Corporate Momentum
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Internal Corporate Memorandum
From: Quality Abroad Inc. president Date: January 27, 2006
To: Senior Management Team of Bulls Eye
Re: Quality should terminate sourcing product in Myanmar
Quality should terminate sourcing product in Myanmar because the immediate savings from sourcing clothing products from Myanmar could soon be exceeded by Qualitys losses from : (1) reduced future revenues due to the undermined reputation in the industry compared to Qualitys most direct competitor Walmart (2) damage of PR image in public caused by accusation from the government, human rights organizations and media.
Even though Bulls Eye may suffer the pain of increasing cost of its source clothing as a result of stopping imports from Myanmar, the net income could be reduced in amounts difficult to estimate. Its a good chance to give Bulls Eye a positive PR image. So I recommend Bulls Eye make an announcement immediately after it implements the policy of stopping importing from Myanmar. The announcement will build customers trust and confidence towards Bulls Eye which leads to future revenues. Also, this action will show Bulls Eyes care about human rights compared to those competitors which didnt respond to the comments of the senators, International Labor Organization, and National Labor Committee.
The best next steps: Quality should look for possible alternative countries for sourcing product, like China and El Salvador. Bulls Eye should find a way to allocate Qualitys cost to all other products sold by Bulls Eye, and allocate some of the cost increase to general overhead.