Google Shifts Pixel Production to Vietnam

Google Shifts Pixel Production to Vietnam

September 22, 2019

Google, likely in partnership with Foxconn, is moving aggressively to relocate production from China to a former Nokia factory in northern Vietnam.

The factory will cover mid-range Pixel smartphones and other hardware for the U.S. market.   This re-positioning of its supply chain reflects the ongoing tariff war between the U.S. and China and an attempt to lower costs.

China is not being abandoned entirely.  Production will remain there for the Chinese market as well as initial runs of new products.  Further, product development remains in China.

Despite a market slowdown, Google is a success story with expectations to ship 8 – 10 million phones this year, nearly 2x the prior year.  Moving production out of China is part of a wider tech trend to diversify supply chains as the tariff war is hurting profits.


Video Spotlight: Vietnam woos smartphone makers


This post is based on the Nikkei article, Google to shift Pixel smartphone production from China to Vietnam, by Cheng Ting-Fang and Lauly Li, August 28, 2019, and the YouTube video, Vietnam woos smartphone makers by Scott Heidler, March 2, 2015. Image source: Shutterstock / Jane0606

Discussion Questions:

1. Why is Google Continue reading

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Shanghai Surprise. Costco Is Overwhelmed

Shanghai Surprise. Costco Is Overwhelmed

September 19, 2019

What does Costco have that other retailers don’t?

Costco just opened the doors of its first store in China. On the first day, huge crowds lined up for hours to get into the store. Once inside, they became part of a frenzied horde of shoppers fighting for anything from detergent to Birkin bags. The chaos was such that the store had to close early. At a time when other large retailers struggle to maintain a presence in China, Costco’s measured strategy and focus on the long game may pay off.


Video Spotlight: Costco’s Opening Day in China


This post is based on The Washington Post article, Shoves, Brawls and Shouts: Welcome to Costco’s Opening Day in China, by A. Fifield and R. Siegel, August 29, 2019, and the YouTube video, Massive Lines at Costco’s China Opening Amid Trade War, by Bloomberg Markets and Finance, August 28, 2019. Image source: Yongyuan Dai/Getty Images

Discussion Questions:

1. Compared to other large, international retailers, is Costco late entering the Chinese market? Why or why not?

Guidance: Large, international retailers such as Carrefour and Walmart entered the Chinese market in the mid-1990s. Despite partnering with local businesses, these retailers have had Continue reading

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Hasbro Reduces China Sourcing

Hasbro Reduces China Sourcing

September 17, 2019

Hasbro continues to reduce ties with China, aiming to source less than 50% of its toys for the U.S. market from there by the end of 2020.  By 2023, that should drop to 33%.

Heading Trump’s call to American businesses to leave China, Hasbro continues to seek new opportunities for sourcing toys from Vietnam, India, Mexico, and back home in the U.S.  Hasbro’s exit actually began back in 2012, when 90% of its toys for the global market came from China.  Today that figure stands at two-thirds.


Video Spotlight: Hasbro CEO on reducing toy production in China below 50% by the end of 2020


This post is based on the CNBC article, Hasbro CEO says moving out of China has “gone very well for us”, by Jasmine Kim, August 27, 2019, and the YouTube video, Hasbro CEO on reducing toy production in China below 50% by the end of 2020, by CNBC Television, July 23, 2019. Image source: Design Pics / Don Hammond

Discussion Questions:

1. Why is Hasbro leaving China, a move which predated the Trump tariffs?

Guidance: In addition to the issue of higher costs because of recent tariff increases, other Continue reading

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