THE SWOT ANALISYS OF THE POLISH LEATHER AND FOOTWEAR INDUSTRIES Lodz, 7th April 2005 Polish Chamber of Shoe and Leather Industry

STRENGTHS - 1 tradition relatively high workforce qualifications (F) relatively high products quality brand development (brands awareness among the consumers, POS promotional activities development) - (F) rationalisation of the production management - subcontracting (F)

STRENGTHS - 2 Market oriented production coherent with fashion trends (F) Law direct workforce cost and good workforce qualifications (L) Free production capacities

WEAKNESSES - 1 Insufficient access to raw materials - lack of local raw material caused by high cattle import (L) Unused production capacity - excessive production capacities, law workforce productivity caused by improper work organisation Access to capital - missing working capital, missing funds for investments and modernisation Law or decreasing local markets share because of weak offer adjustment to the market demand and needs (L)

WEAKNESSES - 2 Other factors: no brands (L) undeveloped distribution channels no (L) or very poor (F) marketing skills management problems law flexibility to customer demand (L) no co-operation no will to develop and raise employees’ professional qualifications

WEAKNESSES - 3 Little understanding or no understanding for the necessity and benefits coming from sector’s consolidation and common operation Liabilities - very long payment terms

CHANCES - 1 Access to EU markets: Access to eastern markets easier EU markets penetration equal law and chances possibility of the access to the Baltic countries markets Access to eastern markets

CHANCES - 2 Capital and investments inflow EU structural funds !!!!!!!!!!!!!!!!!!!!!!! Direct foreign investments credit guarantees and trade insurance market development

CHANCES - 3 Market tendencies fashion and lifestyle tendencies - come back to the natural materials leather articles market development brand development (F) increasing productivity and efficiency new product lines higher added products value

THREATS - 1 Increasing competitiveness power of the products and materials from Asian countries!!!!!!!!!!!!!!!!!!! Retail and wholesalers’ favourable attitude towards Asian origin products Import of finished products!!!!!!!!!!!!!!!!!!!!!! Materials import - leather being imported by the footwear producers (L)!!!!!!!!!!!!!!!!!

THREATS - 2 Increasing direct and INDIRECT work costs SMEs weak position Missing national industrial policy Limited society purchase value

THREATS - 3 Missing national programme of promotional activities for companies Unstable and incoherent law, lack of unambiguous interpretations unacceptable way of EU law transformation to the Polish conditions

THREATS - 4 Undeveloped distribution channels Subcontracting: production relocation outside Europe without any changes, raw materials may be exported outside the country (L)