Why are Companies Moving Back Home? An investigation into the drivers of location choice in the European apparel industry
MetadataShow full item record
As a result of globalization, many firms have chosen to offshore value chain activities in the apparel industry. However, there is an increasing trend of moving manufacturing closer to home. Supply chain disruptions, demand volatility and an increasing pressure on sustainability has made many managers of global value chains consider reshoring or nearshoring segments of their supply chain. Reshoring refers to moving previously offshored production back to the country of the parent company. Closely related to this term is nearshoring, which involves moving production closer to the country of the parent company. This thesis investigates the various drivers of location choice within the European apparel industry. Semi-structured interviews were conducted with eight participants involved in the European apparel industry or the reshoring and nearshoring phenomena. The interviews attempt to uncover the different decision-making processes and perceptions of these trends within the industry. The analysis shows that firms consider both supply-side factors and consumer expectations when making location decisions. Control and speed of production may drive location choice from the supply side, while the increasing consumer preference for local products is driving location decision from the demand side. The pursuit of more sustainable practices can influence the location choice for apparel firms, although this is mainly through the consumer’s perceived notion of sustainability. A limitation associated with this research is the lack of individuals interviewed with direct decision-making power on the location choices of apparel firms. However, the aim of this thesis is not to provide one answer to the drivers of location choice. Instead, this is an attempt to understand the various positions within the industry on this highly relevant topic.