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The opening case explores how globalization influenced strategic decision making at TruckLabs, a US. company producing panels designed to improve the aerodynamics of cargo tricks generating savings on fuel costs. In 2015. TruckLabs set up manufacturing operations in Asia where labor costs were relatively low and skilled technicians were readily available. Low tariffs and efficient shipping options facalitated the outsourcing strategy. Activities essential to TruckLabs competitive advantage remained in the United States. In 2017, recently elected Donald Trump levied 25 percent tariffs on many imports from China including Trucklabs panels. Because the tariffs effectively raised prices by 25 percent, the cost advantages outsourcing production to Asia that had been present in 2015 disappeared. After considering moving production to other countries in Asia. TruckLabs concluded that it made more sense to move production to the United States where most of its customers were located. An unanticipated benefit of the change in manufacturing strategy emerged in 2021, when domestic production enabled TruckLabs to avoid many of the pandemic related supply cham disruptions challenging companies relying on manufacturing in Asia. Discussion of the case can begin with the following questions: QUESTION 1: Reflect on the decision by TruckLabs to initially outsource production to Asia. How has globalization created opportunities for companies like TruckLabs to optimize their supply chains? QUESTION 2: Consider the globalization of production as it relates to China and other southeast Asian countries is China's role as the world's factory floor slipping away? Explain. QUESTION 3: How has geopolitics influenced strategy at TruckLabs?

The opening case explores how globalization influenced strategic decision making at TruckLabs, a US. company producing panels designed to improve the aerodynamics of cargo tricks generating savings on fuel costs. In 2015. TruckLabs set up manufacturing operations in Asia where labor costs were relatively low and skilled technicians were readily available. Low tariffs and efficient shipping options facalitated the outsourcing strategy. Activities essential to TruckLabs competitive advantage remained in the United States. In 2017, recently elected Donald Trump levied 25 percent tariffs on many imports from China including Trucklabs panels. Because the tariffs effectively raised prices by 25 percent, the cost advantages outsourcing production to Asia that had been present in 2015 disappeared. After considering moving production to other countries in Asia. TruckLabs concluded that it made more sense to move production to the United States where most of its customers were located. An unanticipated benefit of the change in manufacturing strategy emerged in 2021, when domestic production enabled TruckLabs to avoid many of the pandemic related supply cham disruptions challenging companies relying on manufacturing in Asia. Discussion of the case can begin with the following questions: QUESTION 1: Reflect on the decision by TruckLabs to initially outsource production to Asia. How has globalization created opportunities for companies like TruckLabs to optimize their supply chains? QUESTION 2: Consider the globalization of production as it relates to China and other southeast Asian countries is China's role as the world's factory floor slipping away? Explain. QUESTION 3: How has geopolitics influenced strategy at TruckLabs?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The opening case explores how globalization influenced strategic decision making at TruckLabs, a US. company producing panels designed to improve the aerodynamics of cargo tricks generating savings on fuel costs. In 2015. TruckLabs set up manufacturing operations in Asia where labor costs were relatively low and skilled technicians were readily available. Low tariffs and efficient shipping options facalitated the outsourcing strategy. Activities essential to TruckLabs competitive advantage remained in the United States. In 2017, recently elected Donald Trump levied 25 percent tariffs on many imports from China including Trucklabs panels. Because the tariffs effectively raised prices by 25 percent, the cost advantages outsourcing production to Asia that had been present in 2015 disappeared. After considering moving production to other countries in Asia. TruckLabs concluded that it made more sense to move production to the United States where most of its customers were located. An unanticipated benefit of the change in manufacturing strategy emerged in 2021, when domestic production enabled TruckLabs to avoid many of the pandemic related supply cham disruptions challenging companies relying on manufacturing in Asia. Discussion of the case can begin with the following questions: QUESTION 1: Reflect on the decision by TruckLabs to initially outsource production to Asia. How has globalization created opportunities for companies like TruckLabs to optimize their supply chains? QUESTION 2: Consider the globalization of production as it relates to China and other southeast Asian countries is China's role as the world's factory floor slipping away? Explain. QUESTION 3: How has geopolitics influenced strategy at TruckLabs?
Transcribed Image Text:The opening case explores how globalization influenced strategic decision making at TruckLabs, a US. company producing panels designed to improve the aerodynamics of cargo tricks generating savings on fuel costs. In 2015. TruckLabs set up manufacturing operations in Asia where labor costs were relatively low and skilled technicians were readily available. Low tariffs and efficient shipping options facalitated the outsourcing strategy. Activities essential to TruckLabs competitive advantage remained in the United States. In 2017, recently elected Donald Trump levied 25 percent tariffs on many imports from China including Trucklabs panels. Because the tariffs effectively raised prices by 25 percent, the cost advantages outsourcing production to Asia that had been present in 2015 disappeared. After considering moving production to other countries in Asia. TruckLabs concluded that it made more sense to move production to the United States where most of its customers were located. An unanticipated benefit of the change in manufacturing strategy emerged in 2021, when domestic production enabled TruckLabs to avoid many of the pandemic related supply cham disruptions challenging companies relying on manufacturing in Asia. Discussion of the case can begin with the following questions: QUESTION 1: Reflect on the decision by TruckLabs to initially outsource production to Asia. How has globalization created opportunities for companies like TruckLabs to optimize their supply chains? QUESTION 2: Consider the globalization of production as it relates to China and other southeast Asian countries is China's role as the world's factory floor slipping away? Explain. QUESTION 3: How has geopolitics influenced strategy at TruckLabs?
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