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John Martin is in a very difficult situation. On the one hand, he has lots of competitors and they can soon provide cheaper products. On the other hand, his loyal clients say that they are not ready to pay more or even the same money (Hill 258). The company’s CEO has to bring some changes.
Of course, it is possible to set a factory in Mexico where workers get less than $5. However, the quality of products becomes low as workers are not loyal and they are not productive (Hill 258). There are also ethical issues. First of all, workers of the plant have worked there for years and this will be a betrayal. These people can have difficulties while looking for a good job as the country’s economy is facing problems.
This is also seen as unethical conduct that can spoil or even destroy the image of the company (Sinclair 129). Besides, setting a plant can lead to losses (Robertson 185). It is necessary to note regulations in Mexico. It can be necessary to rent facilities or even build new ones. Of course, this needs a lot of investment.
Thus, the CEO of the company should focus on the plant in New York. It is necessary to note that the CEO will have to implement several changes to make the company more competitive. First of all, it is necessary to start a new promotional campaign for the company’s products. It is important to focus on such things as quality, traditions, and American values. It is possible to mention that it was a thoughtful decision to stay in New York to make sure the company follows the principles of ethics. This campaign can show the facility and the people working there. It is necessary to stress that workers are very productive and pay a lot of attention to the quality of their products.
However, the promotional campaign is not enough and the CEO should focus on looking for new customers. Of course, it is a good idea to negotiate with old and loyal customers. Some of them will understand the benefits of working with Martin’s Textiles as this is a truly American production. It is also important to look for new customers in the USA and other countries. Again, it is necessary to stress that the products are American. It is important to focus on high quality.
Moreover, it is possible to try to reduce costs. Of course, salaries take up a lot of the company’s budget. However, it is possible to try to invest in new, more productive equipment. It is a good idea to look for new suppliers who can provide the necessary raw materials at lower prices. It is also possible to discuss this issue with the workers. It is possible to cut some extra payments (bonuses, extra days off, and so on) and save some money. Finally, it is possible to open a small subsidiary in Mexico (a small facility) and observe whether it is profitable. It can help the company have a range of products at lower prices.
In conclusion, it is necessary to note that the company’s CEO should not close the New York factory to open a facility in Mexico. This is unethical and economically risky. Instead, the CEO should try to increase the profitability of the plant by working with new partners (both customers and suppliers).
Works Cited
Hill, Charles W.L. International Business: Competing in the Global Marketplace. Boston, MA: McGraw-Hill Higher Education, 2001. Print.
Robertson, Roland. Globalization: Social Theory and Global Culture. Thousand Oaks, CA: SAGE, 1992. Print.
Sinclair, Amanda. “Improving Ethics Through Organizational Culture: A Comparison of Two Approaches.” Business, Ethics and the Law. Ed. C.A.J. Coady and Charles J.G. Sampford. Marrickwille, NSW: Federation Press, 1993. 128-149. Print.
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