It goes without saying that Garments industry of Bangladesh has drawn a special attention to the mass people in the world because of being both cost leader and quality leader at the same time. The purpose of this research paper is to analyze the garments industry in Bangladesh which is going to be an emerging tiger in the world economy. It also aims to assess the impact of macro-environmental factors affecting the industry by PESTEL analysis. Again, five forces model has been analyzed to assess the impacts of competitive external factors on the Garments industry in Bangladesh. Furthermore, Garments sector competitive responses to the primary issues affecting the industry have been evaluated here. It also outlines the primary external influences to which this industry is subject. In this case, SWOT analysis has been conducted to assess the competitive position of this industry in comparison with the global perspective. The study suggests that total export is highly correlated with the exports of garments. It also finds that there is severe lacking in the safety and security compliance, wages and compensations and code of conduct of the current organizations. Moreover, GSP facility withdrawn can impact severely on the ready made garments of Bangladesh to compete with price in the international market with China, India and Vietnam etc. The ready made garments sector of Bangladesh is enjoying cost leadership as a source of completive advantage because of cheap labor. Finally, the study would like to recommend for further improvement of garment sector in Bangladesh.