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Consider the challenges of global manufacturing and supply chain management. Pay attention to page 348 attached. Then: Identify and mention the four production location strategies. Discuss the order in which you understand strategies should be developed and why.

Consider the challenges of global manufacturing and supply chain management. Pay attention to page 348 attached. Then: Identify and mention the four production location strategies. Discuss the order in which you understand strategies should be developed and why.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Consider the challenges of global manufacturing and supply chain management. Pay attention to page 348 attached. Then:

Identify and mention the four production location strategies.

Discuss the order in which you understand strategies should be developed and why.

348. INTERNATIONAL BUSINESS MANAGEMENT Four major location strategies for Global Production Networks can be identified: Centralized Global Production: The entire production occurs within only one nation (or region) and is exported thereafter on the global market. This is particularly the case for activities that are difficult to relocate, such as goods linked to the location of resources, difficult to reproduce (e.g. luxury and craft) or depending on massive economies of scale. Regional Production: Takes place within each region that manufactures goods with the size of the production system related to the size of the regional market. This system depends more on a regional accessibility than on economies of scale. It particularly applies to well- known manufacturing technologies and/or to products having high distribution costs (e.g. soft drinks). ● Regional Specialization: This global production network involves a spatial division of the production based on the theory of comparative advantages. Each region specializes in the production of a specific good and imports from other regions what it requires. Vertical Transnational Integration: This global production network is another variant of specialization. Different stages of the production occur at locations offering the best comparative advantages. Raw materials are extracted from locations where they are the most accessible, while assembly is performed in regions having low labor costs or high levels of expertise depending on the type of product or the stage in its manufacturing.... Each production sector has a different production network. The automotive and electronics sectors are good examples of vertical integration. For instance, the manufacture of a television generally implies stages of research and development in the United States and Japan (as well as being important markets). Several nations, such as England, South Korea and Germany provide components. The assembly takes place in low wages countries such as China, Mexico, and Thailand. Labor costs are a key element of this system, but also its level of expertise. Venkateswaran, N.. International Business Management, New Age International Ltd, 2011. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/nucportal- ebooks/detail.action?docID=3017434. Created from nucportal-ebooks on 2024-02-17 17:39:29.
Transcribed Image Text:348. INTERNATIONAL BUSINESS MANAGEMENT Four major location strategies for Global Production Networks can be identified: Centralized Global Production: The entire production occurs within only one nation (or region) and is exported thereafter on the global market. This is particularly the case for activities that are difficult to relocate, such as goods linked to the location of resources, difficult to reproduce (e.g. luxury and craft) or depending on massive economies of scale. Regional Production: Takes place within each region that manufactures goods with the size of the production system related to the size of the regional market. This system depends more on a regional accessibility than on economies of scale. It particularly applies to well- known manufacturing technologies and/or to products having high distribution costs (e.g. soft drinks). ● Regional Specialization: This global production network involves a spatial division of the production based on the theory of comparative advantages. Each region specializes in the production of a specific good and imports from other regions what it requires. Vertical Transnational Integration: This global production network is another variant of specialization. Different stages of the production occur at locations offering the best comparative advantages. Raw materials are extracted from locations where they are the most accessible, while assembly is performed in regions having low labor costs or high levels of expertise depending on the type of product or the stage in its manufacturing.... Each production sector has a different production network. The automotive and electronics sectors are good examples of vertical integration. For instance, the manufacture of a television generally implies stages of research and development in the United States and Japan (as well as being important markets). Several nations, such as England, South Korea and Germany provide components. The assembly takes place in low wages countries such as China, Mexico, and Thailand. Labor costs are a key element of this system, but also its level of expertise. Venkateswaran, N.. International Business Management, New Age International Ltd, 2011. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/nucportal- ebooks/detail.action?docID=3017434. Created from nucportal-ebooks on 2024-02-17 17:39:29.
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