Flextronics International Limited is a company that was founded in 1969. It was trading for twelve years before going public after it had been bought by three investors. The company is still in existence today having survived a few decades in the sometimes volatile global manufacturing market. Flextronics has been dealing with technology equipment and is thus represented in the manufacturing industry (Fisher, 2001). Majorly, the company is known for the design, development, and productions of phones where technology plays a very important role in the delivery of the high-quality devices. By taking designs from other firms and building on them, Flextronics has effectively stamped its mark on the global manufacturing arena (Jackson & Winkler, 2004). It makes cheaper phone options for customers. Flextronics has with time made sure that it has lowered its production costs. Effectively, this enables the business to hover over its competitor. It has seen the company grow in numbers all through the years. The study conducted it this paper seeks to evaluate the manner in which the electronics manufacturing services industry underwent rapid growth. The 1990s will be the era of focus. Special attention will be paid to Flextronics and how it has continued to have an impactful role in the electronics manufacturing services industry.
Factors Leading to the Growth of Flextronics and other EMSs and their Performance
A study of Flextronics and other EMS companies indicates that these firms had already developed enough to carry out all the needed production processes themselves to manufacture their final products (Huckman & Pisano, 2010, p. 2). In the 1990’s, the electronics manufacturing industry went through an expedited growth phase. This stage included the outsourcing of contractual work from both the computer and communication sectors. During this period, EMSs were able to differentiate their products through design and marketing strategies (Huckman & Pisano, 2010, p. 2). According to the studies that were carried out, EMSs also started to benefit from the economies of scale (Huckman & Pisano, 2010, p. 3). They were also able to lower the risk of making losses in one location by marketing and distributing their products in many different countries (Huckman & Pisano, 2010, p. 3). The outsourcing mechanism enabled Flextronics International and other EMS companies to leverage in how they dealt with suppliers. Primarily, these business entities would use this advantage to buy raw materials in bulk. Further, EMSs were allowed to offer products at lower prices to OEMs which could not provide the same based on their operational strengths.
As an example, this period was characterized by the development of the company’s culture that involved engaging customers in Flextronics’ innovative platform. These innovations were designed to handle the models seeking to be created in the futuristic markets. Moreover, Flextronics has always been known for the latest innovations. During this period, most companies could not adherently keep up with the changing times in the EMS industry. Furthermore, Flextronics as an innovator always ensured that it delivered enhanced designs in engineering which made it be ranked among the best firms in the EMS sector globally. Through the elimination of redundancies and the shortened design life cycles of their innovations, Flextronics also made sure that it expedited its testing to ensure that its products got to the international markets in the fastest way possible. This was done through the use of the fastidious approach the company had at its disposal. The 1990s were proper years during which Flextronics made several successful acquisitions that enabled the firm to develop and grow at a dramatic pace. This had never been experienced by other companies in the EMS sector. Besides, a review on their growth trend is evidently portrayed by the growth model where electronic manufacturing service companies ought to link their capability expansion with other outsourcing needs to safeguard their growth. The supply network environment that Flextronics required for its growth effectively ensures the penetration process and positioning of the supply chain.
Flextronics managed to grow its business and, therefore, strengthen its capital base thanks to its positioning and three other considerations that catapulted the firm to where it is in the present days. The company’s production performance was unmatched, and this gave it the required impetus to reach the levels it achieved in the 1990s. An assessment of the firm’s production effectively shows that capability development, and its perspective on the supply chain efficiently guaranteed the business entity a place in the big leagues (Laseter, 2004). Through capital accumulation, adaptation, and evolution, Flextronics has today grown to become a major global operations company. This was made possible by through its innovative product designs being manufactured and sold in more than 28 countries across the globe. The firm’s presence in the world market has enabled it to gain a global outlook and promote maximized productivity. Flextronics can be rated as a top-tier company, and this is due to the practices that it adopted in the 1990s.
The Difference between Outsourcing of Electronics Manufacturing and Outsourcing of Design for Flextronics
The major difference between the economic or strategic rationale for outsourcing of electronics manufacturing and the outsourcing of design is the risk involved. On the one hand, according to the case study (Huckman & Pisano, 2010, p. 3), the risks that are glaring to outsourcing electronic manufacturing include the risk of placing all resources in one country. If anything was to go wrong, firms would lose everything, which would not happen if they had separated some part of property from their manufacturing plants (Huckman & Pisano, 2010, p. 3). These risks are high and may be caused by political turmoil, terrorist insurgence and some other threats that may be prevailing is some particular time period. On the other hand, the rationale for outsourcing of design is product differentiation. The major consideration would be the particular strength of the product, how this product is acceptable in the market and customer response. Whereas the outsourcing of manufacturing processes will put the company at a considerable volatile situation, brand effectiveness and quality will also have an important role. Some of the considerations for the above will be dependent on the social, political and business environment of the country. Lastly, distance will also be considered because of the factors alluded to above.
Flextronics Developing its Product Design
Flextronics should consider the fact that business in many companies has gone virtual. The Internet has presented many opportunities for speculative operations and business expansion. For instance, in ODM a market analysis as well as the architecture of the product evaluation are necessary. These processes become the company’s responsibility. Performance of these functions should in no way be placed on the customers of the product. In this sense, it is necessary for Flextronics to take a sober evaluation of each product focusing on its specifications and unique strategies of entry into the market. Additionally, the firm should make sure that the right technology is available for introduction of new products in the market. The timing of the above should also be well calculated to avoid unnecessary competition or losses that may be incurred. According to the case study, it should be noted that the proper design is able to beat the competition that may come about. Considering this, a through research of different Internet sources should be conducted as global reach of the virtual environment grows (Womack, Jones, and Roos, 1991). Continuous innovation such as those of the Phone 1 project should be considered at every step of the company’s operations.
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The Viability of Flextronics Moving into the ODM Market
There are many considerations which Flextronics has to take into account to ensure that its market share is maintained. It is a known fact that many companies, especially in Taiwan, have benefited from implementing the ODM idea. Outsourcing has made it possible to buy and assemble certain products outside a firm’s manufacturing facilities. The idea is viable for Flextronics, because the company has been involved in outsourcing to different countries for various reasons. That is why the Senior Vice President of Flextronics said that the many OEM companies are comfortable because they can source gadget manufacturing to different markets (Huckman & Pisano, 2010). I would not grant an exclusive relationship for Phone 4 based on the discussion above. However, it remains a good idea for Flextronics to consider the ODMs as an option in future as it continues to develop its phone manufacturing vision.
In summary, Flextronics’ continuous implementation of different strategies in the market has enabled it to achieve its current heights. The properly laid down plans that were focused not only on the Singaporean market and the major innovations and acquisitions conducted by Flextronics have made it successful not only in the domestic market, but also in other 24 countries it currently operates. The company’s core competencies show that the future development requires the adoption of the new wave of the virtual world. With the growing demand and market for phones, the business entity can easily penetrate new markets through the implementation of the ODM model of outsourcing to increase its availability in the market. For Flextronics, the 1990s can be seen as the growth years for the company, but through continued implementation of innovative strategies, the firm will continue improving its authority in the global market.