Hanes Brand Incorporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Solution No.1

Vietnam has attracted various investors to come and enter in the industry due to the low labor cost. In the case of Hanes Brands Inc., they are providing low wages to the employees and focus on the short-term strategy to just maximize the profit in the short term and enter into the next market. The investment in Vietnam is doubtable due to an economic downturn and other economic fluctuations. The Government of Vietnam should play a key role in the performance of the manufacturing industry and attract foreign investors to come and participate in the economy. Shifting trends towards mixed market system or what we can call “Economic Renovation” attracts and motivates the private and foreign investors to some degree because of low wages and low tax rates. Investment in the manufacturing sector means that there will be further jobs available for the people in the long term and investment in the manufacturing sectors contributes directly to the GDP of the Vietnam. Private and foreign investment in Vietnam means that the economy can grow further and it will be beneficial for the general people including labor in order to take benefits from the Government of Vietnam.

Solution No.2

The global strategy of Hanes Brand Inc. is not very effective and creative; they are just following the strategy of other brands and retailers in the industry to make profit on short-term basis while providing low wages to the labor and enter into the next possible market. As Hanes Brand Inc. closed 30 plants in North America and South America; consequently, thousands of people became unemployed and lost their jobs. This is not a good strategy of Hanes Brands Inc. because it has affected lots of people very badly and the overall impact is extremely negative for the economy of Vietnam as well. Hanes Brand Inc. was just focusing on the profit maximization theory on short terms basis, which was not effective in the long run.

Solution No.3

Due to the shutdown of various plants in North and South America, there was a negative impact on people due to unemployment and economy of the country because manufacturing sectors contributes directly to the country’s Gross Domestic Product (GDP). Hanes Brands Inc. should provide equal employment opportunity in all regions in which they are working. If they have plants in North America and South America and suddenly they decide to shut down them then it is not a good approach. In order to cope with criticism, Hanes Brands Inc. should offer and provide “Redundancy Compensation” to the affected employees both in North and South America in order to give them sufficient time period to find a new job. As Hanes Brands Inc. operates in the manufacturing sector of Vietnam; hence, it is their responsibility to boost the investment in the best interest of the country’s growth in the long run and they should be able to attract and motivate private as well as foreign investors. They should also do the same for other Asian countries up to some level in order to keep investors’ interest to enter in these industries and regions. The participation of government is also very important in this regard as without the contribution of the government, Hanes Brand Inc. will not be able to attract foreign investors. They should motivate and encourage the government to actively participate so as to attract investors and design friendly tax as well as trade policies and support them in order to boost the investment in the country.

Solution No.4

There is no comparison between United States and Vietnam because there is a huge difference in wages compensation in Vietnam and United States. Due to the demand and supply factors, wages compensation in both the countries is totally different. United States is a growing economy with GDP of around 17 trillion dollars while Vietnam has a GDP of about 170 billion dollars only. If we talk about the Hanes Brands Inc., they offer $80 per month wages compensation on average basis but it can go up if there is an increase in productivity. According to the market standards, Hanes Brand Inc. did not provide too much high wages rates but they provided the facility of free lunch to their workers in order to compensate them to some level. The work consists of 48 hour per week including 6 days. Bargaining power in the Vietnam is low due to an economic downturn and other economic fluctuations; but laborers were quite happy to work for Hanes Brand Inc. because they were able to enjoy their social lives as well. In United States, the situation is totally different as laborers get high per hour wage and other benefits as well due to the sustainability in their economy.