posted by Sarah .
can investing more money in the business help to reduce the fixed and variable costs of that business?
Global Reader is a 5 year old E-company that grew from $1 million in sales in the second year to $8 million in sales. They have created the industry’s first portable book reader that provides any book in four major languages. They have manufacturing operations for their hand-held devices located in India and the Dominican Republic to supply the western and eastern hemispheres.
You have become Global V.P. for Distribution and Logistics. Due to the global economic downturn, your CEO has tasked you with looking at the possibility of relocating your operations elsewhere. You know that in the last few years there have been increased kidnappings and robberies in Santo Domingo (due to increased drug-related problems) at the operation in the Dominican Republic. It has gotten to the point where your employees feel threatened by coming to work there. In India, with the down turn in the economy, your plant is the only one open in that area of Goa on the East coast of India. You are located right near the port. But as work has become scarce for people there in Goa they have moved out, and it is difficult to find workers willing to work various shifts and transport shipments to the port. Your company does have another smaller plant in Mumbai, but lately there have been several bombings in that city by extremists and employees feel threatened.
Based on this information, what do you suggest to the CEO and why? Where should your plants be located? What cost-cutting can be accomplished while positioning the company for continued explosive growth? Create a step-by- step initial plan of action using bulleted points. Then write 2 paragraphs detailing your potential plans for production facilities/staff for the next three years.