(b) Outsourcing allows for selecting a low-cost location and finding a favorable currency exchange, greater flexibility to discontinue the component's use if it becomes obsolete in light of improvements in technology, avoiding a non-recoverable investment, and creating a potentially beneficial relationship with another nation. DQ4. Efficient logistics functions like just- in- time (JIT) inventory systems have been key to the success of Japanese firms. These "economize on inventory holding costs by having materials arrive at a manufacturing plant just in time to enter the production process and not before. The major cost saving comes from speeding up inventory turnover. This reduces inventory holding costs, such as warehousing and storage costs. It means the company can reduce the amount of working capital it needs to finance inventory, freeing capital for other uses or lowering the...
New technology and communication such as electronic data exchange and "web-based information systems play a crucial role in modern materials management. By tracking component parts as they make their way across the globe toward an assembly plant, information systems enable a firm to optimize its production scheduling according to when components are expected to arrive" (467). Good logistics planning allow for 'lean' manufacturing, which is especially critical when serving the needs of a wide and diverse consumer base, on an international scale. There may be wide swings in demand seasonally, changes in regulations because of politics, or shifts in different demand segments. Just-in-time manufacturing and other approaches to make sure demand and inventory are closely matched become even more vital to success, in the current global marketplace.
These can create significant management problems due to the impact of different cultures, taxation and pricing, the complexity of choosing the optimal structure for international business, high political risks and many other issues. The specifics of financial planning is determined by the following problems, including volatility in exchange rates, particularly the national taxation, revaluation of currencies, possible difficulties with the export of funds from abroad, problems with in-house transfer pricing,
International Business Environment Outline and critically discuss the criteria by which they judge whether or not a country is stable. International businesses faces a number of risks when they decide to operate overseas. Their ability to make sound investment decisions and to address those risks is directly related to the stability of the country in question. Firms therefore need to develop mechanisms for measuring stability before making the decision to enter a
International Business of Starbucks Starbucks Corporation established in 1971 has its headquarters based in Seattle, Washington. The company is the leading and largest coffeehouse company, with a wide coverage of the market across the globe (Simon, 2009). It is a global coffee company and chain of coffeehouse stores, operating in over 50 countries all over the world. At its founding, it was a mainstream coffee bean roaster and retailer. The company
The localization strategy into Vietnam is also characterized by the fact that it ensures higher levels of business diversification for the company, which in fact serves the number one rule of investments -- portfolio diversification. This in essence means that, through the penetration of the Vietnamese market, the company would increase its sources of revenues and it would decrease its dependency on the more traditional manufacturing plants. Finally, the localization strategy
International Business The Effect of National Culture on the Choice of Entry Mode Foreign direct investment has increased dramatically over the last couple of decades and this trend has been studied. However, it is argued that the entry model form many of these investments has not been studied with the same rigor. It is commonly thought the composition of national cultures on Hofstede's scale and the distance between the two cultures influences
International Business South Korea International Business South Korea: Introduction and Business Potential South Korea is the 12th largest economy in the world. It has made tremendous growth in all manufacturing, industrial, and services sectors to become economically and technologically strong. Due to rapid economic growth and positive governmental behavior, South Korea has become an attractive target country for foreign corporations for their international business expansion strategies (Central Intelligence Agency, 2013). However, these foreign
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