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Choice For Business Expand

Essay by   •  November 7, 2010  •  788 Words (4 Pages)  •  1,423 Views

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Good morning everybody.


Our company was established 20 years ago and the business has been growing fast in the past few years. So we decided to expand our production lines into women's outdoor leisure clothes. Firstly I would like to present you with the introduction of the 3 options for the plant site. Then I will also recommend one of the choices and I will explain why, after a long consideration, I chose that. IÐŽ¦d like to start with the 3 options for the plant sites. The first one I will introduce is buying Orange Jeans Company, which is located in Vietnam. As we can see in the list, they already got the machine and 40 skilled workers but what they are skilled at is just for making Jeans. We are still not sure if they are good at making Women's cloths. But we have to employ at least 80% of the existing workers, which can be turn out to that we have to re-train them again. Despite of this, we only need 10 months to get the plant ready.

The second choice is expand the existing plant in China. 6 years ago, we was experienced some difficulties about the attitude of the officials. But till now everything is working fine. And we only need to buy new machines and employ more workers. Moreover, the construction work only takes 8 months to complete.

Our third choice is to build a new modern and hi-tech plant in Korea. In Korea there are many people lost their job after the Asia economic storm, we can easily hire workers from there. But as everything is new there and we have to build from scratch, extensive training programme is required for unskilled workers and it requires 18 months to complete the construction work.

Now let's take a look at this figure. We compare them using government support, transportation system, labour cost and currency. As you can see from the figure. When China isnÐŽ¦t really topped in all of the area. She doesnÐŽ¦t have any very bad points. She has acceptable transportation system. Cheap labour cost and stable currency. She only has a little problem that the Government is supportive but a lot of restrictions. Let's look at this chart. The white bar is the cost while the shaded bar represent the Selling value after 4 years. The Korean plant site cost the most since it's a new plant and we need to buy new machines, set-up assembly lines and offices, offer training to workers recruited and install hi-techs equipment. While the other 2 options requires much less although the selling value are relatively less. But it cause us less risk.

Now I'd like to introduce my choice among the 3 attractive options. I am pretty confident that expanding the existing plant to China is the best choice



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