Case analysis

Table of Contents

Case analysis: Bags of Luck3

Introduction3

Growth history3

Analysis4

Strengths and weaknesses4

Strengths4

Weaknesses4

Scanning the external environment6

Analysis of the findings7

Recommendations9

References11

Case analysis: Bags of Luck

Introduction

The case study is about a small sized Chinese firm located in the coastal town of Xiao Min Nan in the South Eastern province of Fujian. The case looks into the rise and fall of company, interprets and analysis the key factors leading to the rise and the fall and make recommendations in the end. The case is a descriptive manuscript that attempts to analyse Chinese business environment and takes an all-dimensional view of firm's policies regarding all management functions and areas. It also reflects on firms corporate and business level strategies and outlines the flaws made, as well as, their impact on firm in all respects.

Growth history

The firm was located in the industrial park named Xiao Min Nan (XMN) with the most developed and advanced facilities in the year 1990, with extensive cheap labour as well as tax incentive facilities. The foundation of BOL (Bags of Luck) is attributed to principal developer of XMN village, who gave Yang family a 4000 square meter land in compensation of the loss of their Oyster Farmland. The two founders raised 20,000 RMB from relatives and friend and founded a small sized factory with office area, canteen and toilet (anon, 2004). The firm initially dealt in manufacturing school uniforms, and then school bags. In the year 2000, firm had a complete turnaround, when they launched their product in the United States, that is, ladies bags. Their launch was a success and they received large no of orders with proposed designs. The anticipated growth escalated to a point where they quit rest of the production and focused on manufacture of export quality bags, packaging bags as well as laptop carrying cases.

Analysis

Strengths and weaknesses

Strengths

Huge market: Their product; ladies handbags had an enormous market in the United States.

Growth if demand: their extensive design facilities and low priced bags with high-quality had an ever-growing demand in the United States market, there were regular new customers coming in, as well as, old customers were also retained.

Un-sophisticated organization structure: the organizational structure was based on consensus and listening to majority, with four key people, rather than a rigid hierarchy (Anon, 2000) .

Design facility: due to labour intensive processes, new orders coming in with new designs were addressed and requirements were met.

Strong supplier relationships: maintenance of long term supplies relationships led to supplier interest and concern towards the firm, as well as, maintaining good quality standards with premium quality raw material.

Material handling and stock valuation: adequate material handling process as per each order requirements led to fulfilment of customer compliance, whereas, regular stock valuation processes provided with easier product costing for each order.

Minimal marketing expense: firm does not depend on marketing activities but rather repeat customers who regularly placed orders (anon, 2004).

Zero turnovers in management staff: management and supervisory staff showed zero turnovers ever since the inception of the ...