After performing a SWOT analysis on competitors operations, the Uniform and Linen Leasing Company (U&L) discovered one of their largest and looming threats is in area of increased operational costs. Some of these expenses are: rising labor wages, worker's compensation, increased and aging retirement population with pensions and miscellaneous benefits, rising state unemployment insurance, and rising healthcare costs. U&L has made decision to expand and open manufacturing facility in China as part of their strategy to lower these types of expenses. Plant will be utilized to manufacture uniforms.
Do you agree that opening the new facility in China will alleviate increased operational costs for U&L? Explain benefits and challenges to support the answer.