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Transcript of MGT210 Kindle
Isabelle Kallenius Chapter 4 Case Study:
Why Amazon's Kindle Cannot be Made in the US Background Amazon's Kindle What is a Kindle? Manufacturing What the experts say Steve Denning: the problem with jobs and why so much of manufacturing has been outsourced overseas Case Discussion Questions From a resource-based view, what resources and capabilities do Asian firms involved in the production of Amazon Kindle have that US firms do not have? E Ink display screen: can only be produced in Taiwan.
Flex circuit connectors, controller board, highly polished injection-molded case, and Lithium polymer battery: all manufactured in China.
Wireless card: made in South Korea.
Once manufacturing is outsourced, process-engineering expertise cannot be maintained--> without this, companies can no longer develop new products.
Innovation then shifts towards the countries that can manufacture them (Asia). What are the differences between the production of PCs and the production of Amazon Kindle? Kindles are still (for the moment) being designed by Amazon's Lab126 unit in California and assembled in China.
Every US PC brand is both designed and manufactured in Asia.
As mentioned previously, if a company cannot innovate it will die.
The main difference lies in the companies decision between lowering costs vs adding more value. e-reader device developed by Amazon's Lab126 based in California Kindle 1: retailed for $399 200 e-book capacity sold out in 6 hours of it's debut in 2007 Kindle 2: retailed for $259 1,500 e-book capacity introduced a lighter design, more developed technology compontents made in Asia released in 2009 Statistics From an institution-based view, what should the US government do to foster US competitiveness? In the long run, the U.S. Government needs to establish laws and regulations for companies operating in the U.S. regarding outsourcing.
Ex. regulate a company's outsourcing by letting them outsource only a certain % of manufacturing.
The U.S. needs to regain its power in manufacturing.
Try to create jobs within the U.S. to be able to keep the manufacturing uphand and advantage.
Keep the design in the U.S. to promote innovation and design experts. No US-based manufacturer is able to make it in the United States
Components are made in China, Taiwan. and South Korea
Final assembly done in China The Problem After decades of outsourcing production to low-cost countries...
US firms have lost millions of low-skill jobs
The ability to make the next generation of hihg-tech, high-value goods Any Questions?