Shui Fabrics Case
Shui Fabrics Case
I. Statement of the Problem The company wants to improve or increase the annual return on investment.
10 years ago, the company ventured to China to lower labors costs of Rocky River Industries. It suffered money losing from the day it started its operations and interference from the Chinese government. Currently the annual return on investment of the company has been 5% for the past 3 years. The president of the company is expecting a 20% return on investment.
The company is looking for ways to improve its annual return on investment without attracting the unwanted attention of the Chinese Government.
II. Objectives a. increase annual return on investment b. continue access to the potentially huge Chinese market c. protect the company from Chinese government interference
III. Analysis of Relevant Facts
A. Assumptions for the low annual return on investment
1. The company wasn’t able to properly establish its ties with the Chinese government. 2. The company wasn’t able to assess the difference between American and Chinese cultures. 3. The company only caters to sportswear manufacturers. 4. Invested in technology to further lower labor costs without checking the actual amount difference. 5. The process of producing textile is too elaborate that it incurs costs. 6. The movement of the product is too slow and inventory is accumulating. 7. The Chinese deputy general manager, Chiu Wai, acts for the benefit of his country and government instead of the company.
B. SWOT Analysis
| |Opportunities |Threats |
| |The government will let them continue |Censure of the government if the company |
|
I. Statement of the Problem The company wants to improve or increase the annual return on investment.
10 years ago, the company ventured to China to lower labors costs of Rocky River Industries. It suffered money losing from the day it started its operations and interference from the Chinese government. Currently the annual return on investment of the company has been 5% for the past 3 years. The president of the company is expecting a 20% return on investment.
The company is looking for ways to improve its annual return on investment without attracting the unwanted attention of the Chinese Government.
II. Objectives a. increase annual return on investment b. continue access to the potentially huge Chinese market c. protect the company from Chinese government interference
III. Analysis of Relevant Facts
A. Assumptions for the low annual return on investment
1. The company wasn’t able to properly establish its ties with the Chinese government. 2. The company wasn’t able to assess the difference between American and Chinese cultures. 3. The company only caters to sportswear manufacturers. 4. Invested in technology to further lower labor costs without checking the actual amount difference. 5. The process of producing textile is too elaborate that it incurs costs. 6. The movement of the product is too slow and inventory is accumulating. 7. The Chinese deputy general manager, Chiu Wai, acts for the benefit of his country and government instead of the company.
B. SWOT Analysis
| |Opportunities |Threats |
| |The government will let them continue |Censure of the government if the company |
|