{"id":24390,"date":"2017-11-15T17:36:05","date_gmt":"2017-11-15T22:36:05","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/does-a-trump-presidency-mean-fewer-free-t-shirts\/"},"modified":"2017-11-15T17:36:05","modified_gmt":"2017-11-15T22:36:05","slug":"does-a-trump-presidency-mean-fewer-free-t-shirts","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/does-a-trump-presidency-mean-fewer-free-t-shirts\/","title":{"rendered":"Does a Trump presidency mean fewer free t-shirts?"},"content":{"rendered":"

Gildan Activewear Inc (\u201cGildan\u201d, GIL.TO) is a Montreal based manufacturer of printwear (think promotional materials) and branded apparel. Chances are you have at least one Gildan T-Shirt in your closet \u2013 the company has a 53% share of the US printwear basics market.\u00a0At least one of your free HBS t-shirts is a Gildan shirt.<\/a><\/a><\/p>\n

<\/a> With large customers [\u2020]<\/a>\u00a0in the United States, Canada and Europe and a commodity product, it is essential that Gildan delivers products reliably, on-time, and at the absolute lowest cost. Gildan has does this by vertically integrating its supply chain to maintain visibility and control.\u00a0 To meet the demands of its customers, Gildan has located its production facilities in low cost centers around the world (see the table below) where trade agreements exist with its biggest customer market, the US[\u2021]<\/a>.<\/p>\n

\"\"<\/a>\u00a0 Source: Gildan 2016 Annual Information Form, page 14<\/em><\/p>\n

With the United States renegotiating or threatening to withdraw from major trade agreements, this value chain is at risk of cost escalation. The potential for further disruption to trade agreements between the United States and the various countries where Gildan operates increases uncertainty, making it difficult for Gildan to price contracts, plan production and make hiring\/firing decisions.<\/p>\n

The head of Bain & Company\u2019s supply chain practice Joe Terino says that taking a wait and see approach in response to this uncertainty won\u2019t work[2]<\/a>. In his recent 性视界 Business Review article, Terino suggests companies anticipate a range of regulatory scenarios and plan a series of moves that are \u2018no-regrets\u2019, create natural options and hedges, or represent significant bets. Gildan has thus far heeded this advice with the moves outlined below:<\/p>\n

 <\/p>\n\n\n\n\n\n\n
Type of Action<\/strong><\/td>\nDescription<\/strong><\/td>\nGildan Action<\/strong><\/td>\n<\/tr>\n
No-regret moves<\/strong><\/td>\nActions benefitting a company\u2019s competitive advantage, no matter which scenario plays out<\/p>\n

 <\/td>\n

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    \n
  • Since 2011, Gildan has invested US$1B in operational efficiencies ($140mm in 2016) to establish itself as a lowest cost player globally<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Option building \/ hedge moves<\/strong><\/td>\nInvestments that companies can make to develop strategic options for different scenarios<\/td>\n\n
Big bets<\/strong><\/td>\nLarge scale investments that have different payouts depending on the scenario outcomes<\/td>\n\n