Overview

Three major limitations of the international product cycle theory

1. The trend to increased pace of new product introduction and reduction in innovational lead time 2. Ability to preempt the product life cyclepredictable sourcing development during the product life cycle. 3. More active management of locational and corporate resources on a global basis.

1. Extent and Complexity of Global Sourcing Strategy Exhibit 10-1 Hondas Worldwide Production and Sourcing Network

2. Trends In Global Sourcing Strategy

Exhibit 10-2 Factors that Affect Global Sourcing Strategy

Trend 1: The Decline of Exchange Rate Determinism of Sourcing Trend 2: New Competitive Environment Caused by Excess Worldwide Capacity
Exhibit 10-3 Key Factors for Sourcing from Abroad
3

2. Trends in Global Sourcing Strategy (cont) Trend 3: Innovations in and Restructuring of International Trade Infrastructure Trend 4: Enhanced Role of Purchasing Managers Trend 5: Trend Towards Global Manufacturing

3. Value Chain and Functional Interfaces

Exhibit 10-4 Value Chain Concept Exhibit 10-5 Interfaces Among R&D, Manufacturing, and Marketing

R&D/Manufacturing Interface Manufacturing/Marketing Interface

Core Components Standardization Product Design Families Universal Product with All Features Universal product with Different Positioning
5

4. Logistics Of Sourcing Strategy

Exhibit 10-6 Types of Sourcing Strategy

Intra-Firm Sourcing Outsourcing

5. Costs and Consequences of Global Sourcing Need for Coordination Functional Mismatch Long - Term Consequences
Strategic Alliances Dependence Gradual Loss of Design and Manufacturing Abilities