Rio Textiles (RT) Carlos set up RT in 2010 with a small factory to weave and print fabrics used in the fashion industry. RT is located in Brazil, which is one of the world's largest producers of cotton cloth. However, Brazil Brazil is a middle-income country and is increasing its exports. One of Brazil's most important exports is soya beans, which make up much of the world's supply. Carlos believes there are several opportunities to diversify to allow for further growth and expansion. RT could enter different fabric markets, start to export its products or develop new products with its farm and factory resources. Carlos aims to achieve 'profit through diversification'. He wants to propose a new business strategy for Carlos is planning to undertake a PEST analysis but needs advice on this and other approaches he Appendix 1: Lean production - extracts from 2018 Operations report RT implemented lean production in its cotton processing factory which has increased efficiency. The cost savings which have resulted from introducing several lean production techniques have increased profit margins. However, there have been some supply interruptions from late deliveries of cotton. Annual labour turnover has increased by $$\(5 \%\)$$. Appendix 2: 2019 Brazil fabric industry magazine article Last week there was a take-over of three of the largest cotton farms in the north of the country by fabric manufacturer RT. The deal, thought to be worth $$\(\$ 3.5 \mathrm{~m}\)$$, will see RT secure its supply of cotton and enter the farming industry for the first time. Since its establishment in 2010 as a fabric printing firm it has grown so that it weaves its own fabric and now grows its own cotton. This should enable RT to increase its production and make it one of the top five fabric producers in the country. However, a business analyst commented that RT must be aware that managing farms is a very different challenge to managing a factory. Appendix 3: RT's 2021 investment in its new factory and machines - $$\(\mathrm{RT}\)$$ 's mortgage debt increases to finance the purchase of the factory. - RT's fabric production capacity increases by $$\(66 \%\)$$. - Machines costing $$\(\$ 1.5 \mathrm{~m}\)$$ are financed through a share issue. - $$\(\quad\)$$ Critical path analysis (CPA) helps manage the purchase and installation of machines. Evaluate the extent to which RT's operations strategy has supported the success of the business from 2015 to 2023.

Answer:

Knowledge points:

Solution: