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Is a U.S.A company based in New York City with wide recognition and acceptance throughout the country
UNIT 11 NEW BUSINESS Group 11 1. Lê Nhật Tân 4115435 2. Nguyễn Minh Luân CHOOSE A LOCATION FOR A NEW FACTORY • Background • Background Marcia Lee Jeans - Is a U.S.A company based in New York City with wide recognition and acceptance throughout the country - It industries Clothing Marcia Lee Jeans has its own stores but does not own any factories Marcia Lee Jeans- Competitors 1. G- STAR Marcia Lee Jeans- Competitors 2. DIESEL Competition in this segment of the market is strong, so the company has to keep costs as low as possible in other to remain profitable Goal • Expand in Europe and Southeast Asia • Decide to build its own factory in an overseas country. • Our company is considering four countries as a location for the factory: code-named A, B, C and D. BACKGROUND Company Marcia Lee jeans Based in New York Price range … Segment ……………………………………… Factories East Coast US, not owned by Marcia Lee Jeans Cost …………… Wants to expand into ……………………………………… New factory-number of worker ………… Sour of denim …………………… …… New factory –location To be decided among A, B,C, D upper Fashion conscious people aged 15-40 Kept low Europe and South-east Asia 2,000 Imported from several countries CHOOSE A LOCATION FOR A NEW FACTORY • Background II. Advantanges and Disadvantages The criteria used to decide whether or not to invest in one country will be based on 3 main aspects: economy, transport, and labour. A D C B Country A Economy: general lot of debt, trying to modernise Growth …………… inflation average interest rates high unemployment …………… Transport good rail but poor roads and seaports, new airport Labour: skilled workforce no unionised no Wages …………… Other comments: business good government grants general military government, bribery, political problems (independence for north) low very high very low [...]... comments: business general member of trading group, strict pollution laws, no tax incentives, high taxes Stable government Country C Economy: general unstable exchange rate Growth high high …………… inflation interest rates unemployment Transport average high …………… good near ports, good airport, bad roads Labour: skilled workforce no unionised yes …………… low but rising …………… Wages Other comments: business. .. protest movement against foreign business first free elections last year Economy: general Growth inflation interest rates unemployment Transport Country D government encouraging privatisation average average …………… high …………… high Labour: skilled workforce bad road and rail, but ten-year investment plan yes, but short hours ………………………… unionised yes Wages Other comments: business low lot of paperwork,... very high low high high good rail but poor roads and seaports, new airport good road and rail, airport, no seaport good near ports, good airport, bad roads bad road and rail, but ten-year investment plan Labour: skilled workforce no no no yes, but short hours unionised no yes yes yes Wages very low high low but rising low Other comments: business good government grants member of trading group, strict... but rising fast C A lot skilled workers (short hours) Strong unions Low wage rates 5 D 6 7 9 Color RED means: not good Transport & Tax Rail Road Airport Seaport Tax Score A Good Poor New, I Poor \ 6 B Good Good I No Business (H) 7 C \ Not bad Small, good Good No 8 D Poor(↑ ) Poor(↑ ) \ \ Free(3y) 6 Pay attention: I : International years \ : unknown H : high ↑ : improving 3y: 3 Overall 23 22 Country... government grants member of trading group, strict pollution laws, no tax incentives, high taxes limit on profits to be taken out of country, not much paperwork, strong protest movement against foreign business lot of paperwork, pollution problems, tax-free profits for first three years, part of profits into training fund general military government, bribery, political problems (independence for north)... Country A (4) Country C (5) - General: unstable exchange rate - Growth: high - Inflation: high - interest rates: average - Unemployment: high - Limit on profits, strong protest movement against foreign business - Growth: low Inflation: very low - Growth: low General: modern - - - interest rates: high - Unemployment: low - With many anufacturing industries Member of a trading group Country B (9) Country... ………………………… unionised yes Wages Other comments: business low lot of paperwork, pollution problems, tax-free profits for first three years, part of profits into training fund general - • CHOOSE A LOCATION FOR A NEW FACTORY • Background 3 The Final Decision To compare the economy, labor and transport of each country, then score them Country A Country B Country C Country D IN SUMMARY…… debt, trying to Economy: . UNIT 11 NEW BUSINESS Group 11 1. Lê Nhật Tân 4115 435 2. Nguyễn Minh Luân CHOOSE A LOCATION FOR A NEW FACTORY • Background • Background Marcia Lee Jeans - Is a U.S.A company based in New. Lee jeans Based in New York Price range … Segment ……………………………………… Factories East Coast US, not owned by Marcia Lee Jeans Cost …………… Wants to expand into ……………………………………… New factory-number. …………… Transport good rail but poor roads and seaports, new airport Labour: skilled workforce no unionised no Wages …………… Other comments: business good government grants general military government,