Foreign manufacturing as a global strategy
Foreign manufacturing as a global strategy works well for mega companies including Apple, retail behemoth Wal-Mart and countless other companies. Major advantages of foreign manufacturing include cost cutting and ability to make their products available to customers at lower and competitive prices. It not only provides an opportunity for the company to be a dominant player but also gives an opportunity to go global.
This strategy is not without risk. Major companies often use China and other parts of Southeast Asia for manufacturing mainly due to lower labor cost and lately in China and everywhere else labor costs are rising. At the same time many companies are increasingly subject to loss of intellectual property. Laws are not similar to the home country mainly to that of the United States and as a result many are struggling to navigate through the multilayered judicial systems to protect their intellectual property. Another disadvantage comes from the competitors. They are constantly stealing trade secrets including infringing on patent rights and copycat products. Apple is battling with Samsung for years for the same reason. Meanwhile the competitors are flooding the market with similar products that resemble the quality of the product.
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