Why Is the Manufacturing of Flat Panel Tvs Migrating to Different Locations Around the World?

Angela Gandhi

Discussion Question #7 Pg 35 &

Research Task #1 Page 36

GM 640: International Management

Professor: Mary Ann Gaal

November 24, 2013

Discussion Question #7 Pg 35

7a) Why is the manufacturing of flat panel TVs migrating to different locations around the world?

The manufacturing of flat panel TVs is migrating to different locations around the world because depending on the part of the world, different locations have cheaper manufacturers of flat panel displays and TV parts. For example, like the case study suggested, Vizio' TV obtains a panel from South Korea, gets electronic components from China, processors from the United States, and then lastly assembles it in Mexico. It makes the most sense for companies to utilize countries on the rise to manufacture their products because labor costs are much lower there than already developed countries such as the U.S. This reduces the cost of the product in production as well as the final product for sale. In turn, selling merchandise at lower costs will create an up rise in market sales. Additionally, manufacturing in different locations around the world lowers tax rates to foreign businesses making it easier for the businesses to import and export products to other countries.

7b) Who benefits from the globalization of the flat panel display industry? Who are the losers?

The companies that utilize globalization of the flat panel display industry benefit from it because by manufacturing the product in different developing locations, they have reduced labor costs and in turn are able to increase profit with higher percentages of sales. In addition, labors working for the company also benefit because they are being hired by a big manufacturing company who is paying them at a higher rate than most of other companies in their country. Lastly, customers buying the flat panel also benefit because they are able to purchase the product at a lower rate than comparable brands that may be manufactured in developing countries. The losers from the globalization of the flat panel display industry are those people who don't get the opportunity to work for the company in certain countries or those that end up losing their work because the company is moving its manufacturing plant to a different location.

7c) What would happen if the U.S. government required that flat panel displays sold in the United States had to also be made in the United States? On balance, would this be a good or a bad thing?

If the U.S. government required flat panel displays to be made and sold in the U.S., I think it would be bad thing because the total cost of the product would increase making it more difficult for consumers to purchase them. In turn, this would make the product less completive with other brands. Basically, customers would not purchase the merchandise, reducing sales, and closing down the manufacturing plant in the U.S. creating a loss of employment for many people in the United States, which