Chapter IC, Problem 1.2CDQ

Summary Introduction

Case summary:

In the early days, Company A usually manufactures its products in their own backyard. In 2004, they have started to turn into a foreign manufacturing. They have shifted their manufacturing process to offshore. Ninety percent of the manufacturing was done in foreign countries. In the home country, they have kept almost 43,000 people to do the important tasks. Their in-house activities include marketing, product design, and software engineering.

Company A decided to assemble the smartphone in Country C, as the labor cost is lower in Country C when compared to Country U. The advantages of assembling in Country C is further discussed in the case.

To determine: The advantages of outsourcing to Company A and the people who are potential losers due to outsourcing.