Clothing Industry Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Clothing Industry Case Study Solution

Introduction to Globalization

Globalization is a process of international integration of products, services & cultural views. The advancement of science & technology has dramatically changed the impact of globalization. The traces of globalization can easily be found fromearly 18^th century when people use to voyages to the world to discover new places.

Globalization After 1945

The impact of globalization can clearly be seen from 1820 during this globalization expand on alarge scale. But after the World War II and its aftermath witness the rise of global corporations and the increasing distancing of those that owned the corporation from those that ran at a time when scope of corporations meant that such institutions had growing significant potential to affect not just the market & shareholders but all of those whom they interact, from communities to government bodies. In the late nineties& early 2000 with the development of new ways of communication, transportation, technological advancement the globalization shows rapid growth. In 2000 globalization has given new terms by International Monetary Fund (IMF) it defines four essential aspects or parameters of globalization; trade & business transactions, movement of business capital & investment, movement of people into different regions & the transfer of knowledge & culture(Choucri, 1991).

Industrialization and innovation during the19^th century led to the creation of large production facilities and the need to build anational infrastructure to bring the good produced in these factories to market. Such infrastructure, particularly in the U.S was beyond the means of government to finance, so corporations were developing& a new source of financing was developed raising finance through theoffering of shares to meet the financing requirements to support this large scale infrastructural development & construction projects(Ionescu & Dumitru, 2012).

In order to attract investment limited liability was established & later concept of separate legal identity concept was introduced to provide a governance structure to support corporations. In this sense, Governance is about governments balancing the requirements of the corporations & the requirements of society or introducing the appropriate degree of regulations to support corporations, and through them, support the growth of the country.

Impact of Globalization on different industrial sectors

Globalization is anincreasing trend in most of the developed & in some of the developing countries around the world. Globalization has marked its footprint into each sector of business. The redefining trend of supply & demand has compelling the companies to consider the market as a homogeneous mix worldwide market(Monshipouri, Claude E. Welch, & Kennedy, 2003). Long decades of sustain peace & government policies, of developed countries that support the idea of developing a free market, has reduced the trade barriers allowing companies to expand their business activities by making aninvestment in different countries. During the late nineties, the globalization shows a growth of 20% from 12% in (1970) to 27% in (1990). The impact of globalization can be evidence across all industrial sectors.

The Wall Street Crash of October 1929, followed by Great Depression shows how governance undid can destroy the societies. The subsequent crash led a global generation into bankruptcy. In 1932 Bearle& Means, look back on the events that had to define their lives in the markets, reluctantly reporting that the lessons had not been learned.

Shareholders of large corporations were too separate from the directors who managed their investment. Worse, shareholders had little interest in how returns did not match expectation rather than criticize or become involved in dialogue with directors. The separation of ownership and control was identified for the first time.

As the demand become homogeneous, the producers of goods can market their products across the borders of different countries by using similar marketing techniques. Thus globalization possesses both threat and opportunities for businesses. Organizations adopt different strategies to market their products based on the nature of their goods and services, the industrial sector in which they operate. For example, a technological base industry brings innovations & technological advancement into their product rapidly & replaces their products by upgrading them very quickly if they are operation in a developed country with a number of international competitors in the market. Whereas if they are operating in a less developed or poor country where buying power of consumers are low, with few competitors they can earn good returns on old products with few upgrades. They can bring a discontinued product from developed country to launch into underdeveloped country.

Clothing Industry Harvard Case Solution & Analysis

Clothing Industry

Powers of Multinational Industries

Multinational corporations operating in the clothing industries enjoy some legitimate powers due to their nature of business. Mostly clothing business operating globally have increased reliance on imports because of fashion industry more or less same all over the world, they do suffer due to cultural differences in some parts of the world, but themajor market segment is not much different. Transferring of raw material is a usual phenomenon between countries(Keane & Veld, 2008). Multinational organizations main focus remain on raw material particularly fabric and design;they usually outsourced labor as this reduces thecost of production especially in third world countries it a common the business model large fashion companies. As fashion is all about creativity industry evolve rapidly, therefore importing goods has a number of tangible benefits, other than mere financial benefits.......................

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