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Textile Industry

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Isabel Torres

on 24 September 2013

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Transcript of Textile Industry

Economic crisis in Ecuador
$1 = 25.000 ECS
Textile boom in China invaded Ecuador
The environmen caused the need for a change in strategy for InZatex
Industry recovery
Chinese products were poor quality and for those companies that survived the crisis result as an advantage
President Correa defended the local textile industry by implementing taxes
After the dollarization economic conditions were favorable
In 2000 the oil prices recover
The exchange rate is allowed, dollarized exports
InZatex started to increase sales again and started to rethink its new strategy
Slow growth by 2.5% in country economy
As a manufacturers started to recover 15% of market share
President Correa started a good relation with China
Supply and demand are regularized
Many companies went bankrupt but those who survived became stronger
Company started to invest in new technology and innovation
INZATEX operations began by Acurio's Amparo spouses of Zumarraga and Luis Zumarraga.
This was a young couple with three children, Christian, Andrew and Paul, who had just been born.
Don Luis worked at a company that manufactured threads and in this place realizes the boom that had the textile industry.
This coupled with his desire to start a business that promised much at the time, the decision, with his wife, to buy four used sewing machines to a seamstress
Politic and Economic environment changes
Oil prices decline
Profits fall by 9% and growth less than 1%
Public debt increase, risk and hyperinflation, inestability, speculation, general discontent, recession...
Mahuad regime falling after his monetary manage
Domestic banks suffer from capital flight, nonperforming loans and international credit lines was cut
They were no long term investments, low productivity
This is a family-owned corporation located Quito, Ecuador, dedicated to textile industry mainly for children's clothing
Economic Impact in the Company
Chinese textile industry
Low prices of Chinese textile products took more than 60% of market share in Ecuador
Sales decrease
Business reduction
Direct-manufacturing operation employees decreases in 90%
Gas, electricity and fuel prices rise because the government cut the subsidiary help
Company looses 40% of market share
Sales decreased in 80%
Local costs increased in 70%
Suddenly InZatex products were more expensive
High impact
Maria Fernanda Fernandez
Pablo Paniagua
Ana María Robles
Isabel Torres
Paul Zumarraga
Only manufacturing services
Quality products
Mono-business orientation
Main production of Children's clothing
Positioned as a pioneer in many textile techniques

Provide textile maquila service with excellence, quality and service to meet the needs of the customers, within a framework of efficiency and continuous process improvement
Workforce =122
First country to export is Costa Rica, this event started in 2012
The company produces approximately 25.000 pieces per month in 6 collections per year
Today the company is facing a new crisis due to lack of working capital, due to the high demand
Market Share
73 Direct-manufacturing
6 Designers
12 Distribution division
16 Administration
12 Sales Force
3 Supervisors
Initial Strategy: Low costs
Own Brand production
Vertical integration forward
Sporto, Advantix, Teddy, Sporto Baby
Target: Middle segment to high
Private label production as a manufacturer to some customers
Own stores were opened
High Perceived Value Strategy
Positioning and branding
Customer satisfaction
about clothing industry
Birth rate
75% of population have no full employment
Urban poverty rises from 36% to 65%
All financial system was in a precarious situation
Domestic demand decreases from 10% to 57%
Blue Ocean Strategy: Kids Fashion
*12 M population in 2005
Full transcript