Page 282 - DMGT545_INTERNATIONAL_BUSINESS

Unit 14: International Production and Logistics Management

softside, and 30 percent from attache cases and travel bags, some of which were hardside notes
and some softside. However, the trend for hardside luggage in Europe is changing. By
2000, softside luggage comprised 51 percent of the European sales. In 2001 and 2002, sales
of softside luggage continued to increase as a percentage, and hardside luggage sales
declined.
As Samsonite expanded throughout the world, it continued to manufacture its own
products and license production to other manufacturers. Then, Samsonite entered into
subcontract arrangements in Asia and Eastern Europe. In Europe, the subcontractors
provide final goods as well as the subassemblies used in Samsonite factories. Along with
its own production, Samsonite outsourced parts and finished goods.
Samsonite is a good example of the challenges a firm faces in determining how best to
manage the supply chain from supplier to consumer. The greater the geographic spread of
the company, the more chal lenging the management of the supply chain becomes.
Questions

1. When Samsonite, a US based company, became a global company?
2. In which countries of Europe Samsonite began it operations?
3. What programme Samsonite designed to establish its products of high quality?
4. What were the expansion plans of Samsonite?

5. What was the R&D policy of Samsonite to keep a competitive edge?
6. What was the basic feature of its supply chain to meet the growing demand for the
product of Samsonite?
7. What were the challenges faced by Samsonite to manage successfully the supply
chain from supplier to customer?

Source: John D. Daniels, Lee H. Radebaugh & Daniel P. Sullivan, “International Business”, Peterson Education, Singapore,
p.561-563.



Case Study make or Buy Decision at the Boeing company
he Boeing Company is the world’s largest manufacturer of commercial jet aircraft
with a 55 to 60 per cent share of the global market. Despite its large market share,
Tin recent years, Boeing has found the going tough competitively. The company’s
problem is two fold. First, Boeing faces very aggressive competition from Europe’s Airbus
industry. The dog fight between Boeing and Airbus for market share has enabled major
airlines to play the two companies off against each other in an attempt to bargain down the
price for commercial jet aircraft. Secondly, several of the world’s major airlines have gone
through some very rough years during the 1990s and many lack the financial resources
required to purchase a new aircraft. Instead, they are holding onto their used aircraft for
much longer than has typically been the case. Thus, while the typical service life of Boeing
737 was once reckoned to be about 15 years, many airlines are now making the aircraft last
as long as 25 years. This translates into lower orders for new aircraft. Confronted with this
new reality, Boeing has concluded that the only way it can persuade cash-starved airlines
to replace their used airlines with new aircraft is if it prices the aircraft very aggressively.
Thus, Boeing has had to face the fact that its ability to raise prices for commercial jet aircraft,
which was once quite strong, has now been severely limited. Falling prices might even be
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