This week, the international fashion group Fortune Garments is holding its first global conference in Barcelona, Spain. Fortune Garments,one of Hong Kong's oldest trading groups, makes high quality, clothing. It has become a global company: it has over 3000 suppliers in 17 countries, and employs staff from all over the world in itshead office and factories. It is expanding rapidly in foreign markets with sales of over $US 1.8bn.
Fast delivery, innovative design, and reliable quality are essential for success in the fashionbusiness. Fortune Garments' Chairman, Michael Chau, is proud that his company can usually accept a major order and deliver the goods to a customer within four weeks. However, globalisation has broughtproblems in the company's overseas plants, and this is having a bad effect on its share price. A journalist from the Eastern Economist Review suggested recently that the company could become the targetof a takeover if it didn't sort out its problems soon.
Managers from all the overseas plants are attending the conference. Michael Chau has asked them to consider the problems outlined in thediscussion document below.
1. Quality control
Many subsidiaries make; clothing from materials supplied by several of the company plants Although this helps tolower costs, the materials are, often of poor ouality,This has resulted in cancelled orders Recently, a German distributor refused a consignment of 50.000 blouses .the goods simply did not meet its,quality standards Cancellation of the order cost Fortune Garments half a million dolars in lost sales
2. Responding to customer needs
Orders have also been cancelled because Fortune Garments'subsidiaries are not responding quickly to customers needs when customers want last minute changes to. clothing, the plants cannot meet customers tight deadlines For example an Australian...