, the textile industry in the United States is faced with a crisis that arises from the changes that are arising from the global trade. The devaluation of exchange rate of majority of countries that export textile products in Asia is one of the contributing factors to the textile crisis in the United States as indicated in figure 1. In addition to this, the multilateral agreements and trade liberalization policies have increase the accessibility of products to the United States market. The World Trade Organization established that the crisis in the textile industry has contributed to unemployment as a result of job losses. The most affected region is the rural areas of the South eastern region where this trade is more concentrated. The global financial crisis especially during the period 1997/1998 resulted to the currencies of major Asian exporters to drop (Amponsah & Boadu, 2002). On the other hand, the apparels market in the United States has faced volatility as a result of frequent change in fashions thereby creating an economic stress to the industry and its participants in the rural areas. According to the United states Department of Commerce, there were 5117 textile companies and 6134 textile plants. The gross sale of cotton fiber textile was $58 billion in the year 2000 though this was a drop from $60.3 billion in 1999. On the contrary, the industry is still the leading manufacturing employer which employed close to 1.4 million people in the year 2000. According to the United States Bureau of Labor Statistics, 425 000 jobs in the apparel and textile industry were lost since the year 2000 (American Textile Manufacturers Institute, 2007). Further the United States Bureau of Labor Statistics established that the textile and apparel industry is the leading employer in ten of the major states in the United States. The apparel and textile industry is currently facing competition from other leading producers (Plunkett, 2008). This among other problems like overproduction, abrupt changes in fashion and demand, importation of cheap raw material from Asia and the global financial crisis has prompted US to seek ways of addressing the problem. In order to address the problem, the US textile industry has invested high speed, efficient and automated technology while sacrificing the loss of domestic jobs. Textile and apparel worth $16 million were exported in 1997 which was equivalent to 31 percent of the industry’s total annual sales. However, the global over production of textile and apparel products in addition to the ease of substituting imports with other products has resulted to competition in the US market. 2.1 Industry structure The United States clothing and textile factories are the first team of the production of apparel and textile products. Such factories include those that are real owners of garments or facilities to produce textile products. The companies that qualify to have the mentioned facilities are included in the list of clothing and textile industry. There are several companies that are identified to own garments. For instance, Activewear Inc that has over twenty years experience in cut and sewing service in the United States. The company specializes in cutting and sewing of garments and offers its services on contractual basis. In addition, the company also produces its own sport wear clothing and fabric accessories. Another similar company is Amma maternity which specializes in the manufacture of maternity wear. Other companies in this category include: Amex manufacturing, All American, Alore, America textiles among other. Each of these companies is proud of the original product it produces (Plunkett, 2007). The specialization of this nature has helped the companies to overcome the problem of completion that may arise when different companies produce similar commodities. The wholesellers of clothing and apparel products in the United States are situated in different states across country. They deal with supplying and distributing the goods that are manufactured by their respective companies. The wholsellers do their business locally and internationally whereby they sell products to local retailers and also export products in bulk to other countries. On the other hand, the retailers target individuals who are interested with particular products. The retailers are distributed in all the states across America. They are supposed to deliver quality products to the customers in order to meet the expectations of the customers. 2.2 Supply Globalization in the twentieth century has lead to an increase in supply of apparel; and textile products in the US. This has resulted to the low labor-intensive characteristic in the production of clothing products (US Labor Statistics Bureau, 2006). The twentieth century was also associated with growth in technology which has continually been applied in the production of clothing products. For instance, there was 115% increase in delivery of clothes delivered to United States from Mexico between 1991 and 2000 (American Textile Manufacturers Institute, 2007). The value of the products supplied rose from $71 million to 8,193 million between that period. United States benefited from intra-trade marked by the increase in the importation of the clothing and textile products. The common shared interest between United States, Canada and Mexico of exporting goods to each other has affected the market share of other exporters. The recent past has resulted to an increasing demand for clothing and textile product in the US (Plunkett, 2008). This has created an opportunity for the many manufacturing firms to manufacture more products in order to satisfy the demand. Each manufacturing company specializes in manufacturing unique products that target the surrounding market. Consequently, competition in the global market challenges the manufacturing companies to manufacture products that would catch the eyes of the intended buyers. 2.2.1 Raw materials Fiber is the sources of the raw material used in the textile and apparel industry. The fiber sector plays an important role in the industry since it provides the initial product that needed in order to have the industry running. There are two types of fiber: natural and synthetic. Synthetic fiber is man-made and it is currently dominating the industry at a higher rate when compared with natural fibers. The synthetic fibers represented only 10 percent of the raw material in the 1940s; however, by the 1980s it captured 75% of the industry (Olsen, 2006). Cotton was the dominant natural fiber in the 1940s representing 80 percent f fiber in the fiber mills. The existence cotton in the fiber mills fell to 25 percent in the mid- 1990s (Rosen, 2007). Rayon and acetate were the main manmade fibers in the last fifty years. Today, there are many thousand different products that can be grouped in ten major classes which are used to construct different variety of fabrics and designs. The first half of the twentieth century was marked with extensive production of synthetic fibers while the adoption of the fibers by the consumers took place in the second half of the twentieth century. The first fiber to be produced was rayon in 1910. On the other hand, acetate production begun in the mid 1920. Later in the 1930s, more synthetic fibers like nylon, rubber, vinyon and nylon begun. Production of more synthetic fibers like polyester, saran, metallic fibers and modacrylic started in the 1950s (Johns & Kelly, 2004). Their dominance in the apparel and textile industry took effect at a high rate. By the mid 1970s, polyester had dominated the sector as the major fiber in industry (Olsen, 2006). The natural fibers that are used in the apparel and textile industry in United States are cotton, wool and silk. Cotton is the major natural fiber used comprising 90% of the natural fiber and 25% of the total fiber used in the US. However, despite cotton dominating the natural fiber market, its consumption is very unstable due to the growing and weather conditions. The United States depends on cotton that is produced and grown in the west and eats. The major states that produce cotton are: Texas, California, Mississippi, Arizona and Louisiana. These states produce approximately 75 percent of the total natural fiber with Texas leading by the production of 30 percent (Johns & Kelly, 2004). 3.0 Conclusion Domestic and international competition in the textile and apparel industry has been increasing every time. In addition to this crisis, the market for the products from the apparel and textile industry has also experienced slow growth in the United States. This has been attributed to the trade liberalization policies and currency devaluation in major Asian countries that supply the United States with fiber. The outcomes of this crisis have caused a lot changes in the US apparel and textile industry. The retailers and producers of the apparel and textile products have been forced to focus on these changes that have encountered the market. The industry players have been prompted to discover the market niches and the change in customer preferences. New products manufactured from different fibers enter the market everyday thereby affecting the tastes of the customers. The competitive edge in the industry has lead to growing markdowns and stock outs as a result of lost sales. In order respond to the crisis, firms have embarked on marketing research. Most of the researches conducted recommend the adoption of new technologies to meet the needs and tastes of the consumers. 4. 0 References American Textile Manufacturers Institute. (2007). Crisis in U.S. Textiles. U.S. Department of Commerce. Amponsah, W & Boadu, V. (2002). Crisis in the U.S. textile and apparel industry: Published by U.S Department of Agriculture. Johns, L. & Kelly, H. (2004). The U.S. Textile and Apparel Industry: A Revolution in Progress OTA Project Staff. Washington DC: Government Printing Office. Olsen, R. (2006). The textile industry: an industry analysis approach to operations management. New York: Lexington Books. Plunkett, J. (2008). Plunkett's apparel and textiles industry almanac. Washington DC: Plunkett Research, Ltd. Plunkett, J. (2007). Plunkett's Apparel and Textiles Industry Almanac 2007: Apparel and Textiles Industry Market Research, Statistics, Trends and Leading Companies. Washington DC: Plunkett Research, Ltd. Rosen, E. (2007). Making sweatshops: the globalization of the U.S. apparel industry. New York: University of California Press. US Labor Statistics Bureau (2006). Career Guide to Industries. New York: Government Printing Office. Read More