FASM 420- Global Sourcing Country Profile Professor R. Kline
Aiyana D. Jackson & Rachelle Fortune
Contents Our History
.The Company. .Importing Activity.
Our Imported Products .Product Line. .Major Countries.
Our Import Buying Plan
.Country Profile. .Country Analysis. .Business Etiquette. .Trade Agreements, Laws, & Policies. .Import Classification. .Cost. .Shipping. .Documents.
History
.The Company.
Carter’s, also known as, the William Carter Company, is the #1 brand of children’s apparel, accessories, and gifts in America. It was founded in 1865 by William Carter. The company is headquartered in Atlanta, Georgia. The company also owns the brand name Osh Kosh B’Gosh. As of January 2015, the company has 18,000 wholesale locations and 855 companyoperated stores. Carter’s heritage has continued throughout the generations. They are well-known for som products, such as the Jiffon neck that slips over babies heads easily, or the Handi-cuff mitten sleeve that keeps babies from scratching. Parents have trusted our brand for years because we pay attention to the quality and functionality of the garments while celebrating childhood through thoughtful designs. Osh Kosh Joined the Carter’s Family in 2005. Both Carter’s and Osh Kosh have launched other brands under their names. They are Just One, Genuine Kids, and Precious Firsts for Target customers, and Child of Mine for Wlamrt customers.
.Importing Activity. We source products internationally, primarily from Asia. One sourcing agent currently manages approximately 80% of our inventory purchases. Our sourcing network consists of over 75 vendors located in over 15 countries. We believe that our sourcing arrangements are sufficient to meet our current operating requirements and provide capacity for growth. In fiscal 2012, we established new sourcing operations in Hong Kong. Our goal is to shift the mix of our direct sourcing from approximately 5% to 50% over the next five years in an effort to improve the performance of our supply chain.
Our Imported products
.Product Line. Carter’s produces a wide range of apparel, accesories, and gifts for parents, children, and babies. Our product lines includes: Baby (Boy & Girl) .Sets .One Piece .Bodysuits .Tops .Bottoms .Dresses .Layering .Jackets & Outerwear .Pajamas .Swimwear .Shoes .Accessories .Bibs & burp cloths .Blankets & bedding .Toys & gifts .Diaper bags .Bath time Toddler (Boy & Girl) .Sets .Tops .Bottoms .Dresses .Rompers & Jumpsuits .Layering .Jackets & Outerwear .Pajamas
.Swimwear .Shoes .Accessories .Underwear .Toys & gifts .Bath time Kid (Boy & Girl) .Sets .Tops .Bottoms .Dresses .Rompers & Jumpsuits .Layering .Jackets & Outerwear .Pajamas .Swimwear .Shoes .Accessories .Underwear .Toys & gifts .Bath time
.Major Countries.
Most of our products are sourced from foreign contries. We have formed business relationships with a number of different countries, including: .Cambodia .Thailand .China .Indonesia .Taiwan .Malaysia .Vietnam
Our Import Buying Plan
.Country Profile. Traits Social/Cultural .Theravada Buddhism is the belief system of most Cambodians. .Common hierarchical guidelines are that parents are superior to children, teachers to students and managers to subordinates. .Cambodia is a collective society - individuals take second place to the group whether this is the family, neighbourhood or company. Political .Constitutional monarchy, Parliamentary Representative Democracy. .Head of States: His Majesty Samdech Preah Baromneath Norodom Sihamoni (elected October 29, 2004) .Head of Government: Prime Minister Hun Sen (appointed on January 14 1985, elected in 1998, 2003, 2008, and 2013) is in charge of overall execution of national policies and programs, and is accountable to the National Assembly. Economic Over the past five years, economic freedom in Cambodia has stagnated, with potential gains from a liberalized labor market and a small opening to international markets undermined by a weakening business environment, looser fiscal policy, and a decline in property rights.
Geographic Cambodia borders Thailand, Laos, and Vietnam in southeastern Asia. Before 1970 Cambodia was fairly rich in natural and agricultural resources. Cambodia was one of few Southeast Asian countries that enjoyed a stable export business and shipped rice, rubber, coal, and cotton worldwide. Contributing Factors Labor There are 700,000 estimated workers in Cambodia’s garment sector. Standards: .Fundamental C029 - Forced Labour Convention, 1930 (No. 29) C087 - Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) C098 - Right to Organise and Collective Bargaining Convention, 1949 (No. 98) C100 - Equal Remuneration Convention, 1951 (No. 100) C105 - Abolition of Forced Labour Convention, 1957 (No. 105) C111 - Discrimination (Employment and Occupation) Convention, 1958 (No. 111) C138 - Minimum Age Convention, 1973 (No. 138) Minimum age specified: 14 years C182 - Worst Forms of Child Labour Convention, 1999 (No. 182)
.Governance (Priority) C122 - Employment Policy Convention, 1964 (No. 122) .Technical C004 - Night Work (Women) Convention, 1919 (No. 4) C006 - Night Work of Young Persons (Industry) Convention, 1919 (No. 6) C013 - White Lead (Painting) Convention, 1921 (No. 13) C150 - Labour Administration Convention, 1978 (No. 150) Inputs Cambodia’s natural resources are oil and gas, timber, gemstones, some iron ore, manganese, phosphates, hydropower potential. Products Using the 1992 revision of the HS (Harmonized System) classification, the top exports of Cambodia are: .Knit Sweaters ($1.66B) .Postage Stamps ($1.52B) .Knit Women’s Suits ($1.08B) .Non-Knit Men’s Suits ($778M) .Non-Knit Women’s Suits ($750M) Top Imports: .Light Rubberized Knitted Fabric ($1.67B) .Refined Petroleum ($1.49B) .Postage Stamps ($978M) .Other Synthetic Fabrics ($423M) .Planes, Helicopters, and/or Spacecraft ($328M)
Transportation .a few local bus routes & metered taxis .The remork-moto (tuk tuk) is large trailer hitched to a motorcycle. .The cyclo (pedicab) .Motos, also known as motodups are small motorcycle taxis. . Outboards are a sort of local river-bus or taxi. . Rotei means ‘cart’ or ‘carriage’ and ses is ‘horse’, but the term is used for any cart pulled by an animal. Business Climate Cambodia has an average tariff rate of 8.9 percent. Nontariff barriers at the border further restrict trade. The slow-moving bureaucracy and court system present challenges for foreign investors. Effects of Quota Removal The removal of T&G quotas on the exports of all exporting countries at the beginning of 2005 in compliance with the WTO’s 1994 Agreement on Textiles and Clothing represents both an opportunity and a threat for Cambodia. Cambodia will be free to export beyond current quota limits to markets where these apply; but it will also have to compete with exports from other garment-exporting countries on which quotas bore more heavily, notably China.
.Country Analysis.
Code of Conduct Everyone at Carter’s is expected to live their values by honoring the following commitments: .Commitment to each other .Commitment to our Company and shareholders .Commitment to our customers and business partners .Commitment to our communities Our consumers, shareholders, business partners, and fellow employees have placed their trust in us to act honestly, fairly, and in accordance with the highest ethical and legal standards, and our Code helps us accomplish this. Even more, our Code defines who we are.
S.W.O.T. Analysis Strengths All of our orders are flown in by air freight for shorter shipping times. .Cambodia’s cultural values parallel the beliefs of Carter’s. Weaknesses Some communication barriers may spring up because vendors are so eager to please and make a deal that they may never say no to a request, even if they can not fulfill it. Opportunities .There is no export quota in Cambodia, so we can always do business. Threats .If any proof of illegal child labor or unjust treatment gets out it could harm Carter’s reputation.
.Business etiquette. Type of Culture Cambodia is a collective society - individuals take second place to the group whether this is the family, neighbourhood or company. Feminine Cambodia is a predominately feminine country due to it’s strong values of compassion and peace. Negotiation Style/Strategy .Cambodians value relationship building and harmony. Stay away from hard selling or pressuring to make business decisions and any sort of problem or confrontation. .Negotiating is usually expected; no emotional attitudes, it is seen as a weakness in the eyes of the Cambodians. .Cambodians will not say no when answering questions. They like to answer with “maybe”, or “yes” or “no problem” even if the answer is really “no”. .In a market setting, some negotiating is expected. Many vendors tend to charge foreign buyers 10 times more, negotiating is a must as you will get the better price. Social & Cultural Elements Appropriate Business Attire For Men: Nice pants and collared shirts. Jackets and ties are not a must but good to have just in case. Being well groomed is appreciated.
For women: Ankle length skirts and blouses. If trousers are worn, they should be worn with a matching business jacket. Avoid short, tight fitting, and sleeveless attire if possible. Jeans and are not recommended but may be appropriate in more rural areas. Introductions .The traditional greeting is a bow combined with a bringing of the hands together at chest level (similar to bringing hands together for prayer). . If one intends to show greater respect the bow is lower and the hands brought higher. Greetings As Cambodia is a hierarchical culture the business world follows suit in terms of protocol and behaviors. .Respect and deference must always be shown to the most eldest person. .When meeting a group you will be introduced to the highest-ranking person, which in return you should introduce your eldest in your group. .Groups are involved you introduce according to rank so that your Cambodian counterparts understand the ranks of the group. .No hard handshakes, it is seen as aggressive. .If men are dealing with women they should wait and see if they extend a hand before doing so. Minimum eye contact is important.
.Cambodians address people with the honorific title “Lok” for a man and “Lok Srey” for a woman. .The concept of face also ties in with this collective outlook. .Protecting both one’s own and other’s face is extremely important. .Face can roughly be translated as a combination of honour, dignity and public reputation that is attributed to a person.
.Face can be lost, given and accrued.
Business Card Presentation Business cards should be exchanged after the initial introductions. .Have one side of your card translated into Khmer if possible. .Present your card so the Khmer side is readable to the recipient. .Use the right hand or both hands when offering or receiving a business card. .It is important to treat business cards with respect, as the way you handle the card is indicative of the way you will treat the person.
First Name/Title Titles are somewhat important and make sure you address with Miss., Mrs. and Mr.
Gestures .Rotating one or both hands held up in front of the body means “no”, “I don’t want it”, “we’re closed”, etc. .To beckon someone, hold your hand palm downwards with the fingers pointing towards the ground and waggle them loosely in a scratching motion. Beckoning with the palm upwards (Western style) is considered rude. .Cambodians have two different smiles. One of which is for embarrassment and the other for pleasure. It can be hard to tell but a nervous laugh indicates the difference. .It is normally courteous to remove your shoes before entering somebody’s home. It is required when entering a Buddhist temple. Color & Number Symbolism
Gift Giving Gifts are usually given at Cambodian New Year (Chaul Chnam). .Birthdays are not usually celebrated and some don’t have an idea of what age they are. .A small gift can also be taken if invited to someone’s home for food. .If you invited to someone’s home, take nicely presented fruit, sweets, pastries or flowers. .Avoid giving knives. .Gifts are usually wrapped in colorful paper. .Do not use white wrapping paper, as it is the color of mourning. .When giving gifts use both hands. .Gifts are not opened as they are received. Time .The view of time tends to vary a bit between the countryside and the city. .In the country, they may choose to be late to a meeting, as they would like to finish up the activity they have started. .If you’re supposed to be helping, make sure you are on time. .Timeliness is usually only valued by the person who asking for meeting. It is understood that transportation is unreliable and people may be late. Joke Telling Avoid joke telling. These cultures have different senses of humor.
Business Entertaining Table Manners Table manners are fairly formal. .If unconfident with the dos and don’ts simply follow what others do. .When invited to the dining table wait to be told where to sit as you would not want to upset any hierarchical arrangements. .The oldest person is usually seated first. .Similarly the eldest person should start eating before others. .Do not begin eating until the eldest person starts. . Cambodians will always offer people drinks such as water, tea or juice, and sometimes food. To honor the host, the offer should always be accepted, even if the guest just takes a sip or small bite. Appropriate Conversation Subjects Small talk should always be employed at the beginning of meetings. Topics to Avoid .Never discuss business in such social settings. .If unsure about statements be sure to double check. . Modesty and humility are emphasized in the culture, so compliments and praise are generally responded to by a deprecating comment.
.Trade Agreements, Laws, & Policies. .In 2006, the United States and Cambodia signed a bilateral Trade and Investment Framework Agreement (TIFA), creating a cooperative mechanism focused on deepening and expanding our bilateral trade and supporting Cambodia’s efforts to implement its WTO commitments and domestic reforms. .The United States remains Cambodia’s largest trading partner and export market. Cambodia is currently our 70th largest goods trading partner with $3.0 billion in total (two ways) goods trade during 2013. .Consumer Product Safety Comission (CPSC) regulates consumer products in U.S. at the federal level – including apparel. CPSC Rules for Children’s Apparel .Flammability Standard for Wearing Apparel .Flammability for children’s sleepwear (sizes 0-14) .Lead Content (100 ppm total content) .Lead in Surface Coating (90 ppm) .Phthalates (child care articles for children < 3 years old, including children’s sleepwear) .Small Parts (children < 3 years old) (only if applicable) .Sharp Points (children < 8 years old) (only if applicable) .BAN: Children’s upper outerwear with drawstrings, sizes 2T-16. .Flammable Fabrics Act (FFA) regulates the manufacture of highly flammable clothing. Standards have been established for the clothing textiles, vinyl plastic film, carpets and rugs, children’s sleepwear and mattresses and mattress pads.
.Import Classifications.
HTS Code: 6102.20.00 Girl’s Pajamas .
.Cost. COMPONENT COSTS: Fabrics: Lining:
Yds/Qty Unit Prc $ Amt 1.5 $ 2.00 $ 3.00 1 $ 2.00 $ 2.00
Other: (TOTAL FABRICS) Trims: Bow Brand Label Care Label Thread
(TOTAL TRIMS) CMT COSTS: Grading: Marking: Cutting: Make Charges:
(TOTAL LABOR) PACKING MATERIALS: Tissue Polybag (TOTAL PACKING) (TOTAL COST): WHOLESALE PRICE WHOLESALE MARGIN RETAIL PRICE RETAIL MARGIN
2.5 0.1 1 1 1 3.1
$ 5.00 $ 0.20 $ 0.10 $ 0.40 $ 0.20
$ 0.02 $ 0.10 $ 0.40 $ 0.20 $ 0.72
0.3 $ 1.00 $ 0.30 0.2 $ 1.00 $ 0.20 0.23 $ 1.00 $ 0.23 $ 0.28
$ 1.01 0.3 $ 1.00 $ 0.30 1 $ 1.00 $ 1.00
$ 1.30 $ 8.03 $ 1.30 10% $ 13.00 28%
.Cost. COMPONENT COSTS: Fabrics:
Yds/Qty
Unit Prc $ Amt 1.5 $ 2.00 $ 3.00
Lining:
0.12 $ 2.00 $ 0.24
Other:
0.45 $ 2.00 (TOTAL FABRICS)
Trims: Small Bow Brand Label Care Label Thread
(TOTAL TRIMS)
CMT COSTS: Grading: Marking: Cutting: Make Charges:
(TOTAL LABOR) PACKING MATERIALS: Tissue Polybag (TOTAL PACKING) (TOTAL COST): WHOLESALE PRICE WHOLESALE MARGIN RETAIL PRICE RETAIL MARGIN
2.07
$ 3.24
1 1 1 1
$ 0.20 $ 0.10 $ 0.50 $ 0.10
$ 0.20 $ 0.10 $ 0.50 $ 0.10 $ 0.90
0.36 0.22 0.26 0.84
$ 1.00 $ 1.00 $ 1.00 $ 1.00
$ 0.36 $ 0.22 $ 0.26 $ 0.84
$ 1.68 0.03 $ 1.00 $ 0.03 0.1 $ 1.00 $ 0.10
$ 0.13 $ 5.95 $ 6.08 38% $ 16.00 25%
.Shipping.
Air Freight B757-200 freighter Type of Garment Carrier .UPS L11 Container (125 in. x 60.4 in. x 64 in.) .5-ply Carton (61 in. x 48 in. x 38 in.)
Number of Garment Carriers
2 L11 Containers (4 cartons each) Space Needed in Air Freight 2 containers= 554.5 cu. ft. Cost $4,689.54 - $5,183.17 Map Airport Route A truck will deliver the containers to the UPS Air Cargo airport in Bangkok, Thailand. From there, the garments will be flown from Thailand to the Atlanta, Georgia UPS Air Cargo airport. Then it will be delivered to the distribution center located in Stockbridge, Georgia.
.Documents.
Importerâ&#x20AC;&#x2122;s Documents Power of attorney
GSP Form
Freight
Freight Carrierâ&#x20AC;&#x2122;s Documents Insurance Certificate
Arrival Notice
Intermodal Bill of Lading
Manufacturerâ&#x20AC;&#x2122;s Documents Packing List
Commercial Invoice
Pro Forma Invoice
Banking Documents Letter of Credit
Works Cited
. ”Cambodia - Language, Culture, Customs and Etiquette.” Kwintessential. N.p., n.d. Web. 13 Nov. 2015. . ”Cambodia | United States Trade Representative.” Cambodia | United States Trade Representative. N.p., n.d. Web. 13 Nov. 2015. . ”Cambodia.” Heritage. N.p., n.d. Web. 13 Nov. 2015. . ”Cambodia’s Garment Industry - Origins and Future Prospects.” Cambodia’s Garment Industry. N.p., n.d. Web. 13 Nov. 2015. .“Getting around Cambodia on Local Transport - Lonely Planet.” Lonely Planet. N.p., n.d. Web. 13 Nov. 2015. . ”UPS Air Cargo: Airports.” UPS Air Cargo: Airports. N.p., n.d. Web. 13 Nov. 2015.
At Carter's, we embrace creative leadership, innovative teamwork and a winning spirit to be the best for the benefit of our customers, our consumers, our employees and our shareholders.
Aiyana D. Jackson & Rachelle Fortune