Flextronics International Essay Example

strategic rationale for the outsourcing of electronics manufacturing differ from that for the outsourcing of design? If so, what is different?

The strategy of outsourcing the manufacturing from the OEMs to EMS allows for less overhead with the OEMs and takes advantage of the buying power the EMS has for material. It makes sense to outsource manufacturing costs, but I think this differs from the design. Each OEM has a design style that symbolizes its company (i.e. Apple) and by using a EMS’s design, you are at the mercy of what the EMS believes the customer wants and not by what the OEMs marketing research says. I believe you could also run into poor quality from a EMS’s design as they are working at reducing costs and not picking the best materials. EMS may go for more function vs. design.

3.Do you believe that moving into the ODM market is a good idea for Flextronics? If yes, explain your rationale, and decide whether you would grant an exclusive relationship for Phone 4. If not, what alternate strategy would you recommend?

I think the moving to ODM may create some positives and negatives. Positives could lead to such a great design that the consumer loves your design and you bring an exclusive agreement to a OEM that you now have complete design control over the OEM and they will keep signing that exclusive agreement.

The exclusive agreement has now upset your other OEM customers and they will start outsourcing to another EMS company.

After reviewing this case study and understanding how the current phone market works. I think that Flextronics can

afford to gamble on signing an exclusive agreement with a OEM. Each OEM has a different phone and you don’t see many look a likes with different OEMs.

I also think that this will ultimately allow the OEM Flextronic chooses to offer a phone at a lower cost than if they came up with the design themselves.