1. 1. Read the following case on Flat Screen TV's. Prepare a response to the following questions:
- Which parties experience advantages from the globalization of the flat-panel industry?
- Which parties experience disadvantages from the globalization of the flat-panel industry?
- What would happen, if the U.S. required that all flat-panel displays sold in the U.S. would also have to be manufactured in the U.S.?
- What does this case tell us about the future of production in an increasingly global economy?
MANAGEMENT FOCUS Vizio and the Market for Flat-Panel TVs
Operating sophisticated tooling in environments that must be kept absolutely clean, fabrication centers in South Korea, Taiwan, and Japan produce sheets of glass twice as large as king-size beds to exacting specifications. From there, the glass panels travel to Mexican plants located alongside the U.S. border. There they are cut to size, combined with electronic components shipped in from Asia and the United States, assembled into finished flat-panel TVs, and loaded onto trucks bound for retail stores in the United States, where consumers spend more than $35 billion a year on flat-panel TVs.
The underlying technology for flat-panel displays was invented in the United States in the late 1960s by RCA. But after RCA and rivals Westinghouse and Xerox opted not to pursue the technology, the Japanese company Sharp made aggressive investments in flat-panel displays. By the early 1990s Sharp was selling the first flat-panel screens, but as the Japanese economy plunged into a decade-long recession, investment leadership shifted to South Korean companies such as Samsung. Then the 1997 Asian crisis hit Korea hard, and Taiwanese companies seized leadership. Today, Chinese companies are starting to elbow their way into the flat-panel display manufacturing business.
As production for flat-panel displays migrates its way around the globe to low-cost locations, there are clear winners and losers. U.S. consumers have benefited from the falling prices of flat-panel TVs and are snapping them up. Efficient manufacturers have taken advantage of globally dispersed supply chains to make and sell low-cost, high-quality, flat-panel TVs. Foremost among these has been the California-based company Vizio, founded by a Taiwanese immigrant. In just eight years, sales of Vizio flat-panel TVs ballooned from nothing to more than $2.5 billion in 2010. By late 2011, the company was the second largest provider to the U.S. market with a 15.4 percent share. Vizio, however, has fewer than 170 employees. These focus on final product design, sales, and customer service. Vizio outsources most of its engineering work, all of its manufacturing, and much of its logistics. For each of its models, Vizio assembles a team of supplier partners strung across the globe. Its 42-inch flat-panel TV, for example, contains a panel from South Korea, electronic components from China, and processors from the United States, and it is assembled in Mexico. Vizio's managers scour the globe continually for the cheapest manufacturers of flat-panel displays and electronic components. They sell most of their TVs to large discount retailers such as Costco and Sam's Club. Good order visibility from retailers, coupled with tight management of global logistics, allows Vizio to turn over its inventory every three weeks, twice as fast as many of its competitors, which allows major cost savings in a business where prices are falling continually.
On the other hand, the shift to flat-panel TVs has caused pain in certain sectors of the economy, such as those firms that make traditional cathode-ray TVs in high-cost locations. In 2006, for example, Japanese electronics manufacturer Sanyo laid off 300 employees at its U.S. factory, and Hitachi closed its TV manufacturing plant in South Carolina, laying off 200 employees. Sony and Hitachi both still make TVs, but they are flat-panel TVs assembled in Mexico from components manufactured in Asia.
2. 2. Research another industry that has experienced globalization or may be a good candidate for globalization in the future and share your example with the class and explain why you selected the industry.
- Choose two countries (other than the U.S.) within the same region of the world. Assess the political risks, economic risks, and legal risks of each country. If you had to invest a large sum of money into one of these two countries, which one would it be? Why?
This needs to have in-text citations and full reference list and to be in APA format. It also needs to be plagiarism free.
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