German toymaker Steiff, famous for its teddybears and other stuffed animals, announced that it will pull out of the Chinese market soon. Like many other companies, Steiff entered China (in 2004) in an effort to reduce costs and remain competitive with its range of high-quality toys that are often more collectors items rather than toys. From the outset Steiff was battling with low quality manufacturing. Workers didn’t seem to be capable or willing to adhere to Steiff’s strict strict quality standards. Even intensive (and expensive) training has not shown much effect because of high turnover among workers which is quite common in China. When, in addition, wages began to rise, the venture simply didn’t seem to hold its initial promise and Steiff decided to leave China.
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