Mexico has become the most favorable relocation site as it not only offers incentives of cheap labor but the low import duties to materials shipped into Mexico would help the firm to gain cost leverage in the manufacturing and production of subpacks. The proximity to US considerably reduces the transportation cost and time, while at the same time, the fluctuating rate of currency has also less impact on the production process as against Taiwan sourcing site
In the rapidly changing environment of globalization, change is essential for development and organizations tend to adapt to the constantly evolving business environment. To exploit the emerging business opportunities, the organization needs to look forward to improve it performance outcome through diversification of its products and services using optimization of operational functions and effective supply chain management. Since supply chain helps coordinate the organization’s various linkages with the external agencies and promotes efficient receipt and delivery of goods and services, it has great potential to give Emerson Electric a competitive edge in the global and domestic arena. Indeed, the evaluation of operational logistics of relocation of company’s subpack production facility from China would greatly facilitate competitive advantage.
The business relationship thrives on the modules of exploitation of knowledge gained through the strategic alliances. Hence, it is extremely important that the partners identify their core competencies and forge alliances on areas that either complements or supplements their competencies and market efficiency. Elements of product differentiation become the vital aspects for exploiting business relationships. In the tough economic scenario, the management would like to relocate the sourcing so as to cut cost and increase profit. ACP product line comprises of ceiling fans that are marketed under Northwind and 1895 brand names. Many components of the fans are