Eliminate the middle man- Case Analysis

Presented By:
Raisha Shakya Rashma Dangol Sabina Panthi Saurav Pokhrel

BACKGROUND
Greg Jamison, the head of global sourcing at US Tech, has a complicated situation The U.S. consumer electronics giant has long outsourced much of the design and production of company to its branded offerings to Tai Source, an original design manufacturer, or ODM, in Taiwan. Tai Source, in turn, has moved most of its manufacturing to Beijing, giving US Tech many of the cost benefits and none of the hassles But commodity producers are squeezing

 Rethink its sales strategy in China And its relationship with Tai Source. When Greg hires a longtime Tai Source employee to get a feel for the fast-growing China market and scout out other suppliers in China and Taiwan, relations between the two companies start to fray There are signs that Tai Source plans to market its own branded goods in China.

Will Tai Source and US Tech end up as competitors?

Intermediation or Disintermediat ion

Sourcing to Tai Source or Direct Sourcing to China.

How can US Tech protect its relationship with Tai Source while it explores sourcing and sales opportunities in Asia?

Multiple sourcing
Trust alone is not sufficient. Effective relationships need to be grounded in a current, quantitative, and shared understanding of supply chain environment and best practices. Rigorous study of the suppliers in both Taiwan and China. Alternatives to pure ODM sourcing and

Clear ownership structure

All interdependent relationship are competitive. The relationship with Tai Source looked great on the bottom line, the result was to empower a new competitor. Fuzzy collaborative relationship between US Tech and Tai Source because of entirely unregulated industrial relationship between the US and China. This will lead to fight for larger profits or for

Direct Sourcing to China

Provides US Tech a base to penetrate the fastestgrowing market in the world. Build Trust with the Chinese supplier. Hire a local purchasing manger. Competitors analysis: How Cali Tech and Texa Tech are doing it.

Different Suppliers for serving different Markets

Continue using Tai Source for products sold in existing markets, while shifting to Chinese manufactures for new markets.

Work on Relationship with Tai Source

It was not a good idea to hire Morris and expect him to work amicably with Joe. US Tech now will have to hire someone else to manage the Tai source relationship. Wont be a wise decision to simply abandon Tai Source because of current strains. At least, US Tech needs to buy time while he establishes links with Chinese Suppliers. Try to identify the ways that apparent conflict of interests might be transformed into a mutually beneficial situation. Win- win business Relationship

Thank You!!!! Any Queries???