In this project, you will conduct research on strategic manufacturing of an individually selected product. The product should be
1) simple, to assure project completion within the allotted time, and
2) currently manufactured outside of the United States. The objective of the project is to come up with a recommendation as to whether or not manufacturing of this product should be brought back to the United States.
Analyze the process originally used by the company to outsource the manufacturing task. Explore why and how the company engaged in global business and analyze factors, such as price and quality, leading consumers in the U.S. and in the current country of manufacture to a purchase decision.
Common strategic reasons for outsourcing include lower costs of inputs, including the cost of labor, lax regulations regarding sustainability and environmental protection, preferential treatment for tax purposes (tax holidays), and improved access to local markets. In completing the project you will discuss the impact of the decision to go global on an organization’s functions.
Steps to Complete This Project
Select a product that is currently being imported to the United States that could possibly be manufactured here. Visit a local Wal-Mart, Lowes, or Home Depot store to identify a suitable product. Sample products appropriate for this analysis include a dress hanger, a toilet plunger, a hammer, a spade, or any simple tool.
Provide a short background of the company that currently manufactures and distributes this product in the U.S. Summarize the steps used by the organization to develop its global strategy.
Identify and analyze strategic reasons for this company to engage in international business (i.e., establish why manufacturing of the selected product has been outsourced).
Was the decision to outsource based on complete information, or was it based on a few key factors such as lower labor and energy costs? You might find the learning resources listed on the project page helpful.
Discuss market factors, such as price and quality, leading consumers in the U.S. and in the current country of manufacture to a purchase decision. Include a discussion of demographic, geographic, and socioeconomic factors driving purchase decisions in different countries.
Discuss the impact of the decision to engage in international business on the organization’s functions. Include the following factors:
Organizational structure implications (decision-making decentralization)
Human resource management issues
Financial and tax implications
Transportation and logistic issues
Culture issues
Calculate the Total Cost of Ownership (TCO) for the selected product.
Conclude the analysis with a recommendation section providing the executive with a clear go or no-go recommendation on re-shoring.
