Fortune Garments - Strategic analysis of the enterprise

Résumé du document

In the beginning, Fortune Garment was an innovative and efficient company. Its high quality standards were appreciated worldwide. The development rapidly led to expansion. The group grew in size and popularity. Extending to over 17 countries, arming itself at about 3000 suppliers, the group underwent a phase of globalization.

Fortune Garment is one the oldest trading groups in Hong-Kong; Mickael Chau, the company president, is filled with pride recollecting his company's spectacular growth. The company was renowned for its efficiency. Distribution was rapid, and the group could deliver stocks to Australia within a short span of four weeks. Staff was of international stature.

In brief, Fortune Garments was at its apogee. Foreign market sales were over 1.8 billion dollars. Three elements appeared to be key to fashion business success: fast delivery, innovative design and reliable quality.

Nevertheless, as the years went by, demand increased. Faced with piling demand, the company quickly felt overwhelmed. The elements that once were essential to Michael Chau started to become obsolete. Much criticism was directed at the quality control, customer service, product design; in short, the company was losing the prestige it had gradually created.

However, the difficulties endured by Fortune Garment were not only external. Internal instabilities were observed and seemed to contribute to the group's downfall. The company is now stretch out too thinly and decentralization is causing managerial problems. Global implantation poses a major concern and is difficult to handle.

Consequently, unhappy customers are recalling their demands, an example of this can be found in one of the latest order cancellations in Germany: where 50,000 blouses were cancelled due to poor quality. This incident cost the group $500, 000. Similar cost issues followed, with the example of the Australian branch: this time however, the problem did not concern quality control but a lack of organization within the company. The American plant was not able to bring modifications to a silk garment in time and this cancellation cost $400,000. The examples are numerous and recurrent, and unfortunately for Fortune Garments the logical consequence to such disorganization is a noticeable fall in profits.
The main objective for ForUS Consultant Company is to formulate an answer to all this discontent. By finding a solution to the problems faced by Fortune Garments, the company will experience a rebirth, and can therefore pursue a more prosperous future.

Extraits

[...] Therefore, a necessity to restore quality control is inevitable. To accomplish such objectives, Fortune Garments needs to fulfill certain regulation: ISO-9001. This consists in two main points: - Demonstrate an aptitude to regularly furnish quality products in conformation to the demands of clients and of set reglementation. - Attempt to increase clients' satisfaction via the efficiency of system, and put in place a quality improvement continuation process. Once a norm has been respected, special experts will be asked to come and check on the raw materials. [...]

[...] At any rate, the final and most important consequence of the action plan is to reach Unity and Harmony. A renewal, a modification, a new launching program are ambitious concepts that await only one prospect: financial reality. The difficulty faced in this section is to properly marry the two. Preventing the ideas to be too extravagant, and insuring they suit financial potential. The objective of this study is to evaluate the total cost this relaunch amounts to, so that the document presented to the bank is coherent, sustainable and irreproachable. [...]

[...] Hours must be fixed, and any extra-time spent at work must be rewarded. Salaries as well must be stable; nevertheless the offices can envisage a possible bonus for certain qualified and efficient workers. This establishment will encourage staff and pacify the tensions between workers; nevertheless another dimension needs to be changed, that is the cultural barrier between different workers. Improvement concerning communication Cultural disparities are not an issue that can easily be solved. Nevertheless the first step to take is to unify languages. [...]

[...] Once such will be accomplished, harmony will drive Fortune Garments to prosperity. [...]

[...] The first observation is closely correlated to the issue of the working conditions mentioned above. Indeed room temperature regulations are not monitored, the mists of winter takeover and generate a freezing working atmosphere; on the other hand the heat of summer is unbearable, employees face difficulties to work. Since the group is extended to a global level, it is certain that some plants are situated in regions where climate is an imposing factor; and the humidity, heat or cold could contribute to the potential discomfort of the working environment. [...]