Global Location Decisions

Unit 9 Assignment: Global Location Decisions

**Please use unit 9 grading rubric attached***

MT433-5: Analyze the role of customers and locations for effective supply chain networks.

Facility and partner location decisions depend on many factors, and customers play a significant role in this evaluation. To establish an effective supply chain network, a company may extend into areas that are closer to its customers, or use a location that provides certain advantages for its customers.

For this assignment, assume that your organization is going to expand globally and is evaluating locations to establish a new presence. If you cannot use your organization, use another whose supply chain you can research.

Describe what your organization does and how it serves its customers. Then describe what this “extension” would be. Depending on your organization and industry, this may be a supplier, distribution arm, remote branch, etc. You may choose any type of an establishment as long as it makes sense as a global extension.

Search the Internet for the latest “Global Competitiveness Report” by the World Economic Forum. Using the tools on the website select two countries from two different continents. Evaluate the fit of these two companies based on the 12 criteria listed in your readings. Which of these criteria would be most critical and which country would you select? Explain.

Respond using the critical elements below:

Compose your original response in Standard English, paying special attention to grammar, style, and mechanics.
Respond to the questions in a thorough manner, following the prescribed format and citing your sources using the current APA guidelines.
Ensure that your viewpoint and purpose are clearly stated.
Demonstrate logical and appropriate transitions from one idea to another.
Your paper should be highly organized, logical, and focused.

ANSWER

Global Location Decisions

Introduction

Lulu lemon is an athletic apparel company operating in several countries. The company sells yoga pants, running shorts, and other apparel and accessories through its chain of retail stores, e-commerce sites, and wholesale business. Lulu lemon’s expansion into new geographic markets is an integral part of the company’s growth strategy. Entering new markets enables the company to grow its customer base and sales. This paper will focus on Lulu Lemon and the most appropriate global extension strategy for the company.

What the Organization Does

Lulu lemon sells women’s and men’s clothing, accessories, and personal care products (Sánchez González, 2019). Lulu lemon also offers yoga classes and teacher training at their stores. Lulu lemon’s mission is to lead transformational experiences for individuals to live content, healthy, enjoyable lives. Their vision is to become a world leader in experiential retail.

The company offers a range of products, including pants, shorts, tops, jackets, and more for both men and women. Its goal is to help individuals live a healthier, more active life by providing the gear needed for a better lifestyle. In addition to their extensive apparel line, Lulu lemon also offers accessories and gear such as bags, water bottles, yoga mats, and more to help consumers.

Lulu lemon provides high-quality, innovative products that empower people to pursue their passions and lead active lifestyles. The company offers a range of products for both men and women, designed to improve the quality of workouts and daily life. In addition to apparel, Lulu lemon also provides accessories and gear such as bags, water bottles, yoga mats, and more.

How the Organization Serves its Customers.

Lulu lemon is a yoga-inspired, technical athletic apparel company that delivers innovative products designed to elevate the quality of workout, yoga practice, and daily life. Lulu lemon exists to empower all people to realize their potential through the power of yoga. Through its retail stores and eCommerce, consumers can access its products and services (Kosbab, 2021). Lulu lemon’s retail stores offer a unique shopping experience, featuring knowledgeable sales staff and in-store yoga classes. The company’s eCommerce site offers a convenient way for consumers to shop for Lulu lemon products online.

Lulu lemon has used digital transformation to improve its customer service experience by creating an online live chat feature that allows customers to chat with a customer service representative in real-time. This feature enables Lulu lemon to provide faster and more convenient customer service. Lulu lemon’s focus on digital transformation has also led to the development of new features such as order tracking and automated fraud prevention. These features allow Lulu lemon to provide a better shopping experience for their customers.

Exporting for Global Extension

 Exporting, also considered to be building the distribution arm, would be suitable for Lulu Lemon for a global extension. Exporting is considered the most straightforward way of entering a global market (Charbonneau and Menon, 2013). Exporting entails the sale of services and products in foreign countries that have been sourced from the company’s country. The initial benefit of exporting is that the organization eliminates the expenses of developing subsidiaries in the new market. Exporting entitles companies to contractual agreements with distributions, agencies, and retailers who market and sell the products on their behalf. Through exporting, Green Gate Fresh will grow its business and market share.

Selection of the Country

Global competitiveness helps assess how a country can achieve economic growth and how businesses within the country are influenced by competitiveness. Japan and Switzerland are most suitable for Lulu Lemon’s global extension regarding the global competitiveness index. Japan and Switzerland have an overall score of 82.3. Japan has scored 93.2 on infrastructure, 94.9 on macroeconomic stability, maximum score on health, 96.2 on innovation, 85.9 on financial stability, 86.9 on market size, 73.3 on skills, 71.5 on the labor market, and 75.9 on business dynamism. This shows that Japan has scored high in most global competitiveness pillars.

Switzerland has a maximum score on macroeconomic stability, 89.7 on the financial market, 93.2 on infrastructure, 90.8 on education, 82.1 on innovation, 79.5 on the labor market, and 71.5 on business dynamism. Switzerland is among the leading innovators and has had the most room for improvement concerning market efficiency. However, one of the challenges of Switzerland is the high trade barriers which make it last in terms of tariff regime complexity. There has been a relative reluctance for organizations to focus on disruptive ideas due to high entrepreneurial risks.

Critical Criterion

Business dynamism is a critical criterion in determining the fit of the country. It’s a significant factor in the growth of an economy. It’s measured by examining how organizations enter the market, grow and exit the market. When a country has a high business dynamism, they experience high economic growth, which results from unproductive firms leaving and more productive firms entering the market, growing and increasing the productivity growth rates (Lopes et al., 2021). Lulu Lemon needs to consider the business dynamism of the countries to drive productivity growth in the long run. Japan has a higher business dynamism, making it more suitable for global extension than Switzerland. Therefore, Japan will be an enabling environment for Lulu lemon due to its competitiveness.

Conclusion

In summation, choosing a good location is increasingly a significant factor when expanding into new markets. Good location decisions boost the performance of an organization. Therefore, a decision needs to be made on selecting the best location or market during global extension. Lulu lemon should focus on exporting for a global extension. Japan is more suitable for Lulu lemon’s global extension regarding business dynamism.

References

Charbonneau, J., & Menon, H. (2013). A strategic approach to SME export growth. In International Trade Forum (No. 1, p. 32). International Trade Centre.

Kosbab, H. J. (2021). Strategic Analysis of Lululemon Athletica, Inc.

Lopes, J., Oliveira, M., Silveira, P., Farinha, L., & Oliveira, J. (2021). Business dynamism and innovation capacity, and entrepreneurship worldwide perspective. Journal of Open Innovation: Technology, Market, and Complexity, 7(1), 94.

Sánchez González, M. (2019). Lululemon Athletica Inc. Investment Research.