Artemis Sportswear manufactures sporting equipment and apparel and is based in Louisville, Kentucky. The company competes against companies such as Nike and Adidas, which are much larger and which have significant production facilities overseas where labor costs are less expensive. Artemis has enjoyed good relations with its labor force, but has also suffered a downturn in its profits during the early 2000s. The company is now considering ways to retool its production processes in order to cut costs and improve its profitability. This research considers two options, relocating production facilities overseas and changing to specialized production, and evaluates which holds the most potential for Artemis.
Relocating production facilities to the international market has strong allure for American companies. Labor costs can be significantly lower, and the sportswear industry in particular has found success in this type of production. Nike, for example, manufactures all of its shoes overseas (Feitelberg, 2001).
This option has the advantage of significantly reducing the costs associated with producing the Artemis product line. However, transportation costs must also be taken into account, as well as the managerial difficulties posed by the decision to move abroad. Managers will have to either relocate to the country where production is being done, or visit on a regular basis. In addition, many managers will lose their jobs along with production workers as managers in the producing country will be found who are fluent in the language and capable of supervising the work at the foreign facility.
In addition, there is a significant public relations cost associated with relocating jobs overseas, particularly as the economy begins to recover and people are paying attention to the types of jobs that are being created. Louisville, Kentucky and the other locations of Artemis pl
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