Essay on Electra Bicycle

• What significant advantages did Electra gain by using a contract manufacturer in Taiwan to produce its bikes?

The first advantage that the company gained is expanding its business hence having more customers globally. Using a contract manufacturer in Taiwan means that the company would sell its products in Taiwan and other countries. As long as the bicycles produced were of good quality, the company would get more customers. The more the customers, the more the company will grow and become famous all over the world.

The second advantage that Electra gained by using the contract manufacturer in Taiwan was reducing production costs. All companies aim at reducing the cost of production so that the profit margin becomes higher. When Electra started using a contract manufacturer in Taiwan, the cost of production was less since the raw materials were readily available in Taiwan. This made it easier to produce better-quality bicycles, and they could also be produced in higher quantities. As a result, the company experienced higher profits.

• When Electra produced its bikes in Taiwan, did the company have to follow the laws of Taiwan or the laws of the United States?

Electra had to follow the laws for both the United States of America and those of Taiwan. During the production process, the company had to adhere to all the laws that have been laid down in Taiwan. This includes adhering to the code of ethics, rules regarding the hiring process, and following the regulations concerning the company’s running. For example, the company had to follow the regulations concerning the disposal of waste materials in Taiwan to prevent environmental pollution.Also, the company should handle the employees well and pay them their dues according to the Taiwan employment ACT laws and regulations.

Electra had to follow the laws and regulations of the United States during the importation process. Once the bikes left the manufacturing company in Taiwan and got into the United States, Electra had to ensure that it completes all processes according to the importation guidelines in the United States of America.For example, the company had to clear all the import fees at the port or the airport and pay all taxes that need to be paid according to the United States Importation Laws. In addition, Electra had to adhere to the laws of the United States during the distribution and the selling of the bicycles. Hence, the pricing should be moderated, therefore not too high to scare customers away, and not too low to make other companies that produce similar products lack customers.

• What significant forces impact Electra (or any global producer) in trading in global markets?

One of the major forces is the legal factors. Any global producer must consider the legal aspects of the companies that they want to interact and do business with. The company must ensure that all the laws and regulations are followed during the company’s operations.

The second major force is politics. Some countries are not stable politically; hence it becomes hard to do business in such countries (Nansen, 2017). As a global producer, Electra and other companies must ensure that they assess if a government is stable politically so that its operations are not affected negatively. This will help reduce losses resulting after a country’s economy is affected negatively due to unhealthy politics.

Global producers like Electra should also consider the sociocultural aspect of the worldwide market (Nansen, 2017). Some countries have very different cultures, some of which do not allow consumers to use certain products. Following this, it is good to do due diligence and assess if the products will interest the target consumers. This will help to avoid future losses. Other factors include physical factors like the region’s climate and the economy of the area (Nansen, 2017).

References

Nansen, T. (2017, September 26). What are Some of the Forces that Affect Trading in Global Markets? Retrieved July 2, 2021, from https://bizfluent.com/info-7814010-forces-affect-trading-global-markets.html