Management advice for relocating the production facilities

Résumé du document

We are going to explore the possibility of shifting the production from Germany to a country either in ASEAN, NAFTA or MERCOSUR region, in order to reduce the cost of production. The countries that have been chosen are Brazil, Singapore and Mexico. Brazil has the highest GDP of Latin America and is an emerging market, with its international financial and raw materials market lead from the forefront. Its exports are mainly aircrafts, automobiles, soybean, orange juice, coffee, textiles, ethanol, footwear, corned beef, iron ore, steel and electrical equipment. Brazil's economy is a moderate free market and is export-oriented. Singapore is a highly developed economy based on a free-market system, where naval trade has been significant throughout the history thanks to its strategic port. Its economy depends basically on exports, especially in manufactured products such as electronics, petroleum refining, chemicals, mechanical engineering and biomedical sciences manufacturing, from where it obtains its revenues to purchase natural resources and raw materials which are transformed to be re-exported. It also has an open business environment; transparent stable prices and relative corruption-free. In terms of tonnage shipped, Singapore is the busiest port in the world. It is also the fourth largest foreign exchange trade centre after London, New York City and Tokyo. Mexico is an upper middle income country with free market fixed economy. As measured by purchasing power parity, Mexico has 12th largest economy all over the world. Mexico is very open to foreign investors and has lots of free trade zones, which make it very attractive to investors. The Car industry in Mexico is very developed with high quality. The most important car manufacturers in Mexico are, General Motors, Ford, Chrysler, Volkswagen and Nissan. Mexico is still attractive for car manufacturers desirous of building a plant, as many suppliers have moved to Mexico from Asia and Europe. Not only the car industry, but also other industries that produce low prices materials have a very high export level in Mexico. The country that was chosen to position the new manufacturing plant in is Mexico. The reason for this is that labor is cheap though the level of education is adequate. Furthermore in the area where the new plant will be positioned there is good infrastructure, and because it is a free trade zone, no tax has to be paid. Also, Mexico is big when it comes to the automotive industry which may give rise to future opportunities to Autotainment. The forecast is made for five years with the begin year being 2009 and running till 2013. There is expected to be a profit from the first year (2009), even with the extra costs that are incurred by moving to Mexico. During the five year forecast the retained earnings of Autotainment will continue to grow as the overall sales increase over the years. The estimated budget for the new manufacturing plant is Mexico is 60,000.

Extraits

[...] Forecasting The forecast is made for five years with the begin year being 2009 and running till 2013. As you can see in the table below, from the first year (2009) there will already be a profit, even with the extra costs that are made by manifesting in Mexico. During the five year forecast the retained earnings of Autotainment will continue to grow as the overall sales increase over the years. Mexico Table 1. With the sales figure, entries to new markets and life cycles of the products have been taken into account when estimating the sales figures for Autotainment. [...]

[...] Foreign direct investment has undergone a significant growth due to its technological and scientific development. Production of submarines, aircraft and involvement in space research, would not be possible without a sophisticated technological sector, which it also allows the country to be the only one in the Southern Hemisphere to integrate a team involved in the construction of the International Space Station. The industrial sector is the third most advanced in the Americas. There are different sort of industries such as automobiles, petrochemicals, computers, steel, aircraft and consumer durables. [...]

[...] We will use e-mail and Blackboard for circulating the agenda's and the minutes. We will not compromise or dismiss each others tasks and work. We will not plagiarise and always cite sources. We will not miss deadlines. Results term 2 At the end of term the final report will be around 15-20 pages and it will contain the following results: An economic environment analysis of three countries. A legal environment analysis of three countries. A financial analysis which focuses on the budgeting and forecasting aspect of the three countries An entry strategy for the chosen country where the plant will be relocated. [...]

[...] There should be very clear agreements on handing in the tasks on time. If one can not finish his/her task in time because it appeared to be too much or too difficult, he/she should contact his/her group members, so that it can be finished on time with each others help. In the end you are responsible for the task given to you. The planner will help everyone remember his/her task every week. The project ultimately complies with the requirements applicable Each group member will have his/her task to work on, and must do this as good as possible. [...]

[...] There were not any strikes since 1986 and the labor unrest in not common in Singapore. The amount of workers members of unions were falling since the seventies till 1997 when it started to grow again. The last characteristic about Singaporeans is that they really emphasize in upgrading their skills through government upgrading courses or self-help groups. Figure 6. Porter five forces Threat of substitute products There is not a big threat for direct substitute products for car audio systems. [...]