Strengthening Competitiveness of Multinationals through Relocation of Production to Asia: An Advance Study

This article investigates whether there is a strategic opportunity for a company producing products labeled “Made in Germany” to relocate production to Asia while retaining German engineering. This article focuses on the current market situations of several multinational corporations headquartered in Germany, which are facing increased competition from Asia due to disadvantages in product price, delivery costs, and transportation time caused by a non-adaptive and non-future oriented sourcing concept. Respondents from Asia were polled in an empirical research study about their willingness to accept the price of a ‘Made in Germany’ product, the importance of price, and their willingness to accept the price of a ‘Made in Germany’ product. opinion on delivery issues, as well as their acceptance of Asian local production A total of N = 636 (100.0 percent) responses were collected, with Asia accounting for n = 108 (17.0 percent). The findings are aimed at strategic management in German companies that can gain competitiveness by shifting production to Asia while keeping long-term requirements in mind. The study’s findings suggest that the fundamental strategy of combining German engineering with local production in Asia is one worth pursuing in light of future market conditions. The findings also indicate that the current sourcing strategies of German multinationals may be incorrect and, as a result, require modification.

Author (s) Details

Dr. Daniel Feyerlein
Independent Strategy & Marketing Consultant, Heideck, Germany.

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