Investigation of leather industry competitiveness in Iran

Abstract

Purpose

The purpose of this paper is to investigate the competitiveness of the Iranian leather value chain (LVC) and compare that with those of nine other countries including China, Pakistan, Turkey, Republic of Korea, Indonesia, Spain, Italy, Brazil and the USA. The results presented in the paper seek to assist in assessing the competitive performance of the LVC in Iran. In addition, based on Porter's diamond of competitive advantages, the aim is to provide recommendations to improve the competitive performance of the industry.

Design/methodology/approach

An economic method, i.e. revealed comparative advantage (RCA), as a well‐known approach, is used to investigate the competitive performance of LVC in Iran. The LVC products analyzed in this research include hide, skin, leather manufacture, trunks and cases, and footwear. In addition, in order to investigate the factors which affect the low competitive performance, a questionnaire based on Porter's diamond of competitive advantages was designed and completed by researchers and practitioners working in the field of leather industry. Finally the reasons for low competitive performance of the industry are discussed.

Findings

The results reveal that the competitiveness of the Iranian LVC is low, compared with those of some other countries. China and Italy have superior comparative advantages in the period studied. The results also indicate that except one product, Iran has no comparative advantage in LVC industry. In addition, Iran has mainly focused on the upstream sector of LVC whereas China and Italy compete more in the downstream sector which offers more value added products. The results also reveal that among the elements studied, specialized factors, availability of capital, quality of demand and stability of macroeconomics highly influence the competitive performance of LVC in Iran. This is followed by subsequent recommendations on how best to improve the competitive performance of the industry.

Originality/value

The results of the investigation presented in this paper give an insight into the competitiveness of the LVC in Iran compared with nine other countries which play an important role in this industry in the world. The results also confirm that RCA can be used as an effective approach to assess the competitive performance of industries. Furthermore, reommendations provided in this paper assist in improving the competitive performance of the industry. In general, the findings should prove useful for both researchers and practitioners.

Citation

Shafaei, R., Shahriari, H. and Moradi, M. (2009), "Investigation of leather industry competitiveness in Iran", Journal of Fashion Marketing and Management, Vol. 13 No. 3, pp. 343-357. https://doi.org/10.1108/13612020910974483