COMMERCE 2OC3 Chapter Notes - Chapter 2: Southeast Asia Treaty Organization, North American Free Trade Agreement, World Trade Organization
31 Aug 2016
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Department
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OM: Chapter 2
Reasons to globalize:
1. Reduce costs (labor, taxes, tariffs)
-foreign locations with lower wage rates can lower direct and indirect costs
-WTO, NAFTA, APEC, SEATO, EU
2. Improve supply chain
-locating facilities closer to unique resources (auto design in Cali, shoes China, perfume France)
3. Provide better goods/services
-objective and subjective characteristics of goods and services
-on-time deliveries, cultural variables, improved customer service
4. Understand markets
-interacting with foreign customers and suppliers can lead to new opportunities
-cell phone designs in Europe, cell phone fads from Japan, extends product life cycle
5. Learn to improve operations
-remain open to free flow of ideas
-GM partnered with Japanese firm for new approach to production
6. Attract and retain global talent
-offer better employment opportunities, insulation against unemployment
-relocate unneeded personnel to more prosperous locations
Cultures and their attitudes can be much different towards:
-punctuality -lunch breaks -thievery -bribery -child labor -environment
-intellectual property
Problems with Bombardier plant:
- Laying off workers that it could not keep busy
- Delaying shipment, put together 3 when schedule required 43
- Having trouble accommodating technology from globally sourced parts
- Frames bought from Mexico are the wrong size or defective
- Supply hai outsourig ausig ore proles tha it’s solvig
Reshoring: bringing production back to your base of operations
-Made in China scaring away small businesses
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Reasons to globalize: reduce costs (labor, taxes, tariffs) Foreign locations with lower wage rates can lower direct and indirect costs. Locating facilities closer to unique resources (auto design in cali, shoes china, perfume france: provide better goods/services. Objective and subjective characteristics of goods and services. On-time deliveries, cultural variables, improved customer service: understand markets. Interacting with foreign customers and suppliers can lead to new opportunities. Cell phone designs in europe, cell phone fads from japan, extends product life cycle: learn to improve operations. Gm partnered with japanese firm for new approach to production: attract and retain global talent. Cultures and their attitudes can be much different towards: Laying off workers that it could not keep busy. Delaying shipment, put together 3 when schedule required 43. Having trouble accommodating technology from globally sourced parts. Frames bought from mexico are the wrong size or defective. Supply (cid:272)hai(cid:374) outsour(cid:272)i(cid:374)g (cid:272)ausi(cid:374)g (cid:373)ore pro(cid:271)le(cid:373)s tha(cid:374) it"s solvi(cid:374)g.
