The philosophy with regard to pay and working conditions at Alta Gracia might lower costs in the run. As stated in the case, Bozich realizes he has a strong marketing message built around fair labor. As the business grows and becomes more established with building relationships with more colleges, Alta Gracia will gain more profit and this can help lower prices. Bozich already has a foundation build with student groups as well as 350 college campus stores.
This has potential to grow with advertisement and word of mouth with his strategy story. This will help the business gain more revenue and eventually help produce lower prices. Alta Gracia should also be able to save some money on their operating costs by avoiding employee turnover and saving on training costs. The case states the pay is competitive, the pay supports families, employees have good and safe working conditions and there is a union. This will keep employees satisfied and help cut costs. 2.
If Knights Apparel was a publicly traded enterprise I don’t think Bozich would have been able to try the Alta Gracia experiment. If the company was a public enterprise in the Dominican Republic and controlled through public authority they would follow the societal culture and continue to work in an unethical manner. There would be stockholders and other people would have to agree and support the experiment. As stated in the case, the minimum wage in the area is $147 a month, a fgure so low that it is insufficient to live on.
Most likely if operated as a publicly traded enterprise, he business would demonstrate cultural relativism because clearly it is unethical to ay workers such low wages for their hard labor and performance and they can’t even live off the salary being paid. 3. The competition could possibly stand in the way of Alta Gracia becoming successful. The two competitors listed are Nike and Reebok who are two major successful companies well established in the international market. Regardless of their unethical behaviors, many customers will still prefer the well known brand name product.
Customers often go with what they are use to. The case also states that Nike and Reebok are watching what happens carefully. They could possibly begin to use the same strategy as Alta Gracia and over take their business being they are bigger international companies. A strategy Bozich could look into would be moving business to a country with a lower cost of living and opening a factory there. This would allow him to lower costs and still have fair labor costs. He can also look into gaining sponsorship from different colleges to grow his brand name.
This could avoid business corruption and ethical dilemmas. By growing in other countries and xpanding working conditions, Alta Gracia would still demonstrate a high level of social responsibility. 4. If Alta Gracia tried to apply their same strategy with schools to sell to retailers such as Walmart I d ‘t think they would be successtul. They are paying higher wages to employees and that would cause the wholesaler and retailer to pay more. Walmart is a huge company and known for their leading low prices. Through the years there have been manta ethical cases brought against Walmart.