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Fortune Garments - Strategic analysis of the enterprise

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case study
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  1. Observed difficulties
    1. Internal conflicts
    2. Peripheral instabilities
    3. External considerations
  2. Decisions and actions established by ForUs Consultants
    1. Launch a new organization based on a Federal System
    2. Response to consumer needs
    3. Solution to managerial problems
  3. Financial capacities
    1. Proposed objectives
    2. Economic reality
    3. Prevision plan

In the beginning, Fortune Garment was an innovative and efficient company. Its high quality standards were appreciated worldwide. The development rapidly led to expansion. The group grew in size and popularity. Extending to over 17 countries, arming itself at about 3000 suppliers, the group underwent a phase of globalization.

Fortune Garment is one the oldest trading groups in Hong-Kong; Mickael Chau, the company president, is filled with pride recollecting his company's spectacular growth. The company was renowned for its efficiency. Distribution was rapid, and the group could deliver stocks to Australia within a short span of four weeks. Staff was of international stature.

In brief, Fortune Garments was at its apogee. Foreign market sales were over 1.8 billion dollars. Three elements appeared to be key to fashion business success: fast delivery, innovative design and reliable quality.

Nevertheless, as the years went by, demand increased. Faced with piling demand, the company quickly felt overwhelmed. The elements that once were essential to Michael Chau started to become obsolete. Much criticism was directed at the quality control, customer service, product design; in short, the company was losing the prestige it had gradually created.

However, the difficulties endured by Fortune Garment were not only external. Internal instabilities were observed and seemed to contribute to the group's downfall. The company is now stretch out too thinly and decentralization is causing managerial problems. Global implantation poses a major concern and is difficult to handle.

Consequently, unhappy customers are recalling their demands, an example of this can be found in one of the latest order cancellations in Germany: where 50,000 blouses were cancelled due to poor quality. This incident cost the group $500, 000. Similar cost issues followed, with the example of the Australian branch: this time however, the problem did not concern quality control but a lack of organization within the company. The American plant was not able to bring modifications to a silk garment in time and this cancellation cost $400,000. The examples are numerous and recurrent, and unfortunately for Fortune Garments the logical consequence to such disorganization is a noticeable fall in profits.
The main objective for ForUS Consultant Company is to formulate an answer to all this discontent. By finding a solution to the problems faced by Fortune Garments, the company will experience a rebirth, and can therefore pursue a more prosperous future.

[...] The examples are numerous and recurrent, and unfortunately for Fortune Garments the logical consequence to such disorganization is a noticeable fall in profits. The main objective for ForUS Consultant Company is to formulate an answer to all this discontent. By finding a solution to the problems faced by Fortune Garments, the company will experience a rebirth, and can therefore pursue a more prosperous future. One of the most obvious problems concerns the absence of harmony within the company. Three main difficulties can be distinguished: 1. [...]


[...] The necessity for the creation of a renewed Fortune Garments is of prime importance; it has been noted that a possible takeover would be more costly than a renovation. This point thus brings about the question of the economic reality of the reconstruction Economic Reality It is essential not to neglect the fact that the world is currently going through a significant global economic crisis. The stable currencies that constitute the Dollar and the Euro are no longer present in vast quantities. [...]


[...] In its expansion, Fortune Garments spread to over 17 countries throughout the world. In order to follow through the benefits of the construction, the countries must be regrouped in sections. The logical sense would be to use the current division of the world: continents, regions, countries. Therefore, the establishment of Sub-Departments at a continental level is vital. Those offices will personify the diplomatic connotation of embassies. They will obliged to reporting back to headquarters every six months during times of normal operations, and every three months in times of crisis. [...]

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