Global sourcing Essay Example for Free

Global sourcing Essay 1) What is global sourcing? Global sourcing is defined as the process of identifying, developing, and utilizing the source of supply for the enterprise through expanding purchasing activities internationally. It is a part of post reengineering activities which is an useful measure of cutting cost. Global sourcing is a typical example of foreign construction outsourcing firms which process construction by distributing each process of construction work to vendors instead of running on its own. Such construction method not only does reduce costs in terms of managing construction sites such as labor cost and equipment cost including vehicles, but also is being adopted by various companies for value-adding construction management (CM) project. For instance, global sourcing was utilized when building Daewoo Business Center at Warszawa, Poland, on March, 1997. The process of erecting the center was alloted to vendors; construction was executed by VOICE(England), design through RTKL(U.S.), facility management was duty of Dongwoo which is a department of Daewoo Group, hotel management by Hilton hotel(U.S.). 2) Global sourcing factors Global sourcing factors that must be understood and balanced can be segmented into 5 categories. First factor is material cost. The bottom line of execution of global sourcing is reduce cost by minimizing material cost. Another category is transportation cost. Various costs including inventory delivery cost can be dwindled through global sourcing. Moreover, significant amount of transportation expense can be reduced when marketing products at outsourcing regions. Cross-border taxes, tariffs, and duty costs are third factor which form global sourcing. Instead of relying on domestic production but rather outsource each process internationally, costs can be reduce by avoiding trade barriers which include cross-border tax, tariff and duty cost. Next factor is supply and operational performance. With effective resource management and cheap labor cost, supply and operational performance can be efficiently managed which enables global sourcing companies to manufacture high quality-low price merchandises. The last category of global sourcing is supply and operational risks. Cultural and geographical disparities can yield additional costs such as labor cost and transportation cost. If not managed thoroughly, they can militate as huge risks in terms of conducting sourcing. 3) Advantages of global sourcing There are three major merits of performing global sourcing; gumption to changes, reduction of cost, and trade barriers avoidance. To begin with, global sourcing allows a firm to develop capacity to cope with changes in market condition. Importing numerous raw materials and resources economically and steadily can be done through global sourcing. With such abundant resources, a firm can flexibly adopt to environmental alterations when confronting unexpected economic crisis. Secondly, average 20% of cost saving is possible. Components of products or raw materials procured from abroad is advantageous in terms of price. Furthermore, many countries such as American and Europe are sourcing materials to cut cost in terms of distribution industries. As a result, China has become the hub of production base for global sourcing. Even in case of Korea, sourcing products from China are 30%~40% cheaper than Korean domestic goods. In particular, simple functional merchandizes whose design and quality are relatively less considered are largely influenced by global sourcing. Consequently, over 70% of commodities and clothes are imported from China. Last merit of global sourcing is evasion of trade barriers. In case of global sourced goods, the price is lower, leading to economical purchase, by avoiding trade barriers such tariffs and cross-border taxes. On top of that, firms are able to acquire restricted raw materials and resource. Thus, unique and competitive products can be created. 2. Case-Study (LiFung) 1) Introduction LiFung is a professional trading company which specializes in global sourcing and was founded in 1906. It functioned as a broker between Asian manufacturers and foreign traders and expanded as a trading company later on. Today, LiFung acts as a professional sourcing and distribution firm focusing on toys and textile. Becoming an intermediary, it reconstructed the business by forming it as a connection and manager of diverse supply chains. LiFung is the representative of smokeless factory without owning any equipment and factories regarding production process from raw material to final goods and distribution of final products. 2) Business area / Present condition LiFung won the rewards in Fabulous 50 selectied by Forbes Asia, 50 for 2012 from Morgan Stanley, and The most influential companies 25 from Business week. The sales of LiFung in 2007 was 92.4 billion in Hong Kong dollars, approximately 36% increase in sales compared to that of 2006. Net income reached 30 billion dollars(2007) and LiFung Co. Ltd. succeed in gaining 19.8% increase in sales (110.7 billion Hongkong dollars)than that of previous year. After 1998, foreign companies such as The Limited, Gymboree, American Eagle, Warner Brothers, Abercrombie Fitch, Bed, Bath Beyond, Tesco, Avon Products, Levi-Strauss, Reebok have become major customers of LiFung, and Royal Ahold, Guess Jeans, Bebe also joined as major customers of LiFung in 2000. As a result, LiFung currently has 68 offices in the 38 countries, and shareholders numbers 17,900. In addition, it consists of 107,000 employees engaged in the business associated with LiFung, especially 40,000 related businesses only in the United States. Thus, it can be said that LiFung has entered plateau stage as a company settling new form of SCM rather than just being a simple trading firm. 3) Platform / Operation System LiFung is one of the enterprises which effectively employ platform strategy. In terms of strategy, LiFung adequately balances SRM and CRM strategy to manage producers and customers. LiFung distributes textile component orders to vendors as soon as receiving orders from textile industries. It makes most of 15,000 subcontractors which are located around the globe. When producing a jacket, for example, LiFung procures materials from diverse vendors; outshell is from Korea, Zipper from Japan, lining is done from Thailand, and trademarks and thread from Hongkong. Fabric is dyed in Southern Asia, China sews, and finally quality inspection and packaging are done in Hongkong. Then, headquarter in Hongkong generally manages cash flow and value-added process. 4) Success Factors Success factors of LiFung can be categorized into three elements. The first factor is IT evolution. Through IT development, product lead time dwindled through forming network among producers and customers, and even efficiently manage vendors. Another facet is SRM and CRM, especially have strength on SRM. LiFung analyze customer’s needs and scrutinize supply chain to meet the desires. Since firms tend to focus on maximizing their capability instead of in accordance with needs, LiFung can otherwise strive to fortify supply chain or value chain for customers. In other words, the key role of LiFung is to direct manufacturers of supply chain to the intended direction. For that specific purpose, it establishes education to producers on scattered network management rather than having strict control system for managing vendors, and emphasizes on trust and active empowerment. Lastly, LiFung follows 30/70 rule, which is to set a standard(from 30% to 70% of total production) on production quota to LiFung. This enables LiFung to have loose liaison among subcontractors. Minimum 30% of total production allows LiFung to possess minimum supply from each subcontractors and prevention vendors from being subordinates can be done by setting maximum 70%. The core objective of this principle is to assure vendors of gaining huge profit from being a member of the network and on the other hand guaranteeing flexibility of business and availability of a room for growth. Other vendors also benefit from the principle by being expose to opportunities to work with others, which help them to learn and come up with innovative ideas. Such principle demonstrates value of LiFung on making supply chain more dynamic and lively. Thus, change in partners frequently happens in supply chain of LiFung. In conclusion, LiFung shows contradictory management of pursuing stable and long-term partnership whereas also demanding loose network instead to forming strict organization. 3. Problem Solution 1) Wage stagnation / Pricing pressure The first problem of LiFung is wage stagnation of China. China accounts for 60% of total global sourcing of LiFung, which means that shift in China impact LiFung heavily. After the economic liberalization of China, China has been able to attract world companies as the most suitable production base due to cheap and abundant labor. As a consequence of substantial growth, China’s wage has been increasing 16% annually. As labor cost takes up the largest portion of garment industry’s costs, Li Fung’s first half of 2011 net income dwindled 18%. Therefore, there is high necessity for finding a new production base(a new partners) and gain price competitiveness through such measure. Second problem is overseas buyers’ desire to lower supply pricing due to high uncertainty from global recession. As shown in the ‘average import price of textile in the U.S.’ graph on the right, the average import price has been continually decreasing, from $3.18 in 2006 t o $3 in 2009. Heavy pressure on supply pricing is having negative impact on net income of LiFung. 2) China U.S Trade conflict Third adversity is potential trade disputes between the United States and China. This trade conflict, which is referred to as protectionism, is noteworthy of a notice as 69% of total production of LiFung is sold to the United States. The United States has criticized China on the currency exchange rate manipulation, along with accusation of exchange dumping. In addition, Section 421 is an article which can be executed in a situation where increased import of Chinese products acts as a severe damage to American domestic industries. Accordingly, it is inevitable to exclude potential trade conflict between two countries on account of high possibility of implementing additional countervailing duty by executing section 421. 3) Expanding partners in Southern Asia In preparation for deterioration of China’s production environment and falling competitiveness of China as a sourcing region, Southern Asia is evaluated as the most practical alternative for strategic sourcing of LiFung. In terms of percentage change in world textile industry sourcing, diminution of China is noticeable, as –7%, whereas Vietnam and Bangladesh show growth, respectively displaying 1% and 20% of sourcing uprising rate. To demonstrate suitability of sourcing to Banladesh, environment of Bangladesh such as social infrastructure and facilities, and educational level should be thoroughly examined. Nevertheless, wage of Bangladesh is much cheaper than that of China, Bangladesh being one third that of China, in terms of only considering unit labor cost. Furthermore, Bangladesh is likely to be significantly equipped with garment-industry infrastructure judging from the large number of textile industries sourcing to Bangladesh. Therefore, it is no hasty conclusion that Bangladesh is the most appropriate region for new production base of LiFung. 4) Quality management system Controlling over 15,000 vendors is demanding and the possible drawback is failure of consistency in quality. Since quality is prerequisite these days, stricter vendor’s quality management system should be made. One of the tools that LiFung can utilize and apply stricter is ‘Vendor compliance index’. There are six indexes LiFung should keep attention to; efficient operation, productivity, process innovation, ensuring the quality, purchase the appropriate law material, and good working condition of labor. By balancing and fulfilling following vendor compliance indexes, LiFung will be able to afford products to customer with coherent quality. 4. Conclusion The concept having used by LiFung is highly familiar to us as global sourcing is also deployed by domestic companies such as Samsung and LG. Global sourcing can be divided into two factors; risk element and opportunity element. These two elements are in trade-off relation which means that change in one element accompanies the other, while endeavoring to maximize opportunity element. Thus, taking advantage of opportunity and risk element in a timely manner is the premise for successful global sourcing and in-depth analysis on local region and strategy should be followed when implementing global sourcing.

Gender Barriers in Athletics Essay -- Sports Feminism Equality Essays

Gender Barriers in Athletics 2. What are the social and cultural costs and benefits of an individual (male or female) entering a non-traditional sport for their gender/sex (eg women who enter body building, power lifting, boxing; men who enter synchronized swimming or field hockey)? Throughout history it is clear that not only women, but both genders have faced seemingly insurmountable barriers when attempting to break into a sport that is not "proper" or stereotypical for their gender to participate in. Though as a society we are making strides towards equality in sport, such as the advent of Title IX, it is clear that we still have a long way to go. Though breakthrough policies such as this are moving in the right direction, other evidence points towards the fact that as a society, we are still more comfortable with women in traditionally female sports such as field hockey as opposed to boxing, and men in traditionally male sports such as body building as opposed to synchronized swimming, since these activities fit with our preconceived notions of what is "normal" for a specific gender. Supporting this idea is the fact that though we seem to be moving towards equality in sport with many coeducational universities and colleges having sport opportunities for bot h sexes, funding is still extremely unequal, as states by the Women's Sports Foundation in 2001: But women and girl athletes have yet to reach parity with men. Women are still only about one-third of interscholastic and intercollegiate athletes. In addition, women college athletes receive less than 26% of college sports' operating budgets, and less than 28% of college recruiting money. Though as a society we are making progress towards equality, there is no way... ...n of both sexes, as described below by Sandi Bittler, Director of women's sports marketing for Nike: It's not like when the boys used to play sports and the girls play with dolls. Now there is crossover in appeal. The first time I noticed it was in 1995 when I traveled with the women's national basketball team tour to 30 universities. For the first time I started seeing these female athletes touching younger kids and it didn't matter if it was a young boy or a young girl (http://www.reporternews.com/1999/features/sport0822.html). In this manner, it is clear that these athletes are taking strides towards equality by affecting the future of our society, youth. Though as a society we face many remaining obstacles in striving toward gender equality in sport, it is important to look at what has been accomplished, and also look to the future for what can still be done.

Barbour’s Entry into Spain

John Barbour and Sons is Ltd is a cloth manufacturing company that has been in operation since 1894. They manufacture garments that are waxed to provide a waterproof finish. The clothes have been used by fishermen, naval officers and cyclists. The company’s products have gained varied popularity response in different regions depending on the perception of their clients. Some have considered it as functional while others view it as a passing fad and fancy. In spite if the varied reactions by the customers, the Barbour company has managed to sustain its market share and keep its reputation high by maintaining its mains principles.The company, originally from Britain has gained popularity in the international market and has moved to other neighbouring countries like United States, Canada, France and Spain. Due this expansion, the company introduced new products in terms of designs to cater for the new markets. Their unique marketing strategy and the development of new designs hav e played an important role in their success especially in the international market hence solving the exchange rate inconveniences.The launch of the company website was another great achievement of the Barbour Company that came with a lot of benefits including improved business-customer relationship and developed brand loyalty. The uniqueness of the company’s marketing strategy has lead to formation of two clubs on their website that is, Barbour owners club and Barbour members club. This is a competitive advantage they have against their competitors. They also provide for cross selling through their website database Product standardizationBarbour Company is very popular with manufacturing of classic waxed clothed in the European market. Since there is increased competition in the international market, the company has to do a great deal of promotion and marketing in order to remain competitive in the developing market. One of the strategies to do this is to carry out product st andardization (Carlo 1994). Though marketing abroad is very tricky and the products for export are not necessarily the same as those for domestic market, core aspect still remain crucial for both markets.In order to maintain competitiveness in the international market, the Barbour Company should carry out international strategies that include customization, product adaptation, and innovation other than standardization. In the international market, the extent of standardization should be limited to certain degree since the requirements may not be the same as the domestic needs. Three methods commonly applied by some of the successful companies include; 1. adopting the same promotion and marketing policy home and abroad 2. the company takes care of the specific requirements of foreign customers3. The firm may opt to start designing from scratch, products for the foreign market. The reasons why Barbour Company needs to carry out some standardization its marketing strategy is the benefi ts that come with the standardization of product in the international market. They include; the company is more likely to benefit from economies of scale, this means that the company would enjoy discounts and expenses that it would benefit as a result of the increased production. Per cost production is reduced and production volume is increased (Carlo 1994).Common consumer needs allow for product standardization, there are some commodities that are universally used and need same prerequisite across borders for example, raincoats and jackets. Standardization allows cutting down of costs that could have been incurred in designing other products from scratch. Consumer mobility is another strategy in International marketing process. This process helps firms to specifically manufacture products for the markets abroad. Other than standardization, consumer mobility is a strategy that brings about consumer retention and consumer mobility.This process will be used by Barbour Company to answe r very elementary questions about the foreign market before venturing in to it. They include subjects like, how do the clients arrive at a purchasing decision, what is the customers’ judgement of the stores presentation and how does it influence buying behaviour. These topics would help the management of Barbour a great deal in the prediction of in-store consumer trends and the other factors that affect their purchasing habits. Such findings can be very useful in designing the marketing strategy that would be used in the foreign market (Carlo 1994).Understanding consumer mobility and purchasing relationships would assist in predicting the expected trend and flow of products in the market and would encourage innovative technology to meet the customers’ requirement as observed by the customer mobility trends. Production adaptation the opposite of product standardization and is equally important in marketing in new markets especially overseas. Product adaptation involves modification and innovation of a firm’s products based on the existing products of the competitors in the market.This strategy exploits the competitor products and not on ground-breaking innovations, it follows the existing product portfolio. Since in Spain there are existing cloth manufacturing already, Barbour Company needs to carry out a research on the existing consumer requirements and specifications and make modifications on their products and promote them in the international market (Carlo 1994). Many exporting companies have or those that are multinational and have branches in other nations have engaged in product modification of their supply and has devised very efficient foreign marketing style.Designing such strategy should consider the available resources and the profits. Having eight retail stores U. K and its presence in over 28 countries in the European market including Spain is a very challenging circumstance for the Barbour Company. The company has to employ the following adaptation techniques in product adaptation as a marketing strategy depending on customer desires and market objectives; 1. Same product same needs – this strategy would help to popularize Barbour Cloth Company along other companies that are producing similar products both in domestic and foreign market.This is because they meet similar deeds 2. Same product different needs – this could be used when similar products are intended for different purposes. Some cloths may be viewed as essential for example, waxed coats used by fisher men while other clients may view them as just fashionable. 3. Different product, similar needs – this strategy would help to provide alternative products in the market for customers in both foreign and domestic market. 4. Dual adaptation – this king of product adaptation would involve modifying the product as well as the purpose for its use.This is usually very expensive and would not be very necessary unless it sho ws greater success rates in a field not yet exploited. 5. Invention – this helps the companies in question to cater for customers who may not be able to afford what already exists in the market. This is because some customers have low income and might not be able to manage to pay for expensive garments or the same adaptation can be applied where a company discovers a cheaper production technology that can be used to accomplish the same requirements.Developing Integrated Communications Strategy Integrated marketing communication is a way of ensuring that all information and messages are connected. This means that the process involved go beyond just the coordination of a company’s outgoing information (advertisements and promotions) through different media and the reliability of the message (Schultz et,al. 1996). Integrated marketing strategy utilizes widespread customer information to plan and develop a marketing approach.Barbour Company has to develop a well designed i ntegrated marketing strategy because it would enable the company to have an on paper plan which would be very effective in sustaining its market niche in a competitive world as well as discover new marketing requirements and unmet customer needs (Schultz et,al. 1996). Steps in designing this communication mix are; 1. Creating customer database – bearing in mind that Barbour Company operates its own data base, creation of customer database would enable the management access customer information and analyze the purchasing habits and trends in the market.2. Laying down on-paper strategies – the marketing strategy is usually developed form the information obtained from the customer database. Business communication, sales and promotions are designed from the insights from the customer information. 3. Designing working tactics – once the general strategy has been laid down, proper promotional plans can be specified to target specific marketing goals. 4. Evaluation of Strategy – the outcomes of the new information about the consumer habits is investigated to establish the efficiency of the strategy set to operate. Marketing Communication MixThis defines the exact advertising medium to be used, personal selling, market promotion, and business – customer relationships the company would use to meet the objectives set in the marketing strategy (Schultz et,al. 1996). The best marketing strategies usually work out the 4 P’s Versus the 4 C’s analysis Product and Customer – in designing consumer products, the company should make sure that the customer needs and requirements are met. Both the international and local markets have changed so much that businesses no longer trade in what they can make rather the product specification is determined by consumers specific needs.Since the customer is the â€Å"man† in business, then meeting the requirement puts a business at a better position in the market mix. Price and Cost – the pricing of products should be designed to comply with the consumer’s cost to satisfy his/her needs. Research has found out that price is just one element of the consumers’ cost structure in meeting their needs (Yeshin 1998). The intrinsic cost plays a very critical part for example; it’s the cost of time to watch a movie and the cost of guilt for not treating your friends well.Place and Convenience – provision of products at the right place at the right time should be matched with the convenience the customer would enjoy. Convenience covers characteristics of physical or practical location, easiness of access, and reduced transaction time (Yeshin 1998). Promotion and Communication – promotional marketing should not be hard to comprehend as the purpose of the message may not be accomplished. The best mediums for communication and promotional activities in marketing should have a feedback mechanism to enable two way communications ( Yeshin 1998).The message should be understood by the customer in a way to create the need to purchase products being marketed. The revolutionized marketing communications has prompted the change of mass marketing strategy to more target specific marketing. The changes and improved information and communication technology has facilitated market segmentation. The progress in information technology especially the aspect of media fragmentation has encouraged narrowcasting as opposed to broad casting The BenefitsThough integrated Marketing Communications would require a lot of resources from Barbour Company, the benefits (competitive advantage, Profits and increased sales) that come with it are worth the cost and the effort invested in the strategy. Integrated communication wraps information around consumers and shortens the time spent in the buying. This enable to reduce queues and the sales made in a day could be greatly increased; this efficiency usually improves company reputation as well as creating a better relationship between the customers and the business (Yeshin 1998).Barbour Cloth Company would be able to retain customers in this competitive environment as good relationship between customers and the company builds customer loyalty. This is very essential in eliminating unnecessary onslaught of competition. The possibility of maintaining customers for a long time is a very strong competitive advantage. Integrated marketing communication will result in increased returns due to efficiency involved. The current advances in information and communication technology have adopted the use of effective unified message as opposed to incoherent innumerable messages.Consolidated and crystal clear message will have higher chances of penetrating the busy environment and reaching the target consumers. Integrated marketing can to a great extent heighten sales by stretching messages across numerous communication tools to d generate more opportunities for customers to acce ss and obtain awareness of the products, stimulate the need to have the product being advertised and ultimately getting the potential customers to actually purchase the goods.Finally the adaptation of an integrated marketing system would enable the Barbour cloth company to save a lot of money that could have otherwise been used to duplicate graphics and photos. In IMC, the photos can be shared and used for advertising, presentations and promotional literature. Agency costs are cut down buy the use of a single agency for all communications and even if the company might use several agencies, time is a saved for meetings, briefings and strategic planning.Workload is reduced and hence the efficiency of the marketing strategy is improved, work stress is completely eliminated. Pricing of Products Price is one of the important aspects of the integrated marketing strategy as identified earlier. This is because it’s closely linked to the positioning of the product in the market. On th e other hand, the price of a product significantly influences other elements of marketing (Phillips et,al. 1994). There are many ways of developing prices for gods and services.Come the most crucial one are; Premium pricing – this allocation of high prices depending on uniqueness of the products, Penetration Pricing – prices are purposively set low in order to achieve a market niche, Economic Pricing – prices are set based on low manufacturing and marketing costs, Price Skimming – higher prices are set as a result of the established competitive advantage, Psychological pricing – prices are set based on the emotional perception of the consumer, Product Line Pricing – pricing benefits are granted on a range of products, Product Bundle Pricing – prices are collectively set for a collection of Products as a single package, promotional pricing – prices are set to enhance promotion of the product and Value pricing – prices are influenced by external factors such as competition, and recession. Pricing Objectives Barbour Cloth Company has to develop pricing objectives in order to settle on the most favorable pricing of their products (Phillips et,al. 1994). There are different objectives for pricing, but the basic reasons include the following; 1. Profits – the purpose of any business organization is to make maximum profits, bearing in mind the expenses and other overhead costs. Present profit maximization may not be the superb pricing strategy if it results in lower profits. 2. Revenue – the purpose of the business is to establish long term trend in profit margin by expanding the market segmentation and reducing costs. 3.Quality leadership – the prices usually indicate the position of a product as the quality leader. This builds consumer confidence and loyalty. 4. Status Quo – prices may help a firm to sustain its position in the market by making a stable and consistent profit level. Conclusion Business success is the dream of many business ventures, expansion and enlargement in to the foreign market is the sign o0f success. With efficient marketing strategy in Place, Barbour cloth company is likely to attain success both in Home market Britain and abroad including Spain. The few set backs that might be encountered would include the Spain’s government policies and business regulations.Barbour being a family business needs to be cautious with the law and utilize all aspects of legal (LE-PEST C Analysis) environment for business operations. References Carlo A. (1994). Product Standardizatuion.. A Management Process. American Society for Healthcare Central Service Personnel of the American Hospital Association Phillips C. Doole I. & Lowe R. (1994). International Marketing Strategy. Anlysis, Development and Implementation. Routledge. Schultz D. E, Tannenbaum S. I & Lauterborn R. F. (1996) The New Marketing Paradgm. Integrated Marketng Communications. M cGraw-Hill Proffessional. Yeshin T. (1998). Integrated Marketing Communications. The Holistic Approach. Butterworth-Heinemann.

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