Analysis of the Primary and Support Activities in the Value Creation of Selected Garment Factories in Addis Ababa, Ethiopia
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Date
2017-06
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Addis Ababa University
Abstract
The garment industry of Ethiopia is reported to show a decline in its export performance
according to the report of the Ethiopian Textile Industry Development Institute. Gaps in logistics,
marketing, leadership capacity are also witnessed in the sector. Success in business depends on
finding competitive advantage. With the objective of addressing the problem in the industry
from the manufacturers’ value chain management perspective, and the role each functional unit
plays in delivering value and gaining competitive advantage, this research was carried out on
fifteen garment factories what were considered representatives on the basis of long years of
experience, productivity, introduction of new technology, marketability. Primary data was
collected with the help of questionnaires and personal interviews. In addition, previous research works in
the sector, journals and different documents were used as a secondary source of data. The collected data
was analyzed using SPSS. The study was based on the value chain model of Michel E. Porter
(1985) in which the management of five primary activities: Inbound logistic, operations,
outbound logistics, marketing and sales, services, and four support activities as technology
development, infrastructures, human resource management and procurements were analyzed.
Accordingly, the study revealed that inbound logistics, outbound logistics and firm infrastructure
are seen to be well managed. On the other hand; services, technology development, human
resources and operations are seen to be moderately managed. However, marketing and sales of
the primary activities are seen not to be well managed. In addition, the study also explored the
challenges manufacturers face in delivering value. Accordingly, problems with respect to
unavailability of locally produced fabrics, accessories, packing materials, and the resulting high
cost of import are mentioned as the main challenge by most of the interviewees. Manufacturers
should improve their marketing activities incorporating marketing research, product design,
branding, beyond the traditional way of selling their products, and develop their human
resource management. Considering the challenges they face in the industry, government should
work on ways of having input materials manufactured locally
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Keywords
Porter’s Value Chain Model, Primary Activities, Support Activities