An example of a global value chain would be the company discussed in chapter 2 Rocky Brands, Inc. The company started out as a domestic value chain with all production and sales conducted in the United States. The company had to shift to a global value chain as the cost of producing boots was getting too high. To avoid having to close its doors it adapted with the market and started using suppliers from Australia and china. The company then has the boots made in the Dominican Republic and Puerto Rico. The company’s headquarters and warehouse are still located in the United States. An example of a domestic value chain would be Weather-Tech. They produce car accessories such as floor mats, window visors, and truck bed liners. They are considered a domestic value chain because all productions and services are done in the United States.
Some of the challenges managers would face in a global value chain would be to know who you are working with. It is very important to understand the cultures of the countries you’re entering into business with because if you don’t the success rate will very small. Another challenge would be the levels of risk with working in other countries. You have to worry about local labor laws, employee strikes, and government involvement that could hinder operations. The ways these could be combated is to have your team well trained in the local culture and customs of the countries your operating in. You could also make sure you’re hiring the right people in those countries to act on your behalf to avoid labor strikes and reduce the risk you’re taking.
Both companies uses the internet and other media outlets to market its products. Weather tech uses the fact that all its products are made in America to attract customers to purchase their products. Rocky Brands, Inc uses its rich history of quality made boots to gain customers. Both companies stands behind their products with lifetime guarantees to gain customer confidence.
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