Moda Textile Factory: Bishkek, Kyrgyzstan Essay

1. How have Sergei and Olga’s lives change in Soviet days? Are their lives better? After the collapse of Soviet Union, Kyrgyzstan’s economics was slowdown since they was moving to market-based economy. Sergei and his wife lost their job and moved to capital. They borrowed money from family and friends starting business outside of the capital. After long period of time doing business over China, India, and Turkey, they did a better job and had enough capital for a largest department store in town. Their business was getting better and they built their own sewing factory of high quality apparel. The clients are wholesale traders who sold their goods to retailers in Kazakhstan and Russia. They had many difficulties in raising capital, exporting to new market, and many small local competitors. Even still having many challenges, their lives were much better than the period of Soviet Union. 2. What is Moda Textile Factory’s competitive advantage? How can it be used to expand the business? Firstly, Moda Textile Factory had a good relationship with their customers. Sergei had worked with most of his customers for many years, some of them were old friends of family, and also friends he knew during buying trips to Turkey. These loyal customers could bring him a lot of orders. Secondly, Moda Textile provided customer high quality products. They also had planned to make fashionable Italian imported cashmere coats. Different with other sewing workshops, Moda Textile want to develop their market not only in Kyrgyzstan but also in USA, Russia, and Europe. With a bigger target market, they will have more opportunities to expand their business. 3. What kind of people should Sergei and Olga look for as business partner to help them to expand their market outside Kyrgyzstan? How should they find a partner they can trust? What can they do to build trust with person? The best way to enter an outside market is looking for someone who has experience in working in that local market. For instant, the local business partners are good choice since they know the language, culture, and behavior of their area. Multinational companies, who is currently working in the local market because they might have experience of a foreigner entering that market. Finding partners they can just is not easy and takes a lot of time. Therefore, they should take business trip to that area, do some market research about it, and start a small contract with some partners. They need time to adapt to new environment and know what their partners benefits from their business. And they can expand their business gradually when they know the partner and the market better. 4. How can Sergei and Olga begin producing fashionable women’s cashmere coats in their factory? Is this feasible or should they give up the dream? Propose an action plan to move their business in this direction. Sergei and Olga could produce the fashionable women’s cashmere coats as their dream. First of all, they should find out target market for the women’s cashmere coats since the market in Kyrgyzstan is too small to develop. The countries like USA, Russian, or Europe are good choice since they have stable politics and provide more information to foreign traders. Secondly, they may want to find some partners, who understand the local markets to help them start with small contracts. They should get familiar to transportation, tax system, special policies, and culture of these markets. After 1 or 2 years working in different markets, they would realize advantages or difficulties of each market. Based on these experience, they could start doing bigger contracts w ith foreign customers.