Chinna Doll

CAUSE OF THE PROBLEM

One of the main causes of the problem might be due to the potential China market growth which is very favorable for business premises who wants to increase their profit margin by lowering their cost. As we know, China currently is the largest population country, thus, offering low labor cost. Low labor cost means lower operating expense, generating more profit. The economies of scale which only could be achieve this way, is also one of the main attraction to cause this problem. Which business does not want to get the same quality of product, with lower cost right? Furthermore, the relaxation of trade barriers between countries also contribute to this problem of outsourcing to the best potential lowest country of production, which as off now, is China. The lesser the restrictions, the easier it is to outsource.

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SWOT ANALYSIS OF HAUTE COUTURE FASHIONS SDN BHD

 STRENGTH Has many talented employees with  high skills  Has vast experience in contract  manufacturing activities  Has necessary skills to produce high quality garments that meets the demand of European and American market  Already known in the European and American market as a high quality contract manufacturer WEAKNESSES Not enough financial strength to finance expansion to China Too much relying on contract

manufacturing activity

OPPORTUNITY  Move all current operation to China  and maintain existing customers  Expand to China by joint venture,  and maintain existing local operation to create own brand name  Exit contract manufacturing activity and create own brand name using existing factories and equipment

THREAT Lessen of trade barriers between countries all around the world China low labor cost

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ALTERNATIVES

“Expand operation to China, and maintain current operations to create own brand name” If HCF management decided to expand their operation to China for contract manufacturing, and retain local operations to create own brand name, HCF...