Not moving to China

1.The context indicates than HURBANK which produced luxury clothing and accessories.This can be a point which supports the main argument.Because,to be honest, according to the background of China,the level of development is not increasing as much as we expected,compared to other developed nations.Selling luxury products might be suitable for high level of consumers in China which only constitutes under 10%of whole population,therefore,producers may not sell as many as they expect,and the profit can not be satisfied as a consequence,it is a risk to sell luxury products in China.

"APPENDIX A"
2.Said that the labour productivity compared to five years ago is increasing by 40%,which shows the positive number,we can`t compare this figure with China because there is not data shows the productivity in China,but we know it is a good situation for CELLTON FACTORY.labours` satisfaction can be a factor which resulting in the increasing the productivity and because labours are satisfied with their works,it can reduce the labour turnover which can reduce the company additional training costs and increase the morale around the company affects the increasing in productivity.Absenteeism can relieve as well,it directly has correlation with the quality of the products and profits,as the absenteeism reduced,the quality of the products can be improved sharply which makes more profits for the company.high level of absenteeism can cause delay the production and machines may be depreciated and out of date over times,it can lead to high variable unit cost and less profits.

3.The shirts returned is almost none in CELLTON FACTORY compared 1%in China,it may illustrates the products`quality produced in CELLTON FACTORY is higher than China,it related to the reputation of the company (which is intangible asset)and loyalty of the products,the quantity demanded might be inelastic if the company has good reputation.Consumers may have loyalty to your company`s products because of the level of quality.If the elasticity of quantity demanded is inelastic, the company can rise the price if necessary and consumers may still expense as before,it can relate to the high dividend to shareholders.

"APPENDIX B"
4.The relocation costs in China is 22m,which is incredibly a huge amount of money,and it is also a risk for shareholders and investors.High fixed cost can level up the total costs,profits may reduce and even may get a loss,and small scale business can not afford this amount,if the company decided to relocate to China,the way where to raise this finance is problem. If borrowed from bank as a long-term loan, the high interest should be taken into consideration,and such non-current liabilities should be accounted into company balance sheet.

5.Lead time to retailers in CELLTON FACTORY is 3 weeks less than in China,it impacts on retailers,it may reduce the costs of the products supplied because the retailers may more happy about the high efficiency of the production and reducing the wastage to reduce the unit cost.

6.The change in the value of the pound relative to the Chinese currency is -18%,which show than there is a increasing to the value in China,oversea companies may costs more to achieve the same amount of money in 10 years ago,it can demotivate the investors and shareholders to put money in China,and the costs are higher than before in transfer into British currency,as a result,the profits they earn are much less.

"APPENDIX C"
7.Both sales revenue and net profit for the ending 1 June 2008 increased 15% and 5% respectively,compared with the previous year,and net profits shared one-third of the total sales revenue,which is considerably high,it shows how successful the company,it also shows how potential the company is relevant to the sustained increasing in SR and NP.