This paper presents a study of a U.S. company wanting to move production abroad in a country that is affected by APEC. Many companies currently are seeking to expand their global markets, and one way of doing this is to set up production facilities in an overseas country that has innate opportunities for expanding sales on an international basis. However, many considerations have to be taken into account when a company decides to set up a manufacturing organization in a foreign country.
Prism Electronics is a medium-sized company located in the Silicon Valley of California. The company is involved in the manufacture and sale of electronic components for the computer industry. Having felt the overseas competition in ways of price, delivery, quality, and lower labor costs, the company has decided to embark on an international expansion program, which includes creating a production facility overseas. Considering its core business, Prism senior management is considering countries of the Pacific Rim, specifically those that belong to APEC.
APEC (Asian Pacific Economic Cooperation) is a loose trade organization that is comprised of some 17 different countries, of note: Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand, and the United States. The organization encompasses about 40 percent of the world's population, half of the world's GDP, and more than 40 percent of its exports. APEC's size will only grow as the region's economy continues to expand and more nations, such as Vietnam and India, press for membership. By some estimates, APEC already includes the world's three largest economies: the United States, Japan, and China. It also encompasses the most dynamic economies in the world. In the last decade, more than half of the globe's increased production was in East Asia. The Asia Pacific will clearly be the locomot...