STRATEGY AND FIRM PERFORMANCE IN THE CROATIAN TEXTILE AND CLOTHING INDUSTRY

This paper examines the differences and similarities in strategies employed by companies operating in the Croatian textile and clothing industry.n The analysis i based on company survey comprising 80 manufacturers. The data was analyzed using k-mean cluster analysis, one-way analysis of variance (ANOVA) and chi-square test. Research results indicate that textile and clothing manufacturers employ two major strategies: low cost strategy and value-oriented strategy. While low cost strategy implies lower material costs, emphasis on subcontracting and lower level of brand intensity, value-oriented strategy comprises the production of firms’ own products, own brand development and higher level of production costs. The results further indicate that value-oriented strategic approach yields signifi cantly more value added per employee, sales volume per employee, and return on sales (ROS) than low-cost strategy, and thus appears to provide a means by which textile and clothing manufacturers may mitigate the effects of increased price competition and achieve competitive advantage in the marketplace.