Tuesday March 30: Photo Blog Essay

Business Observations
By: Abby Hartman

While in China, I overheard someone say that Hong Kong was just like a very big New York City.  After visiting for a few days, I have to disagree.  New York City is very hurry, hurry, hustle and bustle.  In Hong Kong and in Mainland China I always felt at ease and very relaxed, not as if we were always in such a rush. In the business world, being punctual is obviously still a priority, but I just don't see people rushing around like I do in Chicago or New York, especially not with their morning coffee in hand.

Kohl's made clear during their presentation that they negotiate with a win-win attitude.  Not all businesses or companies may do the same.  Kohl's seems to really value their vendors and at the end of the day want to make a good deal with them but also remain in good relations with them.  They also said it may take awhile for negotiations, but even $3 difference in price can mean a difference of $1 million when dealing with the volume of pieces Kohl's does as a company.

Li and Fung has demonstrated to us that they go above and beyond any factory's Quality Assurance inspections with their own inspections to ensure that they deliver quality products to Kohl's and all of their customers.  Li and Fung have definitely take care of their customers and set very high standards for every step of the process of gathering the information about a product and making sure it is the correct information to ensuring the product is delivered on time and in top notch condition. Communication is key when dealing internationally and Li and Fung are constantly finding ways to improve communications, for example approving colors for Kohl's lines before the product comes out.  This is a way to improve communication of colors but also cut the time it takes from the product to go from a piece of paper to the store shelves.

As a company who is invested internationally, it is wise to spread and balance product assortment across factories.  This is good for the vendors as well.  When doing business internationally, a company always needs to be very conscious of what is going on in the world.  This is not just limited to prices that the vendors are charging or the prices of raw materials, but also includes political unrest, ailing or expanding economics, weather, ect.  You have to be prepared in any situation to move production elsewhere.  "You have to look at the world differently."

Other things to be mindful of when outsourcing or when doing business internationally are traditions, customs, and holidays.  One in particular is the Chinese New Year.  Most of the factories will shut down for 3 weeks during Chinese New Year when all the workers travel back home to be with there family to celebrate.  It is becoming more common for the workers to look for jobs closer to home during that time and not return.  The Chinese government has made it easier for people to work in their villages, so less people have to travel so far away from their families to find work.  Factories are having to deal with labor shortage and are having to pay more to attract workers.  This leads to an increase in costs for companies such as Kohl's and an increase in training if the factories cannot find the skilled labor they need.