Scribd Logo
Upload

Welcome to Scribd!

  • 11 views

    CH15

    Uploaded by

    MY HÀ
    This feature describes Philips NV's operations in China since 1985. Philips invested over $2.5 billion in China and operated 25 factories there by the mid-2000s. Initially, Philips planned to sell products locally in China but found the market smaller than expected due to low wages, so exported most output elsewhere instead.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    CH15

    Uploaded by

    MY HÀ
    11 views1 page
    This feature describes Philips NV's operations in China since 1985. Philips invested over $2.5 billion in China and operated 25 factories there by the mid-2000s. Initially, Philips planned to sell products locally in China but found the market smaller than expected due to low wages, so exported most output elsewhere instead.

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This feature describes Philips NV's operations in China since 1985. Philips invested over $2.5 billion in China and operated 25 factories there by the mid-2000s. Initially, Philips planned to sell products locally in China but found the market smaller than expected due to low wages, so exported most output elsewhere instead.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    11 views1 page

    CH15

    Uploaded by

    MY HÀ
    This feature describes Philips NV's operations in China since 1985. Philips invested over $2.5 billion in China and operated 25 factories there by the mid-2000s. Initially, Philips planned to sell products locally in China but found the market smaller than expected due to low wages, so exported most output elsewhere instead.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 1

    CHAPTER 15

    Summary
    This feature describes Philips NV’s operations in China. Philips, the Dutch consumer
    electronics, lighting, semiconductor, and medical equipment conglomerate, has been operating
    factories in China since 1985. By the mid 2000s, the company had invested more than $2.5
    billion in China and operated 25 factories there. Initially, Philips believed that it would sell a
    large portion of its output to the local Chinese market. However, the company quickly
    discovered that the low wages that make China such an attractive production location also meant
    that the market for its products was smaller than anticipated. Philips’ solution was to export
    most of its output to the United States and elsewhere. Discussion of the feature can revolve
    around the following questions:
    Suggested Discussion Questions
    1. What makes China such an attractive production location for Philips? Are there other
    locations that share the same characteristics?
    Discussion Points: Several factors make China an attractive production location for Phillips.
    Perhaps the most important factor is the country’s cheap wages. In addition, the Chinese
    workforce is well educated, the economy is strong, and many of the company’s suppliers are
    doing business there. Most students will argue that at least at the moment, China is the only
    country that offers these particular qualities. While other countries like Mexico and India also
    have low-cost workforces, they do not have the industrial base that is present in China.
    2. Philips wants to eventually turn China into a global supply base from which its products will
    be exported around the world. Consider the advantages and disadvantages of this strategy.
    Discussion Points: Students should recognize that using China as a global supply base from
    which to serve the world offers several advantages to Phillips. By having a single production
    location, the company can capitalize on costs savings that come from economies of scale as well
    as the low wages in China. However, if economic, political, or other types of problems arise in
    the country, Phillips could be in serious trouble if it has no alternate locations to fill production
    gaps.

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy