Hon Hai Precision Industry is sometimes called the biggest company you have never heard of.

Question

USING AN ORGANISATION OF YOUR CHOICE, SHOW HOW THE VARIOUS APPROACHES FIT OR FAIL TO FIT.

 Case study;

HON HAI PRECISION INDUSTRY

Hon Hai Precision Industry is sometimes called the biggest company you have never heard of. Yet it is oneof the world’s largest contract electronics manufacturers who produce many of the world’s computer, consumer electronics and communications products for customers such as Apple, Dell, Nokia and Sony. Since it was founded in 1974, the company’s growth has been phenomenal. It is now the world’s biggest contract manufacturer for the electronics industry. Why? , Because it can make these products cheaper than its rivals. In fact, the company is known for having an obsessionwith cutting its costs. Unlike some of its rivals, it has no imposing headquarters. The company is run from a five-storey concrete factory in a grimy suburb of Taipei and its annual meeting is held in the staff canteen. ‘Doing anything else would be spending your money. Cheap is our specialty’, says chairman Terry Gow,and he is regarded as having made Hon Hai the most effective company in his industry at controlling costs. The extra business this has brought has enabled thecompany to achieve economies of scale above those of its competitors. Hon Hai defines its products in terms of speed, quality, engineering services, flexibility and monetary cost saving. It has also expanded into makingmore of the components that go into its products than its competitors. Perhaps most significantly, Hon Hai has moved much of its manufacturing into China and other low-cost areas with plants in South-East Asia, Eastern Europe and Latin America. In China alone, it employs 100, 000 people, and with wages rates as low as one-fifth of those in Taiwan many of Hon Hai’s competitors have also shifted their production into China.