Abstract: During the last decades, China has been known for being the “factory of the world”, however, as Chinas economy has evolved and living standards have been improved, this picture is changing. The minimum wage and other expenses have increased dramatically and will continue to do so over the years. The rising expenses in China is however not the only issue, analysis show that companies face problems with quality, lead times and other indirect costs. Therefore production companies have been faced with new strategic choices, in the search for cheaper and more efficient ways to produce. This thesis object is to analyze the effect in companies’ total value, when production is insourced from suppliers in China, which will be done through an extensive case study of the Danish design company Bodum. The case study will include a strategic analyses as well as an analysis of Bodum’s historical income statements. Bodum has for the last decade sourced the majority of its household products from Chinese suppliers, but has due to the rising production cost and the other difficulties, chosen to stop the collaboration with the Chinese suppliers. In the search for the optimal production solution, Bodum has chosen to insource the production to its own factory in Portugal, which after extensive expansion will account for 80 pct. of Bodum’s total production, in order to get control with production cost as well as to increase quality and get more flexible production solutions. The result of the case study of Bodum shows that the strategic choice of insourcing production will have a positive effect of the total value of Bodum. However, the analysis also shows that Bodum will become more vulnerable as the company will take on financial and operating risks.
|Educations||Graduate Diploma in Finance, (Diploma Programme) Final Thesis|
|Number of pages||105|