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Compose a 2000 words essay on 1.It may sound strange that Chinese firms are turning to Bangladesh to make clothes, not least because China is the global leader in clothing manufacturing and exports. But the shift is happening for very obvious reasons. BBC new 29/08/2012. Using. Needs to be plagiarism free!

Anyone who has a slight knowledge of economics would be familiar with the concept of competitive advantage. In very simple terms, competitive advantage can be defined as that benefit which a firm has over its competitors and which allows it to make greater sales and generate greater profits. There can be many factors which allow a firm to have a competitive edge over its competitors, but most of the times such factors are related to low costs of production. Other than that, competitive advantage can be achieved by the product offering of a firm, its customer base and its distribution network.

As a matter of fact the more sustainable the competitive advantage a firm possesses, the more likely it is to enjoy a stable position in the market and the more difficult it would become for competitors to compete with such a firm.

For years we have known that China is the market leader in cheap made clothes. And that’s the only reason why not only major retailers from around the world, but also brands like Wal-Mart etc. set up their production facilities there so as to avail the low cost benefit. Talking in economic terms, China has a competitive advantage in the production of clothes owing to the cheap labor force in the country. However the recent years have witnessed many Chinese and worldwide clothing moving out of the country and into Bangladesh for the production of clothing goods.

A textile producer in Bangladesh was quoted as saying that a few years back, only five percent of his factory’s output was for the Chinese markets. However in recent times, this figure has gone up to as much as twenty percent and analysts have forecasted that in the coming five years, the exports of Bangladeshi ready-made clothes to China would reach a figure of around five hundred million dollars.

The question that now comes in mind is that what is it that has caused so