Discussion
An electronics firm is considering how best to supply the world market for microprocessors used in consumer and industrial electronic products. A manufacturing plant costs approximately $500 million to construct and requires a highly skilled workforce. The total value of the world market over the next ten years for this product is estimated to be between $10 billion and $15 billion. The tariffs prevailing in this industry are currently low.
1. Should the firm favor concentrated manufacturing or decentralized manufacturing?
2. What kind of location(s) should the firm favor for its plant(s)?