Couture Fashion’s Chinese Connection

Executive summary In this case, there ar ii major problems that I outhouse analyzed. Firstly, kaki and Houdini which argon two of major loyal customers of Couture Fashions Bad (HCI)s were writing to Jeffrey to inform him that they whitethorn looking to chinaw be to contract manufacture for them as the values there were very competitive. Second, the preceding(prenominal) adverse perception of Made in chinaware ticks had slowly changed as China now manufactured clothes that are higher feeling at substantially lower operating termss. at that place were some recommendation that are going to implemented which are raptors to expand to China, proposal to close push down Hess factories in Malaysia and Thailand or manufacturing its own label for Malaysian and Sean market. Statement of Problems HCI may lose their risky major loyal customers which is Kaki and Houdini as they may looking to China to contract manufacture for them as the prices there is cheaper. apart from that, now adays China was produce high quality product with cheaper price so then makes the perception of people about the made in China goods changed to a good view.This is because of the labor address in China is cheaper kinda Han Malaysia. HCI now is very confusing to make decision just based on the problems they agree to make accurate decision. According to these problems they have to deeply make consideration of their short marge and long impairment decision. As far as I am concerned, the short term problem is HCI may lose their big major loyal customers which is Kaki and Houdini. For long term, they may face a very big injustice and no wonder if their company will go for bankruptcy as Kaki and Houdini may become the benchmark for bleak(prenominal) customers that are trust 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 bad benchmark to ot her customer, it may cause other customers quit from HCI. As a decision, I agree if HCI put away black market it existing company but doing Joint risk in China. Causes of problems There is some cause or problems that cause Kaki and Houdini may thumb doing contract manufacture from HCI to China which is they can save their financial sources a lot as they will establish 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. Rather than buying with higher price, Kaki and Houdini may hold back some more 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. Based on political and legal, to build refreshing manumanufacturing plant in China is non an easy way as HCI have to get he permission from the governing body and also hav e to fully perceive and follow the rules and regulation to incept new factory in China.So it may relieve oneself 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 twain of their existing companies. Even they can sell both it is still not enough to find all the cost to build new factory in China. Based on social view, HCI may lose their specialiser once they move to China as some of them may not want to leave Malaysia which is their country. To find oneself 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 rate of flow 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 factory but in rural area that may cause the shipping cost to shine 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 resource solution, I am alone agree if HCI still continue its physical process in Malaysia but in the same era doing Joint venture with any other strong and well cognize 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 prospect of customers from China thus in the same time HCI can increase their customers.If HCI want to build new factory, it may incur a lot of cost and if HCI want to manufacture its own label f or Malaysian and Sean market, it is hard to brand new label and incur a lot of cost too as they have to advertise it new label. Recommended Solution, Implementation and aloneification As a conclusion, I am totally agree if Jeffery Echoing 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 direct continue operation in China without need to comply with government policy, legal restriction 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.