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Title Export networking challenges and opportunities for manufacturing firms from developing countries: the case of Eritrea
Full text http://irs.ub.rug.nl/ppn/254873421
Date 2003
Author(s) Tsegay, Goitom Tesfom
Abstract The studies in Netherlands and Ugandan footwear and textile export market have shown that no subcontracting and joint venture business opportunities were found. This is mainly because of three main factors. Firstly, there is no need for the importers in the Netherlands and Uganda to make risky investment on setting manufacturing facilities. There are manufacturers who are capable of producing a product according to the importer requirements. Then the point is how to get the reliable manufacturer who can accommodate the orders. Most of theimporters prefer to remain as wholesalers or retailers rather than diversifying to production. Secondly, the unstable political situations in developing countries make investment more risky. Finally, the wholesalers and retailers need to be flexible. Consequently, the case studies have shown that at present flexible supply contracting is becoming popular in the footwear and textile business. The findings show that only agents wholesalers and retailers are active in the Netherlands footwear and textile export market. The intermediaries in the Netherlands are well placed in the local target market, have considerable local market knowledge and crucial contacts with potential customers. Thus it is easier for the footwear and textile manufacturers in Eritrea to enter into the Netherlands footwear and textile export market through a vertical business network with wholesalers and retailers than bypassing them. However, to improve their product quality and expand their production capacity the Eritrean manufacturers need to establish a horizontal business network. The high uncertainty in the Ugandan export market due to the lack of trust in the marketing channel, and inefficient contract enforcing institutions precludes the footwear and textile manufacturers in Eritrea from appointing agents in Uganda. Moreover, wholesalers and retailers in Uganda often travel to markets where they can find different varieties of footwear and textiles from which they can choose. They buy limited volume of footwear and textiles from each design. As a result direct presence in the Ugandan market can help the Eritrean footwear and textile manufacturers to enlarge their sales by collecting orders even from the immediate customers. However, to enter to the Ugandan footwear and textile export markets through the aforementioned strategy, the footwear and textile manufacturers in Eritrea need to establish horizontal business networks relationships among themselves. The horizontal business network relationships among the manufacturers will help them to mobilise the financial and human resources needed to establish a sales outlet in Uganda. This thesis concludes establishing horizontal business network with fellow manufacturers and vertical business network with cotton and leather suppliers, and footwear and textile buyers in the Netherlands and Uganda are preconditions for the Eritrean manufacturers to penetrate to the international market. Moreover horizontal business sub-networks are necessary to improving product quality, expanding production capacity, and mobilizing resources. In view of this conclusion two types of horizontal business network organisations and three types of vertical business network relationships have been recommended to co-ordinate the entry to export markets. A distinction between a network organisation and a network relationship has been made. Organisations have their own administration and continuity is a major goal, while relationships are order based and have a relatively flexible status.
Subject(s) Export; Netwerken; Textielindustrie; Schoenenindustrie; Eritrea; Proefschriften (vorm)
Language en_US
Publisher University of Groningen
Type of publication Dissertation
Format text/html; application/pdf
Rights University of Groningen
Repository Groningen - University of Groningen
Added to C-A: 2008-12-22;03:17:46