Introduction.
Being a significant contributor to the economy of Sri Lanka, this report will evaluate the overall industry environment of the apparel sector in Sri Lanka. Showing modest beginnings in the late 1960’s, the industry showed exponential growth in the following decades, and as per latest data, accounts for approximately 45% of the total exports of the country (Central Bank of Sri Lanka, 2017). With a total export value amounting to $4.8 billion in the year 2016, the apparel industry is almost entirely privately owned and caters mainly to the export market with a relatively low contribution to the local market (IPS,2004). Thus, in the evaluation of the industry, this report will mainly focus on the export-oriented apparel industry of the country.
External Environmental Analysis.
The external environment of an industry, can be defined as the environment which contains factors that cannot be controlled. An evaluation of this enables the organization to anticipate and strategize against possible external changes using internal capabilities. The PESTEL model is a generally accepted tool to perform an external environmental analysis (Hubbard et al, 2015).