Etude de cas CMS electronics

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After losing an IPhone 4 prototype, Sun Dan Yong, a 25-year-old Foxconn employee, was beaten to death and saw his family threatened, committed suicide, this demonstrates how far companies can seek profit. This event promotes the idea that human life is worth less than an Iphone. However, Sun Dan Yon is just a case among others who also committed suicide and this is against the idea of ​​progress that could damage the company if a legal proceeding is continued.

- PEST analysis :

Political

Economic

Social

Technological

Environmental

Legal

Corruption

FDI policy

Globalization

Consumers

Disposable

Income

Exchange rates

Labors Cost

Population growth rate

Age distribution

Perception of safety

Health consciousness

Employment patterns

Corporate social responsibility

Degree of automation

Emerging technologies

Rate of technological change

R&D activity

Climatic conditions

Environmental protection

Electronic waste

Tax policies

Labors Laws

Trade Restrictions

The PEST analysis allows the company to have a clear idea of ​​the environment, in order to define a good strategy that will help the company according to this analysis.

In addition to knowing the advantages and disadvantages of the Chinese market, to know its characteristics such as legislation and R&D allowing the company to face future challenges in order to be able to succeed in this market but this Is not easy given that Chinese companies already made their place in the market.

- SWOT analysis:

Strengths

Weaknesses

Opportunities

Threats

Highly automated production.

Ability to handle logistics.

Diversification of product.

Employees are highly qualified.

High quality product.

Limited budget of the company

Low investment capacity

Problem in following their customers in a foreign market

Target new market

Improvements in the automotive sector.

Alliances in order to face the competitiveness of the market.

Innovative product

Price war between competitors.

Regulation of the Chinese market.

Arrival of Aggressive costumers.

Strong Chinese market is a threat

The SWOT analysis will help the company understand its internal and external abilities in order to better use its strengths, take advantages of its opportunities, overcome its weaknesses, and cope with threats since it has no control over them.

Electronic CMS will face stiff competition in the Chinese market, explaining its complexity and this is justified by the growth of companies in recent years, especially in EMS, which is a sector that uses labor and China Is well known for its cheap workforce.

- Corruption in China:

China is faced with a major problem, which is corruption. The phenomenon is anchored in Chinese culture and it is difficult to get rid of. Given that this last has existed for years, it has been continuously growing with the Chinese empire. However, companies have to fight this scourge especially because this is increasingly harming their development and their people.

On the other side, corruption has favored those with the largest and most trustworthy network of contacts rather than the most effective, and also creates barriers to entry for those who do not have such grids. This leads to dysfunction in the market, characterized by unnecessary subsidies, monopolistic advantages, and deregulation rather than productive activities. Corruption in China also hampers potential investments. Indeed, foreign investors suffer from the disadvantages of a low concern about their rights as well as competition from illegal practices in the procurement process. In the long term, corruption can have "explosive consequences", such as increased income inequality, which have drastic effects on the Chinese people and their values for the coming generations including the difference between social classes leading to inequalities thus preventing foreign investors from entering the market which is contradictory to companies’ values.

- Results of the research:

- The company will reach new customers, enabling it to increase and meet customer demand in a foreign market while being subject to Chinese government regulations that are limited and strict especially for foreign companies.

- CMS Electronics will benefit from the experience of the local company in terms of knowledge, experience and production capacity to compete in this sector, which is an advantage for it.

- The company will have notoriety in a foreign market such as China, which is one of the most