Cultural Identity in the Productive Matrix: A Challenge for Ecuadorian Footwear

Cultural Identity in the Productive Matrix: A Challenge for Ecuadorian Footwear

Sandra C. Varela, Jorge L. Santamaría, Marcelo Pilamunga
DOI: 10.4018/978-1-7998-1859-5.ch009
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Abstract

The revolution in Ecuadorian shoe industry represents a big challenge because of the proliferation of imported products. This tariff advantage put the Ecuadorian entrepreneurs in a comfort zone, evidencing a stagnation in the evolution of products with differentiation strategies in opposition to globalized products. To this problem are added limiting factors such as raw materials and imported inputs. The current work studies the situation of the Ecuadorian entrepreneurs of the National Camera of Footwear in the Tungurahua province in order to know its reality and determine strengths and weaknesses of the sector and strategies to promote the productive matrix of Ecuador. The research exposes the impact that a proposed product can have from a strategic vision of differentiation through sustainability of Ecuadorian footwear.
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Introduction

According to the study published by Transparency Market Research in 2013 (Revista del Calzado, 2017), the worldwide footwear industry is growing rapidly. The study indicates that, for the period 2012-2018, the market reached around 211.500 million dollars and it is also noted that in this period the footwear industry production grew 1.9% annually. In recent years, there have been great changes in the evolution and diversification of footwear products, reaching great impact in international markets.

Revenue in the Footwear market amounts to US$435,139m in 2019. The market is expected to grow annually by 4.2% until 2023 (www.statista.com, 2019).

Countries such as China, India, Italy, Spain and Portugal have been considered historically as powers in the manufacture of footwear (Pontoni, 2003). Each of them bases their growth strategies on aspects such as the low cost of their raw material, the low cost of workforce or the speed and efficiency when supplying the market with new products. It can be said that these aspects are related to common denominators, such as: research, development and innovation in the product, with a high knowledge of the market as an essential factor regardless of the utility, comfort, durability or benefit of the product.

In the last years, Asian countries have become the largest footwear producers in the world, although very rarely if ever with brands from their own country. Thus in 2017, of the first five countries in footwear production, four were Asian: China, India, Vietnam and Indonesia (Revista del calzado, 2018). In 2018, the same five countries were leading the list (Revista del calzado, 2019). The first non-Asian country in the top was Brazil, in fifth place, which does has both, a strong industry and its own brands. The second Latin American country was Mexico in eighth place in 2017 and 2018. The first European country was Italy in tenth place and Spain ranks 16th in the same years.

At the same time, the study is carried out on the knowledge of the needs, preferences, lifestyles, colors and specific factors of each type of consumer, which are bombarded with a wide variety of products, this situation, in turn, influences the decision of consumers to acquire more than they really need, making this a solid and promising industry. China has consolidated its position as a leader in the manufacture and marketing of footwear worldwide, and leaves in the background countries such as Italy and Spain, which have reduced their volume of production, with the need to think about new strategies, based mainly on a product, more attractive in terms of product design and conceptualization. In order to accomplish this, they have taken risks in terms of costs, but have achieved a good reception due to their added value. Another fundamental factor that exerts a considerable influence on consumers is the quality of materials, inputs and productive processes that serve to enhance productivity and competitiveness, and thus, supply markets and satisfy consumer needs.

According to Fuster-García, Spain is the second footwear manufacturer in the European Union followed by Italy since 2009, with about 2300 companies and an approximate production of 118 million pairs of shoes, reaches a value of 2,059 million euros. Leather footwear manufacturing stands out with an approximate production of 25% of the world total, of which 16% is destined for export. Both countries currently maintain their dominance (Revista del calzado, 2019).

Key Terms in this Chapter

Creative Industries: Are the cycles of creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs; constitute a set of knowledge-based activities, focused on but not limited to arts, potentially generating revenues from trade and intellectual property rights; comprise tangible products and intangible intellectual or artistic services with creative content, economic value and market objectives; stand at the crossroads of the artisan, services and industrial sectors; and constitute a new dynamic sector in world trade.

Innovation: Is a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process).

Product Innovation: Is a new or improved good or service that differs significantly from the firm’s previous goods or services and that has been introduced on the market.

Heritage: Cultural heritage is identified as the origin of all forms of arts and the soul of cultural and creative industries. It is the starting point of this classification. It is heritage that brings together cultural aspects from the historical, anthropological, ethnic, aesthetic and societal viewpoints, influences creativity and is the origin of a number of heritage goods and services as well as cultural activities. This group is therefore divided into two subgroups: a) Traditional cultural expressions: art crafts, festivals and celebrations; and b) Cultural sites: archaeological sites, museums, libraries, exhibitions, etc.

Business Innovation: Is a new or improved product or business process (or combination thereof) that differs significantly from the firm's previous products or business processes and that has been introduced on the market or brought into use by the firm.

Economic Value Creation: Results from the difference between “perceived utilities” gained in a transaction and the economic cost of delivering that transaction. Since economic value creation depends on the utilities perceived, it is observer relative and it is not intrinsic. Therefore, it is client/user/consumer-based.

Business Process Innovation: Is a new or improved business process for one or more business functions that differs significantly from the firm’s previous business processes and that has been brought into use by the firm.

Innovation Activities: Include all developmental, financial and commercial activities undertaken by a firm that are intended to result in an innovation for the firm.

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