Company visit analysis: Foxconn Company overview: Foxconn is the leading communications and electronic devices component manufacture in the world. The company owned by a Taiwan company named: Hon Hai Precision Industry Co. , LTD. Foxconn provides solutions to IT and consumer electronics customers include renowned companies of world renown, like Apple and HP. Foxconn in Czech Republic is one of the largest exporters in the country.
The key customer of the Foxconn company we visited is HP. Key Business Model—Outsourcing Outsourcing is the key model of Foxconn’s business in the world. Currently, the highly development of technology companies in the worldwide like Apple and HP now formed a rigorous regime of outsourcing business structure. From the marketing point of view, companies are always seeking for low cost and try to best use the limited resources.
Not only in manufacturing and production, outsourcing now also alive in other business sectors like office activity maintain, public relationship, advertising and financial service etc. Using third world labor, which is cheaper and faster, has become a trend for the worldwide manufactures seeking for the largest profit and efficiency to deliver products. Czech Republic has become the key production site in Europe mainly because the cheap labor cost in this country.
Like the manager mentioned that although China has worldwide cheaper level of labor factories, the transportation between Asia and Europe is still hard to afford for the company. But the profit in outsourcing industry is relatively low. In a competitive market, industries like high technology heavily rely on upstream innovation, which determined and lead the resources allocation in the whole industry, as a result, business parties who focus on downstream can only gain low profit compared to parties who can master the key technology.
Innovation becomes the essential competitive advantages for a company. In the case of Foxconn, the manager mentioned the stable but low profit of outsourcing, Foxconn is actively seeking opportunities to engage in upstream product development in order to increase profit margin. But the business contract partners like HP kept be strict boarder on this, with probably reasons of avoid potential competition. Cross Culture enterprise management and company culture As a Asian company operating in worldwide, Foxconn is making its efforts to create a great cross culture company management style.
Although Foxconn China is suffering from negative news about employee’s suicide issue, Foxconn in Czech build good employee welfare system including low price lunch, various of holidays and employees entertainment. We can see Foxconn is developing towards a more mature multinational enterprise with increasing responsibilities to the world.