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AutoEdge Relocating Manufacturing Operations to the US
AutoEdge is a company specializing in the production and supply of engine parts, which is now considering relocating its manufacturing operations to the United States. To finalize its decision, the company needs to assess possible strengths, weaknesses, threats, and opportunities for relocation. The SWOT analysis identified that AutoEdge might face drawbacks of moving manufacturing processes due to high expenses associated with accessing the physical, financial, and human resources in the States. However, relocating would benefit the company in the long-term as the country has high demands for domestic products, excellent customer loyalty, and technological assets.
Manufacturing in the United States can positively affect a companys productivity and revenues. America has an outstanding economy, and the local currency is stable, so producing goods in this area is profitable. Robots are widely available in the country, and manufacturers often automatize processes, saving money and increasing efficiency (Armbrust, 2021). AutoEdge can use robots for manufacturing engine parts as, unlike humans, they do not require rest or payments. Another strength of relocating to America is the access to the local market. Cars are the most popular transportation in the States, so engine parts are in great demand. Moreover, Americans prefer domestic products as they trust local companies the most (Armbrust, 2021). Therefore, manufacturing goods in the States is more profitable than importing them. Local customers also tend to be loyal to their favorite brands (Armbrust, 2021). They support proven trustworthy companies, so relocation can provide loyal and understanding clients.
However, moving manufacturing operations would be costly as the company has to find a new location, hire new employees, and buy equipment. Manufacturers new to the area have expenses associated with setting up the supply chain for all the raw materials and other production costs (Shih, 2020). AutoEdge would also have to find new specialists to ensure high quality of products. Some manufacturing processes require deep knowledge and finding professionals can be difficult and costly.
The primary threat associated with manufacturing relocation is high competition in the United States. The market has many suppliers, so AutoEdge has to stand out to stay competitive. The States could have many popular manufacturers similar to AutoEdge that have been on the market for years and have their client base. Americans are loyal customers, so it might take some time to find people willing to buy the companys products. In addition, AutoEdge risks production quality as many employees would be new to the company. If the company has issues with quality and fails at gaining loyal customers trust, it risks going bankrupt as expenditures on relocation are enormous.
Nevertheless, the States provide AutoEdge with an excellent opportunity to become an engine parts supplier in one of the biggest markets in the world. The company would be able to automatize manufacturing processes and, consequently, reduce costs. AutoEdge could provide many local citizens with job opportunities and gain a loyal customer base. The company would also have the opportunity to compete with other manufacturers. Competition positively affects the quality of products and marketing skills, so the company could create better advertisements, gain popularity, and improve their goods and services. The United States has a large customer base and excellent economic and technological potential. Despite all the relocation costs, it would provide AutoEdge with the opportunity to make its business more efficient and increase its revenues.
References
Armbrust, L. (2021). Council post: Seven reasons why U.S. manufacturing is on the rise. Forbes. Web.
Shih, W. S. (2020). Bringing manufacturing back to the U.S. is easier said than done. Harvard Business Review. Web.
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