Manufacturing

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Megan Akatu
Jen Dougan
Alyssa Ellis
Tatsiana Stsepaniuk
Kendra Tucker Fykes
Setting the Stage
Gap Inc.
 Core Competencies
 Brand Awareness
 Infrastructure &
International Experience
 History of Corporate
Social Responsibility
 Company Footprint
 Retail Operations
 Manufacturing
Brazil
 Social Factors
 Political Stability
 Economic Strength
 Currency Status
 Investment Friendly
 Anti-Inflationary Goals
 Low Debt to GDP, High
Reserves
Investing Directly
Foreign Direct Investment
 More profitability and control than under franchising agreements
 Builds goodwill and provides access to a growing market of consumers
 Requires a large capital investment and additional currency risk
Retail Operations
 Rio and Sao Paolo are centers for fashion and economic activity
 Leverage existing relationship with Alpargatas
 Introduce Altheta in Brazilian stores
Manufacturing
 Local manufacturing expertise
 Lease factory space and identify current distribution channels through local
relationships
Weighing the Costs and Benefits
Risks
Advantages
 Currency risk
 Stable democracy
 High transaction/set-up costs
 Strong demand for high-end,
 Inexperience in South America
(unknown distribution channels)
 Unexpected shifts in consumer
demand
 Rising inflationary pressures
athletic apparel
 Existing country competitive
advantage in textile
manufacturing
 Future international events
(World Cup 2014, Olympics
2016)
 Existing partnerships with local
suppliers
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