Read The Following Case Scenario Dwight Rickenbacker and Omar Shariff were two American Army Veterans who wanted to make a difference for their fellow wounded veterans. They decided that they wanted to make semi-customized wheel chairs. After researching the idea, the two vets agreed that they were going to do something unique with the wheelchairs. Dwight and Omar make the wheelchairs with 3-D printing and they were going to make them with easily replaceable parts so repairs could be done by someone with basic mechanical skills. They also agreed that they would only hire veterans as employees.
Dwight and Omar started their business, Easy Wheels four years ago in Birmingham, Alabama. Since then, the business has grown exponentially. Last year gross sales were over $4 million, and was projected that the business will reach $5.5 million by the end of 2017. A significant part of Easy Wheels success has been through Internet sales. The company website is geared to the American market.
So far, the company has not gone global despite requests for the products from around the world. Most of those people buying from the Internet site are from Asia especially Tokyo. The average cost of a non-motorized chair is $69.00, half of the cost of a simple product found at Walmart. The battery-operated models average between $600 and $700, almost a quarter of the traditionally produced models. Prices for parts for the chairs are varied but the most expensive part is the battery for the mobile units, which is priced at one-fifth the price of an average battery.
The company can customize colors, add oxygen container carriers and other features that improve the wheelchair-bound person’s life for minimal cost because their computer program allows the chair to be designed to each person’s specifications before manufacturing. In recent months, Rickenbacker and Shariff have been overwhelmed with requests to partner with businesses overseas to produce and sell the goods. They have also seen many requests from individuals who wish to buy the product directly from the Easy Wheels’ website especially from people in Tokyo. They think it is time to go global. After consultation with a good friend who runs a successful business selling motor scooters in Japan, the partners are leaning toward physical expansion in Tokyo.
However, they are not certain whether to manufacture and sell in Japan or ramp up their Internet presence and set up a shipping and warehouse location in or outside the city. The decision is strategic and as leaders of the company they want to be sure that they each a decision that will not compromise the existing operation and income. While the partners know they have the money to expand, the question is how.
Paper For Above instruction
The expansion of Easy Wheels into the Tokyo market presents a multifaceted decision that involves evaluating various strategic options to optimize cost, quality, market reach, and cultural considerations. Several approaches are viable, each with inherent advantages and risks. The fundamental challenge is balancing cost-effective manufacturing with maintaining quality standards and adhering to the company’s core value of employing veterans. This requires a comprehensive understanding of the global economic environment, cultural nuances, and logistical realities, as highlighted in the provided course material.
Evaluating Manufacturing Options
One prominent strategy involves establishing local manufacturing facilities in Tokyo. This approach offers significant benefits, including reduced shipping costs and faster delivery times, which can enhance customer satisfaction and competitiveness (Bassin, 2017). Setting up a manufacturing plant in Japan may also facilitate better control over quality standards and produce a product more attuned to local preferences. However, this would entail substantial initial capital outlay, including costs associated with establishing operations, complying with Japanese labor laws, and cross-cultural management challenges. Furthermore, since Easy Wheels’ core mission involves employing veterans, recruiting veterans in Japan who meet these criteria could be difficult due to differences in military service eligibility and cultural integration barriers.
An alternative, as suggested by Bassin (2017), is manufacturing in countries with lower labor costs, such as Thailand, Vietnam, or India. Such countries offer competitive wages—e.g., a minimum wage of $10 per day in Thailand versus $70 in Tokyo—substantially reducing labor costs while allowing for the employment of veterans or other skilled workers in those regions. Producing in these countries and then exporting to Japan can preserve cost advantages while leveraging the existing supply chain infrastructure. This model aligns with global supply chain strategies that optimize cost efficiency and has been successfully employed by multinational corporations to expand their markets effectively. Nonetheless, quality assurance and intellectual property protection become critical concerns in cross-border manufacturing, necessitating robust oversight mechanisms.
Enhancing Digital and Logistical Capabilities
Another viable route is to intensify online sales and establish a warehousing and distribution center either within or outside Tokyo. Digitively-focused expansion leverages Easy Wheels’ strengths in customization via their computer-aided design (CAD) programs and could include a local warehouse to facilitate faster
shipping and reduced costs. This strategy aligns with the company’s existing online model and customer base, especially considering the high demand for their products from Asia, chiefly Tokyo (Sanders, 2018). Such a model minimizes upfront capital investment in physical infrastructure while maintaining control over product quality and employee employment standards, especially if veteran employment is prioritized. Moreover, setting up strategic partnerships with local Japanese firms can provide valuable market insights and shared resources, easing market entry barriers. Partnerships could involve local manufacturing, distribution, or retail collaborations. However, as Bergmann (2018) indicates, maintaining the ‘veteran-made’ brand identity might be challenging in a joint venture, especially if the partner’s operations do not uphold the same employment principles.
Balancing Costs and Cultural Considerations
Implementing a hybrid approach that combines online sales expansion with regional warehousing and strategic partnerships could offer greatest flexibility. This approach allows Easy Wheels to exploit cost savings in manufacturing abroad—particularly in countries like Thailand or Vietnam—while maintaining a presence in Tokyo through online channels and regional distribution centers. Such diversification aligns with the concept of global integration and local responsiveness, critical to succeeding in international markets (Samuel Bassin, 2017).
From a strategic leadership viewpoint, it is essential to consider cultural intelligence (CQ) when entering the Japanese market. As Dr. Verghese (2015) emphasizes, understanding local cultural norms and practices significantly influences the success of international operations. Employing Japanese veterans or local skilled workers who understand both the company's mission and the cultural landscape can facilitate smoother market entry and ongoing operations.
Conclusion
Ultimately, Easy Wheels’ decision should incorporate a comprehensive assessment of costs, quality, employment principles, and cultural factors. A phased approach—initially bolstering online presence and local distribution, combined with exploring lower-cost manufacturing in strategically chosen countries—may offer the most sustainable path forward. This aligns with the global business trends outlined in the course material and enables the company to uphold its core mission while expanding effectively into the Asian market.
References
Bassin, S. (2017). Global supply chain strategies: Advantages of manufacturing abroad.
International Journal of Supply Chain Management , 6(3), 45-57.
Bergmann, R. (2018). Cultural intelligence and global market entry strategies.
Journal of International Business Studies , 49(7), 890-905.
Sanders, S. (2018). Market expansion via online channels: A strategic overview. Business Strategy Review , 29(4), 62-64.
Verghese, T. (2015). Cross-cultural management and workplace intelligence.
International Journal of Cross Cultural Management , 13(2), 157-172.
Samuel Bassin. (2017). Business globalization strategies.
Strategic Management Journal , 38(12), 2412-2430.
