Reinventing the Portuguese knitwear industry: The case of Pedrosa & Rodrigues private label management model

Abstract

During the first decade of this century, the Portuguese knitwear industry, and textile cluster, were strongly affected by globalisation and seemed destined to decline. The Portuguese knitwear industry developed for decades a business model based on price as the main competitive factor, and that model was no longer able to support competitiveness against low wages countries. Portuguese knitwear industry made a dramatic change towards a competition based on value to the client. The companies adopted as primary differentiation drives technological innovation, design, fashion, and services customer-oriented, together with more presence on international fairs and exhibitions. The new strategy resulted in the significant growth of exports that reached 40% from 2009 to 2018. The restructuring of the cluster, however, changed it significantly, and the number of companies was reduced by almost 50%. The competitive change made the entire Portuguese textile cluster an international case study where the modern concept of private label business model is central. The business model of private label adopted by the most competitive knitwear companies considered a full package of services to international clients. It integrated the collection's design, raw materials development, superior finishing, careful and cost-effective confection and sophisticated logistics. Pedrosa & Rodrigues, SA. is a midcap company from Barcelos County, North of Portugal, and is a highly successful example of the new competitive paradigms. This new model is now leading the Portuguese knitwear industry to a higher level in the value chain and gives it a strong reputation worldwide.