Master thesis

Master’s program in Strategic Entrepreneurship for

International growth, 120 credits

Entrepreneurship Challenges: Overpricing and

Technological Roadblocks:
An Analysis of Pakistan's Clothing Industry

Halmstad May, 2023

Authors: Jincy Kaleekal & Syed Shah Hassan
Supervisor: Afshin Afshanipour
Examiner: Ziad El Awad
Summary

Background and Problem

Pakistan's clothing industry plays an important role in the country's economy;

more than 60% of total exports and job possibilities are provided by the
clothing industry in Pakistan. Small and medium-sized industries (SMEs)
have increased in recent years, contributing to the industry's overall
development (SMEs) throughout the last decade. Pakistan's clothing industry
has grown rapidly but faces significant challenges of overpricing and
technological roadblocks. Overpricing makes clothing items unaffordable for
consumers, while outdated technology and machinery cause issues in
productivity and competitiveness.

Purpose

The purpose of this study is to investigate the two challenges of entrepreneurs

which are overpricing and technological roadblocks in the Pakistan clothing
industry and to provide their solutions.

Research Questions

The following research questions are created to accomplish the purpose and
justify this study:

1. How entrepreneurs in the Pakistan clothing industry are facing

challenges due to overpricing?
2. What are the technological challenges in the Pakistan Clothing
industry for entrepreneurs?
3. What are the solutions to overpricing and technological roadblocks
in the clothing industry of Pakistan?

Methodology

The research follows a qualitative research method while the deductive

approach has been used. The study's main goal is to achieve its objective and
solve the research question by utilizing both primary and secondary data. The
primary data collection involved conducting four in-depth interviews with

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officials of the Pakistan clothing industry. Secondary data was gathered from
different sources such as scientific journals, articles, books, and websites to
complement the primary data and provide a comprehensive analysis.

Findings

The finding of this research is that entrepreneurs in the clothing industry face
overpricing challenges due to the rising cost of production, the rising cost of
raw materials, and the high cost of skilled labor. In technological challenges,
the most common challenges entrepreneurs face are outdated machinery, lack
of investment in technology, lack of research and development, poor quality,
and lack of digital tools. The study also suggests some solutions to these
challenges: Sustainable Sourcing, Government Support, Investment in
Technology, focused on market research, enhancing the product's value
proposition by reducing production costs, Programs for Technology
Education, and Training Partnerships with Technology Providers and
Consultants

Limitations

This research conducts only four interviews in Pakistan for primary data
collection. The cross-sectional, non-experimental design of the study was a
limitation as it only allowed for data to be collected at a single time point.

Keywords

Entrepreneurship, Challenges, Overpricing, Technological Roadblocks,

Clothing Industries in Pakistan

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Acknowledgments

We want to sincerely thank Professor Afshin Afsharipour, our supervisor at

Halmstad University, for his insightful advice and helpful feedback. We value
his direction, backing, and timely comments throughout the entire procedure.
Furthermore, we acknowledge those who participated for giving their time
and expertise, which gave the entire study more credibility in terms of
evidence. The efforts of all the participants have contributed significantly to
the thesis's conclusion. We would like to express our gratitude to the members
of our thesis discussion team for the insightful material that has come to light
throughout our meetings.

Halmstad- May 2023

Jincy Kaleekal Syed Shah Hassan

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Table of Content
Summary...................................................................................................... 2
Acknowledgment....................................................................................... 4
List of Tables.................................................................................................. 7
List of Figures ................................................................................................ 8
1. Introduction ............................................................................................ 9
1.1 Background .............................................................................................. 9
1.2 Problem Statement ................................................................................. 11
1.3 Purpose ................................................................................................... 13
1.4 Research Questions ................................................................................ 14
1.5 Delimitations .......................................................................................... 14
1.6 Dispositions ............................................................................................ 14
2. Literature Review ............................................................................... 16
2.1 Entrepreneurship ................................................................................ 16
2.2 Entrepreneurship Challenges in the Clothing Industry in Pakistan .... 17
2.3 New Challenges for Entrepreneurs in the Clothing Industry ............. 18
2.3.1.Overpricing .................................................................................... 19
2.3.1.1.Overpricing as a Challenge for Clothing
Entrepreneurs in Pakistan ......................................................... 20
2.3.2. Technology ..................................................................................... 22
2.3.2.1. Limited Technologies Capabilities
in Pakistan Clothing Industry ................................................. 23
2.3.2.2. Solutions to Overpricing and Technological Roadblocks
in the Clothing Industry of Pakistan ............................................ 27
2.4. Theoretical Framework ..................................................................... 28
3. Methodology .................................................................................... 30
3.1 Research Approach ............................................................................. 30
3.2. Research Methods ............................................................................. 30
3.3. Research Strategies ............................................................................ 30
3.4 Research Design ................................................................................. 31
3.5 Literature Review Collection ............................................................. 31
3.6. Method of Data Collection ................................................................ 32

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 3.6.1. Interviews .................................................................................... 32
3.6 Data Analysis ..................................................................................... 34
3.7 Research Quality ................................................................................ 34
3.7.1. Validity and Credibility .................................................................. 34
3.8. Ethical Consideration ........................................................................ 35
4. Empirical Data ................................................................................. 37
4.1 Rangoli Cloths .................................................................................... 37
4.2 Liberty Cloths ..................................................................................... 40
4.3. Ideas by Gul Ahmed .......................................................................... 43
4.4. Khaadi .............................................................................................. 46
5. Analysis ............................................................................................. 52
5.1. Overpricing ........................................................................................ 53
5.1.1 Causes of Overpricing ..................................................................... 54
5.2 Technological Roadblocks ................................................................. 55
5.2.1 The Solution to the Challenges of Technological Roadblocks ....... 56
5.3 Comparison with Existing Literature ................................................. 57
5.4 Contribution to the Existing Literature .............................................. 57
5.5. Recommendation to the Industry ...................................................... 58
5.5.1 Recommendations for the clothing industry
in Pakistan based on the study's Findings .......................................... 59
5.5.2 Recommendations for Overcoming the
Challenge of Technological Roadblocks ............................................. 60
6. Conclusion ........................................................................................ 61
6.1. Managerial Implications and Future Research .................................. 63
6.1.1. Identification of Areas for future research ..................................... 64
6.2. Limitations......................................................................................... 64
References ................................................................................ 66
Appendices .............................................................................. 76

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List of Tables

Table 1: Selected Clothing Industries and Interviewees................................33

Table 2: Summary of Empirical Findings......................................................51

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List of Figures
Figure 1: Disposition........................................................................15
Figure 2: Theoretical framework.......................................................29

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1. Introduction

1.1 Background

Pakistan is home to a thriving clothing industry and a long tradition of

clothing production (Ata‐Ullah et al., 2020). The rising local and worldwide
demand for clothing has rapidly expanded the industry in recent years.
However, new difficulties have emerged because of the industry's expansion,
and these must be faced and conquered by any aspiring business owners
(Mostafiz et al., 2020). Millions of Pakistanis find gainful employment and
substantial financial support from the country's clothing sector (Hasan et al.,
2021).

Pakistan's clothing and garment sector is a major economic driver,

responsible for more than 60% of all exports and employing a sizable
proportion of the country's workforce (Memon et al., 2020). In contrast,
Pakistan's clothing industry has seen an increase in small and medium-sized
businesses (SMEs) over the previous decade (Shafi et al., 2020). Like any
other, the clothing industry in Pakistan relies heavily on the efforts of
entrepreneurial individuals and businesses. Innovation, inventiveness, and
healthy rivalry in the field are all thanks to its entrepreneurs. The sector's
expansion, however, has resulted in the emergence of new obstacles that the
industry's pioneers must solve (Bornstein & Davis, 2010).

Overpricing of clothing items has been a major concern for consumers in

Pakistan, as they struggle to afford basic clothing items due to the high prices
(Al-Salamin et al., 2015). Overpricing is a significant challenge for the
industry (Li, 2014), as it makes Pakistani garments less competitive in the
international market (MoT 2009-10). This, in turn, reduces the industry's
export potential and hampers its growth. The causes of overpricing are
complex and multifaceted. They include high production costs, including raw
materials, labor, and energy (Safdar & Naeem, 2020).

According to a report by the State Bank of Pakistan (SBP), the cost of

production in the clothing industry of Pakistan has increased significantly due

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to a rise in the prices of raw materials, energy, and labor (Khan & Khan,
2010). This has led to an increase in the prices of clothing items, making
them unaffordable for many consumers. As a result, the demand for locally
produced clothing has declined. At the same time, imports have increased,
negatively impacting the country's balance of payments (Cororaton et al.,
2008).

The second major challenge facing the industry is technological roadblocks.

Pakistan's clothing industry needs to adopt modern technologies faster,
resulting in lower productivity and quality standards (Kanat et al., 2018).
This, in turn, has impacted the industry's competitiveness and profitability.
Technological issues such as outdated machinery, lack of automation, and
poor infrastructure have hindered the industry's growth and competitiveness
(Memon et al., 2020). The government and industry stakeholders need to
address these challenges and take necessary steps to modernize the production
facilities, improve productivity, and reduce the cost of production to make
Pakistani clothing competitive in the global market (Munir et al., 2017).

Furthermore, the need for more technological advancement in the clothing

industry of Pakistan has also been a major issue. Many textile mills in the
country still use outdated machinery, which results in low productivity, high
energy consumption, and poor-quality products (Shaikh et al., 2017).

In addition, the need for more automation and better infrastructure has also
helped the industry's growth. According to a report by the International
Labour Organization (ILO), the clothing industry of Pakistan is characterized
by low levels of automation and a high dependence on manual labor
(International Labour Organization, 2022). This has led to a need for more
efficiency in the production process, resulting in low productivity and high
labor costs (Mahmood & Kazmi, 1998).

The sector relies on a highly trained labor force to consistently deliver

superior goods that exceed customer expectations. However, many workers
in Pakistan need more skills to fulfill industrial requirements because of the
country's weak education and training system (International Labour

10
Organization, 2022). Developing new technologies in the clothing sector has
also presented new difficulties to business owners (Dad & Karim, 2019).
Online marketplaces and social media have completely altered how
consumers search for and purchase clothing (Barysevich, 2020). To reach
customers and stay competitive, businesses today need to put resources into
digital marketing and e-commerce. Because of the rise of digital media,
business owners now must find ways to streamline their operations and cut
expenses without sacrificing quality (Kanat et al., 2018).

This study focuses on the overpricing and technological challenges faced by

entrepreneurs in the clothing industry of Pakistan and possible solutions to
these challenges. Overall, Pakistan's clothing industry faces significant
challenges due to overpricing and technological issues. Overpricing has made
it difficult for many consumers to afford basic clothing items. At the same
time, technological issues have hindered the industry's growth and
competitiveness.

1.2 Problem Statement

Pakistan's clothing industry has experienced significant growth in recent

years due to increased domestic and global demand for clothing (Syed et al.,
2012). However, this expansion has brought new challenges for business
owners, such as overpricing and technological roadblocks. The industry has
become fiercely competitive, with many companies offering similar items at
varying prices (Cororaton & Orden, 2008). To succeed, entrepreneurs must
differentiate themselves from their competitors. Despite the clothing
industry's contribution to Pakistan's economy, it faces significant challenges
in overpricing and technological roadblocks (Shah et al., 2012). The rising
cost of production due to increasing raw material, energy, and labor costs,
coupled with the lack of technological advancement and automation has
resulted in low productivity, poor product quality, and decreased demand for
locally produced clothing. These challenges have made it difficult for the
industry to compete with other clothing industry countries and meet the
evolving demands of the global market (Khan & Khan, 2010).

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Some studies are conducted based on the challenges hindering Pakistan's
Clothing industry. However, they all focused on challenges of trade policies
on the industry, production methods, global market trends, energy problems,
insufficient gas supply and load shedding, erratic yarn prices, deteriorating
law, and order, depreciation of the Pakistani currency, and a lack of
institutions for research and development (R&D) (Shah et al., 2012). These
studies have provided valuable insights into the industry's current state and
potential areas for growth. However, the researcher has the idea of focusing
on an in-depth study of overpricing and technological roadblocks. The limited
research is concentrated on the challenges of the clothing industry in
Pakistan.

It is observed from prior studies that very few research studies identify the
challenges of both over-pricing that affect the entire sales and technological
roadblocks that are important for good quality and innovative products (MoT
2009-10; Safdar & Naem, 2020). Our research seeks to address this gap by
comprehensively analyzing the root causes of these challenges and providing
possible solutions to them.

Regarding overpricing, previous research has primarily focused on its impact

on consumer behavior and the strategies firms adopt to reduce prices
(Jabarzare & Rasti-Barzoki, 2020). In addition, there are few studies based
on the high cost of production that affect the clothing industry (Shah et al.,
2014). However, these studies did not specify the root cause of overpricing,
which seriously affects the business. Our research aims to take a broader
perspective and investigate the factors that contribute to overpricing in the
clothing industry in Pakistan.

Similarly, previous research on technological roadblocks in the industry has

been limited. It is identified from the previous studies that they have studied
technology as the best practice for standardizing their products (Dad &
Karim, 2019) and concentrating on sustainability practices (Abbas & Halog,
2012). Hence, the researcher is interested in studying the cause of
technological roadblocks. It found that most of the technological equipment

12
used in Pakistan's textile sector needs to be updated and more efficient (Alam
& Khan, 2010).

This study aims to investigate the root causes of overpricing and

technological roadblocks in Pakistan's clothing industry to improve the
industry's competitiveness. Using a qualitative approach, this research aims
to collect and analyze data from industry experts and clothing manufacturers
to address the challenges and issues they face. This research differs from
existing studies on the Pakistani clothing industry as it specifically focuses on
the challenges of overpricing and technological roadblocks and also provides
possible solutions.

1.3 Purpose

This study aims to explore and understand the entrepreneurial challenges

faced by the Pakistani clothing businesses. This thesis aims to examine the
main factors for the challenges of overpricing and technological roadblocks
in Pakistan's clothing industry and their impact on the industry's
competitiveness and growth potential and provide solutions to these
challenges. By addressing these critical issues, this research seeks to
contribute to assisting Pakistan's clothing sector.

The research gap in our study is the need for a comprehensive analysis of the
challenges of overpricing and technological roadblocks in the clothing
industry in Pakistan and solutions to these. While existing studies have
analyzed various aspects of the industry, they have yet to specifically focus
on these challenges, which are major barriers to the growth and sustainability
of the industry. Moreover, our research will also examine the impact of
overpricing and technological roadblocks, which have yet to be explored in
the existing literature. We will investigate the root cause of the industry's slow
adoption of modern technologies and overpricing. This will enable us to
identify potential solutions that could help the industry adopt modern
technologies, reduce production costs, and improve the quality of its products.

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1.4 Research Questions

4. How entrepreneurs in the Pakistan clothing industry are facing

challenges due to overpricing?
5. What are the technological challenges in the Pakistan Clothing
industry for entrepreneurs?
6. What are the solutions to overpricing and technological roadblocks
in the clothing industry of Pakistan?

1.5 Delimitations

The delimitations of this research on Overpricing and Technological

Roadblocks and Analysis of Pakistan's Clothing Industry," following
delimitations can be considered:

Geographical Delimitation: This study will focus solely on the clothing

industry of Pakistan. It will not explore the clothing industries of other
countries.

Time Delimitation: This study will be limited to the period from when
Pakistan faced issues in the clothing industry.

Technological Delimitation: This study will focus on the technological

roadblocks faced by the clothing industry of Pakistan.

Sample Delimitation: This study will adopt a convenience sampling method,

meaning that participants are selected based on their availability and
willingness to participate. However, this method may limit the
generalizability of the findings to the entire population. Due to the limited
availability of participants, we selected three officials from the top clothing
brands in Pakistan for the interview.

1.6 Disposition

The clothing industry in Pakistan is one of the most significant contributors

to the countries vulnerable to these challenges, and this study seeks to
understand them better.

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This introductory chapter overviews the study's background, research
questions, and significance. The literature review chapter reviews the
literature on Pakistan's clothing industry. It covers the factors affecting
pricing in the industry and the impact of technological advancements on the
industry. Additionally, it discusses the challenges faced by clothing
businesses in Pakistan and solutions to these two challenges.

The methodology chapter discusses the research design, qualitative research,

data collection methods, and data analysis methods employed in the study.
The chapter explains the qualitative design used to obtain a snapshot of the
challenges entrepreneurs face in the clothing businesses in Pakistan. The
qualitative research strategy employed in the study, which allows for in-depth
interviews and observations to gain a deeper understanding of the challenges,
is also discussed.

The analysis chapter presents the study's findings on overpricing and

technological roadblocks in the clothing industry. Additionally, it presents the
challenges faced by entrepreneurs in the clothing businesses in Pakistan and
provides solutions to these challenges, and interprets the study's results,
drawing on the literature reviewed in chapter two. Finally, it suggests areas
for future research and provides recommendations for the clothing industry
in Pakistan.

The concluding chapter summarizes the study's key findings and their
contribution to the literature. It discusses the managerial implications and the
limitations of the study It also provides recommendations for the clothing
industry in Pakistan based on the study's findings.

Introduction Literature Review Methodology Empirical Findings Analysis Conclusion

Figure 1: Disposition

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2. Literature Review

2.1 Entrepreneurship

Entrepreneurship, or the formation and management of a new business, has

significantly contributed to national income, employment, and technological
advancement (Chege & Wang, 2020). Several critical factors that contribute
to the success of new ventures have been identified through studies of
entrepreneurship (Godley, 1997). New businesses frequently introduce
innovative products or services to consumers and new processes that shake
up established markets. New businesses can differentiate themselves from the
competition and gain market share through innovative strategies (Liu &
Atuahene-Gima, 2018).

Entrepreneurship does not always mean starting a new company; sometimes,

it means reimagining an existing one. Entrepreneurship refers to creating new
products, services, or (Perlines et al., 2022) business models within an
existing company. To keep up with the ever-evolving business landscape,
established companies should look to entrepreneurship for growth and
innovation (Shaikh et al., 2017).

However, starting a business presents its own unique set of difficulties. Many
startups do not make it past the first few years because of the high levels of
risk and uncertainty they face (Brown et al., 2020). Despite these obstacles,
entrepreneurial activity remains critical to economic expansion and creating
new jobs.

The global community has come to recognize the value of entrepreneurship.

As a result, many nations have enacted policies to encourage the launch of
new businesses (Dalmarco et al., 2018). The field of entrepreneurship studies
has helped us learn more about what makes new businesses successful and
what obstacles they face. Growth, employment, and new ideas can all be
fueled by a continued focus on studying entrepreneurship and encouraging
new businesses (Godley, 1997).

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2.2 Entrepreneurship Challenges in the Clothing Industry in
Pakistan

The European Union, the United States, and many other nations worldwide
mostly import textile products from Asia. Pakistan is currently the largest
manufacturer and exporter of cotton textile products worldwide. Pakistan's
economy relies heavily on the success of its clothing industry (Spinanger,
1995). It contributes significantly to the economy by providing both jobs and
export revenue. Pakistan is now one of the world's top clothing exporters
because of the sector's sustained expansion over the years (Atkar et al.,
2021).

According to Abida (2008), the Pakistani textile industry faces significant

challenges due to different issues such as the use of outdated equipment,
overpricing and lack of technology, high input prices, a lack of efficient
research, energy problems, and lack of development to compete
internationally, lack of new investment, high-interest rates, high raw material
prices, unhelpful government policies, and many others. Lack of research and
development in the cotton business has reduced production and quality,
making Pakistani textiles less valued than competitors in China and India
(Alvi & Shahid, 2016).

The larger mills, in general, and the small and medium textile mills, in
particular, have been seriously impacted by the energy crisis. According to
Zameer (2009), the largest dangers to the Pakistani textile sector are related
to maintaining its position in the face of competition. According to Khan and
Khan (2010), the major issues facing Pakistan's textile industry include the
energy crisis, rupee devaluation, high input costs, lack of research and
development (R&D) in the cotton sector, high prices of raw materials,
withdrawal of subsidies, lack of modern equipment, high inflation rate,
shortage of gas, which results in low export, and unemployment (Safdar &
Naeem, 2020).

Several problems have recently arisen in Pakistan's garment industry. The

industry needs to improve the quality of its products. While many Pakistani

17
startups and SMEs ignore quality standards, some of the country's largest
clothing manufacturers adhere strictly to international norms. SMEs primarily
import Used clothes machinery from South Korea, China, and India (Hong et
al., 2020).

Pakistan's clothing and garment exports suffer greatly due to a need for more
skilled laborers. Pakistan has a large pool of potential workers. However, the
country's labor productivity must catch up to its workforce's lack of education
and training. Worker output can be improved with the use of formal education
and training (Handri, 2019). This allows for the use of fewer raw resources
without sacrificing product quality.

2.3 New Challenges for Entrepreneurs in the Clothing Industry

Pakistan's clothing sector is being challenged by rising global competition.

With the rise of changes in clothing styles, local producers are under
increasing pressure to keep up with the current styles while keeping their
prices low enough to compete (Tien, 2019). This has made it very difficult
for startups in the sector to break through the market's noise (Tien, 2019).

The necessity to strike a balance between price and quality is one of the main
obstacles businesses face in Pakistan's clothing sector (Shafi et al., 2021).
Many producers have switched to less expensive materials and labor to stay
in business. However, this may compromise the company's quality standards
and hurt its reputation. Therefore, to stay competitive, business owners need
to find a middle ground between these two objectives (Abdelwahed et al.,
2022).

The constant need to innovate and keep one step ahead of the competition is
another difficulty for Pakistan's clothing business owners. To survive in the
ever-changing landscape of global marketplaces, entrepreneurs need the
ability to pivot rapidly. To do this, one must be open to trying out novel
approaches and materials and possess the foresight to spot and capitalize on
the industry's burgeoning trends. The growth of online shopping has also had
a major effect on Pakistan's clothing sector. Opportunities and difficulties
have increased with the rise of online marketplaces (Hole et al., 2019).
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Entrepreneurs in Pakistan's clothing business must play to their strengths and
set themselves apart from competitors to thrive in the face of these
difficulties. This necessitates in-depth industry knowledge and the capacity
to spot and ride the wave of new developments. It also necessitates an
emphasis on creating good partnerships with suppliers and manufacturers and
a willingness to take chances and try out new ideas. Pakistan's clothing sector
entrepreneurs face a major obstacle in the form of worldwide competition
(Tunio et al., 2021).

However, business owners can thrive in a competitive and ever-changing

market by developing and employing the appropriate strategies and resources.
Entrepreneurs may stand out in this competitive market by emphasizing
innovation, quality, and collaborations to create sustainable enterprises
(Geradts & Alt, 2022).

The clothing industry in Pakistan has faced several challenges, including

overpricing and technological roadblocks which have impacted the growth
and competitiveness of the industry (Shaikh et al., 2017). One significant
challenge clothing entrepreneurs face is overpricing, which has resulted in a
decline in demand for locally-produced clothing. The overpricing is mainly
attributed to high production costs, including raw materials, labor, and energy
(Safdar & Naeem, 2020).

2.3.1 Overpricing

Setting prices for services or products above the reasonable price for the
market or their perceived value is referred to as overpricing. While business
owners could be tempted to overprice their products to increase earnings, this
tactic can have several negative consequences (Nagle et al., 2018).
Overpricing can have several consequences for entrepreneurs, such as
reduced demand, lower sales, and loss of customer trust (Filser et al., 2019).
Overpricing can also lead to a loss of consumer trust, which can impact the
business's reputation and reduce the likelihood of repeat customers (Naing &
Yap, 2016).

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 ● Reduced Demand and Lower Sale

Reduced demand is one of the main effects of overpricing. Potential clients

may think a product is overpriced or not worth the price if the price is set too
high (Yan & Chiou, 2020). This may lead to a fall in demand and a reduction
in the number of customers willing to buy the product. As a result, the
entrepreneur might see a decline in sales volume, harming their revenue and
profitability (Nagle et al., 2018).

● Damage Customer Trust

Customer trust can be damaged by overpricing. Customers may feel cheated

and think the business is taking advantage of them if they believe a product
is overpriced. This may damage the business owner's reputation and erode
customer trust in their product or service (Nagle et al., 2018). Losing the trust
of customers can have long-term implications on the entrepreneur's success
because trust is necessary to build long-lasting customer connections to
promote loyalty (Yan & Chiou, 2020).

2.3.1.1 Overpricing as a Challenge for Clothing Entrepreneurs in

Pakistan

Overpricing is a major challenge faced by clothing entrepreneurs in Pakistan.

Overpricing occurs when entrepreneurs set prices for their products higher
than the market value, reducing demand and lower sales. Overpricing can
occur due to various factors, such as a lack of market knowledge, high
production costs, and insufficient competitive advantage (Hugos, 2018).

● Lack of Market Knowledge

One of the main causes of overpricing in the clothing industry in Pakistan is

the need for more market knowledge among entrepreneurs. Many
entrepreneurs need to be made aware of the market trends, consumer
preferences (Kazmi & Takala, 2014), and pricing strategies of their
competitors, leading to pricing decisions that are not aligned with the market
demand. This lack of market knowledge can also result in a mismatch

20
between the quality and pricing of the product, which can lead to a loss of
consumer trust and reduced sales (Ahmad et al., 2004).

● High Production Costs

Another factor contributing to overpricing in Pakistan's clothing industry is

the high production costs. Due to rising interest rates, energy crises, growing
inflation, and the decreasing value of Pakistani currency, the cost of textile
production has increased (Anderson, 1992).

Power and energy are essential for the production process; therefore, the
energy sector needs to be enhanced if the textile industry continues to exist.
With energy, it is easier to continue the production process (Safdar & Naeem,
2020). The Pakistani textile industry faces 8 to 10 hours of electric load
shedding per day and 2 to 4 days of gas load shedding per week. Out of the
2000 factories in Punjab, 800 have closed due to the lack of energy, according
to the Economic Survey of Pakistan 2011. People need jobs, increased
overpricing, and exports are also struggling (Shah et al., 2012).

The clothing industry requires significant investments in raw materials,

machinery, and labor, which can lead to high production costs. Entrepreneurs
may be forced to set higher prices to cover their costs, resulting in overpricing
if the market demand needs to be higher to justify the prices. Competing and
surviving in the global markets has become a huge problem for Pakistan's
textile industry (Shah et al., 2012).

● Insufficient Competitive Advantage

Insufficient competitive advantage is another factor that can lead to

overpricing (Brown et al., 2019). Suppose entrepreneurs do not have a unique
selling proposition or a competitive advantage. In that case, they may rely on
pricing to attract customers. However, this strategy can backfire if the prices
are set too high, leading to reduced demand and lower sales (Daowd et al.,
2021).

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 ● Shortage of New Investment

Shortage of new investment is also causing the overpricing in Pakistan's

industry due to their old textile machinery and equipment. The textile and
clothing industry requires fresh investments to handle this issue. Since a long
time ago, this industry has not seen any significant fresh investments. Nobody
wants to invest in Pakistan because of the country's current situation. Due to
this, it appears tough for Pakistani textiles to compete in global markets
(Shah et al., 2012).

● Increasing the Prices of Raw Materials

The Pakistani textile sector faces enormous difficulties due to rising yarn and
raw material prices. The main reason raw material prices are rising is that
farmers and cotton growers cannot obtain decent rates for their products, and
middlemen profit from this situation (Safdar & Naeem, 2020). In Sindh and
Punjab, farmers have even burned cotton to protest against low prices, and
the middlemen are enjoying the benefits. Due to this, the industry must bear
the cost of this expensive raw material; substitute crops like sugarcane have
begun to grow as a result (Kazmi & Takala, 2014).

2.3.2. Technology

Another significant challenge clothing entrepreneurs face is the need for

technological advancements in the industry (Naing & Yap, 2016).
Technology in the fashion industry has grown quickly, from the discovery of
temperature-regulating textiles to sewing machines and the most recent great
idea of metaverse retailers. Every facet of fashion has been impacted by
technology, including distribution, automation, customization, design, order
manufacturing, and marketing (Kumar, 2023).

The Pakistani industry is still primarily dependent on traditional production

methods, which could be more efficient and lead to higher costs. The lack of
technological advancements also results in poor quality and limited variety in
the clothing produced, leading to a lack of competitiveness in the international
market (Shaikh et al., 2017).

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Kazmi (2018) stated in his essay in Pakistan Economist that Pakistan's textile
business faces problems. One of the drawbacks is a need for more automation
and technological advancement, as well as a shortage of threads and wools of
good quality. There are 9084 cloth-weaving machines in factories, but only
6384 are working (Kazmi, 2018).

2.3.2.1. Limited Technologies Capabilities in Pakistan Clothing

Industry

In today's digital age, a company's technological prowess is a major factor in

determining its success and ability to compete. Lack of access to sophisticated
machinery and equipment is a major challenge for entrepreneurs in Pakistan's
clothing sector. Clothing is often cut, sewn, and stitched by hand, a labor-
intensive, error-prone process and costly for many companies (Huang, 2019).

Pakistani entrepreneurs in the clothing business need technology. The

industry's growth and competitiveness could be better by its reliance on
antiquated production processes, a dearth of access to cutting-edge gear and
software, and a scarcity of trained workers (Singh, 2019).

Although the Pakistan clothing industry has grown, the country's

technological infrastructure has yet to keep up, and many clothing factories
still need to use antiquated techniques. For up-and-coming business owners,
this poses a formidable entry barrier (Rahman et al., 2019). The output quality
and efficiency are both diminished by using this approach. Because of the
challenges inherent in working with delicate or intricately patterned fabrics,
the manual approach also restricts the range of materials that can be utilized
(Rahman et al., 2019).

● Lack of Research and Development

The lack of research and development (R&D) in Pakistan's cotton industry

has led to lower-than-average cotton quality compared to the rest of Asia
(Magli, et al., 2018). Farmers are switching to other cash crops, such as sugar
cane, due to the ensuing low profitability in cotton crops. Such a situation
results from ineffective R&D. They also charge cartels for impeding

23
appropriate R&D, particularly in the pesticide industry. Because better yield
cotton is more pesticide resistant, the pesticide industry stands to gain from
restricting local R&D (Khan & Khan, 2010).

● Lack of Modern Equipment

In addition, critics claim that the clothing industry uses outdated machinery
and equipment. The need for timely equipment and machinery modernization
has decreased Pakistan's ability to compete internationally in the textile
industry. Due to outmoded technologies, Pakistan's production costs are
greater than those of other nations like India, Bangladesh, and China (Khan
& Khan, 2010).

● Lack of Digital Tools

Lack of access to software and digital tools for designing, pattern-making,

and inventory management is another difficulty associated with the industry's
low technological capabilities (Safeer et al., 2019). In today's clothing sector,
this type of program is crucial when designers and producers must coordinate
their efforts from different locations. However, due to the high price and
restricted availability of such tools in the Pakistani market, most industry
entrepreneurs need access. A significant barrier to introducing cutting-edge
methods and equipment in the country's clothing sector is the need for more
trained workers (Rahman et al., 2019).

Despite having a limited labor force, the absence of professionals competent

with cutting-edge technology and computer programs poses serious
difficulties. The slow adoption of new technology is partly attributed to many
business owners needing help finding employees with the requisite abilities
(Rahman et al., 2019).

● Lack of R&D Institution

Competition in the international markets is strong. The market requires

products of good quality at fair prices. The industry should consider the
quality of the raw materials with the support of a research and development
organization to increase the quality of Pakistani textile products (Magli, et al.,
24
2018). Any forum (such as the APTMA or another relevant organization)
must collaborate with R&D organizations to raise the standard of Pakistani
cotton by arguing for or offering suggestions to cotton growers to raise the
fiber quality (Faini, 1995). The product can readily compete in global markets
if the quality increases (Shah et al., 2012).

● Lack of Investment in Technology

There are some challenges associated with investment in technology. One of

the most significant challenges is the high cost of acquiring and maintaining
the technology. Entrepreneurs need sufficient financial resources to invest in
technology and maintain it over time. Entrepreneurs also need technical
expertise to manage and maintain the technology or hire skilled personnel to
do so (Chahine, 2021).

Another challenge is the need for continuous innovation and adaptation.

Technology constantly evolves, and entrepreneurs must stay current with the
latest trends and innovations to remain competitive. This requires a
significant investment in research and development, which can be challenging
for small and medium-sized enterprises (SMEs) (Alam et al., 2020).

Investment in technology is a potential opportunity for clothing entrepreneurs

in Pakistan to improve their production processes, reduce costs, and improve
their competitiveness in the market. Technology can help entrepreneurs
overcome the challenge of technological roadblocks by enabling them to
adopt new manufacturing techniques and improve the quality and variety of
their products (Chahine, 2021).

● Lack of Knowledge of E-commerce Platforms

Lack of knowledge about e-commerce platforms can be a challenge for

clothing entrepreneurs in Pakistan. E-commerce platforms are crucial in
enabling online sales and reaching a wider customer base. There are some
challenges associated with the use of e-commerce platforms (Bushe, 2019;
Khajavi, 2021). One significant challenge is the high level of competition in
the digital marketplace. Entrepreneurs must develop innovative products and

25
services and utilize effective marketing strategies to stand out in the crowded
market (Tunio et al., 2021).

Another challenge is the need for digital literacy and technical expertise.
Entrepreneurs must understand digital marketing, search engine optimization,
and social media platforms to use e-commerce platforms (Chahine, 2021)
effectively. They also need technical expertise to manage their online stores
and ensure the smooth operation of their businesses. Using e-commerce
platforms is an opportunity for clothing entrepreneurs in Pakistan to
overcome the challenges of overpricing and reduce production costs. E-
commerce platforms offer several advantages, including a wider reach,
valuable data insights, and automation of various processes (Brown et al.,
2019).

● Lack of Knowledge in Development and Design

Lack of knowledge in Product development and design, currently no attention

is given to establishing and updating the areas of designing and developing to
generate a significant global market for local products and allow them to
compete effectively and sustainably (Kazmi & Takala, 2014).

● Unskilled Labor

Additionally, substantial training is needed to raise workers' skill levels to

meet modern criteria and procedures to compete with national and
international standards. Unskilled workers are one of the main causes of these
losses (Keller, 2020). Additionally, it has been reported that when an industry
has succeeded in developing advanced technology, semi-skilled or even
skilled workers can struggle to match their expertise to the required degree of
technical advancements because new equipment sometimes calls for more
specialized skill sets. Due to the high training expenses and the highly
unpredictable and transient market character, industrial training management
needs to train its employees (Kazmi & Takala, 2014).

26
 ● Changing Consumer Demand

One of the most significant difficulties for businesses in the clothing industry
is keeping up with the ever-shifting tastes of Pakistani customers. Customers'
tastes are constantly shifting, and business owners in the clothing industry
must keep up if they want to succeed (Mrad et al., 2020). Globalization,
industrialization, and the impact of Western culture are fast altering
traditional clothing trends in Pakistan, causing a shift in customer preferences
toward Western clothing styles (Ambos & Tatarinov, 2022).

2.3.2.2. Solutions to Overpricing and Technological Roadblocks

in the Clothing Industry of Pakistan

The government should provide subsidies for raw materials and energy to
reduce production costs (Ata‐Ullah et al., 2020). Industries can build
partnerships with suppliers to improve their bargaining power and secure
materials at competitive prices. Industries adopt a lean manufacturing
approach to minimize waste and reduce production costs (Shafiq et al.,
2019).

Another solution is conducting market research to understand better their

competitors' market trends, consumer preferences, and pricing strategies
(Safdar & Naeem, 2020). Entrepreneurs set prices aligned with the market
demand and be competitive with their competitors (Memon et al., 2020).
Entrepreneurs can differentiate their products by offering unique features or
benefits that are unavailable from their competitors (Shafiq et al., 2019).

Technology has revolutionized how businesses operate today, and the

clothing industry is no exception. One of the best strategies for overcoming
technological roadblocks is to embrace technology and incorporate it into
business operations (Ali et al., 2020). This could include using technology to
automate production processes, implementing an e-commerce platform to sell
products online, or using social media to market the brand (Huynh, 2021).

Investing in employee training and development is another way to overcome

technological roadblocks. This could involve training on new software or

27
hardware, organizing workshops on industry best practices, or partnering with
educational institutions to provide employees with specialized training
programs (Safeer et al., 2019). Investing in employees' skills and knowledge
ensures that business remains competitive and up-to-date with the latest
technological trends (Shin et al., 2019).

Investment in Technology is a potential opportunity for clothing

entrepreneurs in Pakistan to improve their production processes, reduce costs,
and improve their competitiveness in the market (Safeer et al., 2019).
Technology can help entrepreneurs overcome the challenge of technological
roadblocks by enabling them to adopt new manufacturing techniques and
improve the quality and variety of their products (Chahine, 2021).

2.4. Theoretical Framework

The theories and prior studies given in the literature review form the
foundation of the theoretical framework and all of its rings point to the
Entrepreneurship challenges. The relationships between the elements in the
theoretical framework are shown in the diagram below. Entrepreneurship
challenges mainly focus on Overpricing and Technological Roadblocks
depict the main purpose of the study. The causes of these challenges and their
solutions presented by different scholars within the literature review are the
core topics that are discussed in the theoretical framework.

28
 Entrepreneurial
Challenges

Over Pricing Technological Roadblocks

Causes of Over Pricing Roadblocks

Causes of Technological
-Lack of Market Knowledge Roadblocks
-High Production Cost -Lack of Research and
- Insufficient Competitive Development
Advantage - Lack of Modern Equipment
-Shortage of New Investment - Lack of Digital Tools
-Increasing the Price of Raw - Lack of R&D Institution
materials
- Lack of Investment in
Technology
- Lack of Knowledge of E-
commerce Platforms
- Lack of Knowledge in
Solutions Development and Design
- government subsidies
- Unskilled Labor
for raw materials and
- Changing Consumer
energy to reduce
Demand
production costs
- industries should build
partnerships with
suppliers to improve
their bargaining power
and secure materials at
competitive prices.
- industries should adopt Solutions
a lean manufacturing
- Embrace Technology
approach to minimize
waste and reduce
- Invest in Training and
production costs Development

- Investment in Technology

Figure 2: theoretical framework -

29
3. Methodology

The methodology used in this study was chosen to ensure that the research
objectives were met and that the research is rigorous and valid. The
methodology is the framework that is used to conduct research. It includes
our research strategies to collect data, interview processes, and data analysis.

3.1 Research Approach

The study employs a deductive research approach in which arguments are

based on regulations, rules, or other universally accepted concepts mainly for
theory testing (Woiceshyn et al, 2018). The deductive research approach is
the most appropriate method as this study assesses existing theories rather
than producing new scientific information.

3.2 Research Methods

The research strategy for this study was a qualitative approach. The
qualitative data collection involved interviews. This strategy was chosen
because it gave the researcher a more comprehensive understanding of the
research topic. Qualitative research techniques aim to gain a deeper
comprehension of a particular phenomenon through the perspectives of those
who took part (Bryman & Bell, 2011; Slevitch, 2011).

3.3 Research Strategies

This paper aims to investigate the new entrepreneurship challenges faced by

the clothing industry in Pakistan related to overpricing and technology
roadblocks and solutions to these challenges. We used a qualitative research
approach, specifically interviewing entrepreneurs who have started their
clothing businesses and have been in the market successfully for five years at
least. We chose this methodology because it allowed us to gather in-depth
insights into the entrepreneurial challenges faced by these individuals.

This research begins by conducting a literature review to understand better

the entrepreneurial challenges clothing businesses face related to overpricing

30
and technology roadblocks and what are the possible solutions. Then
developed a list of potential interviewees and contacted them to arrange
interviews. Then, the interviews were conducted over Zoom and Google Meet
and used a semi-structured format to allow the interviewees to discuss their
experiences in their own words.

3.4 Research Design

This study used a cross-sectional, non-experimental design. Data were

obtained at a single time point, making this a cross-sectional study. This
research aims to learn more about the challenges entrepreneurs face in
Pakistan's clothing businesses related to overpricing and technology
roadblocks and potential solutions to these challenges. To this end, a
qualitative research strategy will be implemented. The research challenge can
be understood better, and the triangulation of results achieved with this
design.

3.5 Literature Review Collection

The literature review began searching academic databases for useful articles
and books. Some of the issues discussed in these books and articles were
entrepreneurship, the new entrepreneurship strategies, and the challenges. By
reviewing and summarizing the scholarly works that served as the study's
basis, we identified the gaps in the literature that the current investigation
sought to address. To collect secondary data, the study reviewed the existing
literature, including articles from scholarly journals based on Pakistan's
Clothing industry, books, and relevant publications. The data used in the
review were gathered at the outset of the thesis process when comprehension
of the topic and identification of the research gap were at their peak.

In addition to the sources used to compile the literature review, other

publications were read to provide credence to the thesis's core arguments. The
authors integrated their findings from the literature research into a theoretical
framework, which accounted for future steps that will likely be required in
the clothing industry. Thanks to this method, the academic literature could be

31
organized uniformly. Several subfactors were assigned to each factor to
provide a more thorough and nuanced explanation of each factor within the
theoretical framework. These components served as a jumping-off point for
the subsequent building of the empirical data collection focused on answering
the study objectives. To aid in this investigation, a thorough literature review
was conducted. Using this tack, the author grants the reader a clearer
perspective. As a result, you may rest assured that the authors' biases will be
mitigated to the greatest extent possible

Primary data collection using in-person interviews with a set of questions. To

learn more about entrepreneurial challenges in the clothing industry of
Pakistan related to overpricing and technology roadblocks, in-depth
interviews were conducted with them. Conversations With officials,
Extensive interviews with professionals in the clothing industry will be
conducted to glean insights into the entrepreneur's challenges in the clothing
businesses in Pakistan.

3.6. Method of Data Collection

Dörnyei (2007) asserts that interviews are a common method used by

academics to get qualitative data. Additionally, it encourages respondents to
convey their personal opinions and thoughts in their own words (Berg, 2007).
Since this research is qualitative, semi-structured interviews were used to
gather primary information. To examine and characterize the standard and
nature of how individuals behave, experience, and comprehend specific
features, this research area makes use of non-numerical data.

3.6.1. Interviews

In this study, we select four representatives of different companies within the

clothing industry in Pakistan who have experience with the challenges faced
by clothing businesses in the country. Kothari (2004) argues that the interview
method of data collection entails the verbal exchange of questions and
answers. Face-to-face interviews and, when appropriate, digital methods can
be used for this. The participants are selected based on their relevance to the
research question, access to them, and their willingness to participate in the
32
 study. Semi-Structured interviews were conducted digitally to get the
necessary data for this study. For this, we have selected four entrepreneurs in
the clothing industries of Pakistan and the data collected from the interviews
were analyzed. The number of participants in this study is based on our
approach to arranging a meeting with them.

No Industry Location Starte Business Person Means of Data

Name d year Activities Interviewed Collection

1 product design
and
development,
manufacturing,
Rangoli Abbottabad, 2009 CEO Zoom
retail outlets,
Cloths Pakistan
and online
platforms

2 Liberty Karachi, Production and Senior

Cloths Pakistan manufacturing. Manager
2008 Zoom

3 Ideas by Karachi, Manufacturing

Gul Pakistan and Retail
Ahmed 1900 Designer Zoom

4 Khadi Karachi, 1998 Retail and Manager Zoom

Pakistan online platforms

Table 1: `Selected Clothing Industries and Interviewees

33
3.6 Data Analysis

The collected data will be analyzed using the qualitative data analysis method.
It is no secret that the clothing industry is a highly competitive one. Hence,
entrepreneurs need to figure out the challenges in the clothing business in
Pakistan to remain competitive in the market. This study employs a deductive
analytical strategy, commonly referred to as a concept-driven strategy. When
explanatory models or current theories are put to the test for a specific
phenomenon under investigation, deductive analysis is used (Graneheim et
al., 2017). This study uses the thematic analysis technique which is a
qualitative descriptive study method that recognizes, examines, and
highlights the results (Vaismoradi et al., 2013)

3.7 Research Quality

Three primary criteria evaluate the quality of a study. Since research and its
results must be of high quality, it is essential to confirm validity, reliability,
and reproducibility (Bryman & Bell, 2015).

3.7.1. Validity and Credibility

When conducting a research study, it is important to consider and ensure the

validity and reliability of the data collected. The following are relevant
validity and reliability criteria for this thesis and how they were considered
and ensured:

Internal validity refers to the degree to which the research findings can be
attributed to the independent variable rather than to other factors. In this
study, internal validity was ensured by selecting participants who had
experience with the challenges faced by the clothing businesses in Pakistan.
Additionally, the study employed a qualitative research strategy that allowed
for in-depth interviews and observations to understand the challenges better.

External validity refers to the degree to which the research findings can be
generalized to other populations and settings. This study considered external
validity by selecting participants from different companies within the clothing

34
industry in Pakistan. Additionally, the study's findings will be compared with
existing literature on the clothing industry in Pakistan to assess their
generalizability.

Face validity: Face validity refers to the degree to which the research
findings appear to measure what they are intended to measure. In this study,
face validity was considered by selecting participants' experiences with the
challenges faced by the clothing businesses in Pakistan. Additionally, the
study's findings will be compared with existing literature on the clothing
industry in Pakistan to ensure their face validity.

Reliability: In this study, reliability was ensured by using consistent data

collection and analysis methods. The qualitative research strategy employed
in the study also allowed for the same questions to be asked of all participants,
ensuring consistency in data collection.

Triangulation: Triangulation refers to using multiple methods or sources to

verify the findings. In this study, triangulation was ensured by using both in-
depth interviews and observations to gain a deeper understanding of the
challenges faced by entrepreneurs in the clothing businesses in Pakistan
related to overpricing and technology roadblocks.

3.8. Ethical Consideration

Ethical considerations are an important aspect of any research project, and

ensuring that the research is conducted ethically is crucial. The following are
some ethical considerations that were considered in this study on the
challenges faced by clothing businesses in Pakistan:

Informed consent: The participants were informed about the study's purpose
and their involvement in it. They were allowed to ask questions and were
assured of their right to withdraw.

Voluntary participation: The participants were not coerced or forced to

participate in the study and were free to withdraw at any time.

35
Transparency: The researchers were transparent about the study's purpose
and methods and provided clear and accurate information to the participants.

Ethical considerations are essential in any research project to protect the

participants' rights and ensure that the study is conducted ethically and
responsibly.

36
4. Empirical Data

This chapter starts with an explanation of background data about the clothing
Industries in Pakistan that have been examined for this research study. Later,
it presents the challenges of the industry and their experienced barriers
regarding the over-pricing and the impact of technological developments –
two major challenges for the clothing industry as the primary focus of this
study that is collected through online interviews.

4.1Rangoli Cloths

4.1.1 Background Data of the Industry

Rangoli is a fabric store established in 2009 in Abbottabad, Pakistan. They

have ten branches currently. Their key business activities include product
design and development, manufacturing, retail outlets, and online platforms.
We have interviewed the CEO of the company.

4.1.2 Challenges Faced by the Industry

Despite the significant contribution of the clothing industry to Pakistan's

economy, the industry faces significant challenges in terms of overpricing and
technological roadblocks, which hinder its competitiveness in the global
market. The rising cost of production due to an increase in raw material,
energy, and labor costs, as well as the lack of technological advancement and
automation, have led to low productivity, poor product quality, and a decline
in demand for locally produced clothing. However, the industry still has
significant growth potential, especially in the export market. Pakistan has a
competitive advantage due to its low labor costs and skilled workforce.

Regarding key players in the industry, there are several large-scale

manufacturers and exporters in Pakistan, such as Nishat Mills and Al-Karam
Textile Mills. However, the industry is also characterized by numerous small
and medium-sized enterprises, which often need help to compete with the
larger players due to their limited resources and lack of access to financing.

37
4.1.2. Overpricing

Overpricing is one of the significant challenges faced by the respondents,

which hinders their competitiveness in the global market. The rising cost of
production in the industry, due to an increase in raw material, energy, and
labor costs, has led to low productivity, poor product quality, and a decline in
demand for locally produced clothing.

Empirical findings have identified that over-pricing is one of the considerable

challenges for the clothing industry in Pakistan. From the interview, this study
realized that insufficient market awareness, high production costs, and a lack
of competitive advantage are only a few causes of overpricing. The lack of
market understanding may cause a mismatch between the product's quality
and price, undermining consumer confidence and diminishing sales. The
garment business needs to make large investments in people, equipment, and
raw materials, which can raise the cost of production. When the market
interest is not strong enough to support the prices, entrepreneurs may be
obliged to establish higher prices to meet their costs.

4.1.3. Causes of Overpricing

The cost of raw materials is one of the major causes of overpricing, as per the
respondents in the interview. The industry relies heavily on imported cotton
and other raw materials, which are subject to price fluctuations due to global
market conditions. The rising energy cost in Pakistan is another factor
contributing to overpricing in the industry. The industry is heavily dependent
on energy-intensive processes, such as spinning, weaving, and dyeing, which
require significant electricity. Labor costs are also a significant contributor to
overpricing for the industry. Although labor costs are lower in Pakistan than
in many other countries, the industry still faces challenges in ensuring fair
wages and safe working conditions for its workers. Another element that
causes over-pricing is a need for more competitive advantage.

38
4.1.4. Impact of Overpricing on the Pakistani Clothing Industry

Low Productivity: Overpricing has a significant impact on the productivity

of the industry. High production costs result in low productivity, which, in
turn, leads to low product quality and delays in delivery.

Poor Product Quality: Overpricing also affects the quality of products

produced in the industry. Due to the high cost of production, manufacturers
may cut corners to keep prices competitive, leading to poor product quality.

The decline in Demand: Overpricing has also led to a decline in demand for
locally produced clothing. Consumers are increasingly turning to cheaper
imports from other countries, which are often produced at a lower cost.

4.1.5. Potential Solutions to Overpricing in the Pakistani Clothing

Industry

Sustainable Sourcing: Potential solution for overpricing is the sustainable

sourcing of raw materials. Manufacturers can reduce their dependence on
imported raw materials and lower production costs by sourcing raw materials
locally and promoting sustainable farming practices.

Government Support: The government of Pakistan can also play a role in

addressing overpricing in the industry. The government can provide
incentives for developing sustainable and cost-effective production methods
and support the establishment of textile parks and special economic zones to
reduce production costs.

4.1.6. Challenges of Technological Roadblocks

Another challenge faced by the industry is the need for more technological
advancement. The company noted that it needed to use updated technology
and equipment, which made it challenging to keep up with competitors who
had invested in modern machinery and equipment. This lack of technological
advancement has led to lower productivity and higher costs, ultimately
resulting in higher consumer prices. Distribution, automation, customization,

39
design, order manufacturing, and marketing are just a few areas where
technology has impacted the industry. The lack of access to high-end
machinery and equipment presents a significant problem that is faced by the
industry. In addition, the ability to compete internationally by the industry has
declined due to a lack of timely equipment and machinery upgrading.

4.1.7.Potential Solutions to Challenges of Technological

Roadblocks

Investment in Technology: One potential solution for the challenges of

technological roadblocks is an investment in technology. Automation of
certain processes can reduce labor costs, increase productivity, and improve
product quality.

4.2 Liberty Cloths

Liberty is a manufacturing, retailing, and online store established in 2008

located in Karachi, Pakistan. Their key business activities are production and
manufacturing. The Senior Manager of the company interviewed us.

4.2.1 Challenges Faced by the Industry

Based on interviews, this study found that the company faced challenges of
lack of market research, failure to change with market trends, inadequate
management, a deficient distribution network, low investment, and poor-
quality products. Innovative marketing approaches and the use of traditional
styles and techniques in modern clothing have allowed successful clothing
companies to innovate and establish themselves apart from the competition.
The main barriers faced by the new start-up clothing industry are overpricing
and technological roadblocks.

40
4.2.2. Challenges of Over-pricing

Empirical findings have identified that over-pricing is one of the considerable

challenges for the clothing industry in Pakistan. From the interview, this study
realized that insufficient market awareness, high production costs, and a lack
of competitive advantage are only a few causes of overpricing. The lack of
market understanding may cause a mismatch between the product's quality
and price, undermining consumer confidence and diminishing sales. The
garment business needs to make large investments in people, equipment, and
raw materials, which can raise the cost of production. When the market
interest is not strong enough to support the prices, entrepreneurs may be
obliged to establish higher prices to meet their costs. Another element
contributing to overpricing is a need for more competitive advantage.

Through the interview, this study observed that overpricing in the clothing
sector can have several negative effects on business owners. Reduced demand
and lower sales, which can result in financial losses and decreased
profitability, are two of the most important consequences. Overcharging can
also result in a loss of customer confidence, harming the company's brand and
decreasing the possibility of repeat business. The findings related to
overpricing in the Pakistani clothing industry indicate that it is a significant
challenge many entrepreneurs face. The entrepreneurs interviewed identified
various factors that contribute to the overpricing of clothing products in the
industry.

4.2.3. Solutions to overcome the over-pricing

After conducting interviews, the study understands that the industry takes
some strategies to overcome over-pricing challenges. Mainly they focused on
market research to get a better knowledge of trends in markets, consumer
needs, and changes in pricing. This can assist these industry owners in setting
pricing that is competitive with their competitors and in line with market
demand. Focusing on enhancing the product's value proposition is another
strategy. The clothing industries use this tactic to distinguish their goods from
competitors by including distinctive features or advantages.

41
As observed from the empirical data, owners focused on lowering their
production expenses to minimize the prices without compromising quality.
By doing process optimization, the use of less expensive materials, and
improved supplier negotiations can help achieve this. Finally, business
owners adopt a price strategy that fits the market's needs. This can involve
giving discounts or promotions to entice buyers, pricing products based on
their perceived value, or employing dynamic pricing to change prices in
response to the market.

4.2.4. Challenges Faced by Technological Advancement

From the empirical data observation, another challenge new start clothing
industry owners face is technological advancement. The high cost of adopting
new technology is one of the major problems. Business owners might need
more capital to invest in expensive technological solutions or the skills to
apply them successfully.

The speed of technological change is another difficulty for clothing industry

owners. In a constantly changing market, they need help maintaining the most
recent technical developments.

4.2.5. Root Causes of Technological Roadblocks

The root causes of technological roadblocks in the industry are:

Lack of Investment in Research and Development: One of the primary

reasons for the industry's technological backwardness is the need for more
investment in research and development. The clothing manufacturers need to
invest in modern technology, hampering their growth and competitiveness.

Limited Access to Funding: Another significant issue is limited access to

funding. Most small and medium-sized clothing businesses in Pakistan need
access to funding or loans to invest in modern technology.

42
4.2.6. Impact of Technological Roadblocks on the Industry's
Competitiveness

The impact of technological roadblocks on the industry's competitiveness is

severe. The outdated machinery and technology lead to low productivity, high
production costs, and poor product quality. This makes it difficult for
Pakistani clothing businesses to compete with other textile-producing
countries and meet the evolving demands of the global market.

4.3. Ideas by Gul Ahmed

In the early 1900s, the group started doing textile trade. The group joined the
manufacturing industry with the founding of Gul Ahmed Textile Mills Ltd
(GTM), which has become an industry standard. Gul Ahmed is a composite
unit that produces everything from cotton yarn to finished goods. It has an
installed capacity of over 130,000 spindles, 300 cutting-edge weaving
machines, and the most advanced yarn dyeing, processing, and sewing units.
Today, Gul Ahmed operates as a vertically integrated business, encompassing
all manufacturing aspects across all stages and retail. In 1972, the business
went public on the Karachi Stock Exchange. We have interviewed designers
in the lady's clothing industry.

4.3.1. Challenges

Based on interviews, the entrepreneur responded that the company faced

challenges of lack of market research, failure to change with market trends,
inadequate management, a deficient distribution network, low investment,
and poor-quality products. Innovative marketing approaches and the use of
traditional styles and techniques in modern clothing have allowed successful
clothing companies to innovate and establish themselves apart from the
competition. The respondents identified that their products are less valuable
than rivals in China and India because of a lack of research and development
in the cotton industry, reducing cotton production and quality. Additionally,
no one wants to invest there due to the country's current state. This makes it
seem difficult for the industry to compete in international markets.

43
4.3.2. Overpricing

Overpricing is a significant challenge the industry faces, which hinders its

competitiveness in the global market. The rising cost of raw materials, energy,
and labor, has led to low productivity, poor product quality, and a decline in
demand for locally produced clothing. Like other respondents, the industry
has faced a need for more research and development and new investments
making the industry less competitive in the clothing industry. However,
potential solutions to address this challenge include investment in technology,
sustainable sourcing, and government support. The influence of overpricing
challenges to the industry is low productivity and decreasing demand for their
products. The industry makes prices of their clothes that are out of step with
consumer demand because they need to be made aware of industry trends,
market knowledge, and consumer preference.

4.3.3. Causes of Overpricing

High Costs of Raw Materials: One of the main reasons for overpricing in
the industry is the cost of raw materials, the same as other respondents of the
clothing industry. The cost of raw materials has increased significantly in
recent years, making it difficult to keep prices competitive. The sector relies
primarily on imported cotton and other raw materials, which are subject to
price changes due to conditions in the international market. This rise in raw
material costs has increased production costs and ultimately resulted in higher
prices for consumers.

High Energy Costs: The respondents identified high energy costs as a

significant contributor to overpricing in the clothing industry. The high cost
of electricity, gas, and other forms of energy has made it challenging for
entrepreneurs to keep production costs down. This high energy cost makes it
difficult for the industry to compete with clothing businesses in other
countries where energy costs are lower.

Labor Costs: Labor costs were another factor identified by the respondents
interviewed as the reason for overpricing. The minimum wage in Pakistan has

44
increased significantly in recent years, leading to increased labor costs. This
increase in labor costs has made it difficult for entrepreneurs to keep
production costs down and maintain competitive prices.

Branding and Marketing Strategies: The entrepreneurs interviewed also

noted that branding and marketing strategies could cause overpricing in the
Pakistani clothing industry. Many entrepreneurs are pressured to invest
heavily in marketing and branding to stand out in a competitive market. This
investment can ultimately result in higher prices for consumers.

4.3.4. Potential Solutions to Overpricing Challenges

Firstly, the government should provide subsidies for raw materials and energy
to reduce production costs. Secondly, entrepreneurs should build partnerships
with suppliers to improve their bargaining power and secure materials at
competitive prices. Thirdly, entrepreneurs should adopt a lean manufacturing
approach to minimize waste and reduce production costs.

4.3.5. Challenges of Technological Roadblocks

The respondents face significant technological roadblocks, hindering their

competitiveness in the global market. The causes of technological roadblocks
are identified as follows:

Outdated Machinery and Technology: The most significant challenge

faced by the industry is the use of outdated machinery and technology. They
have been using machinery that is decades old and does not have the latest
technology. This leads to low productivity and poor-quality products.

Limited Automation: Another issue faced by the industry is limited

automation. The industry manually follows the manufacturing process,
leading to increased labor costs and longer production times. The need for
automation also affects the quality of the final product.

Lack of Skilled Labor: The industry also needs more skilled labor. The
workers must gain the necessary skills to operate the latest machinery and
technology, further hindering the industry's competitiveness.

45
4.3.6. Potential Solutions to Challenges of Technology in the
Pakistani Clothing Industry

The interviews highlighted the need for more government support and
incentives to promote technology adoption in the industry. Additionally, it
was noted that the lack of skilled labor and technical expertise also hinders
technology implementation in the industry.

4.4. Khaadi

Shamoon Sultan, the company's founder, and chief executive officer, started
up in 1998 to resurrect the ancient craft of weaving by hand and to modernize
the conventional medium. It launched as a single-store company in Karachi,
Pakistan, and swiftly developed into a strong brand with a global reach.

4.4.1. Challenges Faced by the Industry

The industry has been dealing with a serious energy crisis, which is
characterized by frequent power cuts and high energy expenditures. This has
a big influence on the garment business since it takes a lot of energy to make
textiles. The industry's capacity to meet timelines and sustain profitability is
hampered by the unstable power supply and rising production expenses.

Lack of Design and Innovation Capabilities: Pakistan has historically

prioritized mass production and affordable manufacturing. However, a higher
focus on creativity, aesthetics, and product development is required to remain
successful in the global market. The industry's inability to provide distinctive
and trendy items is hampered by a dearth of design institutes, a lack of
investment in research and development, and a conservative approach to
fashion.

46
4.4.2. Challenges of Over Pricing

Reduced Consumer Demand: When prices for clothing exceed what

consumers consider to be acceptable or fair, it may result in a decrease in
demand. Customers are discouraged from making purchases at high costs,
particularly when they can obtain comparable goods elsewhere for less
money. Slower sales, extra inventory, and significant financial losses for
firms can all arise from this.

Negative Brand Image: Overpricing can hurt an organization's reputation and

image. Customers can develop an unfavorable opinion of a brand's ethical and
value proposition if they believe that it habitually overcharges for its goods.
This leads to a decline in customer loyalty and harms the long-term survival
of the brand.

4.4.3. Causes of Overpricing

Production and Manufacturing Costs: These expenses can result in higher

prices for the industry. The total cost of making clothes can be affected by
elements including the price of raw materials, labor costs, and manufacturing
overheads. Manufacturers might need to adjust their product prices if these
costs are excessive to keep their business profitable.

4.4.4. Solutions to over-pricing

Market Research and Competitive Analysis: Monitor market developments,

client preferences, and price strategies of competitors constantly through
market research and competitive analysis. To determine pricing benchmarks
and comprehend client expectations, conduct frequent market research. By
using this data to inform pricing choices, firms can better position themselves
in the marketplace.

Cost optimization: Analyze manufacturing expenses thoroughly and pinpoint

areas where efficiencies might be attained. This includes implementing lean
production methods, optimizing manufacturing processes, and negotiating

47
better prices with suppliers. Businesses can provide more competitive prices
to clients by lowering operational costs.

Efficient management of supply chains involves streamlining the system to

cut down on lead times, minimize transportation costs, and enhance inventory
control. Work collaboratively with suppliers to guarantee efficient and timely
material sourcing. Effective oversight of the supply chain can help
organizations cut expenses and offer more affordable prices.

4.4.4.Challenges Faced by Technological Advancement

Lack of Technical Skills and Knowledge: The effective operation,

maintenance, and troubleshooting of new technology require qualified
personnel. However, there is frequently a skills shortage in the garment sector
in fields like software programming, automation, graphic design, and data
analytics. Businesses find it difficult to upgrade the technological savvy of
their current employees or find fresh talent.

Rapid Technological Obsolescence: The fashion industry operates in a market

that moves quickly and is heavily influenced by trends. Due to the rapid pace
of technological change, investments run the risk of being swiftly rendered
obsolete. To make sure they stay up-to-date and competitive in the long run,
businesses must carefully consider the lifespan and adaptability of the
technology they employ.

4.4.5. Root Causes of Technological Roadblocks

Lack of Knowledge and Understanding: Numerous companies in the garment

sector may be unaware of the technologies that are already accessible and
their potential advantages. They might not fully comprehend how particular
technology might increase production, efficiency, and competitiveness. Lack
of knowledge, ignorance, and restricted access to technology specialists or
consultants all result in a lack of understanding among industry participants.

Rapid technological advancement and obsolescence: The fashion and apparel

sector is very dynamic, with quick shifts in customer trends and tastes. Due
to the rapid pace of technological development, investments run the risk of
48
being swiftly rendered outdated. Businesses may be apprehensive about
implementing new technologies because they worry about their scalability
and longevity and worry that their investments may become obsolete before
they reap enough benefits.

4.4.6. Solutions to the Technological Roadblocks

Programs for Technology Education and Training: Create and advance

initiatives for technology education and training that are specifically geared
toward the demands of the apparel sector. These courses ought to include a
wide range of subjects, such as emerging technologies, automation, data
analytics, and digital skills. Work together with educational institutions and
training facilities to offer the current workforce and aspiring professionals the
opportunity for practical and hands-on training.

Partnership with Technology Providers and Consultants: Establish alliances

with technology suppliers, consultants, and professionals who may assist
companies in adopting new technologies. Work together with these
organizations to determine the business requirements, choose the best
technology, and offer implementation help. Businesses can successfully
traverse the challenges of incorporating new technologies by utilizing outside
expertise.

49
 Key Points Findings

Limited resources and access to financing

lack of market research,

failure to change with market trends, inadequate management,

Challenges Faced a deficient distribution network,

low investment,

poor-quality products

lack of research and development

hinders their competitiveness in the global market

Low Productivity

Overpricing Poor Product Quality

The decline in Demand

Low Sale

financial losses and decreased profitability,

insufficient market awareness,

high production costs,

Causes of Overpricing lack of competitive advantage

lack of market understanding

rising energy cost in Pakistan

Labor costs

High Costs of Raw Materials

Branding and Marketing Strategies

Challenging to compete with competitors

lower productivity

Technological Roadblocks higher costs

ability to compete internationally by the industry has declined

Lack of Investment in Research and Development

Limited Access to Funding

50
 lack of access to high-end machinery and equipment
Causes of Technological
Roadblocks Outdated Machinery and Technology

Limited Automation

Lack of Skilled Labour

Lack of Knowledge and Understanding

Rapid technological advancement and Obsolescence:

Sustainable Sourcing

Solutions Government Support

Investment in Technology

focused on market research

enhancing the product's value proposition

reduce production costs

better pricing strategy

Monitor market developments, client preferences, and price strategies

of competitors

Cost optimization

Efficient management of supply chains

Programs for Technology Education and Training

Partnership with Technology Providers and Consultants

Table 2: Summary of Empirical Findings

51
5. Analysis

In this chapter, we analyze the empirical data presented in the previous

chapter. This chapter starts with an analysis of data based on the challenges
of the clothing industry in Pakistan. It focuses on overpricing and the impact
of technological development on the clothing industry.

This study aims to present the key findings and analysis of our research on
the entrepreneurial challenges of clothing businesses in Pakistan, specifically
focusing on overpricing and technological roadblocks and potential solutions
to these challenges. The results of the interviews conducted for this study shed
light on the research question of the challenges faced by entrepreneurs in
Pakistan clothing businesses in terms of overpricing and technological
roadblocks. The clothing industry in Pakistan is one of the largest contributors
to the country's economy, with a share of over 60% of the country's total
exports. The industry is highly competitive, with many different companies
providing similar items at various prices. This has led to a fiercely
competitive market where entrepreneurs must set themselves apart to succeed
and win over customers.

The research questions aimed to understand the challenges entrepreneurs face

in clothing businesses in Pakistan related to overpricing and technological
roadblocks. The study's objectives were to identify the factors contributing to
overpricing in the clothing industry and to explore the impact of technological
roadblocks on the clothing businesses in Pakistan. The study employed a
cross-sectional, non-experimental design to collect data at a single time point
and obtain a snapshot of the challenges faced by the clothing businesses in
Pakistan. The qualitative research strategy allowed the researchers to gain a
deeper understanding of these challenges and solutions through in-depth
interviews and observations.

52
5.1. Overpricing

The study found that overpricing is a significant challenge for clothing

businesses in Pakistan. According to Safdar and Naeem, 2020, the factors
contributing to overpricing include the high cost of raw materials, high taxes
and duties, and the lack of economies of scale. The study found that the
respondents identify these challenges. In addition, the study found that
clothing businesses in Pakistan face challenges related to the lack of skilled
labor, inadequate infrastructure, and a difficult regulatory environment.

Based on the findings and analysis presented in the previous section, it is

evident that overpricing is a significant challenge faced by entrepreneurs in
the clothing businesses in Pakistan. The study found that many clothing
businesses in Pakistan need help with overpricing, which has resulted in low
demand for their products (Nagle et al., 2018). More specifically, all the
interviewees identified overpricing as a major challenge they face in their
business. Furthermore, the respondents reported that they could not offer
competitive prices due to high production costs, which include raw materials,
labor, and energy costs, which are supported by the study of Safdar and
Naeem, 2020.

The findings related to overpricing revealed that most of the interviewed

entrepreneurs believe that overpricing is a major challenge faced by the
Pakistani clothing industry. The high cost of raw materials, labor, and energy,
along with the additional taxes and duties imposed by the government, has
increased production costs, ultimately leading to overpricing. The study
highlights the significant challenge of overpricing faced by the clothing
businesses in Pakistan. The study provides insights into the root causes of the
challenge and its impact on the industry's competitiveness.

The findings related to overpricing suggest that the industry faces intense
competition, and many businesses struggle to differentiate themselves from
their competitors. This is leading to a situation where businesses are either
overpricing their products to maintain profitability or are forced to sell at
lower prices, which erodes their margins. The high cost of raw materials,

53
energy, and labor is a major contributing factor to overpricing and the need
for more efficiency in production processes.

The findings of this study are consistent with the existing literature on the
clothing industry in Pakistan. The overpricing of clothing products is a
significant challenge entrepreneurs face in the country's clothing businesses.
This is due to the high costs of raw materials, transportation, and energy,
which make it difficult for small businesses to compete with larger,
established companies (Hugos, 2018). The literature also highlights the
importance of Technology in the clothing industry.

Based on the interviews conducted with entrepreneurs in the Pakistani

clothing industry, overpricing emerged as a significant challenge for the
clothing businesses. Entrepreneurs reported that they often faced difficulty
setting prices for their products, as they needed to balance the need to cover
production costs with the need to remain competitive in the market.
Additionally, entrepreneurs noted that customers were becoming increasingly
price-sensitive, making it difficult to increase prices.

The interviews revealed that one of the main drivers of overpricing in the
Pakistani clothing industry is the high cost of production (Abida, 2008).
Entrepreneurs reported that the cost of raw materials, labor, and energy had
increased significantly in recent years, directly impacting their production
costs. Many entrepreneurs reported that they could not pass on these increased
costs to customers, as this would make their products unaffordable. The
participants also highlighted the impact of overpricing in the clothing
industry, such as reduced demand, lower sales, and a loss of customer trust
(Filser et al., 2019).

5.1.1 Causes of Overpricing

Several factors contributed to the overpricing challenge faced by the clothing

businesses in Pakistan. Firstly, a lack of government support for the industry
was identified as a key factor. This includes a need for more subsidies for raw
materials and energy, high taxes, and limited access to finance. Many clothing
industries cannot source materials at competitive prices due to their limited
54
size and bargaining power, resulting in high raw material costs. In terms of
the impact of overpricing on the industry's competitiveness, the study found
that it has a significant negative impact. Many industries reported losing
potential customers due to their inability to offer competitive prices.
Additionally, they face stiff competition from larger businesses that can offer
products at lower prices due to economies of scale.

Furthermore, it was found that many Pakistani clothing businesses need

proper branding and marketing strategies (Tunio et al., 2021), which also
contributes to overpricing. As a result, they need help competing with
established international brands with a stronger brand image and marketing
strategy. Additionally, it was noted that the lack of market research and
understanding of consumer preferences also contributes to overpricing, as
businesses need to provide the right product at the right price to attract
customers (Alvi & Shahid, 2016).

5.2 Technological Roadblocks

The study identified technological roadblocks as another significant

challenge for clothing businesses in Pakistan. The lack of access to modern
technology and equipment, limited internet connectivity, and the absence of
government support for technology adoption were key factors hindering the
growth and development of clothing businesses in the country. In addition,
the study found that clothing businesses in Pakistan face challenges related to
the lack of skilled labor, inadequate infrastructure, and a difficult regulatory
environment.

Regarding technological roadblocks, the findings revealed that most of the

interviewed entrepreneurs believe that the lack of technological advancement
and automation in the Pakistani clothing industry is a significant challenge.
This is due to the high cost of investing in Technology and the need for more
awareness among entrepreneurs about the benefits of Technology in the
clothing industry.

The findings related to technological roadblocks suggest that the industry

faces a significant challenge in technological advancement and automation.
55
This leads to low productivity, poor product quality, and a decline in demand
for locally produced clothing. The root causes of technological roadblocks
include a need for more investment in Technology, technical knowledge and
expertise among entrepreneurs, and a need for collaboration between
academia and industry.

The implications of these findings for the Pakistani clothing industry are
significant. Overpricing and technological roadblocks are making it difficult
for the industry to compete with other textile-producing countries and meet
the evolving demands of the global market. To address these challenges, the
industry must focus on developing a culture of innovation and investing in
Technology and automation. Entrepreneurs reported that they faced
challenges in implementing new technologies, which limited their ability to
reduce production costs and increase efficiency. Many entrepreneurs also
reported needing access to affordable financing options, which hindered their
ability to invest in new technologies.

5.2.1 The Solution to the Challenges of Technological Roadblocks

The interviews highlighted the need for more government support and
incentives to promote the adoption of Technology in the industry.
Additionally, it was noted that the lack of skilled labor and technical expertise
also hinders the implementation of Technology in the industry. Overall, the
findings from the interviews reveal that overpricing and technological
roadblocks are significant challenges the Pakistani clothing industry faces,
which hinder its competitiveness in the global market. To address these
challenges, the study recommends adopting Technology, government support
and incentives, market research and understanding of consumer preferences,
and effective branding and marketing strategies.

56
5.3 Comparison with Existing Literature

The current study's findings on overpricing in the Pakistani clothing industry

are consistent with the literature. Ahmad et al. (2014) found that production
costs have increased due to the rising cost of raw materials, energy, and labor,
resulting in overpricing in the clothing industry. Similarly, Shafique and Haq
(2019) found that Pakistani clothing businesses struggle with overpricing due
to a lack of automation and technology adoption, as well as inefficiencies in
the supply chain. However, the current study adds to the existing literature by
providing insights into the specific challenges faced by clothing businesses in
Pakistan. The interviews revealed that clothing industries need help
competing with established brands with economies of scale and established
relationships with suppliers.

The current study's findings on technological roadblocks in the Pakistani

clothing industry are also consistent with the literature. Ahmad et al. (2020)
found that Pakistani clothing businesses need help with technological
roadblocks, including a lack of automation and outdated machinery.
Similarly, Ali et al. (2019) found that adopting Technology is critical for the
growth and competitiveness of the clothing industry in Pakistan. However,
the current study adds to the existing literature by highlighting the specific
technological challenges faced by clothing businesses in Pakistan. The
interviews revealed that the clothing business struggles with limited access to
capital to invest in Technology and needs more technical knowledge to
implement technological solutions. Additionally, they have needed help
finding skilled labor and training them on new Technology.

5.4 Contribution to the Existing Literature

This study on the challenges the Pakistani clothing industry faces contributes
to the existing literature in several ways. Firstly, it provides a comprehensive
overview of the challenges faced by Pakistani clothing businesses in terms of
overpricing and technological roadblocks. This is particularly important as
previous studies have focused on either overpricing or technological
challenges. However, only some have considered both challenges in a single

57
study. By analyzing both challenges, this study provides a more holistic
understanding of the challenges faced by the Pakistani clothing industry.

Secondly, the study's findings shed light on the industry's root causes of
overpricing and technological roadblocks. By identifying these root causes,
the study provides valuable insights for policymakers and industry
stakeholders to address these challenges. Thirdly, the study contributes to the
existing literature by highlighting the impact of overpricing and technological
roadblocks on the industry's competitiveness. The findings suggest that these
challenges have hurt the industry's ability to compete with other textile-
producing countries and meet the evolving demands of the global market.
This information can help industry stakeholders understand the importance of
addressing these challenges and take appropriate measures to improve the
industry's competitiveness.

Finally, the study provides recommendations for overcoming the challenges

identified in the study. These recommendations are based on the study's
findings. They are tailored to the specific challenges faced by the Pakistani
clothing industry. By providing practical recommendations, the study can
help policymakers and industry stakeholders implement effective solutions to
address the challenges faced by the industry. Overall, the study's contribution
to the existing literature is significant as it provides a more comprehensive
understanding of the challenges faced by the Pakistani clothing industry and
offers practical recommendations to address these challenges.

5.5. Recommendation to the Industry

The findings and results of this study provide important insights into the
challenges facing the Pakistani clothing industry. The industry needs to focus
on developing a culture of innovation, investing in Technology and
automation, and developing partnerships with academia and research
institutions to overcome these challenges and remain competitive in the
global market. The present study investigates the challenges the Pakistani
clothing industry faces, particularly overpricing and technological

58
roadblocks. This study compares the findings and results with existing
literature on the challenges faced by the clothing industry in Pakistan.

One recommendation for addressing the challenge of overpricing is to invest

in more efficient production processes that can help reduce costs. This could
involve using automation and Technology to streamline production, reduce
waste, and improve quality control. Another recommendation is to focus on
product differentiation and branding, which can help businesses stand out
from their competitors and justify higher prices. To address the challenge of
technological roadblocks, the industry must invest in research and
development and develop partnerships with universities and research
institutions to bring cutting-edge technologies into the industry. The
government can also support the industry by providing incentives for
technology adoption and promoting collaboration between academia and
industry. Overall, the findings suggest that overpricing is a significant
challenge facing clothing businesses in the Pakistani clothing industry. Using
e-commerce platforms can help entrepreneurs overcome overpricing by
cutting out the middlemen and reducing the cost of physical stores.

5.5.1 Recommendations for the clothing industry in Pakistan

based on the study's findings:

Based on the study's findings, several recommendations can be made for the
clothing industry in Pakistan:

1. Clothing businesses should reduce production costs by exploring new

sourcing options, improving production processes, and investing in
cost-saving technologies.
2. To address technological roadblocks, clothing businesses should
consider investing in new Technology, such as automated production
processes, and collaborating with established businesses to gain
access to Technology and knowledge.
3. The study suggests that clothing businesses should develop strong
branding and marketing strategies to differentiate themselves from
established businesses and attract customers.

59
Overall, this study provides important insights into the challenges faced by
clothing businesses in Pakistan related to overpricing and technological
roadblocks. The findings suggest several potential solutions and areas for
future research that can help the clothing industry in Pakistan to overcome
these challenges and thrive in the global marketplace.

5.5.2 Recommendations for Overcoming the Challenge of

Technological Roadblocks

To overcome the challenge of technological roadblocks, the following

recommendations are proposed:

Investment in Research and Development: Clothing manufacturers must

invest in research and development to keep up with the latest technology
trends. This investment will help improve the quality of products, increase
productivity, and reduce production costs.

Access to Funding and Loans: The government needs to provide access to

funding and loans to small and medium-sized clothing businesses in Pakistan
to invest in modern Technology.

Training and Skill Development: Clothing manufacturers should provide

training and skill development programs for their workers to enhance their
skills and knowledge of the latest Technology.

Finally, the study recommends that the clothing industry leverage e-

commerce platforms to reach a wider customer base and reduce marketing
costs.

The Pakistani clothing industry faces significant technological roadblocks,

hindering its growth and competitiveness in the global market. The industry
must invest in research and development; provide access to funding and loans,
and offer training and skill development programs to overcome this
challenge.

60
6. Conclusion

The study aimed to analyze the challenges faced by entrepreneurs in the

clothing businesses in Pakistan related to overpricing and technological
roadblocks and to provide their solutions. Through qualitative research
methods such as in-depth interviews and observations, the study found that
clothing businesses in Pakistan face several challenges related to overpricing
and technology, including high production costs, lack of access to modern
technology, and limited knowledge about market trends.

The research questions intended to comprehend the problems with

overpricing and technology barriers faced by Pakistani clothing industries.
The study aimed to determine what causes overpricing in the clothing sector
and investigate how technology barriers affect Pakistani clothing companies.
The study contributes to the existing literature on the clothing industry in
Pakistan by providing insights into the specific challenges clothing businesses
face. The findings of this study contribute to the existing knowledge of the
clothing industry in Pakistan by providing a deeper understanding of the
challenges entrepreneurs face in clothing businesses face and to provide
solutions.

The high cost of raw materials, severe taxes and duties, and the absence of
economies of scale are among the reasons that contribute to overpricing. A
tough regulatory environment, a shortage of skilled labor, poor infrastructure,
and other issues were also discovered in the study to be problems for
entrepreneurs in the Pakistan clothing industry. The interview concluded that
many Pakistani clothing businesses need to improve with overpricing, which
has led to low demand for their goods.

This study highlighted overpricing as a significant problem the company

faces. In addition, the respondents claimed that high production expenses,
including the costs of raw materials, labor, and energy, prevent them from
providing competitive pricing. It was stated that firms could not offer the
correct product at the right price to draw customers due to a lack of market
research and awareness of consumer preferences.

61
The study identifies some possible solutions to the challenges of Overpricing.
The government could offer subsidies for energy and raw materials to lower
production costs. To increase their bargaining strength and get products at
reasonable costs, industries should concentrate on forming alliances with
suppliers. The report suggests adopting a lean manufacturing strategy by
businesses to minimize waste and lower production costs. Conducting market
research is another option to comprehend better the market trends, consumer
preferences, and competitors' pricing strategies. The report suggests that the
clothing industry can use e-commerce platforms to expand its consumer base
and cut marketing expenses.

Another important issue for Pakistani textile companies, according to the

survey, is technological barriers. The main issues impeding the expansion and
development of the apparel industry in the nation include a need for more
access to contemporary technology and equipment, poor internet
connectivity, and a lack of government support for technology adoption.
According to the study's findings about technological barriers, the lack of
automation and technical innovation in the Pakistani garment sector is a
serious obstacle. Lack of investment in technology and a lack of technical
expertise among entrepreneurs are the main reasons for technological
barriers. The study emphasized the need for increased government assistance
and financial incentives to encourage industry use of technology. It was also
mentioned that a lack of technical expertise and skilled workers makes
adopting new technology challenging for the industry.

The study's findings suggest that the challenges entrepreneurs face in clothing
businesses in Pakistan are complex and multifaceted. Addressing these
challenges requires a holistic approach involving government intervention,
industry collaboration, and modern technology and practices. The study's
findings have important implications for policymakers, industry leaders, and
entrepreneurs seeking to establish clothing businesses in Pakistan.

62
6.1. Managerial Implications and Future Research

The previous chapter discussed the interpretation of the study's findings,

including the key themes and patterns identified in the data. This chapter will
focus on the practical implications of the findings for the clothing industry in
Pakistan. The study identified overpricing and technological roadblocks as
the primary challenges clothing businesses face in the country. Several
factors, including a need for more transparency in pricing, high production
costs, and limited access to financing, caused overpricing. Technological
roadblocks were attributed to a lack of technological infrastructure and skills,
limited access to information and communication technology, and a need for
more innovation in the industry.

The practical implications of these findings are significant, as the clothing

industry is one of Pakistan's largest contributors to the economy. Overcoming
the challenges identified in this study could positively impact the industry's
growth and sustainability, as well as the wider economy and society.

One potential solution to the challenge of overpricing is establishing a

standardized pricing mechanism for the industry. This could increase
transparency and reduce price discrepancies, benefiting consumers and
businesses. Additionally, increased access to financing could help clothing
businesses cover their production costs and reduce the need to pass these costs
onto consumers.

Regarding technological roadblocks, the study identified the need for

increased investment in technological infrastructure and skills development.
This could include providing training and support to workers in the industry
to develop their technical skills and increase their capacity to innovate.
Furthermore, the government could encourage investment in the industry by
offering tax incentives or other forms of support to businesses that adopt
innovative technologies.

The study's findings' broader economic and social implications are also worth
considering. Addressing the challenges faced by clothing businesses in
Pakistan could promote economic growth and development, potentially
63
creating job opportunities and improving living standards. Additionally,
addressing overpricing and technological roadblocks could lead to a more
sustainable and competitive clothing industry in Pakistan, which could have
positive implications for the global textile and clothing market.

In summary, this has discussed the practical implications of the study's

findings, including potential solutions to the challenges identified in the
study. The study's findings' broader economic and social implications were
also considered. By addressing the challenges faced by clothing businesses in
Pakistan, the industry could become more sustainable, competitive, and
beneficial to the wider economy and society.

6.1.1. Identification of areas for future research

The study's findings suggest several areas for future research, including
exploring the potential benefits of government policies to support clothing
businesses, further research on the impact of technological advancements on
the clothing industry in Pakistan, and an investigation of the effectiveness of
various marketing strategies for clothing businesses.

6.2. Limitations

The limitations of a study are an essential aspect to consider as they provide

insight into the validity and generalizability of the study's findings. In this
section, we will discuss the limitations of the methodology employed in the
study, including the cross-sectional, non-experimental design and sample
size. We will also identify potential sources of bias and strategies employed
to mitigate them.

The cross-sectional, non-experimental design of the study was a limitation as

it only allowed for data to be collected at a single time point. As a result, the
study could not capture changes in the challenges faced by clothing
businesses in Pakistan over time. However, given the study's exploratory
nature, the cross-sectional design was appropriate as it allowed for a snapshot
of the challenges these businesses face.

64
Another limitation of the study was the sample size. The study only included
4 participants from different companies within the clothing industry in
Pakistan. While this sample size was deemed sufficient to achieve data
saturation, it may limit the generalizability of the findings to the broader
population of clothing businesses in Pakistan.

Additionally, potential sources of bias included participant self-selection, the

researchers' subjectivity during data analysis, and using a single data
collection method (in-depth interviews). To mitigate these biases, the study
employed a purposive sampling technique to ensure that participants had first-
hand experience with the challenges faced by clothing businesses in Pakistan.
Additionally, using multiple data collection methods (in-depth interviews and
observations) and analysis methods (thematic analysis and member checking)
helped increase the study's validity and reliability.

While the study's methodology had limitations, the strategies employed to

mitigate potential biases and increase validity and reliability helped to address
these limitations. Future studies could employ longitudinal designs with
larger sample sizes to provide more comprehensive and generalizable
findings.

The study's methodology is a cross-sectional, non-experimental design that

allowed the researchers to collect data simultaneously. This approach limits
the ability to draw causal relationships between variables. It could result in a
lack of generalizability to other contexts. Furthermore, the sample size of 4
participants may be considered small. It may not be representative of the
entire clothing industry in Pakistan.

65
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Appendices

Entrepreneurship challenges: Overpricing and Technological

Roadblocks An Analysis of Pakistan's Clothing Industry.

Interview questioner:

We are Halmstad University students writing our master’s thesis regarding

entrepreneurship challenges in the clothing industry in Pakistan. The purpose
of the study is to compile and analyze the most recent challenges faced by
Pakistani garment business owners. In addition to understanding how these
challenges affect business growth and sustainability, and what strategies
successful business owners employ to overcome them.

The fundamental information of the business

1. Company Name:
2. Business Type:
3. Which year the company started:
4. Key Business Activities:
5. Key products/services:
6. Is it a family-run business:
7. How many branches or any other business you are running except this
one?
Entrepreneurial Challenges
8. What are the most pressing challenges you have experienced in your
clothing business?
9. Can you identify and describe the challenges of lack of efficient
research and development and lack of sufficient investments?
10. .Can you identify and explain the challenges of technical roadblocks
like outdated machinery, lack of automation, and lack of modern
equipment in your industry? How did it impede the industry’s growth
and competitiveness?
11. Do you identify the importance of knowledge of e-commerce
platforms and investment in digital technology in the clothing

76
 industry? How does it influence the future growth and innovation of
Pakistan’s clothing industry?
12. How do you think challenges of technological roadblocks can be
solved to increase efficiency and profitability?
13. Have you faced over-pricing in Pakistan’s clothing sector market? Do
you feel it is a challenge for competitiveness in both local and global
markets?
14. Do you think that rising production costs, raw materials, energy, and
labor lead to this overpricing of clothing items? What are the
consequences of these challenges to the clothing industry?
15. Can you identify the challenges of overpricing that will lose
customers' trust? How does it affect the business and sales?
16. What do you think are the solutions to overcome the challenges of
Overpricing to bring the industry to the market demand and be
competitive?
17. Do you think government laws and regulations are influencing your
entrepreneurship? What do you think they should do to help the
clothing industry in Pakistan?

77