The Changing Landscape for Chinese Small Business: the Case of ‘‘Bags of Luck’’

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The changing landscape for Chinese small business: the case of ‘‘Bags of Luck’’| | Submitted to: Professor Payal Mehra Date: 10/23/2011| | Submitted by –

Amey Rambole
ABM 08009
Submitted by –
Amey Rambole
ABM 08009

Letter of Transmittal1
1. Synopsis3
2. Introduction4
2.1 Problem Statement4
2.2 Statement of Purpose4
2.3 Methodology4
3. Case Analysis4
3.1 Stated Problems4
3.2 Unstated Problems5
4. Relevant Facts5
4.1 Organizational Structure5
4.2 Procurement and material handling5
4.3 Stock evaluation5
4.4 Products and production5
4.5 Sales, Marketing and Distribution6
4.6 Accounting and Finance6
4.7 Human Resource Management6
4.8 Current Situation6
5. Issues & Concerns6
5.1 Informal Organisational Structure7
5.2 Lack of Trait Expertise7
5.3 Inefficient Procurement and material handling7
5.4 Accounting and finance7
5.5 Human resources management7
5.6 General Working environment7
6. Key decision criteria8
7. Recommendations:8
8. Most preferred recommendation:9

Letter of Transmittal

Amey Rambole
PGP-ABM Candidate, IIM Lucknow

Dr. Payal Mehra
Area Chair, Communication Group
IIM Lucknow
October 27, 2011

Dear Dr. Mehra,

Please find attached a copy of the final report “Turnaround Plan for Bags of Luck”. As per the case provided, this report contains the thorough analysis of the ‘Bags of Luck’ company and a detailed set of recommendations for their turnaround. It contains a summary of my research findings on a range of business management issues faced by the company. This report will facilitate the understanding of the current state and concerns faced by Bags of Luck. It contains a detailed analysis of the company’s functioning and the impact of the methods used by them on the business. The report analyses the impact of economic changes on the growth and survival of the organization. The report includes an analysis of the organizational structure that is in place in BoL currently. The report analyses various alternatives that the company can resort to in order to improve its situations. Finally, the report concludes with recommendations for the company to improve from its current state and show results of sustained growth. In case of any queries, clarifications, or comments regarding this report, please feel free to contact me. I express my gratitude for granting me this project and I look forward to working on many more of such projects in the near future.

Yours truly,
Amey Rambole

Enclosure: Final report.

1. Synopsis
This case details about a small family run Chinese company, Bags of Luck (BoL), located in the South-Eastern Fujian province. BoL produce three ranges of bags, namely, ladies fashion handbags, unisex fashion backpacks and trendy lightweight cases for laptop and netbook computers, for six major retail chain stores in the USA. In spite of economic crisis and many setbacks in terms of labour shortage, old technique etc., BoL managed to stay afloat while its competitors have shut down. Currently BoL is in deep crisis due to various reasons such as fast changing market trends, rising labour and material costs, Chinese currency appreciation, labour shortage, declining production volume, out-dated machinery and ineffective management structure.

2. Introduction
2.1 Problem Statement
The management of ‘Bags of Luck’ is worried over the performance of the organisation post-recession 2008 and wants to investigate into the cause of the issue. Aim is to suggest recommendation for correcting the course of action. 2.2 Statement of Purpose

This report investigates into the cause and effect of the issues faced by ‘Bags of Luck’ (BoL) with the purpose of suggesting actions to improve its current situation. The report contains the summary of my observations, inferences and recommendations. 2.3...
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