Background/Context
Globalization is the future of the world, recently
politics have turned to regionalization but the
overall trend will lead to globalization in the long
run. I want to provide a manufacturing company
the course of action for becoming regionalized
then scaling up to be globalized as this is what
many manufacturing companies are doing and
likely need guidance.
Purpose/Problem
The problem is that the world is going from
globalized to regionalized and many companies
haven't made the switch due to not having
experience or knowledge on making the ever
important switch. I will provide an in-depth
overview of how to switch from an asian
manufacturing base to switching over to Mexico
and leveraging that growth to become bigger than
they currently are, in turn increasing profits.
Research Methods
I will study literature, current market trends, and
overall economic trends. Research current
companies who are successful in implementing
this and those that are not. Lower labor costs: The
cost of labor in Mexico is generally lower than in
South Korea, which could potentially reduce
Samsung's production costs and increase
profitability. Closer proximity to North American
markets: Moving production to Mexico could
allow Samsung to more easily reach North
American markets, which could potentially
increase sales and revenue. Favorable trade
agreements: Mexico has a number of free trade
agreements with other countries, which could
potentially make it easier and cheaper for Samsung
to import and export goods.
Research Results/Discussion
The overall trend is that regionalization is
outpacing globalization and there's currently a mad
dash for Asian based companies to set up
manufacturing in Mexico to avoid tariffs from the
US.
Implications of Research
Results
Companies would be making the move of a
lifetime if they transitioned some but not all of
their manufacturing from Asia to Mexico while
international politics sort themselves out
Recommendations
My recommendation would be for the company I
am advising, Samsung to close one or two
overseas fabrication sites and open up in Mexico to
take advantage of Mexico's favorable trading
practices.
Implementation Plan
Develop land in Mexico and set up the infrastructure in
Monterrey. Slowly move production from Asia to
Mexico while maintaining a foothold in both and
moving operations in the future with guidance and a
forecast of what is most favorable.