Sri Lanka's Rubber Industry: Succeeding in the Global Market

The global rubber industry is in a growth phase where competition is intense. It is a critical period for the industry where fundamental changes are taking place in the way rubber is produced and marketed for competitive survival. In the long run, it is the cost differential which will sustain either the natural rubber industry or the synthetic rubber industry. The Sri Lanka industry has recently been taken out of state management and the private companies who now are in control should make important strategic moves to enhance its competitiveness in the global market. This volume identifies some of the major strengths and weaknesses of Sri Lanka's rubber with respect to other major exporters in the world and examines the strategic options for the Government of Sri Lanka and the private rubber companies. The industry needs to move away from mass marketing strategies to more focused strategies of differentiation and positioning. The government should develop critical resources for high levels of productivity and assist innovation and improvement within the industry, thereby creating an environment in which firms can upgrade their competitive advantage. A few of the essential steps that the government of Sri Lanka must take are deregulation of the labor market, removal of unnecessary controls on the industry, and developing the financial market. The government should also assist with overseas promotion and collecting market intelligence. Individual firms have to assist the government in shaping policy and must put their support behind constructive government programs. They must also look for strategic alliances with firms in other countries to fill any resource gap that may hinderdevelopment.