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Global Strategy for Crappy Shades - Case Study Example

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This paper "Global Strategy for Crappy Shades" discusses Crappy Shades that should move to India to start its operations. It should choose India over the other countries of Africa and Asia because India has a huge market of low-end customers and the country has a huge reserve of cheap labor…
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Global Strategy for Crappy Shades
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Download file to see previous pages The company increased its workforce from 150 to 450 workers. The increased personnel was necessary to cater to a wider market but it also brought with it a variety of other problems like increased input cost and problem in labor management. Crappy shades are suffering from high costs which is clear from the financial data which says that out of a revenue of 35 million pounds a profit of 2.5 million pounds generated. The Net profit ratio is 7% which is far below the industry standard and does not maximize the value of shareholders. It is clear that the company is suffering from high direct costs, as the marketing activities comprise only 15% of the total sales. The company was also affected by the global economic downturn as well as the seasonal demand in the market. Unseasonal wet weather in 2007 in the UK decreased the company’s sales by 15%. The market in UK has the presence of many similar companies selling the same products within the same price range. The market needs innovation, which the other companies can afford to do with their strong financials. The other competitors in the industry outsourced their activities enabling them to produce at a much lower cost. Crappy Shades was losing its market share. These factors led the top Management to believe that outsourcing its activities will lead to improved performance and revive the lost glory for the company.

Crappy Shades started functioning in the year 2000 and projected itself as a company producing cheap sunglasses. The sales are focused on the retail sector and some large MNCs who offer give away products to its customers. The products offered by Crappy Shades are cheap and are high on quality. The products come as cheap as 0.99 pounds to 2 pounds. The sales of the company rocketed to sky-high and Crappy Shades became the 92nd fastest-growing SME in UK. The company owns its own warehouse and produces from one center in the UK.   ...Download file to see next pagesRead More
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