November 15th, 2013
The Good of Apparel;
1) American Apparel is a multinational corporation at the crossroads of profitability and nationalism. The clothing industry is one of the biggest manufacturing sectors with respect to the exploitation of human rights. American Apparel has made numerous landmark moves to get away from the negative connotations of the clothing industry. There are 3 main ways that American Apparel has tried to combat these negative associations; utilization of Vertical Integration, Sweat Shop Free and 100% Made in USA. Vertical Integration allows for ...view middle of the document...
” (“Sweat-shop Free”) Lastly, American Apparel is 100% American made from design to production. More specifically, LA receives a huge boost to the local economy from the large number of employees based there on top of additional taxes from large number of workers in the area. This on top of healthy food choices available and on-site gyms make American Apparel a respecting place to work.
3) By producing all clothing nationally American Apparel has given itself a collection of competitive advantages, the biggest of which being the marked stability over competition. If the price of cotton went up internationally, a firm that relied on being the cheapest is at a disadvantage because the difference in price is shrinking. People who buy for the cheapest product will be more subjected to price changes but people who buy American Apparel will still purchase American Apparel. Anothe huge advantage is the ability to utilize infrastructure/economic stability of USA. Who says cost of labour doesn’t drastically rise in the next 10 years. Being based in the infra-structure rich USA allows for easier barriers of entry into new markets in addition to a more stream-lined supply chain. Another huge advantage for American Apparel is that they know that the business environment for which it operates in will not go through any huge changes. They are not in existence as a company because a political dictator has allowed only there company to prosper. No huge changes will happen to the US business system. Another huge benefit is the positive press/ customer recognition of good manufacturing practices. The positive word of mouth and the large presence in LA gives American Apparel a strong “grass-roots” feel to the company.
If American Apparel exploited developing countries for their labour resources or did not support ethical manufacturing processes, there would be a lot of suggestions to be made. However, because the main competitive advantage for American Apparel is its production practices it is harder to suggest new ideas. Before I...