In today`s global economy, it is becoming increasingly common for businesses to outsource manufacturing to other countries. This has given rise to the phenomenon of contract manufacturing, which involves hiring a third-party manufacturer to produce products on behalf of a company.
Contract manufacturing has a number of benefits for businesses, including reduced costs, increased efficiency, and access to new markets. Here are some examples of contract manufacturing in international business:
1. Apple and Foxconn
The Apple-Foxconn partnership is one of the most well-known examples of contract manufacturing in the world. Foxconn is a Taiwanese electronics company that specializes in producing hardware products for other companies. Apple has been working with Foxconn for many years, and the partnership has allowed Apple to produce its products at a lower cost while maintaining high quality standards.
2. Nike and Yue Yuen
Nike is another company that has successfully implemented contract manufacturing in its operations. The company has been working with Yue Yuen, a footwear manufacturer based in China, since the 1990s. The partnership has allowed Nike to produce its shoes at a lower cost while maintaining high quality standards, and has enabled the company to expand its operations in China.
3. Toyota and Daihatsu
Toyota is a Japanese car manufacturer that has been working with Daihatsu, a smaller Japanese car manufacturer, since the 1960s. The partnership has allowed Toyota to produce small cars at a lower cost, while Daihatsu has benefited from access to Toyota`s resources and technology.
4. Procter & Gamble and Kao Corporation
Procter & Gamble, a consumer goods company based in the United States, has been working with Kao Corporation, a Japanese chemical and cosmetics company, since the 1980s. The partnership has allowed Procter & Gamble to expand its operations in Japan, while Kao has benefited from access to Procter & Gamble`s resources and technology.
5. Boeing and Mitsubishi Heavy Industries
Boeing, an American aerospace company, has been working with Mitsubishi Heavy Industries, a Japanese engineering company, since the 1990s. The partnership has allowed Boeing to produce parts for its aircraft at a lower cost, while Mitsubishi Heavy Industries has benefited from access to Boeing`s technology and expertise.
In conclusion, contract manufacturing is becoming more and more common in international business, as companies seek to reduce costs and increase efficiency. The examples above illustrate how contract manufacturing can be used to create successful partnerships between companies in different countries, and how it can help businesses to expand their operations in new markets.