Acer Group’s R&D Strategy – The China decision
Strategic Outsourcing at Bharti Airtel Limited
“The concept of absolute cost advantage leads us to believe that successful firms ultimately locate in the lowest cost environment (or country) for their business. Compare the Acer and Bharti Airtel cases (and relevant materials) to either agree or disagree with this view.”
I disagree with this statement as we can see in both cases for Acer and Bharti Airtel firms are not only concerned about locating their business in the lowest cost environment but in the environment that can provide also more competitive advantage to their business. The concept of absolute cost advantage tells us that ...view middle of the document...
The company chose to locate one of the R&D location in the US, even thought is an expensive option in order to better access the knowledge of high-skilled engineers and also because they were US engineers were more closer to the market and in this way more aware of most recent technology trends and innovations. This is also a competitive advantage, because Acer is using knowledge as a source to obtain differentiation from their competitors.
Opening a new R&D lab in Shanghai doesn’t mean that the company is looking only for lower cost options, but because the company will get access to high-skilled work force as there are many high-skilled engineers in Shanghai due the number of universities located in the area.
For Bharti Airtel, the biggest concern was how to manage its capital expenditures for its operations and how to face this exponential growth in a competitive environment. Budgeting and tendering for network expansion was consuming a tremendous amount of management time and bandwidth and for this reason the company wanted to strategically outsource work to his vendors in order to focus more in the growth of their market, and remove...