IBM 414 | Current Events
Assignment #1
Publication source: Los Angeles Times
Date: Tuesday, April 2, 2002
Page(s): A1, A18
Title of article: High-Paid Jobs Latest U.S. Export
The firm is Emerson Electric Co. and the market strategy presented in the article primarily involves pricing by outsourcing labor and materials to foreign countries with the hope of reducing total cost of operation and overhead, which in turn would ultimately pass saving to consumers.
No
The reasoning behind why I think the strategy will not work is because the issue of quality. I'm sure outsourcing has its advantages, but control over how the product is made is critical and the only way to have absolute control is if you manufacture the product yourself. There is nothing worse than buying a product that is unreliable. Think about all the negative ties the company would be associated with if the product failed, damaging the company's name and perceived value in the eyes of the consumer. I personally would pay the additional costs for a quality product. Take for instance, companies who charge a premium for their products like Sony, Lexus, and Calvin Klein.
This article relates to the marketing mix and competitive advantage discussed in chapter 1 on page 2 and 4 respectively. By outsourcing their labor and materials to foreign countries, Emerson Electronic Co. is able to gain a competitive advantage by reducing the total cost (resulting in aggressive pricing) of getting their products to market. This, in turn, maintains the company's status in being a major competitor in the global marketplace.
