Case Study Hon Hai Company

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Question (1)
Hon Hai is an additional business this has conveyed has allowed the company to accomplish economies of scale above those of its competitors. It has also extended into production more of the components that go into its products than its competitors. Maybe most knowingly, Hon Hai has relocated much of its manufacturing into China and other low-cost areas with plants in South-East Asia, Eastern Europe and Latin America. Refers to Hon Hai Company that needs to kept low costs it need to identify the cost leader ship and its components. That the cost leader ship is classified into internationalization cost, economic scale cost, and cost strategy.
- Cost leader ship: It defines how companies get gaining by lowering their operation costs …show more content…

- -General Overhead: Overhead costs are those you acquire to manage your business, such as rent, phones, advertising and cleaning services. These expenses incurred even when you’re not producing your product or service. To make reduces to these overhead costs down, Terry Gow, who is the manager of Hon Hai asks their marketing, sales, administration, human resources and information technology managers to submit individual budgets to Look at costs that can reduce without decreasing quality, for example: Tery Gow can meet with insurance workers to look in their treatments and deductibles to find possible cost …show more content…

That the quality objective can be make effect in the cost objective, that can make a reduce in the cost when make a mistake in a product or deliver incorrect service, will pay extra money and time to correct its mistake, for example if one of the customers of Hon Hai companies who receive faulty products the customer have the right to Return the Material, in this situation Hn Hai company is responsible to pay the shipment fees as well as the new replacement of the product.
- The second objective is speed: it is the objective that determines how fast the business can achieve with the customer requests. This process can make an effect on the cost objective by make effect of inventory, because the Fast processes cycles make reduce the time between customer request and product distribution. For example, when the customer and partners of the Hon Hai company pay when they receive the equipment, so when it is happen any delays in production procedure the result it also make delaying in incomes, which affects the overall profitability in the

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