Winner-tips - Trade Secret

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NER-TIPS - Trade Secret of Womens Enterprises: Stay Small, Go Big http://www.winner-tips.org/article/articleview/1

6/4/2008

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Trade Secret of W omens Enterprises: Stay Small, GoBig

There must be in the small, colorful bits and piecesthat come with marking a holiday that enables themto generate a festive air and inspire joy in the heart.Whatever makes these minutiae do what they do, itseems drowned in the cheer they create and in thecelebrationbut who cares? That they create joy isenough and in that their reason for being andpurpose seem fulfilled. Perhaps because of theirsmallness and because of what theyre made of,these things are not given much moment. It cant bedenied, however, that an event is much less festiveand rather empty without them. Though cheer maynot directly flow from them, cheer being an internalbubble of joy rising from within the human makeup, these bits and piecesdo have a good part in creating the effect.

When we see the streets, public places and homes festooned with lightsand display colorful ornaments, we know that a happy season is near, andChristmas tops the list. When colored lights deck street trees, wound abouttheir trunks and branches in great care and artistry, exuding goodness, thecitys usually drab byways turn into extraordinary places and excitingpromenades on eveningsespecially when chill has invaded the air. Whentiny tinny stars, papier mache balls, paper wreaths and buntings, andwhatnots, all in attractive colors, are tacked on and hang from the eaves,shimmer and throw back light, and when a Christmas tree occupies a placeof glory at home, the bubbling of cheer cannot be kept down at the sight.

These ornamental bits and pieces, lumped as one under holiday decor,have grown into a big industry, and, while they are the lightest handcrafteditems among the ever widening array of handicraft groups, among themgifts, arts and crafts, fashion accessories, houseware, and furniture, theyare not necessarily the simplest. Many of these bits and pieces, thoughmade of the lightest material, come in so artistic and so attractive designsthat only long honed skills, patience and a meticulous penchant forattention to detail bring off winners from out of the long and elongating lineof products in a highly competitive field.

Holiday dcor products, and the industry, can be described as one whichfeatures a wide variety of ideas and designs, fast moving and as fickle asfashions in garment. The name of the game is creativity, and there isalways room for new shapes and concoctions, innovations and newmaterial. Designs and concepts come and go and then, much like fashion,wing back in cycles of revivals. Lightweight and low-priced, the small bits

and pieces have short market life and are as good as disposables. Most, ifnot all, are discarded at the close of each season. Only a few select itemsare kept, stored, to be reused the next season, or recycled as gifts tofriends. This makes the seasonal demand for the products on an even keel,steadily rising from year to year.

Piece for piece in terms of price, holiday dcor items expectedly are thelowest among the handicraft groups, but it is amazing to know that sales ofthese bits and pieces and whatnots have snowballed in 2005 to US$6.4billion global business worldwide. This business sector has been averaginga modest 6% yearly growth in the last survey period spanning 2002 to2005. More than half of that volume of global market, no less than a 64%slice, were made up of Christmas dcor and related items. Only 23% wentto items for Easter, Halloween and other festivities, while 13% of the piewent to holiday lights and other lighting sets.

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A study visit at the F.A.M.E. International Exhibit 2007, one of the yearlyindustry exhibits regularly held in Manila as part of the countrys productsales blitz efforts, provided a closer look at the holiday dcor industry.

According to Ms. Felicitas Agoncillo-Reyes, assistant secretary of theDepartment of Trade & Industry, FAME 2007 was the 46th edition of theproduct display extravaganza sponsored and worked out annually bycountrys Center for International Trade Expositions and Missions. As inprevious exhibits, the extravaganza was a collegial effort put together forthe countrys small and medium scale enterprises (SMEs) in collaborationwith business support organizations of participating industry sectors.Visitors are treated not only to a sampling of holiday decors, but at the

same time also to a choice in the latest concepts and designs in fashionaccessories, gifts and houseware, arts and crafts, and furniture. Foreignbuyers and their representatives are given an early free run of the place forshopping and trade negotiations, before the exhibit is declared open to thepublic.

Through the years a tradition of holding two such exhibits every year hasbeen established, one in April and the other in October or November, withspecial related events intervening between the two major ones. The datesare set apart to give logistical space for sales, production and shipmenttime within each season. The November canto looks forward to marketdemands in Easter and Summer next year, while the April editionanticipates requirements in Halloween, Christmas and other feasts in Falland Winter seasons in the Western hemisphere, the traditional destinationof holiday dcor exports. Every exhibit functions as the local counterpart ofinternational events held in other countries, with those held in Hongkongtopping the list in terms of international participation. It is a must for

Philippine producers, suppliers, exporters, and foreign importers to be atthese exhibits to learn of emerging concepts, market trends, andtechnology development in skills and production.

A woman entrepreneur who has made the industry her whole life in the lasttwo decades, Ms. Marlane Villa-Real, said that the holiday decor businesssupport organization, which is the Christmas Dcor Producers andExporters Association of the Philippines, is the champion of this productsector. The organization provides support and assistance to members inupdating the state of the art and meeting the challenge of competitionabroad.

The period 1987-2000, she said, were the golden years of the holiday dcorindustry in the country. It was the time when annual exports steadily roseand peaked at US$104-$105 million. Haply, from that peak, industryperformance steadily declined in succeeding years, due largely to theaggressive sales performed by competing countries. By the end of 2006,Philippine holiday dcor stagnated, with exports coming up with only US$57million that year, without any promise of change for the better in sight. Inthree industry surveys, the latest being that of 2006, respondents surveyedamong local industry players invariably point to China as single biggestchallenge to the countrys prospects in the sector, followed far back on thetrack by India, Thailand, Vietnam and Taiwan. For example, in 2005, U.S.households accounted for US$3.3 billion of overall global holiday dcorimports, and China captured all of the $2.1 billion worth of that market. Therest of the pie was shared among the other exporting countries, with thePhilippines capturing only about $55-$57 million of the slice.

The dismal picture has not taken the wind out of the countrys sail. It mighteven prove to be a blessing in disguise. Due to the phenomenon of thesudden rise and sharp fall, local producers and exporters have fallen back,giving themselves space for serious thought, looking at the situation interms of strengths and weaknesses, and making ready to plot and accept a

more logical rank and position for the local industry in the global sphere,considering its situation vis--vis the rest of the players in the field.

It has greatly helped the local producers and exporters of holiday dcorproducts to go into in-depth industry study and to learn from sectoralsituation reports undertaken through the initiative of Pearl2 of the CanadianInternational Development Agency. The project is a five-year study from2002 to 2007 in support of the development of small and mediumenterprises in the country. It uses the value chain analysis methoddeveloped by a Dr. Michael Porter of the Harvard Business School. Theprojects focus on the holiday dcor sector was undertaken in partnershipwith the De La Salle Universitys Center for Business and EconomicResearch and Development.

According to the recent report of Pearl2, the value chain method looks hardat the primary activities of a firm, namely: inbound logistics, operations,


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outbound logistics, marketing and sales, and service. It then determineswhich aspects of the operation can be enhanced, where the firm can reducecosts and optimize resource use. Or, it may determine that a change iscalled for and it prescribes ways by which to reconfigure the entire chain ofoperation to achieve higher performance, increase product or service value,lower costs of operation, among others.

As a consequence of the study, many things came out of the woodwork.Based on the situation assessment, the report prescribes some very logicalmeasures to be taken. The focus of sales should be to recover lost accountsin the global market and to diversify its markets, at the same time turningan eye on regional and local markets. It suggests a serious shift to medium

and high-end markets, market segments which are not price-sensitive. Themove would mean a production realignment, where the aim is to creategreater product value in terms of design and craftsmanship. Diversifyingexport markets would likewise mean decreasing the industrys traditionaldependence on the U.S. and other markets and to intensify efforts atgetting business in Europe and other regions, including Australia, theMiddle East and Japan. The shift in sales strategies and market targetswould ultimately require an industry-wide upgrading on the technical andhuman aspects of production. Though the report did not emphasize it, itwould likewise entail an overhaul of the values molding and informing themost important aspect of production, the human factor.

Its in the attitude.

To sustain the effort in skills and quality improvement, a continuous valuesformation program for all players and stakeholders should be institutedindustry-wide. It should take in all firm owners and entrepreneurs, the

producers and exporters, all the craftsmen, staff, and workers at all levels,all subcontractors, and all the suppliers of raw materials. This was thestrong view of Ms. Marian Nash, director of FOBAP (Foreign BuyersAssociation of the Philippines), who is also an international projectconsultant of various concerns.

She said that a key consideration in the development and the achievementof a stronger position for the local holiday dcor and other handicraft-basedindustries is the availability, proximity and quality of raw materials. If onlyraw materials are pre-treated and preprocessed at the level of the suppliersand material quality is zealously kept according to desired specificationsand standards, in view of a particular target market niche, a lot of good willresult in the quality and value of Philippine export products. She then addedthat all this will result from having the right kind of working attitude amongall industry entrepreneurs and workers. These stakeholders can effect thechange among themselves, as it will redound to their benefit, she said, buta values formation program can help achieve the change where oldattitudes have hardened.

The line is not unfamiliar. We have heard it said and shouted in all sectorsof Philippine society. But the elephantine mass has simply not budged, itmay as well be stone-deafor dead. Hope, however, springs eternal in thehuman heart and it does not stop from conjuring visions and dreamingdreams. It climbs down the holiday dcor tree and takes a hard look at theground on which the tree lives and confronts its roots.

According to the Department of Trade and Industry, there are about 2,000producers of holiday dcor in the country, employing 250,000 workers.These workers come from the poorest segment of the population. It is alsothe segment where most of the more than eight million overseas Filipinoworkers have come from.

The initial lure of the power of the dollar, the euro, or the pound, which led

the poor to seek job opportunities overseas and the local producers to thinkbig, could likewise be the key to opening an entirely new vista for a peoplemade weak by the sight of the sheer size and the numbers of thecompetition they face. If only each one of the 250,000 workers in holidaydcor can be made to realize and appreciate that they, too, can bring in thebacon from overseas without leaving home, much in the same way as theirfamily member who is across the seas, perhaps hope will be not be soelusive and distant. If a family member has done it, the local producers cando it too. The task will not be as daunting or onerous if hope is seen as areality, close to home and within reach.


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