Managing ressources and operations Essay Example | Topics and Well Written Essays - 750 words

Managing ressources and operations - Essay Example Recently, in some studies regarding the demand of consumers for durable goods (Goeree, 2008 and Kim et al., 2009) and non-durable goods (Bruno and Vilcassim, 2008) it was found that while purchasing the goods be it a vehicle as well, consumers consider two aspects i.e. search cost and account travel. Most important factor according to Bucklin et al. (2008) that is considered by the customers is the cost and safety of SUVs. Bucklin et al. (2008) in their study concluded that the car manufacturers need to ensure that their production facilities are in low cost areas so that they are able to manufacture cars at reasonable prices. PPQ parts are planning to do expansion in other countries so that it can provide service to other markets and earn more profits. Currently, the company has profit margin rate of 6% which is on the same level as industry average. In order to help the company expand by following the right strategy, it is suggested that it starts its production in developing country such as China and try to capture SUVs market share in other countries. In order to expand in other countries, it is vital for PPQ parts to do its external analysis so that it has an idea about the hurdles that it might encounter while expansion. The factors that are most likely to impact the production and sales of SUVs are economic, political, social, cultural and environmental factors of the countries. 1. China political environment is very stable and the government encourages foreign companies to set up their facilities in the county. The government also gives grants to the foreign investors so that both the countries get benefited from the investment. However, Chinese government imposes some regulations that the company employs more than 30% of their local residents and the company will have to comply with some rules and regulations. 2. Since