Why we left our factories in China - Essay Example

Only on StudentShare

Extract of sample
Why we left our factories in China

Businesses are compelled by competition to sell products at the lowest price possible at the highest quality doable. Such, businesses are always on the lookout for ways on how to cut cost and improve quality on the inputs of production. This effort to cut cost often points producers and businesses to outsource to China because of the cheap labour and material cost. In the article by Sheridan Prasso entitled “Why we left our factories in China”, Prasso pointed the numbers why manufacturers go to China. In 2005, Sleek Audio was quoted a price of $20 of $19 or $20 for one particular component that the Chinese were offering to make for $2 (2011). That is a whooping $17 to $18 price difference with each component. If Audio Sleek will purchase by the thousands, the price difference will just be very hard to ignore. 2. Economy of scale In the article of Prasso, businesses are now beginning to leave factories in China with the emerging movement called reshoring where business are beginning to bring their operations close to home. One of the major reasons cited for reshoring is that it is very difficult to deal with China; other is the presence of language barrier and delay in response time if there are any issues. Mark even lamented that when they are in China, great care are being extended to satisfy them where parts are made perfectly when they are around. ...
Download paper

Summary

Economic Theories from the Article “Why we left our factories in China?”

1. Cost minimisation
The economic concept that compelled business that includes Sleek Audio to outsource its production be it in China, India or elsewhere is the imperative of cost minimisation. …
Author : bryana68

Related Essays

Volkswagen in China.
In order for MNCs to operate effectively and gain a competitive advantage it is important to assess the competitive position and the relationship between success and strategies. In a highly competitive market it is very important for companies to gain a competitive advantage over its competitors. This can be achieved by either cost advantage or offering differentiated product. Hills work suggests that the differentiation strategies in the automobile sector in China can be beneficial because of many reasons like Chinese automobile is an expanding market and is the world’s second largest...
16 pages (4016 words) Research Paper
Marketing Planning on Portakabin
Currently, it is employing more than thousands of people and expanding its operations in European countries. Although construction industry relies on the same traditional methods of first designing building architecture and then moving ahead with the project; Portakabin changed the entire industry by introducing innovative products in the market. The management of company realized that it will have to apply Piercy (2010) going to market concept which states that everyone within the firm will have to work together to achieve the desired goals. The key elements of this concept are represented in...
20 pages (5020 words) Assignment
Marketing Practices of China
The article from the Financial Times examines the activities of the HNA business group of China. The group is the first investment company from China to start purchasing property around the world. It indulges in purchases across various sectors ranging from the shipping industry, hotel industry and airline industry in various countries across the globe (Lemer and Rabinovitch 23). The company has a lot of capital and is increasingly obtaining more property around the world. The CEO of the group tells the writer of the article that they will purchase more companies outside his country. This will...
5 pages (1255 words) Research Paper
China-USA Trade Essay
China has emerged as the main strategic partner to the USA. The USA has identified China as one of its top ten emerging markets. Just like commodities, capital requires high capital markets, and hence the USA has heavily invested in the Chinese markets, and this is a clear demonstration that China has become the largest overseas market for the USA capital. China and the USA have recorded remarkable achievement in terms of financial cooperation and by the year 2005, China was holding US$254.4 in US treasury bonds as well as a considerable number of US private securities and stocks....
3 pages (753 words) Essay
Consumer Behaviour in China
Personality Personality refers to special organization of the different behaviour of particular individuals. This is in regard to both physical and psychological aspects, which influence the behaviour and responses in the social and physical surrounding (Silver, 1986 p. 67-89). Through studying of the personalities of the Chinese, one can study the consumer behaviour of the Chinese. The personalities of the Chinese vary from one individual to the other. The personality of individuals helps in identifying individual differences. Although personality is usually consistent and enduring, it may...
3 pages (753 words) Essay
UNIQLO in China
UNIQLO in China ...
9 pages (2259 words) Essay
Luxury Consumption in China
Despite of these challenges, the luxury industry still is becoming highly attractive as the affordability of consumers is also increasing. As the middle class in the world is gaining strength and becoming more loyal to luxury branded goods, luxury industry still have a number of lucrative market segments to be catered. It was estimated in 2003, that the financial returns of luxury goods manufacturing industry globally was $ 90 billion, which crossed the $ 150 billion mark in 2007. By offering services and products to the untapped market segments, the luxury industry is expected to increase the...
18 pages (4518 words) Literature review
Got a tricky question? Receive an answer from students like you! Try us!