STRATEGIC RESPONSES BY HONG-KONG TEXTILE AND CLOTHING FIRMS TOWARD THE MFA

The present paper constitutes the first part of the Research Project o n 'Hong Kong Textile and Clothing Industrialists' Strategic Responses toward the MFA'. It was the authors' intention to examine how the text ile and clothing industrialists in Hong Kong have managed to cope with the Multi-fibre Arrangement (MFA) issues during the last two decades. The study was composed of three parts. First, a thorough review of th e literature was conducted on issues related to the MFA and the Hong K ong textile and clothing industry. Second, a list of ten strategic act ions was initially developed by the authors to be used to conduct in-d epth interviews with fifteen professionals in the textile and clothing industries in Hong Kong, including industrialists, managers, and acad emics. Seven categories of strategic actions were identified to be ado pted by the textile and clothing firms in response to MFA issues: (a) switching to production of non-quota items; (b) increasing focus on va lue-added items; (c) implementing new technology; (d) switching produc tion to low-cost countries with quota advantages; (e) venturing into n on-quota markets; (f) diversifying into retailing and other businesses ; and (g) investing directly in developed importing countries. Third, on the basis of these seven strategic actions, the authors conducted i n-depth interviews with top managers of 41 local clothing firms that h ad exported clothing products to countries with quota restrictions. Th e results indicated that four of the seven strategies were adopted by the majority of clothing firms in Hong Kong.