Kiwi medical case

According to a market study, it was evident that Kiwi Company was facing some hostile as well as volatile competition from its competitors. Thus in considering this study, the company management decided that the only way that they were to compete with this kind of competition was to reduce their operating payments with at least 3 % per annum in the five years to come. In doing so, they would be able to provide fast and consistent delivery of products which are far much better than those of their competitors hence having a competitive edge. They therefore aimed at reversing their market share through the raising of a profit margin by 8% per annum. This was accomplished through off-shoring mechanism where they would operate oversees and get an outsourcing into their business. China was the best place where they would set up their business and be able to achieve their profit margin. This is because the Chinese market is an already established market and thus this market will be definitely be of value to their developing business. The technological nature of the china nation makes it more suitable for the off-shoring opportunity with Kiwi Company as the company’s strength is that it has a leading innovation edge. Manufacturing in China would be of great importance to the company as it would enjoy a 10 about 15% price benefit since China has a lower cost site. This therefore reduces the operating expenditure of the company as the cost expenses are greatly reduced by the location of the company. Though china is a low cost site, it is however technologically sophisticated thus off-shoring the company to china will result to technological improvement and innovation hence maturing of the kiwi product line. This therefore will increase the value of Kiwi products.

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Fawcett S. (2012). Kiwi medical devices ltd: is “Right shoring” the right response? Weber state university.