The Use of Channel Integration as a Strategic Option: A Study of Hong Kong Clothing Manufacturers

This paper explores the changes in Hong Kong clothing manufacturing firms regarding the development of vertical and horizontal channel integration as a strategic option in international marketing. Analyses of data suggested that Hong Kong clothing manufacturers are increasingly integrating forwardly by utilizing foreign based channel intermediaries, as well as establishing internalized export departments and overseas sales offices to handle their export functions. In addition, a dominant trend of horizontal integration exists in the form of expansion of outward processing facilities in southern China. Such developments aim to take advantage of the lower cost production so as to remain competitive with low cost producers from other less developed/developing countries.