According to China Credit Information Service Ltd.¡¦s classification, Taiwan¡¦s women underwear industry is under the ¡§Apparel¡¨ category. The women underwear industry has developed from 1950¡¦s, and now is in a mature period with high entry barrier. Under the ¡§Oligopoly¡¨ market structure and well-developed domestic distribution system, there are seven leading firms--competing in product¡¦s design, fashion and shop ladies¡¦ service based on good on-job education and training with each other. Foreign rivals¡¦ emulating in the industry also prompted domestic firms developing international competence. Because of mounting up in production cost in Taiwan and low-end products dumping from China and South Asia after signing up for WTO, many firms sought to build ¡§International Division of Labor System¡¨ and engage in overseas production to make cost cut down and improve the industry competitive position effectively. This research adopts the qualitative exploratory study method. The first, author collected an amount of domestic and foreign relative references, including industry yearbooks, books, professional reports, journals, magazines and newspapers as the secondary data. Then, author interviewed three firms and formulated these materials by which author can understand the business operation situation and the industry¡¦s competition model. In order to explore the competitive advantage of Taiwan's women underwear industry, author implemented consumer behavior analysis, analysis of Porter¡¦s ¡§structure of five competitive forces¡¨, ¡§value chain¡¨, and Porter's ¡§concept of crystal model of national competitive advantage¡¨. Finally, we drew up the competitive strategies to the industry and the government for further improvement by SWOT analysis. Those competitive strategies will be include ¡§Production Innovation Strategy¡¨, ¡§Market Development Strategy¡¨, ¡§International Strategy¡¨, ¡§Cost Minimize Strategy¡¨, and ¡§Relative Advantage Strategy¡¨.