Honduran Apparel Manufacturers Association

National Value Added (In Millions of US$)

455 2541.1

Association

186 241.8 284.3390.1

455.2

400

600

30.9186

0

200

01989 1994 1995 1996 1997 1998 1999

30% 18% 37%Growth 502% 16.7% 18.9%

In five years Source: IDS

Value per Square meter of FabricPais 1999 Value/M2

Square Meters Value $$/M2Square Meters Value $$/M2Hong Kong 841 4256 5.06China 910 4307 4.73South America 157 730 4.65India 376 1525 4 06India 376 1525 4.06Guatemala 305 1233 4.04Korea 537 2103 3.92Thailand 386 1509 3.91Other CBI 87 334 3 84Other CBI 87 334 3.84Indonesia 441 1686 3.82Other Asean 531 2002 3.77Sri Lanka 337 1269 3.77Turkey 230 834 3 63Turkey 230 834 3.63Phillipines 506 1792 3.54Mexico 2307 7538 3.27Taiwan 637 1974 3.10Pakistan 237 733 3 09Pakistan 237 733 3.09Dominican Repub 858 2337 2.72Costa Rica 346 819 2.37Jamaica 148 345 2.33Honduras 943 2158 2 29Honduras 943 2158 2.29El Salvador 602 1329 2.21Bangladash 773 1676 2.17

Opportunity: Build Complex Exports Avoid Over-Relying on Basic FactorsRelying on Basic Factors

Sri Lanka Exports of Gems and Jewelry200

160

180jewellerydiamondsgems

100

120

140

60

80

100

20

40

Source: Sri Lanka Industry Statistics

01987 1988 1989 1990 1991 1992 1993 1994 1995 1996

STRATEGYProtectionQuality of firm level strategyReactive vs. ProactiveHi d l d

Company and strategiesThe quality of sustained commitment of capital

and resourcesIndustry cooperation

Hi-end vs. low-endPrice vs. DifferentiationDistribution channelsE-commerce

Industry cooperationThe level of domestic rivalryPossibility of new business formationThe nature of dialogue with laborFairness of local competition

Number of competing firmsCommodities vs. Specialized products

Fairness of local competitionParastatals and monopoliesLeadership characteristics

FactorsFactors DemandDemand

The ClusterThe ClusterGov't

Examples: Uganda Coffee, DR Cigars, Sri Lanka Rubber

Exports of Sri Lanka Rubber Products

120

140

100

60

80

40

0

20

Source: Sri Lanka National Statistics

01987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Rubber Rubber products

Edible FishFish and Fishmeal Exports for 1987, 1990, 1993 in $U.S.

Opportunity: Understand Competitive PositionEdible Fish

Japan ‘93Chile ‘93

Product Scope

Japan ‘87Norway ‘90-’93

Japan ‘90

Chile ‘90Perú ‘93 Fishmeal exports

DifferentiationLow cost Competitive Advantage

Standard Fishmeal Chile ‘87

Perú ‘87Perú ‘90

Fish exportsby country

While Peruvian manufacturers are very competitive within the fishmeal segment, other producers have increased total fish export volume by

DifferentiationLow cost Competitive Advantage

SOURCES: UNITED NATIONS TRADE STATISTICS; NATIONAL MARINE FISHERIES SERVICE; MANEDSSTATITIKK OVER UTENRIKSHANDELEN; MONITOR ANALYSIS

other producers have increased total fish export volume by migrating toward more edible fish production = $1 Billion in Total Fish Exports

CLUSTERStrategy, Strategy, StructureStructure& Rivalry& Rivalry

Gov't

FactorsFactors DemandDemand

Competitive and high quality supplier?Financial sector?Business services?Business services?Strong business associations?Strong ties with research institutions?Quality of private-public dialogueQuality of private-public dialogueQuality of education and training providers

Examples: Mongolian Cashmere, Leather, Sri Lanka Tea

The Borovetz DiamondI th h ?Is there a chance?

Strategy, Strategy, StructureStructure& Ri l& Ri l

Gov't

& Rivalry& Rivalry

Lack of understanding of competitive position

Vague Knowledge When and When Not to

Strong Paternalism

FactorsFactors DemandDemand

g gForward Integrate

Over-reliance on Snow and Landscape

Mixed Understanding of Customers

Defense of low price level

The ClusterThe Cluster

Small-Big Hostilityg yUnclear links to financeUnclear ownershipDubious relation with the government

Borovetz DEMAND

Strategy, Strategy, StructureStructure& Rivalry& Rivalry

Gov't+/- Undifferentiated local demand+ Large EU skier market+/- Many package ski tour operators

FactorsFactors

+/ Many package ski tour operators+ Many independent buyers

The ClusterThe Cluster

Borovetz FACTORSz

St tSt t Gov't

BASIC+Climate

Strategy, Strategy, StructureStructure& Rivalry& Rivalry

Gov t+ Snow, forest, slopes0 Location Proximity+ Close to historic, cultural sites? L b F

DemandDemand

? Labor Force

ADVANCEDOutdated ski infrastructure

The ClusterThe Cluster

– Outdated ski infrastructure– Knowledge – Research capability+,- Limited use of Internet,+/- Management skills

Borovetz CLUSTERStrategy, Strategy, StructureStructure& Rivalry& Rivalry

Gov't

FactorsFactors DemandDemand

- Poor hotel facilities- Contacts with tour operators- Collaboration with other diversionsCollaboration with other diversions - Heavy licensing and permit procedures- No effective industry organization

Borovetz STRATEGY- Reliance on low price tours- Single event package+ Good quality ski experience+ Good quality ski experience - No targeting of customer niches- Little knowledge of customer requirements

FactorsFactors DemandDemand

The ClusterThe ClusterGov't

Export of Sri Lankan Tea by Category

90%

100%

60%

70%

80%

40%

50%

60%TEA IN BULKTEA PACKETSINSTANT TEATEA BAGS

20%

30%

0%

10%

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Source: Sri Lanka Industry Statistics

Dominican Republic Free ZonesExisting free trade zonesExisting free trade zones employ 2500+ information industry workersLocal private investors built and manage San Isidro Free Zone/TeleportZone/TeleportGovernment passed decree exempting San Isidro from telecomsIsidro from telecoms monopolyZone chosen by American Airlines as major offshoreAirlines as major offshore data processing/image processing siteOther Dominican Republic Teleservice Zones established by GTE, PIISA

Stephen Banya and Bancafe (Uganda)

GourmetGourmetCoffeeCoffee

Gov't

Best CoffeeBest CoffeeBest MachineryBest Machinery

Best PeopleBest People

Coffee Coffee HousesHouses

RoastersRoastersFarmersFarmers

pp

FarmersFarmers

Basis of CompetitivenessWorld: Capital Advanced Skills and TechnologyWorld: Capital Advanced Skills and TechnologyWorld: Capital, Advanced Skills, and TechnologyWorld: Capital, Advanced Skills, and Technology

DemandDemand

Global StandardsGlobal StandardsStrategy, Strategy, StructureStructure& Rivalry& Rivalry

The ClusterThe Cluster& a y& a y

FactorsFactors

Basic LaborBasic Labor

GlobalGlobal E-Commerce Projections

Estimates of Outsourcing Market

World Bank sees

Estimates of Outsourcing Market

World Bank sees developing countries able to compete for up tocompete for up to $120 billion in “long distance” telese i es aloneteleservices aloneBusiness services and software are at forefront of outsourcing growth

Indian Software ExportsIndian Software ExportsSoftware Technology Parks are now found in Bangalore Punefound in Bangalore, Pune, Bhubaneshwar, Thiruvananthapuram, Hyderabad, Noida (near Delhi), and Gandhinagar (near Ahmedabad).

All STP's are 100% export-oriented platforms that typically combine high speed telecommunications reliablespeed telecommunications, reliable power, and office space designed to meet the need of IT firms.

To minimize problems of red tape, STPs also help issue import certificates, software valuation, and attestation of export declarationexport declaration.

Source: NASSCOM, 1999

Macro Economic Environment:Much Reform Has Been Successfully Implemented

Monetary: Inflation Being TamedMonetary: Inflation Being TamedFiscal: Budget Deficits are NarrowingTrade: Tariffs Being LoweredTrade: Tariffs Being LoweredFor. Exch. Greater Convertibility

Yet Private Investment Often Slow to Respond--Where Are the Results??!