ÜMarket positioning ¡V more features than commodity and lower price than higher-end rivals ÜGoal ¡V number 3 spot in the global market
ÜCompetitors ¡V CaliTech and TexaTech
cProduce innovative products and pull down price (20% cost cutting by sourcing directly from China) ÜSourcing directly from China
cIndirect cost (government bureaucracies and long distance logistics breakdown) and low quality cPrices were undeniably attractive
cAccess to Chinese market
cWorld-class research and design and lower manufacturing costs cCan become USTech¡¦s competitor if it decided to enter China using its own brand ÜMulti-sourcing ¡V increase operating cost
ÜTaiSource strategic initiatives
cBroadening our production base to other Chinese cities
ÞImprove economic of scale (purchasing and manufacturing) ÞCost saving
cEstablish an R&D office in the U.S.
ÞWork closely with USTech on product innovation
cShip products directly to your U.S. warehouse
ÞCutting logistic cost
Problems of sole-sourcing
ÜThe major benefit of sole-sourcing is simple management and the cost of managing multi-sourcing is seen to be higher. Whereas, relying on a sole original design manufacturer (ODM) for both development and production of technology products is risky because USTech may have seen the supply of his business through the supplier prospective, in this case, TaiSource. It also has less control of the quality and cost of production. Given that the vendor may not always disclose everything to USTech, the firm may not have enough knowledge of its vendor capabilities and whether it is competitive. ÜFacing the demand of information technology products in mainland China, TaiSource has the ability to use its own branded products to capture this opportunity. Nonetheless, the worse scenario will be TaiSource attack the USTech current market by entering US market with its own branded goods...