| Abstract | This study explored Porter's "diamond" Theory relating to export competitiveness and examined in depth the efficacy of the theory in relation to trade policy and export promotion for the Zimbabwe clothing sector (with particular reference to the
United Kingdom and Germany). Competitiveness is an issue of major concern to governments, as well as firms. Governments are concerned because competitiveness
is central to economic growth and prosperity; it also fulfils the wider economic objectives such as creating and sustaining employment, raising and sustaining the standard of living, and achieving a trade surplus and favourable balance of payments. Firms are concerned with competitiveness because it is central to their survival and growth. The study is set in the context of developing countries.
Porter's central thesis is that domestic competition (because of its stimulating effect on the other diamond factors) explains the export success of a nation's industry in international markets. The evidence from this author's research is that domestic competition does not give rise to the export success of a nation's industry in international markets. Domestic competition in the Zimbabwe clothing industry is
intense, but the industry is not competitive on the United Kingdom and German export markets, and the other international markets. The findings from the research
show that the export success of a nation's industry in international markets depends on choice of a competitive strategy, full utilisation of skills in the industry. a
competitive supporting industry, and technology orientation (use of up-to-date technology). The intense domestic competition which exists in the Zimbabwe clothing industry failed to create an industry which pursues a competitive strategy, an industry which fully utilises skills (let alone the upgrading of skills). a competitive supporting industry and an industry which is technology orientated. The analysis of these findings revealed that the export success of a nation' s industry in international markets derives from international competition because of its stimulating effect on these competitive factors. It is the absence of international
competition on the domestic market which explains why the Zimbabwe clothing industry is pursuing an uncompetitive strategy and underutilising skills, why the industry is using outdated machinery and the supporting industry uncompetitive. The findings reveal that although the "diamond" theory is not valid in its present form
based on domestic competition, it is applicable in a modified form based on international competition. In the modified form, international competition becomes the central thesis of the theory because of its stimulating effect on the other
competitive factors. Domestic competition does not have the stimulating effect. The policy implication for developing countries is that they should expose their industries to international competition, in order to gain export competitiveness.
The "diamond" theory bases the export success of a nation's industry in international markets on competition. The evidence from the research is that the export success
of a nation's industry in international markets is not only dependent on competition, but also on factors such as entrepreneurship, foreign investment, alliances, collaboration, export promotion and good management. The implication for developing countries is that gaining export competitiveness is not only achieved by exposing their industries to international competition, but can also be achieved by promoting entrepreneurship, foreign investment, alliances, collaboration, as well as export promotion (export planning and providing export promotion support) and management development. |
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