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Segments under the Indian Textile Industry

Discuss about the Measurement of Technical Efficiency System.

The textile industry is one of largest sector for generating employment and economic revenue in India. It is believed to be the source of employment for both skilled and unskilled workers and is currently believed to be the second largest employment generation source after the agricultural sectors. Currently more than 45 million people are employed directly or indirectly within the business of the textile industry. 14% of the total production within the industrial sector is generated from the textile sector. This accounts for 4 % of the total GDP in India (Belemkar and Ramachandran, 2015). The industry also accounts for 15% of the total Global export of textile products. Currently the total value of the Indian textile industry is estimated to be around 137 billion-dollar. The industry is also expected to history total value of 226 billion-dollar by the year 2023. The annual growth rate for the next 10 years is expected to be at a rate of 8.7%. The production of raw material of textile industry also increases tremendously at an annual rate of 2.7% (Verma et al., 2015).

There are two main segments under the Indian textile industry. The primary segment includes unorganised sector that consists of Handicrafts, Handloom and sericulture. Small scale business organisations are mainly within the sector of this category. This sector is also highly dependent upon the activities of unskilled labourers. The second is the large scale or organised sector, which consists of spinning and garment manufacturing sector that is done through heavy machineries. Hence it can be said that there is a wide variety within the range of Indian textile industry. The Khadi products and an important part of the textile industry the accounts for 33% of the total revenue. By the year 2020 the total revenue of khadi income is expected to reach beyond 5000 crore rupees. The production of the industry is highly dependent upon cultivation of cotton, which requires high rate of production to meet up with the demand of raw materials.

The textile industry has also witnessed huge investment during the past many years including 2.47 billion dollar of foreign direct investment within the year 2000 to 2017 (Narwal and Jindal, 2015). Many of the multinational corporations are planning to make more investment within the textile industry by opening new clothing stores. The multinational companies have also set up partnership with local small scale cotton industries, which has helped them to expand the international trade business. The Government of India has also launched several programs to promote International export of textile products. This also encourage the young entrepreneurs to make more investment improve upon the skill development work of textile industry.

Investment in Indian Textile Industry

The future of the Indian textile industry is believed to be providing good business opportunity due to the high level of domestic consumption and high demand from the international export market. The retail sector also has the opportunity to develop effective business. The marketing strategies of the Indian textile industry have a vastly changed over the past many years, which is done according to the change in the market demand. It is important for the industry to properly analyse the business environment of the Indian textile industry that will aim to improve upon the economic revenue and profitability. The net profit of the industry is entirely dependent upon import-export policies implemented by the business organisation. One of the basic marketing strategies of Indian textile industry that has helped them to gain competitive advantage in the Global market is due to the low price that is possible due to lower labour cost and effective supply chain. The Mass scale production is also responsible for the lower cost low budget.

Over the course of the current report, Blue Ocean Strategy will be applied on the current market of Indian textile industry. This is one of the popular marketing theories that were introduced in a book written by W. Chan Kim in the year 2005. According to this strategy it is believed that business organisation industry can make more success by creating the concept of Blue Ocean or uncontested market space. This will help the companies to compete freely without any major risks from business Rivals. The report will additionally also use the red queen marketing strategy, which is aimed to describe unsuccessful effort by business organisation to get competitive advantage in respective market domain. With the help of the above two mention marketing strategy it is possible to analyse the competitive environment and business performance along with future of the Indian textile industry in respect to global market economy. The report will analyse the theoretical aspect of Blue Ocean Strategy and red Queen Effect and apply the same in the context of Indian textile industry.

The Blue Ocean Strategy for marketing developed by Kim and Mauborgne (2014), is an innovative new Marketing strategic model that present the opportunity to development of new path on the success. According to Lee et al., (2017), the main purpose of the strategy is to develop new marketing opportunity in the existing circumstances. Additionally, this opportunity is developed without generating burden upon the current cost of the company. The main aim of the company is to question and identify the facts about several companies which have been able to generate more success in the respective market. The idea was generated after conducting research upon over 150 companies in the domain of 30 industries, which was done over a period of hundred years. According to the findings, it can be said that most of the successful companies were able to beat the competition in their on existing market. On the other hand, the unsuccessful companies often face the issue of Limited growth opportunity. The profit impact is also significantly higher for the successful companies and it is able to create new market space for improving level of profit. The term Blue Ocean has been used as an analogue of Market space that can be created by a company in their own domain of industry. This is believed to be one of the best ways to gain competitive advantage and capture the significant part of the market share of the respective industry (Morrison, 2016). There are also certain systemic patterns that separate most successful companies within a single market. This pattern is about developing value innovation that is needed to attract new customers that is usually achieved by driving down the cost of product or service. This is therefore believed to be one of the best ways to deal with high level of marketing competition. It is also essential to capture and implement new market demand along with making competition irrelevant. The Blue Ocean Strategy provides unique opportunity for any business to use analytical tool and frameworks along with technical strategy making process to meet up with the market demand of respective industry (Siddique & Shukla, 2016). As New Market space is developed it is possible for new companies to make good profit. In other words it can be said that the main idea of Blue Ocean Strategy is to create new market space along with new opportunity with innovative business strategy rather than fighting or competitive over the existing market opportunity or market space. This is also effective in the matters related to that of the hypercompetitive strategy, where the business organizations play important role in speeding up the rate of policy implementation. This is mainly helpful to ensure that all the major rivals within the market do not get the opportunity to make business. As suggested by Bourletidis (2014), one of the best ways to create Blue Ocean is to launch new industry within the consumer market. For example in recent times the launch of e-commerce business provided the opportunity of New Market space that has been captured by companies like eBay or Amazon.

Marketing Strategies of Indian Textile Industry

However, the major criticism about the theory is related to the fact that it is not possible for a company to create and simultaneously use the new market space that has been generated. There are also certain associated risks that can increase the risk of financial loss (Siddique & Shukla, 2016). There is also the risk that the company which create a new market space may not have complete control over the growing demand and external market environment of the respective industry. The strategies also do not properly address the external threats that can compromise upon the quality of the business in a respective market space.

Similar to the Blue Ocean Strategy there is also a red Queen Effect business strategy, which is used to describe the unsuccessful attempt by business organisation to gain competitive advantage in the market (Chakravorty & Hales, 2016). This can also help them to implement the environment of hyper competition. One of the fundamental rules of the market is to properly analyse and research on the competitive environment on the market before implementing business strategy that can help to improve upon the sales record. Nevertheless, it is believed that this technique may not work in practical situation due to the challenging environment of the market. According to Zheng (2017), it is one of the main highlighting point about marketing strategies is to develop a path of clear distinction between all the Rival brands of a respective industry. This is believed to be one of the effective ways to overcome the red Queen effect in marketing. It is important for the company to implement effective competitive strategy to improve the popularity of new product that has been launched in the market. The rate of success of a company in the market depends upon its ability to think differently and evaluate the need of the customer that is also one of the effective ways to stay ahead in the competition.

As mentioned in previous section Indian textile industry is one of the giant Supermarkets of its type in the respective market space. It is also one of the important foreign exchange earners and plays the significant role in the development of the nation's economy. Being one of the largest manufacturers of textile products, the Indian textile industry does enjoy certain competitive advantage in the Global market. However, there are certain top level of competition that the industry faces from neighbouring countries like China, Bangladesh and Pakistan. It is therefore necessary for the Indian textile industry to implement new marketing strategy to improve upon their market demand in the global market and maintain a high reputation by implementing innovative business ideas. The marketing theory of Blue Ocean Strategy can be implemented that have been mentioned in the previous section in the context of the Indian textile industry to generate opportunity of improving the total revenue amount. It is relevant to mention that the fashion and the textile industry need to implement change in the business ideas by introducing new product that is based upon the new demand generated within the market. According to Clarence-Smith (2014), it is always essential to initiate new process of investment which is aimed to add value to the existing product. This will not only help to multiply the product utility value but also provide opportunity to put forward the creativity of the textile industry in India. In the usual case of Indian textile industry, the manufacturer produces the garments according to the demand of the target group customer. This is believed to be one of the effective way to maintaining the total amount of revenue generated from the respective market. However, with value added products it is possible to generate new opportunity that is believed to be one of the basic principles of Blue Ocean Strategy (Nurhayati et al., 2015). The introduction of Amsler effect yarn by the Indian textile industry is a typical example which can help to implement the Blue Ocean Strategy in the respective market. This type of Yarn is a newly generated kind of fabric that is used in modern fashion and was introduced by manufacturers of Indian textile industry. With the help of this innovative yarn it is possible develop new kind of textile product that became highly popular among the European Nations (Raichurkar & Ramachandran, 2015). The Indian textile industry has certain advantage with this kind of fabric due to the fact that no other Marketplace has been able to manufacture this unique kind of clothing.

Blue Ocean Strategy and Red Queen Effect

One of the effective ways of implementing Blue Ocean Strategy in the Indian textile industry is to persuade differentiation with low cost manufacturing products. The main idea of the Blue Ocean Strategy is to focus up on the competitive advantage of product that is available in the market with lower cost. As the products are available at lower cost, it is easily possible to generate the environment of hyper competition. Additionally, it is also necessary to focus on the fact that the quality of the product is not compromised due to low manufacturing. This is more relevant to the case of Indian textile industry due to the fact that cost of manufacturing new kind of garments is much lower due to low labour cost and other import duties. This has been one of the major competitive advantages of the Indian textile industry, which can also successfully able to generate new market space according to the terms described in Blue Ocean Strategy. It is also possible for the Indian textile industry to generate value innovation, which is usually achieved through the works of handloom and thereby able to generate new market space in the Global textile market. One of the strategic logic behind implementing new Market product is to identify the need of the buyers. Hence, with the help of Blue Ocean Strategy it is possible for the Indian textile industry to generate differentiation with innovative product and low cost that is believed to be one of the effective ways to compete in the global market and improve upon their business performance. This can be also applied in various features scenarios that can help to improve upon the rate of revenue generation, which is predicted for the Indian textile industry (Nurhayati et al., 2015).

One of the basic principles of Blue Ocean Strategy is not based upon gaining competitive advantage. The main aim is to reconstruct the market demand thereby making competition is relevant in the respective industry. The Blue Ocean Strategy can help the Indian textile industry to break out the traditional principle of marketing and able to create new opportunity within the market. In the future, this will help to New Market space in the respective industry and generate new demand thereby improving upon the rate of promotion. Raymond is one key business organisation within the Indian textile industry, which introduced the concept of techno smart fabric. This is one of the perfect examples of introducing Blue Ocean Strategy within the respective market place. This is believed to be one of the innovative and smart type of fabric introduced by Raymond, which is believed to bring about Revolutionary changes in the Global textile market. The company has been able to introduce this innovative style of fabric and bring about new market demand within the fashion industry. With several new innovative products, it is possible for the Indian textile industry to make competition irrelevant within the global economy and improve upon their margin of profit (Wararkar, et al., 2016).

Systemic Patterns of Successful Companies

Blue Ocean Strategy is also believed to be implement step by step process that not only helps to explore the new path of market space but also understand the path of targeting new group of customer. According to the principles of Blue Ocean Strategy there are 4 step of bringing about new strategic change in a respective industry. These steps are designed within the concept of analytical tools that has helped the Indian textile industry to develop a rigorous market environment at Global scale. It is also important for the marketing manager of the textile industry to conduct essential marketing research that can have them together proper necessary information. It is therefore also possible for the marketing expert to implement alternative marketing strategy thereby preparing for all kind of crisis situation in future scenarios. Hence, it can be said that the Blue Ocean Strategy is also effective not only for the present market situation, it can also help to develop New Market opportunity in spite of all adverse situation the future in the Indian textile industry (Charter & Tischner, 2017).


The Blue Ocean Strategy is also believed to implements new opportunity that can minimise the entire future risk adverse situation that can be paid by the Indian textile industry. It is important to mention about the red Ocean Strategy which is opposite concept of Blue Ocean, where companies are not able to generate hyper competitive advantage situation within the Marketplace. Hence, there are future risks that can be encountered by the Indian textile industry which is associated with entry of new Market Rivals. Nevertheless, the principles of Blue Ocean Strategy provide a unique robust mechanism to mitigate the risk into new business opportunity and thereby able to maintain the rate of success and revenue generation. The Blue Ocean index is one of the key developing concepts in this context that can help to identify the commercial value of the respective industry. The new idea generated by the Blue Ocean can help the Indian textile industry to test the commercial viability of New Textile product before they are being launched in the Global market (Ganapathy et al., 2014). It also help to provide answer to definite question like the why will the customer buy the new products that are being introduced in market. In other words, it will help to understand the importance of new product that is being launched within the respective market. It can also help to decide upon the pricing strategy that will help the new product of the textile industry to penetrate in the Global market. It is important mentioned in this context that at the initial stage it is highly necessary for the product to available at lower cost that can be affordable by a larger group of customers. Hence, it will be able to answer the question related to the relevancy of the new product to mass number of customers. It is important for the Indian textile industry to produce the new innovative product at a mass scale that can help to meet up with the growing demand of the Global market. There are also certain various that will be encountered by the Indian textile industry while introducing new product within the market. With the help of the research principles of Blue Ocean Strategy it is possible for the industry to identify all the barriers and thereby able to address the same in order to implement the new product with new business model.

Criticism and Risks of Blue Ocean Strategy

One of the highlighting features of the Blue Ocean Strategy is due to the fact that it is extremely easy to understand and communicate the strategy of business to the target customer group within the textile industry (Jakhar, 2015). Due to the fact that there is a wide and vast group of customer within the Indian textile industry, it is important for the manufacturers to communicate the business strategy with a simple form of business language. It is believed to be one of the effective ways to improve the popularity of new product within the target customers. Hence, it can be said that the Blue Ocean Strategy does provide an effective way to execute the business plan in practice. The blue Ocean Strategy helps to implement an analytic path that is implemented with human dimension of an organisation within the textile sector. It helps to identify and easy way to focus upon the demand of all stakeholders associated with in the functioning of the industry. It is thereby possible to bring about new changes that can fulfil the interest of all the associated stakeholders and clients. It is relevant to mention that one of the significant issue that have been associated with Indian textile industry is due to the fact that most of the manufacturers implement unethical process to recruit new workers within the industry. There also have been relevant issue due to the fact that in most of the cases the workers are not being paid proper amount. This is believed to be one of the legal issues of the Indian textile industry, which is mainly done in order to lower the cost of product. It is also believed that the bulk of the profit amount is usually consumed by the large scale manufacturers, thereby ignoring the needs of unskilled labours, who work at primary level especially within the Handloom section of the industry (Goel & Goel 2014). With the help of the strategic principles of Blue Ocean theory it is possible to identify all the unethical practices that have been implemented within the Indian textile industry and thereby implement proper strategy to bring about equality within the stakeholder associated with the industry. It is also important to mention about the case of introduction of large scale industrial and technological tools, which has been able to improve the rate of productivity. However, with the introduction of Technology and new machines, there are high risks of unemployment. As mentioned earlier, the Indian textile industry is one of the biggest Employment generations within the nation. However, as technology is being introduced the industry has encountered the risk of losing of job for unskilled labours. Nevertheless, with the help of the strategic principle of Blue Ocean Strategy it is possible to mitigate this challenge with the help of new skill development program that will help the unskilled workers to learn new techniques that can help them to work in large scale industry and thereby not face the challenge or risk of losing job (Nayak&Padhye, 2015).

Future of Indian Textile Industry

One of the major reasons for success of the Indian textile industry over the past several years due to the fact that they are able to implement a clear distinction in the Global market from all other respective rivals. This is according to the principles of red Queen Effect in business, which is a similar theory of the Blue Ocean Strategy that helps to focus upon the competitive environment of a respective industry. Over the past many years the Indian textile industry has been able to introduce new innovative marketing strategy in the Global scale that was mainly possible due to various government schemes that aimed to improve over the level of skill among the workers. One of the major successes of the industry is due to the fact that in spite of new innovative technique implemented by the Chinese industry; the Indian textile industry has been able to maintain their unique position in the Global scale.

According to Nurhayati et al., (2015), the red Queen effect in marketing is mainly based upon implementing new ideas in the market that is far ahead of all competitive Rivals. It is also essential for a respective industry to predict the future and all the upcoming trends, which is believed to be one of the key principles of success within the textile industry. As mentioned in the section of Blue Ocean Strategy it is important to note that the success of the Indian textile industry is highly dependent upon the research conducted by the manufacturer, which will help to identify the changing Trends of the fashion industry. As mentioned in the government report published by the Indian textile ministry it is said that innovative Action Plan is one of the basic principles of business culture that have been able to promote revenue in textile sector. The innovative culture that is maintained by various government schemes have helped to generate innovative products, which is also based upon the principles of sustainability. The implementation of digital marketing and electronic business commerce over the past few years has been one of the essential innovations within the Indian textile industry. According to the principles of red Queen Effect, the introduction of new technology in the marketing principles has been able to generate new revenue. There are dedicated innovation task team appointed by the government, which aims to conduct advanced level of marketing research and thereby monitor the investment made by the Central Public Sector Enterprise. The key areas of development within the textile sector include Handloom and handicraft, which is able to maintain the traditional culture of the textile business in India. The implementation of new technology within the sector is believed to be one of the ways to generate sustainable development and ensure no harm is being done within the environment. It is important to mention in this context that principles of sustainability are one of the essential components of red Queen Effect in marketing.

As mentioned previously one of the drawback of Blue Ocean Strategy is due to the fact that it is not possible to predict all the future risk and threats that can generate after the process of implementing New Market space. It is important to mention that due to the fast changing scenario of the textile market in global scale, it is highly challenging for the Indian textile industry to maintain their respective place. Nevertheless, one of the major critics of the Blue Ocean Strategy is due to the fact that there is ethical concern due to the fact that companies can implement unfair means to gain competitive advantage while they are focusing on generating New Market space (Venugopal et al., 2015). With the help of the environment of competitive environment it is also possible to generate the rapid strategies that are needed in the case of hyper competition that is one of the major aims of the company.  As new demand of innovative product is generated within the market, there is a high risk that traditional manufacturers will suffer great amount of financial loss due to lowering of market demand. As in the case of Indian textile industry, the introduction of new fabric style by large scale companies like Raymond had posed greater level of challenge show the traditional Handloom workers and small scale industries in the respective domain.

On the other hand, in case of red Queen effect there is high probability that small scale business organisation associated with the textile industry can lose significant competitive advantage due to the introduction of new product by multinational business corporations, who are able to produce bulk amount of products (Sharma & Dhiman 2016).

Conclusion

In the concluding note it can be said that the Indian textile industry is one of the greatest generator Employment and also a greater contributor in the economics GDP. One of the major reasons for success of the Indian textile industry over the past many years is due to the fact that it has been able to implement new change in the business process. The implementation of Blue Ocean Strategy that focuses upon creating and developing New Market space is one of the effective marketing theories implemented in the respective domain. This has been one of the effective strategies to generate new demand in the Global textile market. Additionally, the red Queen strategy has also been implicated within the Indian textile industry, which helps the domain to improve upon their international trade business.

In spite of the drawback and ethical issues related to both Blue Ocean and red Queen marketing strategy, the Indian textile industry has been able to utilise the same in order to maintain sustainability for future growth. It is also possible to identify new marketing opportunity and bring about innovation in the style of product.

Reference

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Bourletidis, D. (2014). The strategic model of innovation clusters: Implementation of blue ocean strategy in a typical Greek region. Procedia-Social and Behavioral Sciences, 148, 645-652.

Chakravorty, S. S., & Hales, D. N. (2016). Sustaining process improvement: the Red Queen effect. Production Planning & Control, 27(7-8), 621-636.

Charter, M., &Tischner, U. (Eds.). (2017). Sustainable solutions: developing products and services for the future. Routledge.

Clarence-Smith, W. (2014). The textile industry of eastern Africa in the longue durée. Africa's Development in Historical Perspective, 264.

Ganapathy, S. P., Natarajan, J., Gunasekaran, A., & Subramanian, N. (2014). Influence of eco-innovation on Indian manufacturing sector sustainable performance. International Journal of Sustainable Development & World Ecology, 21(3), 198-209.

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Lee, Y. L., Wang, W. S., & Chung, S. M. (2017, May). The Blue Ocean Strategy applied in a flood control product development. In Applied System Innovation (ICASI), 2017 International Conference on (pp. 1961-1964). IEEE.

Morrison, J. L. (2016). Blue Ocean Program and Curriculum Design.

Narwal, K. P., & Jindal, S. (2015). The impact of corporate governance on the profitability: An empirical study of Indian textile industry. International Journal of Research in Management, Science & Technology, 3(2), 81-85.

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Nurhayati, R., Taylor, G., & Tower, G. (2015). Investigating social and environmental disclosure practices by listed Indian textile firms. The Journal of Developing Areas, 49(6), 361-372.

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Sharma, M., &Dhiman, R. (2016). Determinants Affecting Indian Textile Exports: A Review. Biz and Bytes. A Journal of Management & Technology, 6(2), 193-199.

Siddique, A., & Shukla, A. H. (2016). An Analytical Study of Red Ocean and Blue Ocean Strategy with Special Reference to Indian Premier League Twenty-20 Cricket.

Venugopal, P., Giasuddin, B., &Sivaji, J. (2015). Ethics and Social Responsibility in Indian Textile Industry (A Study on Textile Industries of Coimbatore and Tirupur, Tamil Nadu). Chanakya International Journal of Business Research, 1(1), 62-67.

Verma, S., Kumavat, A., & Biswas, A. (2015). Measurement of Technical Efficiency using Data Envelopment Analysis: A Case of Indian Textile Industry. In 3rd International Conference on Advances in Engineering Sciences & Applied Mathematics (ICAESAM’2015) March (pp. 23-24).

Wararkar, P., Kothari, M., &Wararkar, K. (2016). Performance Analysis of Supply Chain Management Technique at Textile Industry in India in Accordance with Indian Textile Market. International Journal on Textile Engineering and Processes, 2(3), 34-39.

Zheng, W. (2017, January). The Red Queen Effect? Impact of Competition and Political Ties on Firm Performance and Efficiency. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 11220). Academy of Management.

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