| This thesis is a study on how China's silk export enterprises can make the right approach in conducting successfully international marketing. The thesis consists of Eight Sections: Intention of Study, Theoretical Review, Basic Assumption, Study Method, Case Study, Conclusion and Recommendation, Shortcoming and References. Natural Silk is one of China's largest commodity for export. Being the No. 1 producer and exporter in the world, China's Raw Silk output is more than 70 percent of the world's total. It's raw silk export accounts for 80 percent, gray fabric 40 percent, of the world's total exports. Dominant as its supply position in the world is, China's silk industry has mired itself in an awkward situation for many years. Why? In this thesis, the writer try to trace the cause and search for the effective marketing strategy for China's silk industry to extricate itself from its present predicament. China's silk industry is a gigantic complex which involves cocoon, raw material, fabric and garment production, domestic sale and foreign trade. It requires close coordination and mediation among cocoon growers, manufactures and traders to safeguard a dynamic chain of production. Under the "State-Control System" for China's silk production and export from 1949 to 1998, the whole industry was strictly controlled by the central government and all the parties involved were segregated. Only in 1999, the State-Control System remained in the foreign trade sector was abandoned.Has the systematic change gave fresh impetus to China's silk Industry? According to Michael E. Porter's "Factors of National Competitive Advantage" theory, it needs multiple factors for an industry to obtain national competitive advantage. These factors are correlated with each other and every single multifunction will fail the whole industry to gain the advantage. Under the State-Control System, it is obvious that, although China's silk industry possessed numerous favorable factors, it failed to supply the world a variety of elite silk products owing to segmental production interest. What happened was: the country's main silk exports were raw materials and gray fabrics because of easy processing, while further-processing technology and finished product development were neglected. As a result, the industry could not gain National Competitive Advantage. As the government gradually gave free rein to the production, domestic sale and foreign trade of silk products, over-heated production and fierce competition has been enforcing the manufactures and exporters to minimize their overheads and production costs, greatly improve the quality and give more inputs to new product development. This has brought about increasing supply of high quality and further-processed products and modernization of equipment and technology in all segments of the industry. At the same time however, owing that the government place no role in the coordination and stabilization of raw material production as it should, reckless manufacturing has induced suicidal competition in production and pricing, which caused vicious cycle of never-balanced supply-demand perplexity. The cocoon farmers and yarn and fabric manufactures ignore government advise and supervision and keep their eyes only on short-term benefits. In so doing, cutting back on the price has been the only means in the competition and more and more plants are running in red. Take silk garment which accounts for one-third of China's total silk export value for example, low price competition among the internal suppliers in the world markets has not only damaged the elegance of natural silk products but also restrained China's raw silk materials and gray fabrics to be sold at reasonable price. Such being the case, national competitive advantage is still far beyond the reach for China's silk industry. The reason why China's silk industry has been failing to obtain national competitive advantage lies in the fact that the manufactur...
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