Hon Hai Case Study

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Identify the various ways in which Hon Hai has kept its costs low? Cheap service and option to reduce cost is the basic specialty of the company. The basic attributes utilized by company in this reference is sticking to simplicity and adopting the most wise but least costly option. In this pursuit not only the company operates in a simple not glamorous building made of concrete but also the expenses made on management and functions of services are kept at the lowest. The strategically input have made the company place it’s headquartering at most viable place that could earn him bigger chunk of profit with the least amount of investment. The labor wage hitch is the highest cost of operations for an organization is kept at its lowest…show more content…
Primarily, because this approach needs a different kind of company culture which can be a great challenge if considered from the perspective of adoption. The competitors of the company offers lavished salaries and luxurious facilities to the employee to keep up with the standards of industry. Reducing the facilities to the point that even the annual meeting is to take place in canteen of company is likely to suppress the morale of the company. Furthermore, the brand image of other products is different which also targets different user segment. That is, the products of competitors are focused on social standards groups who prefer elite products. Reducing the cost by adopting cost reduction strategy will not only spoil brand image but will also disintegrate the approach of marketing and advertisement that is being pitched to grab the attention of the users of the segment. Therefore, it can be stated that the approach of Han Hai needs cautious attention and disciplines approach which is not viable to be opted for the competitors of the…show more content…
Discuss the effect of the four objectives on the cost objective. Support your answer with relevant examples. The five performance objectives of the company are interlinked with the components of quality, speed, dependability, flexibility and cost. Together the referred objectives render great influence over the component of market competitiveness. Each of the components mentioned above is directly interlined with the cost component. These are discussed below for reference of use. 1. Quality: Quality of a product renders direct influence on the cost element. If you buy high quality raw material or use refined and expensive equipment and machines than obvious is the fact that that cost of the product will be increased as will the cost of the product. Managing quality control at a low cost is a highly challenging task that needs distinct expertise and approach to view the operations system and make necessary changes. 2. Speed: The element of speed is crucial to cost of the product. The economy of scale is the approach used where product in speed is preferred. Likewise, economy is scope where focus of production is specific and condensed. In any method the wastage of time renders direct influence on cost of the product (Seymour et al., 2002). Hence, speed should be monitored to review performance of operation marking the required speed of production with actual

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