Abstract
This study of the UK and German clothing industries analyses firms' competitive strategy and the competencies they have developed to implement it. It makes evident how competencies shape market position and how both then impact on the degree of network power firms can develop. The analysis sheds new light on the triangle of power relations between co-ordinating firms, suppliers and retailers and reveals the sources of power. It is demonstrated that, even in the study of global production networks, the domestic institutional embeddedness of firms still matters and that firms originating from different ‘varieties of capitalism’ behave in divergent ways. Lastly, it is shown that firms have relationships at multiple geographical levels, combining their insertion in global production networks with sometimes pronounced dependence on domestic retail customers.
Acknowledgements
This paper is an output of the project, The Globalising Behaviour of UK Firms in Comparative Context, undertaken in collaboration with the Industrial Performance Center at MIT and funded by the Cambridge-MIT Institute (CMI).
Notes
Some writers distinguish between the two concepts (e.g. CitationTeece et al. 1997) but most use them interchangeably, as in this paper.
This discussion ignores the high-end knitwear sector, where the capital intensity of the machinery utilized can be high and the labour intensity low.