3. “Fidelio” is a designer and manufacturer of exclusive and highly individualized sweaters made of alpaca wool (an alpaca is a type of South American llama which produces very high quality, soft wool). The wool is sourced from Peru and the sweaters are produced in a factory in the UK with jobbing processes; you are the general manager of this factory. The sweaters are sold in 5 boutiques in upmarket locations in the UK and retail at a price upwards of £400. The boutiques have been owned and operated by the company for twenty years.
Given the growing popularity of alpaca products and increasing recognition of the “Fidelio” brand name, the owner of the business, Josef Fernando, is now keen to invest in a major new initiative. The plan is to develop a new brand, to be known as “Fidelio Nuova”, making the “Fidelio” brand accessible to a wider public. The new brand will offer a much narrower range of alpaca sweaters to high street stores, retailing at around £120. The garments will be made of alpaca but not necessarily sourced from Peru. Large department stores are already expressing an interest in the proposition. Josef Fernando has invited you to write a report on its operational implications.
a) Compare and contrast the operational performance objectives which are likely to be important for the two brands
b) Discuss the implications for the management of the production process, and the supply network