Knights Apparel, which owned the four-year old factory, also provided benefits, health care, and allowed the workers to unionize. Most clothing factories paid employees a minimum wage, which in some places was not enough to pay for workers' basic needs along with the needs of their families.
knights apparel case study solution
Knights Apparel was the number one provider of licensed collegiate logo apparel, and Bozich saw the opportunity presented by the increasing variety of college students miserable with the working states of the folks making their schools' branded clothing. Nevertheless, the production costs of Alta Gracia were 20-30 percent higher than at Knights' other factories, and around half a million dollars a year were being lost by Alta Gracia. Knights was capable to keep Alta Gracia open only by subsidizing it with resources from its money-making business units.
Knights was a privately owned company responsible to his board as well as the business's substantial multi-billion-dollar institutional investors. Over time, Bozich had convinced many of them to back Alta Gracia, so as to demonstrate a viable business model was it however he needed to pull the factory into profitability soon. If Alta Gracia was not unsuccessful, Knights would need to determine if it ought to be enlarged. There was also the question of when Knights could, and whether they would have the capacity to duplicate Alta Gracia, should it? Other businesses had attempted and failed to offer a living wage and become profitable. Would Knights be distinct?
PUBLICATION DATE: October 30, 2014 PRODUCT #: SM237-PDF-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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