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Global strategy for small electronics manufacturing firm

You are the CEO of a small electronics manufacturing firm that is about to develop a global strategy.

a. Would you prefer a speculative strategy, a hedge strategy, or a flexible strategy?
b. Why would you prefer the strategy that you selected?
c. Would your answer change if you were the CEO of a large electronics firm?
d. Why would your answer change or not change if you were the CEO of a large electronics firm?

Solution Preview

You are the CEO of a small electronics manufacturing firm that is about to develop a global strategy.

a. Would you prefer a speculative strategy, a hedge strategy, or a flexible strategy?

I would prefer a speculative strategy. The reason for this is that in speculative sourcing there is a single source. Single source would support a global strategy. The global strategy allows the firm to market a standardized product worldwide. So if the small electronics manufacturing firm is developing a global strategy it is appropriate to use a speculative strategy.

b. Why would you prefer the strategy that you selected?

I would prefer the speculative strategy for several reasons. When I invest in a single source, I am able to take advantage of economies of scale and learning (experience) curve effect. I am able to mass produce a standard product that can be exported. If I have selected the global strategy it means that I am in an industry where there are pressures to reduce price. Also it is ...

Solution Summary

Global strategy for small electronics manufacturing firm is discussed in great detail in this solution.

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