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Medium Market Entry

Beyond Borders

#Manufacturing
ProHub Comment

This is a comprehensive market entry case requiring candidates to build a structured decision framework (Demand, Supply, Capability, Macro/Regulatory) and then apply quantitative analysis to compare offshoring scenarios. The case progresses from high-level strategic considerations through financial modeling, ultimately requiring candidates to balance operating margins against non-financial factors like lead time and quality that are critical in fashion manufacturing.

Estimated Time 15 minutes
Difficulty Medium
Source Wharton
50 / 100
ShoeCo, a leading U.S. shoe manufacturer, is currently manufacturing its entire product line domestically. Because of increased labor costs and competitive pressure, the manufacturer is now interested in understanding whether they should offshore some or all of their production and, if so, where should they offshore to. What factors should the client consider as it compares onshore to offshore manufacturing?

Clarifying Information

  1. Client scope: The client currently specializes in shoe manufacturing, but also manufactures some apparel as well
  2. Geography: The client currently sells its products in developed markets (North America, Europe, and Australia) where speed of delivery is paramount
  3. Competitive landscape: Most of the clients’ competitors currently do not offshore their production due to manufacturing and managerial complexity
  4. Product: The client earns $500M in revenue from 5 product lines, that sell at an average price of $50 per product.