The other option that is available to the company is to operate independently in China by eliminating the middle man of Taisource, a strategy similar to the ones adopted by Textech and Caltech. This option would allow the company to take advantage of the low costs of operations, raw materials, and skilled labor while safeguarding their product innovations from third parties.Moreover the Company would also have a much larger market of skilled labor and engineers in the Chinese market as China has some of the world’s best engineering programs and the highest number of degrees in the filed. The following table depicts the statistics for the engineering degrees in USA, India, and China. It represents the intensity of engineering based talent pool for manufacturing industries in China, India and the US.
However the cons of this option pertain to the fact that the company will have to deal with the indirect costs as well as the bureaucracy in China and its government. Moreover the company is unfamiliar with the culture in China and the market dynamics which can become an increased disadvantage for the company.
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