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Rinith Prasad, Nikita Nasta, Anna Sneed

The Story

THREE GREAT MINDS, Rinith Prasad, Anna Sneed, and Nikita Nasta, decided to create a company that sells athletic shoes. They are now a really famous brand.

Advice

Our main advice for starting a business is that you take in the situation factors considered when locating factories, Site factors considered when locating factories, Transportation systems utilized, will your company be transnational, and ways in which you would vertically integrate to keep profits within your company.

Usually,
the site factors many face are that they need cheap labor, yet the quality of the products should be good.

Main situational factors include the economy needs to be good around the area and they must have little competition. If everyone is poor in the area, then not many would by high priced products. They would look for cheaper products, which competition comes in. If there is a store across the street selling shoes 10 dollars cheaper, they will have more business.

Transportation is a key factor in business. We do not own our own transportation system. We have it shipped out by boat and then driven across in trucks to stores by using a break in bulk location to save money and distribute our products more efficiently. Also, since we are using boats, we can ship around the coast and spread inward.

If you are struggling to decide if your company is to be transnational, it depends on what exactly your product is. Since our products were shoes, we became a transnational company. Everyone uses shoes, so it would be a better profit.

We are bulk reducing, so we are closer to our source. It is cheaper to get our supplies from there.


Summary of company

Our factories are in South India (Tamil Nadu) and Cambodia.
South India and Cambodia are located near South Asia, where a lot of rubber is produced. Because athletic shoes are bulk reducing, the factories should be located closer to the source, lowering the overall cost of transportation.

We locate our manufacturing facilities near areas of cheap labor, because producing shoes is labor intensive. These areas both have cheap labor, therefore they have been chosen as the location of our facilities.

We own the manufacturing and marketing of our athletic shoes. We can vertically integrate this by buying the raw materials to make the shoes, and owning and running that factories that make the shoes. We will produce all marketing of our product, but our product will be sold in other stores. Our marketing office will be located in the U.S., because it has highly skilled labor that can operate marketing skillfully.


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