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Block 2 session 3, As China's economy grew, cost advantage disappeared…
Block 2 session 3
International operations strategies
Multi domestic
separate per country
Regional
Per region
Home country w/ exports
Global coordinated
Facility location
Which country?
Part of country?
Hornby & LEGO
Outsourcing
Flexibility
Demand uncertainty
High Variety
Short life cycle
Some more stable products
Demand variation
Inflexible
Low variety
Low complexity
High volume
Cost advantage
Low labour costs
Low fixed costs (space)
Manufacturing excellence
Costs
Tooling had to be moved
Staff trained
Supplier development
UK closure costs
Reopening in UK costs
Keeping stocks to mitigate demand variation
Incurs other costs
As China's economy grew, cost advantage disappeared
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Reshoring