Plant Location Puzzle Essay

d) What ar the pros and cons of not manufacturing abroad and staying moxie local?EDCs success is credited to their corpo enjoin flexibility and service. They consider been competent to adapt quickly to changing demand and optimize the clipping of harvest-time introductions. Located within a high demand foodstuff segment has also facilitated the winning criteria of service and flexibility.PROS* Having the plant in Boulder, a bicycling Mecca, has helped to keep EDC on top of trends and demand changes in the US market. * Keeping its plant on the same campus as its corporate mogul in Boulder,Colorado as along with keeping all the parts of the accompany in the same location would contribute greatly to inter-departmental co deed and ultimately offset like has been seen from the past records * Complete control over the flexible manufacturing operation that would en able-bodied it to meet rapid changes in the local market * Their engineers take care to be ahead of the curve in sp iriting new features that the consumers desire. This design knowledge is also the result of the cross functional cooperation which butt joint be attributed to the geographical proximity of the entire staff.* Communication would be easy and changes in styles and production plans could be made easily.Ex. when orders for cross- bikes which had enjoyed a spurt of popularity began to fall off, Eldora had been able to adjust its production runs with minimal disruptions * If the design function remains in the United States. This will ensure technological advances. EDC should also exploit their articulatio venture in Italy to gain a larger market assign in Europe. Targeting the Far East market requires the design of simple bicycles, which can be accomplished in the U. S. * Had built trust and reputation in the United States. Had a pool of employees at all levels with genuine have it off for bicycles and eagerly pursued knowledge about the industries latest trends and styles. There would neer be a shortage of people who would willingly come forrad to test prototypesCons* Stagnant market of the U.S-The industry of Bicycles seemed to bereaching a saturation point in the United States * Cost of labor and distribution-Growing Asiatic markets enjoyed a significant labour and distribution damage advantage. The company produced 30% of the bicycles in the United States but the mass market was growing un little at 2% * With the promotion of U. S. business in China, cultural barriers are reduced. The growing Chinese infrastructure will promote low cost automated manufacturing with low labor cost. * EDCs primary markets represent less that a quarter of the world wide demand-The demand in the markets for the product categories produced by EDC are doubling annually in Asia and the growth rate seems sustainable* Far past from the Asian markets- They would not be able to sufficiently operate from a location so far away from the emerging markets and tap the potential of the growing economies. They would also not be able to cater to the needs and demands of those consumers sufficiently * Competitive disadvantage-With the two major(ip) competitors of EDC one from China and one from Taiwan, catering to the demand of the Asian markets presently they will be at a disadvantage if they stay ass local