September 30th - September 30th, 2008 Subcontracting and US...

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September 30 th , 2008 Subcontracting and US companies Tultex – why did it fail? Liz Claiborne – why did it succeed? Statistical process control (“hyper Taylorism”) Hiring policies Women’s experiences in subcontracting factories This comparison helps to explain how globalization has impacted on business model. Tultex failed because it didn’t subcontract or when it did it was already too late. Unionized factory that gives high wages for generations of people in Virginia. Liz Claiborne outsourced its productivity. It took advantages of all of the forces of globalization. In addition to that, it implemented the statistical process control which enables them to see that the clothes they were making were up to par. The greenfields strategies which is referring to hiring women in rural areas to work for these factories. Last time, why US started to outsource in 1990. The main reason is to search for cheaper labor. Transportation technology, changes in political context (NAFTA), and the rising of the branding strategy (making money from their brands, distinguishing themselves through branding which lead people to pay more money for a particular brand) are the three reasons why this is happening. Tultex is located in Virginia. Manufactured t-shirts and sweatshirts (fleece), from 1995-98 subcontracted in Mexico. Prior to 1995, everything was manufactured in Martinsville. Starting in 1995, they decided to outsource their labor in Mexico but it was too late. The company failed. Liz Claiborne subcontracts all of its clothes all around the world with many different factories. Gained a lot of money from capitalizing globalization. Why did Tultex fail? It was not a brand. It made clothes for brands; it would get contracts from other brands to make clothes. However, this does not benefit them significantly. It couldn’t compete with the prices that clothes were being made in Mexico. If Tultex had a brand, that will give them some leverage from the consumers. Wal-mart was able to set their prices since they
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This note was uploaded on 08/31/2009 for the course SOC 359 taught by Professor Williams during the Spring '09 term at University of Texas at Austin.

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September 30th - September 30th, 2008 Subcontracting and US...

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