Couture Fashion’s Chinese Connection

Executive summary In this case, there atomic number 18 two major problems t chapeau I can analyzed. Firstly, Kaki and Houdini which are two of major true-blue guests of Couture Fashions Bad (HCI)s were writing to Jeffrey to inform him that they whitethorn looking to china to start even up for them as the prices there were precise competitive. Second, the previous adverse lore of Made in china labels had slowly changed as China presently manufactured c handhes that are higher quality at good lower operating addresss.There were some recommendation that are going to implement which are raptors to expand to China, proposal to close down Hess factories in Malaysia and Thailand or manufacturing its own label for Malaysian and Sean market. Statement of Problems HCI whitethorn lose their turgid major faithful customers which is Kaki and Houdini as they whitethorn looking to China to contract manufacture for them as the prices there is cheaper. Apart from that, straightawaya days China was produce high quality product with cheaper price so then(prenominal) wreaks the perception of people about the made in China goods changed to a good view.This is be sustain of the labor equal in China is cheaper rather Han Malaysia. HCI now is very confusing to make decision scarce based on the problems they bear to make accurate decision. According to these problems they have to deeply make consideration of their short term and long terms decision. As farther as I am concerned, the short term problem is HCI whitethorn lose their big major loyal customers which is Kaki and Houdini. For long term, they whitethorn face a very big loss and no revere if their attach to will go for bankruptcy as Kaki and Houdini may become the benchmark for some other customers that are rely on Hess company.Other customers may assume that HCI does non maintain its reputation and that is why Kaki and Houdini are quit from keep doing contract manufacture with HCI. As it shows a se riously benchmark to other customer, it may ca use other customers quit from HCI. As a decision, I agree if HCI still operate it brisk company but doing common venture in China. Causes of problems There is some cause or problems that cause Kaki and Houdini may switch doing contract manufacture from HCI to China which is they can save their financial sources a lot as they will get cheaper supply from China rather than what was offered by HCI.Apart from that, in 1997 Malaysia had face economic downturn and fluctuation or currency exchange. or else than buying with higher price, Kaki and Houdini may get some more(prenominal) loses in currency exchange. To make an accurate decision, I prefer HCI to use PESTLE theory. PESTLE is divided into six categories which are political, economic, social, technology, ecological, and legal. ground on political and legal, to build novel factory in China is not an well-to-do way as HCI have to get he allowance from the government and also have to fully understand and bring home the bacon the rules and regulating to incept new factory in China.So it may take a very long period to face all the procedures. In term of economic, HCI may get lack of financial resources to build new factory as not confirm can sell both of their existing companies. charge they can sell both it is still not enough to get hold all the cost to build new factory in China. Based on social view, HCI may lose their specialist once they front to China as some of them may not want to bring home the bacon Malaysia which is their country. To find new specialist in China is not easy and may incur a big cost as HCI have to train them well to become professional enough.Their genuine workers also may lose Job as they will be layoff if HCI close their current company and move to China. In term of ecological, by building new factory it may cause pollution to the environment, so it relates to the government policy, rules and regulations. HCI may build a fa ctory but in rural force field that may cause the shipping cost to send all the goods to its customer become higher. In addition, from technological view, I can see hat in China the technology is different from Malaysia, so HCI once once again have to incur a big cost to train all the workers with new technology.Decision Criteria and Alternative Solutions Based on the problems and alternative solution, I am totally agree if HCI still continue its cognitive operation in Malaysia but in the same cartridge clip doing fit venture with any other strong and well known company in China. This is because by doing Joint venture HCI will not incur a lot of cost rather than doing Greenfield which is building a new factory there. Apart from that, by doing Joint venture OVA) with well-known company, it is easy for HCI to find new candidate of customers from China thus in the same time HCI can cast up their customers.If HCI want to build new factory, it may incur a lot of cost and if HCI wa nt to manufacture its own label for Malaysian and Sean market, it is rugged to brand new label and incur a lot of cost too as they have to advertise it new label. Recommended Solution, Implementation and acknowledgment As a conclusion, I am totally agree if Jeffery echo continue it operation in Malaysia UT in the same time doing Joint venture with strong and well known company in China.To ensure that HCI not lose their current big major loyal customers which is Kaki and Houdini, HCI have to as soon as possible doing Joint venture with China. By doing Joint venture, HCI can directly continue operation in China without need to comply with government policy, legal rampart and tax if they are build new factory. They Just continue follow the regulation of its Joint venture partner. Once again I am totally agree if HCI doing Joint venture and still continue its existing operation.