Abstract
The medical device industry is highly profitable and projected to experience double digit growth well into the future. The five top performing American medical device companies offshore some core and non-core value chain activities to realize lower production costs, higher innovation, and faster time to market. This case examines the offshoring decision of Acesco Medical Devices - a medium-size company that produces neurology, orthopedics, and cardiovascular products. It considers the tradeoffs between corporate social responsibility, as it pertains to workforce reductions in the United Sates, and the substantial strategic benefits of offshoring to India.
Highlights
J im Fraser pondered the proposal to relocate some of Acesco Medical Devices, Inc’s activities to India
Any decision must balance corporate social responsibility as it pertains to job loss in the U.S against considerable benefits from offshoring
Exhibit 1: Financial Data for Selected Medical Device Firms Engaging in Offshoring (2008-2012)
Summary
J im Fraser pondered the proposal to relocate some of Acesco Medical Devices, Inc’s activities to India. There are compelling cost savings and attractive new market opportunities from offshoring, but the prolonged U.S recession and dour domestic political mood are reasons for caution. Exporting high paying R&D and manufacturing jobs could be construed as yet another example of corporate greed. Recent developments in the industry’s competitive and external environments offer powerful reasons to do so. Any decision must balance corporate social responsibility as it pertains to job loss in the U.S against considerable benefits from offshoring. Exhibit 1: Financial Data for Selected Medical Device Firms Engaging in Offshoring (2008-2012)
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