Flextronics: A Focus on Design Leads to India-Report

Recommendations

Alternative 2 is recommended because the software development facilities in India are highly advanced and because of time differences arising out of being located in different time zones , productivity would be higher . Huge cost savings would be realized as a result of the low-cost expertise available . It is not feasible to continue to focus on hardware design because of the negative impact of commoditization . It is not feasible either to use off-the-shelf software because that would limit the scope of differentiation . Inasmuch as Flextronics is moving into the software business

because of the greater scope of differentiation , establishing design centers in India to develop customized software is the best alternative

Action and implementation plan

The important question to consider in this regard is whether to buy one of the smaller software development firms in India or whether to form a partnership with one of the three large publicly owned companies . Even though Flextronics had the ability to buy one of the smaller private firms , it would be inadvisable because it would be a long-term commitment . The management could not afford to commit long-term to software development initiatives at this moment because it was new not only to the software development business but also to the pros and cons of moving operations to India . The management had considerable experience in operating in China where most of its hardware design centers were located . However it did not have any operations or it operated on a very limited scale in India at the moment . As a result the management would have to gain a working knowledge of the critical environmental factors through the partnership in the initial phases and then if it judged the operations to be profitable then it could defuse the partnership and open a software development center of its...