Source<\/strong>: “The Retreat of the Global Company; Multinationals.”\u00a0The Economist (US)<\/em>, January 28, 2017.<\/p>\n <\/p>\n Foxconn Technology is a multinational corporation that manufactures electronics in Asia, South America, Europe and Mexico with a $10-billion factory in the works for Wisconsin.[3]<\/a>\u00a0 \u00a0The electronics they produce or assemble are present in forty percent of all electronics worldwide.[4]<\/a>\u00a0 Sixty percent of Foxconn\u2019s business is conducted within China, suggesting that the firm may be overly reliant on one specific country for both their supply and demand for products.[5]<\/a> Foxconn is especially susceptible to isolationist policies because Foxconn specializes in manufacturing parts for other technology companies.\u00a0 Foxconn\u2019s near-term strategy appears to be centered around strengthening relationships with existing governments[6]<\/a>, diversifying global demand through mergers and acquisitions[7]<\/a>, and optimizing existing supply chains.\u00a0 The long-term plan of Foxconn is much more difficult to ascertain due to numerous and countervailing global trends.\u00a0 The rise of isolationist policies is a considerable threat to Foxconn\u2019s long-term profitability.\u00a0 Their supply chains span a multitude of countries and relies heavily on speedy and efficient transitions over borders.\u00a0 Their proposed investment in the United States, mentioned above, is a move to further diversify their manufacturing, but fails to address their overreliance on cross-border trade along long and complex supply chains.<\/p>\n Global demand for electronics continues to increase so Foxconn needs to remain proactive by incrementally increasing supply to keep pace.\u00a0 The challenge is that manufacturing is a highly capital-intensive business, especially with respect to the rise of advanced robotics, so the payback periods for factory investments can be long[8]<\/a>.\u00a0 The rise of populist movements in the West threaten Foxconn\u2019s ability to seamlessly move supplies across borders.\u00a0 Their competitive advantage comes from their ability to produce different parts in different locations based on cost.\u00a0 Due to the decentralized nature of their current global operations, they would not be successful without full access to their Chinese manufacturing sites.\u00a0 As the tides of globalization recede and isolationist walls are built, Foxconn needs to prepare for potentially damaging effects to their supply chain.<\/p>\n The success of multinational firms derives from a number of economic drivers.\u00a0 Some claim that the recent stagnation of multinational firms, to include Foxconn, is solely a byproduct of isolationist policies.\u00a0 In recent years, wages across China have been increasing, the cost of robotics has been decreasing[9]<\/a>, and host nations have been less hospitable to multinational firms.\u00a0 Foxconn should continue to diversify their global operations to deal with their potential overreliance on China.\u00a0 They need to take a regional approach to their global operations and seek to create sustainability on a national scale.\u00a0 Though it seems counterintuitive, as a multinational firm they need to hedge their business against the possibility of a trade war.\u00a0 When times are good, each of their national businesses will collaborate and achieve synergies through economies of scale and specialization, but during periods dominated by isolationist polices, they will still have sustainable business units.<\/p>\n Foxconn is a bellwether for globalization because of its involvement in so many products across the world.\u00a0 In recent years, multinational firms have stalled, leaving many unsure whether they have a place in the future global economy.\u00a0 Is isolationism, or the threat thereof, truly the cause of this recent trend?\u00a0 Assuming global labor prices continue on current trends and the development of AI and robotics continues, does the world need multinational supply chains?\u00a0 Will Foxconn\u2019s current distributed production model allow it to compete in the future with highly automated, nimble, local competitors in the future?<\/p>\n (Word Count: 771)<\/p>\n <\/p>\n [1]<\/a> “The Retreat of the Global Company; Multinationals.”\u00a0The Economist (US)<\/em>, January 28, 2017.<\/p>\n [2]<\/a> Nougayr\u00e8de, Natalie. “France\u2019s Gamble: As America Retreats, Macron Steps Up.”\u00a0Foreign Affairs<\/em>\u00a096, no. 5: 2-8.\u00a0Business Source Complete<\/em>, EBSCOhost,<\/em>\u00a0accessed November 2017.<\/p>\n [3]<\/a> Starner, Ron. \u201cBagging the Big One: How Wisconsin Landed Foxconn\u201d,\u00a0Site Selection<\/em>, 62, 5, pp. 117-123, Business Source Complete, EBSCOhost<\/em>, accessed November 2017.<\/p>\n [4]<\/a> Bradsher, K, & Duhigg, C. 2012. \u201cHow the U.S. Lost out on iPhone Work.\u201d The New York Times, <\/em>January 21, 2012, [http:\/\/www.nytimes.com\/2012\/01\/22\/business\/apple-america-and-a-squeezed-middle-class.html], accessed November 2017.<\/p>\n [5]<\/a> TIMETRIC. \u201cFoxconn Technology Co LTD: Company Profile and SWOT Analysis.\u201d, Thomson One, <\/em>October 9, 2017, <\/em>accessed November 2017.<\/p>\n [6]<\/a> Barboza, David. \u201cHow China Built \u2018iPhone City\u2019 With Billions in Perks for Apple\u2019s Partner.\u201d The New York Times<\/em>, December 29, 2016, [https:\/\/www.nytimes.com\/2016\/12\/29\/technology\/apple-iphone-china-foxconn.html], accessed November 2017.<\/p>\n [7]<\/a> TIMETRIC. \u201cFoxconn Technology Co LTD: Company Profile and SWOT Analysis.\u201d, Thomson One, <\/em>October 9, 2017, <\/em>accessed November 2017.<\/p>\n![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Tom-Graph-1.png\")
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