Bus 250 International business
HW pg. 490 #3, 4
3. Manufacturing in-house would reduce the risk of currency appreciation and rising costs from independent suppliers. Specialized asset investment would make firm dependent on specific suppliers, however, technological skills would be protected, and improved scheduling would be available. Out-sourcing would be beneficial if the product using the component fails in the market because the supplier will bear the cost of the non-recoverable investment. Outsourcing would also lower organizational and coordination costs. In house manufacturing may be the best choice.
4. Management Focus on Phillips in China
A. China is a great location for production due to; low wage rates, an educated workforce, a strong economy, is a member of the World Trade Organization, and has a stable exchange rate that is pegged to the U.S. dollar.
B. Production could be risky if political, economic, or other problems disrupt production and therefore, the company’s ability to supply global markets.
C. strategies Philips can adopt to maximize the benefits and mitigate the risks associated with moving so much product by branching out to other locations
HW pg. 523 #2, 4
2. Within 20 years we will have seen the emergence of enormous global markets for standardized consumer products. I would have to agree and disagree because there are a lot of big companies that sustains a place in the global market but there is always room for the next business to get a share of the global market also.
4. Price discrimination in indistinguishable from dumping. The accuracy of this state-ment is true. When a firm is pricing lower in a foreign country than it is in its domestic market, it can be difficult to distinguish dumping from price discrimination unless it is clear that the firm is selling at below cost in the foreign market.