What advantages and disadvantages does exporting have?What advantages and disadvantages does foreign manufacturing have?3. What are the advantages of employing local personnel and managers when operating overseas?4. What relevance do currency exchange rates have for foreign trade?5. What other factors might be relevant? 6:15 PMENG4/8/2021FileToolsViewIvan Case Study ^N1 - WordX UPLOAD BLOCKED We ran into a problem with this file and can't save any new changes. Please save a copy to avoid losing your work.Save a CopyCASE STUDY (LOCATION PLANNING ANALYSIS)conditions, and the huge capital costs to set up an overseas manufactur-ing operation are daunting challenges. Determining the best way to goWhen the board-games company Bob Moog created in 1985 soughtoften involves solving a perplexing conundrum. "It boils down to a trade-growth through global expansion 2 years later, Moog faced the usual twooff between classic cost-and-time considerations and Eco political fac-options: export the product or manufacture it overseas for local distribu-tors," said Richard Powers, president of Insight Inc., a provider of man-tion. Moog chose the latter. "We decided for a number of reasons toagement support systems based in Bend, OR. With exporting, a companymanufacture our board game, '20 Questions,' in Holland for distributionmust evaluate the various modes of transportation that would be in-throughout Europe," said Moog, president of University Games Corp. ofvolved in getting the goods there, and how this relates to the cycle timeBurlingame, CA. R ecently the company expanded into Australia. Unlikeof putting the product in the marketplace. Some products are time-sensi-the European ventures, however, Moog decided that it was more eco-tive; others are less so. On the other hand, if a company determines thatnomical to import its products into Australia from the U.S. manufacturingan overseas manufacturing operation best meets its needs, it must exam-facility because "anticipated initial sales in Australia just did not warrantine the eco-political factors involved, such as tariff and duty drawbacksa manufacturing operation there at this juncture," Moog said. "If salesand international tax issues. "“It may be less expensive, given these fac-pick up down the line, we may then examine local manufacturing."tors, for a company to incur the logistics costs of exporting than to riskthe eco-political costs," Powers explained. In addition to weighing theseMoog's dual strategy is not unique. One of the toughest questions a com-pany confronts when pondering an international sales strategy is: to ex-trade-offs, there are other related factors affecting the decision to eitherport, or not to export? While exporting is often the least risky method ofexport or locate a plant overseas. To compete in their market, for exam-selling overseas, it frequently involves significant transportation, logis-ple, some countries require that some form of local infrastructure be intics, and tax-related costs that may make it uneconomical when com-place. "Sometimes you run into government contracts where the onlypared with foreign manufacturing. On the other hand, foreign manufac-way to distribute a product in that country is to have it made locally,"turing, while potentially a more competitive way of entering an overseassaid Fred Ehrsam, vice president at Bain & Co., a Boston based strategymarket, has its own bugaboos. Political instability, fluctuating marketScreens 6-7 of 16130% 6:15 PMENG4/8/2021FileToolsViewIvan Case Study ^N1 - WordX UPLOAD BLOCKED We ran into a problem with this file and can't save any new changes. Please save a copy to avoid losing your work.Save a Copyconsulting firm. "In China, for instance, you pretty much have to buildto do the things you need," Ehrsam added. Many companies enter a for-something there in order to enter that market." Certain products alsoeign market by first exporting there, but with an eye toward buildingdictate the international sales strategy to be taken. "If your companyoverseas in the future. "Exporting will give you a feel for the product andmakes drinking glasses, you'll want to manufacture them in whateverits market potential," Powers said. "Instead of jumping in the lake headcountry you plan to sell them," observed Scott Setrakian, a director in thefirst, exporting allows you to get your toes wet. It may cost more, butSan Francisco office of Mercer Management Consulting. "Drinkingyou're able to hedge your risks." But CPC International favors full-scaleglasses, generally speaking, are pretty cheap to make and expensive tooverseas manufacturing to either foreign product assembly or exporting.ship."We rely on exporting chiefly as a means of entering a new market-place," said Gale Griffin, vice president at the Englewood Cliffs, NJ-based" Political instability is another guiding force in a company's decision-making process. "If you want to sell in Russia, you're facing political insta-Food Company. "We then like to move from an exporting environmentinto local manufacturing." CPC manufactures such well-known foodbrands as Hellmann's Mayonnaise and the Knorr's line of soups. Alto-bility as your biggest single operating risk," noted John Koopman, a prin-cipal in Mercer's Toronto office. "In Western Europe, this is not an issue.In Asia, there's a little risk, but in Russia it's a given."... The maturity ofgether, the company manufactures62 of the 110 countries in which itmarkets its products. C PC uses local personnel and managers almost ex-a company's product affects this decision. A product expected to requireclusively when operating overseas. "We look for people who understanddesign changes, for example, may not fit well with foreign manufacturingthe markets and can compete very effectively within them," Griffin said.plans. "It's pretty hard to implement changes to a product when the"They help you understand local government regulations, which can beproduct is fairly far removed from the product development and engi-tricky. We also let our local managers do their own marketing, figuringneering people," Ehrsam continued. "Tactically, you want to be movingthey know their own markets and how to compete there better thanproducts offshore that are relatively stable." Another factor is the skill ofEnglewood Cliffs does." Finding someone qualified to fill these shoes is asthe labor force in the market being considered. "You have to questioneasy as calling an executive search firm or accessing the Internet. "Therewhether or not the labor pool-no matter how low-cost-can be trainedScreens 8-9of 16130%

What advantages and disadvantages does exporting have? Exporting outside of Northern Ireland has the…

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