Research a company that has moved its location from the U.S. to a foreign country or from a foreign county to the U.S. You may also use a company that has recently expanded operations so that they have a plant in the U.S. and in a foreign company. However, this must be a real scenario. As an example, let’s say that Ford Motor company was operating 100% in the U.S. and was shipping cars across the country, but then they decided to open a manufacturing plant in China to save on shipping costs.

Once you find your company, answer the following questions throughout your paper.

1 – Describe your company and explain what service they provide or what they sell. Did the entire company move all operations, or did only part of the company move?

2 – Why would this company have made the decision for this drastic move? What was behind this decision and what was the goal? Use terms and concepts about the strategies we studied.

3 – Explain what difficulties were involved. What was the greatest challenge regarding the move? Was it the employees, the expense, the culture, the leadership, etc?

4 – After reviewing the nine models of change, which model of change would you use during this move to another country? Explain why and how the stages of the model would have been implemented for this move.

5 – Was the move a success in the long run?

Use terms and concepts that we have studied. Do not just recount the steps of the move. Discuss the change model in detail.

 

Sample Answer

Sample Answer

Relocation of Nike’s Manufacturing Operations to Vietnam

1. Company Description

Nike, a multinational corporation known for its athletic footwear, apparel, and accessories, made the strategic decision to relocate part of its manufacturing operations from the United States to Vietnam. While Nike remains a global brand with operations in multiple countries, the shift of manufacturing to Vietnam was a significant move that impacted the company’s supply chain and production processes.

2. Reasons for the Relocation

Nike’s decision to move manufacturing operations to Vietnam was primarily driven by cost considerations and market access. By relocating production to Vietnam, Nike aimed to take advantage of lower labor costs and operational expenses compared to manufacturing in the U.S. This move aligned with Nike’s strategy of optimizing its supply chain efficiency and enhancing its competitive advantage in the global market.

Utilizing concepts from strategic management, Nike’s decision can be attributed to the pursuit of cost leadership strategy, aiming to reduce production costs and increase profitability. By leveraging the benefits of outsourcing manufacturing to Vietnam, Nike sought to enhance its operational efficiency and maintain its position as a leading player in the sportswear industry.

3. Challenges Faced

The relocation of manufacturing operations from the U.S. to Vietnam presented several challenges for Nike. One of the greatest hurdles was managing the transition for existing employees impacted by the move. Workforce restructuring, layoffs, and retraining programs were necessary to address the human resource implications of the relocation.

Additionally, cultural differences, regulatory requirements, and supply chain disruptions posed challenges during the relocation process. Adapting to a new business environment in Vietnam required effective leadership, cross-cultural communication, and alignment of organizational practices with local norms and regulations.

4. Change Model Utilization

In managing the relocation of manufacturing operations, Nike could have applied the Lewin’s Change Management Model. This model consists of three stages: unfreezing, changing, and refreezing.

– Unfreezing: Nike would first need to create awareness among employees about the need for relocation and prepare them for the upcoming changes. Communication, training, and engagement initiatives would be essential during this stage.

– Changing: During this stage, Nike would implement the relocation process, including establishing new manufacturing facilities in Vietnam, transitioning production lines, and addressing logistical challenges. Effective project management and stakeholder engagement would be critical for a smooth transition.

– Refreezing: In the final stage, Nike would focus on stabilizing operations in Vietnam, aligning processes with the new location’s requirements, and reinforcing the benefits of the relocation. Continuous monitoring, feedback mechanisms, and performance evaluation would support the sustainability of the change.

5. Long-Term Success

The success of Nike’s move to relocate manufacturing operations to Vietnam can be evaluated based on factors such as cost savings, operational efficiency, market access, and employee satisfaction. If Nike effectively managed the relocation challenges, adapted to the new business environment, and leveraged the benefits of lower production costs in Vietnam, the move could be considered successful in the long run.

By implementing a strategic change management approach, aligning with cost leadership strategies, and addressing operational complexities associated with relocation, Nike had the potential to enhance its competitiveness and drive sustainable growth in the global sportswear market.

In conclusion, Nike’s relocation of manufacturing operations to Vietnam exemplifies a strategic decision driven by cost considerations and operational efficiency. By navigating challenges, leveraging change management models, and focusing on long-term success factors, companies can optimize their global operations and adapt to dynamic market conditions while maintaining competitive advantage in their industries.

 

 

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