The Value Chain Analysis of the Footwear Capital of the North

Abstract

The study delved at describing the slipper industry in Gapan City, Nueva Ecija anchored on the Value Chain Analysis Framework by Michael Porter. Using the descriptive research design, it involved 46 slipper manufacturers as respondents. The researcher mainly focused on the industry’s demographic profile and the aspects of business operation in terms of inputs provision, production, marketing, cost and return analysis, prospects, problems, and constraints of the slipper industry. The study revealed that majority of the slipper manufacturers were unregistered. Raw materials mostly came from China and claimed to be of poor quality. Worker turnover rate was high, and by standards underpaid because the cost of labor was based on per piece. This was further aggravated by the practice of some slipper traders where orders were contracted with the promise of guaranteed payment in the future, however; manufacturers had to be contented with the offered price of the former. Pricing methods employed were cost-based, penetration, and customer-based pricing. The prime geographical markets of the manufactured slippers were in the City of Gapan and other nearby regions. Many of the slipper manufacturers relied on credit extended by suppliers and additional financing and financial institutions, hence causing shrinkage in income. Although this business is profitable, imported slippers from other countries still haunt the Gapan slipper manufacturers, which was directly competing with their products. The industry is at a standstill because of its current state that enables them to harness full potentials of the product both in the local and international market.