In Making the Most of Foreign Factories by Kasra Ferdows (Notes)
* Not tapping into the full potential of foreign factories * Only use them for benefit of tariffs and trade concessions, cheap labor, etc. * Some companies do use them to full potential and gain exponentially from it. * Use them for the previous reasons mentioned, but also to get closer to their customer and suppliers, to attract skilled and talenterd employees, and create centers of expertise for the entire company.
The answer for why these two approaches lies in the managers hands, which they have answered a simple yet fundamental question: How can a factory located outside a company’s home country be used as a competitive weapon not only in the markets that ir directly serves but also in every market served by the company? * Ex. Some managers don’t consider manufacturing to be a source of competitive advantage, they will establish factories with a narrow strategic scope, which they provide those factories with limited resources. In contrast if they do…then they will be productive and innovative by achieving many goals. Lower tariffs are causing foreign plants to close * Increase in sophistication of manufacturing and product development and the growing importance of having world-class suppliers are causing more multinationals to place less emphasis on low wages. * Factories are being strategically placed in foreign countries where they can have the most advanced infrastructure and workers skills, rather than in the areas that offer merely the lowest wages. * Companies are concentrating production and development in the same organization. * Servers companies?? * Moving horizontally across the matrix??