Business location worksheet
Worksheet Location Decision
"American Apparel" is a vertically integrated manufacturer and retailer of clothing for men, women, kids and dogs based in Los Angeles, USA. So far they have manufactured their products in the USA but sold them lately also in countries like Great Britain, France, Germany, Israel or Korea (see "Store Locations" on their website www.americanapparel.net). As sales figures in these countries are constantly rising they have decided to set up a new subsidiary in Europe, which will make them respond more quickly to market demands there. The new site will include manufacturing facilities and function as a distribution centre for Europe. Projected staff: 400.
- Go to the company website to get more information on "American Apparel" (products, quality, workers etc.) → Go the "Mission" section on their website.
- What is their philosophy?
- What's their attitude towards their staff?
- How can they survive without having their products manufactured in cheap labour countries?
- The company has already undertaken preliminary research on this matter, and has drawn a list of three possible locations. Only one of these will be chosen.
- East Germany (www.iic.de/), Frankfurt/Oder area
- The Czech Republic, Pilsen area (Cech: 'Plzen')
- Bulgaria (www.investbulgaria.com), Pleven area
- Form groups of 3 or 4 students. Decide which location factors are important for "American Apparel" and its business objectives (while looking at the websites you may find additional/different factors important).
- Set up an evaluation table with Excel (Entscheidungsbewertungstabelle - see below), fill in the factors you have decided upon, decide about and fill in the weighting (Gewichtung) for each factor, evaluate each location according to the location factors chosen, and calculate the result.
- Your group must give a presentation on your results explaining about the choice of location factors and the locations' rankings for each of them. In case you find a better location in one of the countries feel free to promote it!
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