Using a SWOT analysis, the internal factors (strengths and weaknesses) and the external factors (opportunities and threats) are identified for setting possible strategies for the reindustrialization of HK SME fashion industry. A comprehensive analysis is outlined in the following table.
| STRENGTHS (S) | WEAKNESSES (W) | |
|---|---|---|
|
Internal Factors
External Factors
|
1. Traditional manufacturers 2. High-quality products 3. Good industry reputation 4. Great trading environment 5. Convenient financial transfer 6. Strong speciality in sourcing 7. Convenient connection with manufacturing bases in Guangdong and SE Asia 8. Speciality in design and product development 9. Strong education resources 10. Rich blend of cultures |
1. Weak manufacturing base 2. Fragmented supply chains 3. High cost for land use 4. High labor cost 5. Shortage of skilled workers 6. Weak innovation transfer 7. Weak E-commerce culture 8. Lack of policy supports 9. Lack of supporting infrastructures 10. Lack of collaboration platform |
| OPPORTUNITIES (O) | SO STRATEGY | WO STRATEGY |
| 1. Expanded global market 2. Global supply chain 3. Increase of ageing population 4. Awareness of personal care 5. Interdisciplinary technology development 6. Development of digital automation 7. Opportunities in e-commerce 8. Opportunities in new retail technology 9. Opportunities in eco-friendly materials and technologies |
Increase internal strengths and seize external opportunities – Develop a high-end market – Take advantage of HK’s trading environment – Upgrade sourcing speciality and adapt new business mode – Develop a digital platform for design and product development in HK – Exploit HK’s good reputation for ecological products |
Seize external opportunities and overcome internal weaknesses – Establish digital supply chains – Take advantage of the latest e-commerce and retailing technologies – Take advantage of automation – Set up a public technology platform for innovation transfer – Introduce new job positions of the novel industry development |
| THREATS (T) | ST STRATEGY | WT STRATEGY |
| 1. Changing trading policies 2. Unstable political environment in some manufacturing countries 3. Increasing the price of traditional raw materials 4. Increasing labor cost in traditional textile countries 5. Poor image of the industry 6. Threats for traditional brick and mortar business models 7. Dominance of fast fashion 8. Stringent environmental rules and regulations |
Exploit internal strengths and reduce external threats – Exploit HK’s strength to adapt to the global changing trading environment – Develop high added value products – Establish local sourcing and product development hubs – Explore new business models – Participate in eco-friendly markets |
Minimize internal weaknesses and face external threats – Find out the niche markets – Develop e-retailing – Rebuild the industrial image to HK’s new generation – Encourage collaboration and establish industry clusters – Take advantage of industrial associations for fast-react to different situations |
Combining findings of this analysis with the global technology trend of the fashion industry, it is perceived that the most promising strategies for HK SMEs are in three main directions, namely; a) digitalized manufacturing and business models, b) circular economy and resource efficiency, and c) high value added solutions.
In order to successfully realize and accomplish the strategic directions, steps must be taken to first comprehend the technology requirements and the corresponding improvements to be made by the HK fashion industry. A Technology Roadmap outlining such steps has been drafted based on further analysis of four key critical success factors, including 1) market drivers for each direction, 2) product/service to be offered in each direction, 3) technology required to meeting the changing market needs, and 4) research and developmental work required in future. Details of the analysis and the Technology Roadmap are presented in the Recommendation Report.