China, as a leading apparel manufacturer and exporter in the world possesses significant market potential for growth because of its growing demand power. Given that low labor costs are increasingly no longer one of the competitive advantages held by Chinese apparel manufacturers, developing powerful and profitable globally recognized apparel brands may be the way to obtain sustainable success for firms in the Chinese apparel industry. Accordingly, Michael Porter’s The Competitive Advantage of Nations (1990) will be applied as a theoretical framework to discuss the competitiveness of a nation’s apparel industry. Brand management, satisfying exacting domestic demands, and stimulating marketing competition will be integrated. Using Porter’s theoretical foundation for demand conditions, a proposed model of fashion sophistication is introduced and a measurement survey utilizing Gen-Y Chinese fashion consumers is assessed. Furthermore, the research on Gen-Y consumers’ fashion sophistication discovered their specialized characteristics which represent exacting domestic demand for apparel products.

China, as a leading apparel manufacturer and exporter in the world possesses significant market potential for growth because of its growing demand power. Given that low labor costs are increasingly no longer one of the competitive advantages held by Chinese apparel manufacturers, developing powerful and profitable globally recognized apparel brands may be the way to obtain sustainable success for firms in the Chinese apparel industry. Accordingly, Michael Porter’s The Competitive Advantage of Nations (1990) will be applied as a theoretical framework to discuss the competitiveness of a nation’s apparel industry. Brand management, satisfying exacting domestic demands, and stimulating marketing competition will be integrated. Using Porter’s theoretical foundation for demand conditions, a proposed model of fashion sophistication is introduced and a measurement survey utilizing Gen-Y Chinese fashion consumers is assessed. Furthermore, the research on Gen-Y consumers’ fashion sophistication discovered their specialized characteristics which represent exacting domestic demand for apparel products.

Clusters are concentrations of companies that reached a critical mass and that produce together all elements of the value chain. This research will look at the Design Services Industry and its clusters. The forming of clusters will be illustrated by examples from The Netherlands and Taiwan. To structure the research an adapted model of the Porter’s diamond is used to analyze the two countries. Porter’s diamond discusses the microeconomic foundations of competition that influence and stimulate the forming of clusters. The four major components of the model are factor conditions, demand conditions, supporting and related industries and strategy, structure and rivalry. These components can be influenced by governments and chance. The adaptations to the model consist first of making the components of virtual clusters more explicit by mentioning elements that can be leveraged by information technology And second by adding attention to the attraction and retaining of talent. The Design services industry has a special need of talent which some also call the creative class. The analysis identified several differences between the two researched countries. These differences can be seen as opportunities for improvement by the design service industries in both countries. Keywords: Design, Cluster, Factor conditions, Demand conditions, Supporting and related industries, Strategy, Structure, Rivalry, Government, Chance, Information Technology, Talent, Creative class.