Kea Fashion Ltd.

Paper Summary:

This paper explains that there are two reasons for internationalizing the business: Saturation of the home market and high production costs in New Zealand. The author points out that China seems to be a good choice because of lower production costs and the size of the Chinese market. The paper relates that a serious challenge is the workers' coordination because of the tremendous cultural differences between China and New Zealand; thus, the author suggests that part of the managerial team should be local Chinese people, preferably those who have studied in the West and who are familiar with Western standards and methods.

From the Paper:

"The first thing we need to analyze and discuss involves the reasons for internationalization. The retail sales follow a seasonal trend, in the sense that the highest sales are achieved in the winter holiday period, while the lowest are generally in the months following Christmas and New Year, with an all time yearly low in February. The reasons for this are easy to explain. In general, no matter what the products commercialized, the Christmas holidays are a time when everybody has to buy presents. Clothing and garments are appropriate gifts for this season. Additionally, in the months that follow, the customers choose to make less or no investments, partially because the funds they dispose of are lower, because of the holidays."

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