An electronics firm is considering how best to supply the world market for microprocessors used in consumer and industrial electronic products. A manufacturing plant costs approximately $500 million to construct and requires a highly skilled work force. The total value of the world market for this product over the next 10 years is estimated to be between $10 and $15 billion. The tariffs prevailing in this industry are currently low. Should the firm adopt a concentrated or decentralized manufacturing strategy? What kind of location(s) should the firm favor for its plant(s)?
The firm should adopt a concentrated manufacturing strategy. This is because based on the fact that tariffs are low in terms of the sum above that was paid, this factory is said to be able to supply different markets at little higher cost.
What is concentrated manufacturing?
A centralized manufacturing strategy is known to be a type of method used that consist of only one principal facility through which one's product is moved and distributed.
It is known to help makes consistent quality easy as a person only need to validate only one process. The Centralized manufacturing is known to be the option that best suit the firm above as priority is focus on just on methods instead of multiple.
