Abstract
<p>This article asks whether a strategic opportunity exists for a company producing products with the label ‘Made in Germany’ to relocate production to Asia while retaining German engineering. This article focuses on the prevailing market situations of several multinational corporations based in Germany, which are encountering growing competition from Asia due to disadvantages in product price, delivery costs and transportation time that are related to a non-adapted and non-future oriented sourcing concept. Through an empirical research study, respondents from Asia were asked about their willingness to accept the price of a ‘Made in Germany’ product, the importance of price, their opinion about delivery issues, and their acceptance of local production in Asia. Total responses of N = 636 (100.0%) were collected, including n = 108 (17.0%) responses from Asia. The results are addressed to strategic management for German companies that can gain competitiveness through a relocation of production to Asia while considering long-term requirements. The results of the study suggest that the fundamental strategy of pairing German engineering with local production in Asia is worth pursuing in which the market conditions of tomorrow are considered.</p>
Highlights
In today’s globalized world, corporations require a progressive consideration to strengthening competitiveness
The results of the study suggest that the fundamental strategy of pairing German engineering with local production in Asia is worth pursuing in which the market conditions of tomorrow are considered
This article is based on the prevailing situation of several German multinational corporations that need to gain competitiveness following a broad handling of markets
Summary
In today’s globalized world, corporations require a progressive consideration to strengthening competitiveness. This article is based on the prevailing situation of several German multinational corporations that need to gain competitiveness following a broad handling of markets. Due to the limited growth potential in European markets, the focus has turned to emerging markets. According to a study by Oltmanns (2013), Western companies expect to achieve 70% of their future profits in these emerging markets. The growth potential in the Asian region is of interest. Asian emerging markets display divergent consumer behavior, different market conditions and different financial power. International exporting corporations from Germany manufacture products under the classification ‘Made in Germany’, and German engineering quality is seen as an important success factor (Ahlert, Backhaus, Berentzen, & Tegtmeier, 2007)
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