Competitiveness of Electronics manufacturing industry in India: an ISM–fuzzy MICMAC and AHP approach

The purpose of this paper is to identify and build a hierarchy of the factors influencing competitiveness of electronics manufacturing industry (EMI) at the industry level and apply the interpretive structural modeling, fuzzy Matriced’ Impacts Croisés Multiplication Appliquée á UN Classement (i.e. the cross-impact matrix multiplication applied to classification; MICMAC) and analytic hierarchy process (AHP) approaches. These factors have been explained with respect to managerial and government policymakers’ standpoint in Indian context.

This study presents a hierarchy and weight-based model that demonstrates mutual relationships among the significant factors of competitiveness of the Indian EMI.

This study covers a wide variety of factors that form the bedrock of the competitiveness of the EMI. Interpretive structural modeling and fuzzy MICMAC are used to cluster the influential factors of competitiveness considering the driving and dependence power. AHP is used to rank the factors on the basis of weights. Results show that the “government role” and “foreign exchange market” have a significantly high driving power. On the other hand, the “capital resource availability” and “productivity measures” come at the top of the interpretive structural modeling hierarchy, implying high dependence power.

The study has strong practical implications for both the manufacturers and the policymakers. The manufacturers need to focus on the factors of competitiveness to improve performance, and at the same time, the government should come forward to build a suitable environment for business in light of the huge demand and frame suitable policies.

The lackluster performance of the industry is because of the existing electronics policies and environmental conditions. The proposed interpretive structural modeling and fuzzy MICMAC and AHP frameworks suggest a better understanding of the key factors and their mutual relationship to analyze competitiveness of the electronics manufacturing industry in view of the Indian Government’s “Make in India” initiatives.

This paper contributes to the industry level competitiveness and dynamics of multi-factors approach and utilize the ISM–fuzzy MICMAC and AHP management decision tool in the identification and ranking of factors that influence the competitiveness of the EMI in the country.