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Recommended Readings: Business Strategy

 

Many companies do not tap the full potential of their foreign factories. They try to derive benefits only from tariff and trade concessions, cheap labor, capital subsidies, and reduced logistics costs. As a result foreign factories are given a limited range of work, responsibilities, and resources. But there are companies that expect much more from their foreign factories and, as a result, get much more. They use them to get closer to their customers and suppliers, to attract skilled and talented employees, and to create centers of expertise for the entire company. The author points out that managers must consider manufacturing as a major source of competitive advantage, not just a way of cutting costs or getting around regulatory barriers.