AutoEdge Individual Project 5

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Colorado Technical University *

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2403A

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Economics

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Jun 18, 2024

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pptx

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AutoEdge Individual Project 5 By: Dameon Griggs Conclusion and Recommendations

Legal, social, and financial factor considerations  An important when regarding moving AutoEdge to another country is it is important legal consideration is ensuring that your intellectual property (IP) rights expand to the country you want to move your manufacturing to. This is key because different countries have different IP laws and manners of enforcement.  AutoEdge would have to become more vocal on social media due to our company expanding and moving our processes to a different country.  Even with thorough preparation, conflicts can emerge. A lawyer skilled in handling international business conflicts can speed up the settlement procedure, safeguard your rights, and reduce possible interruptions to your production activities.

Economic factors  A country is only as good as their GDP and knowing which resources are the most valuable while understanding the meaning of scarcity.  Moving manufacturing nearer to existing and future buyers further down the supply chain boosts trade. By operating in the same regions and sharing time zones, manufacturers can reduce delivery times, enhance customer service, and provide higher degrees of personalization.  The cost of manufacturing could be further reduced from what they are now by taking use of opportunities to use innovative production techniques, such as a hybrid of in-house and outsourced production or partnering with a shelter provider.

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Elasticity of demand  The demand for AutoEdge auto parts will fluctuate according to the resources available in both nations. We will be able to swap them out to ensure that the business will be sustainable because the resources in our two countries are balanced. Due to uncertainty, economic changes can be erratic, but our study will play a major role in how the economy changes. Even though elastic demand pricing may increase, this will still be the best thing for the business since, if it is profitable and prospering, it will be able to cut prices to remain competitive and satisfy customers.  When customers are highly sensitive to changes in price, there is a high PED. This suggests, for example, that if prices rise due to inflation, customers will reduce the quantity they purchase by skipping, switching, or substituting.

Economies of scale and efficiency  This move will increase our quality control numbers and provide better quality for our consumers. One of main concerns that consumers have when deciding on whether to buy products is the quality aspect.  This move will give us an edge over our competitors with bringing manufacturing to the United States. Reducing your shipping and transit expenses not only saves money but also energy, making American production the more ecologically responsible choice.  Consumers today want to feel good about the companies they do business with, and many will take a company's environmental standards into account before making a purchase.

SWOT Analysis  Strengths: Being able to control the quality of our products and doing so in a sustainable manner. When making a purchasing decision, one of the primary worries of buyers is product quality. The saying "quality over quantity" has always been there, yet it is untrue quite a bit of the time. Profits are a bigger priority for corporations than producing high-quality goods. We will have an advantage over our rivals thanks to this move to bring manufacturing domestically.  Weaknesses: The cost of relocation can be expensive and can exhaust a lot of our resources. Our company needs to know all the factors that can occur. Potential risks include loss of customers, disruption to operations, and unforeseen expenses. Rewards may include access to new markets, lower operating costs, and opportunities for growth. Carefully evaluate the potential risks and rewards to determine if relocation aligns with your business goals and objectives.

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SWOT analysis cont.  Opportunities: We can become a premier company by expanding our social media presence. Social media is the leading force in any company’s success in business and having the attention of the media is crucial to showing our brand to the world. This will boost our revenue and increase our customer obsession that drives our metrics to be the best. Auto Edge can take advantage of the favorable microeconomic factors such as low inflation and low interest rates to obtain cheap financing. Additionally, high employment rates mean that it can source labor cheaply in the United States.  Threats: This move can cause trade barriers among other countries and can cause an increase in competition. Even though our company stands out on the market and have unique products, this can cause our competitors to imitate some of the operations that we conduct as well as steal some of our businesses due to the relocation.

Market structure  The four market structures are: perfect competition, monopolistic competition, oligarchy, and monopoly.  The market structure that would best fit our company would be perfect competition.  Being a price taker, a completely competitive firm is obligated to accept the equilibrium price at which it sells its commodities. A completely competitive business cannot earn any sales if it tries to charge even a small amount above the going rate .

Risks  Loss of personnel: Most businesses focus on senior management retention, but typically undervalue the effect of losing mid-level staff members, who are intimately familiar with crucial operational concerns, as well as the loss of a skilled labor force, where the rate of retention is typically lower. Key vendor and customer connections could be harmed by these people leaving.  The manufacturing equipment in the new factory might not be supported by the facility's infrastructure. For instance, the sewage system, trash disposal, and electrical supply could not be enough and might need to be upgraded at a high cost.

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Costs  Expanding a company can be extremely expensive and needs to be thought out very thoroughly.  Making sure that our company is producing high quality products and knowing what our cost analysis is.  The costs of production are more extensive. They consist of the manufacturing cost as well as the overhead and administrative expenses required to run a profitable company. Insurance, record- keeping, rent, marketing, and staff compensation for indirect or non- value-added labor are some of these expenses.

International expansion  In conclusion, choosing to locate the manufacturing facility in the United States has more benefits than drawbacks, and as a result, we as a business may dictate how people see our superior goods and fixation with customers. This action will boost the GDP of the United States, stimulate positive economic movement, and provide more jobs for Americans.  International expansion is the goal for AutoEdge as we will become the premier company with our leading products and our strong social media presence.  We should take into consideration the cost, pros, cons, longevity, and social presence before the expansion which I feel leans more to the right.

References  Guzman, T. (2023, September 20). Key Legal Considerations When Moving Your Manufacturing Overseas. Transnational Matters. https://www.transnationalmatters.com/key-legal-considerations-when- moving-your-manufacturing-overseas/#:~:text=Intellectual%20Prope rty%20Protection  Donahue, D. (n.d.). Council Post: The Economic Argument For Moving Manufacturing. Forbes. Retrieved May 30, 2024, from https://www.forbes.com/sites/forbesbusinesscouncil/2022/01/24/the-e conomic-argument-for-moving-manufacturing/?sh=76f00a615d0f  yorksaw. (2010, June 29). Benefits of Manufacturing in the US vs. Outsourcing. York Saw and Knife. https://www.yorksaw.com/case-return-us-manufacturing/#:~:text=By %20choosing%20to%20manufacture%20you  Bigelow, S. (2023, February). What Is a SWOT Analysis? Definition and Examples - TechTarget. SearchCIO. https://www.techtarget.com/searchcio/definition/SWOT-analysis-stren gths-weaknesses-opportunities-and-threats-analysis#:~:text=SWOT %20analysis%20is%20a%20framework

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References Cont.  Lackey, K. (2023, August 14). Key Factors to Consider When Relocating Your Business. Brunswick Business & Industry Development. https://brunswickbid.com/key-factors-to-consider-when-relocating-you r-business/#:~:text=Potential%20risks%20include%20loss%20of  Khan Academy. (2016). Perfect competition and why it matters . Khan Academy. https://www.khanacademy.org/economics-finance-domain/microeconomics/perfect-c ompetition-topic/perfect-competition/a/perfect-competition-and-why-it-matters-cnx  Gross, H., & Rutman, M. (n.d.). Retrieved May 30, 2024, from https://richter.my.site.com/rci/resource/1651251904000/RCI_PlantRelocation#:~:text= Productivity%20decline%

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