Eliminate the Middleman? (HBR Case Study and Commentary)
This case is about serious issues that may affect Taisource and USTech relations and make their images bad in the market have arisen, which need to be sorted out.
Greg Jamison is currently facing a problem being Head of global sourcing at the company USTech.The company had traditionally outsourced or gave it designing and production tasks to TaiSource which is an ODM in Taiwan. Taisource in return has located to Beijing (Capital of China) giving huge cost advantages. Nevertheless many of the competitors are exerting immense pressure on USTech’s prfit margins; furthermore branded/ top end rivals are capturing the market pie. This has made the company to reconsider its sales approach in the Chinese region and also rethink its terms with Taisource.
Still Greg Jameson considers the relationship with TaiSource very dear to his heart but he also realizes that the model has become extinct in prevailing competitive industrial environment. Furthermore there is a strong voice within the company to go for other Taiwanese ODMS as well as few execs want to explore the option of direct sourcing to China as well.
Relationship between the two countries soon turned sour when Greg hired one employee from Taisource to explore new Taiwanese ODMs. TaiSource is also considering launching its own brand in China. So are these two companies going collide head on in Chinese market as competitors ? Is there any possibility of USTech protecting its relationship with TAISource so as to explore and safeguard its sales opportunities in Asian region?
The actors in this case R0603A and R0603Z are Bruce Riggs SVP Operations and Customer Care, gateway in California; W. Dongsheng CEO BOE Tech Group, Beijing; B. Lynn a fellow at NAF in Washington DC; EVP Supply Chain Staples Massachusetts.
Written by MING HUANG, PAUL GAFFNEY, BRUCE K. RIGGS, WANG DONSHENG, and BARRY CLYNN. The document comprises of 6 pages and the source is taken from Harvard Business for discussion.
Published on 1st march, 2006.product number is R0603A-PDF-ENG
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