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December 01, 2010
Case Study Analysis # 70
Castlebridge, a maker of high-quality outerwear, located in London is at a cross roads. Although its headquarters operates from London, most of its manufacturing has moved offshore. With the last domestic factory slated to close, the firm's executives struggle to preserve the "Britishness" of the brand. On the other hand, the company has to reduce costs to remain profitable. It seems that moving production offshore is inevitable. The executives believe that Castlebridge should come clean about it. In a world where stakeholders matter more than ever, the firm can't just outperform competitors. It has to go above and beyond to satisfy their constituents. Therefore, the CEO Mary Crane asserts that the plant closure is a logical step. Reputational risk is a concern as well as brand image. The majority of the customers who purchase Castlebridge items are wealthy. They pride themselves in wearing high class British fashions. The company fears that Asian manufacturing tags will diminish consumer confidence in quality and authenticity. The CEO wants to take the logical approach where the objective of any firm is to maximize profits. By not doing so, the firm will lose out to the competitors and will continue to face rising production costs in keeping up with consumer preferences. She holds Fergus Harold accountable for being overly nationalistic and even rather ignorant to the status of British clothing made in Malaysia and its effect on a Japanese consumer. Her unabashed perception indicates that backlash would be from local purchasers whose confidence may be undermined by the outsourcing of a classy British brand to a third world country. Furthermore, it is well pointed out that the CEO does not feel threatened by British media. Supposedly she sees that production line workers are of the lower working class whereas buyers of Castlebridge's products of are of the wealthier class. Castlebridge simply cannot...
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