Xtech Business Case Study and Discussion Questions
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Based on what you read in the case report, what should XTech do in China?
In regards to its strategic business position, Techy should have operation in China. This is the best strategic move for the company if it hopes to compete with its international counterparts. This decision is tough as Techy American staff will be displaced. However, this decision is the best in regards to the future viability of the business. Further compounding this issue is the prevalence of Xtech's competitors who are undoubtedly expanding into China as costs of production is lower. In order for Techy to compete in this market, it too must lower its costs to a level competitive to that of its peers. The technology field is predicated on innovation. Innovation however, cost extensive amounts of money. In order to innovate quickly, large expenditures in R&D are needed. By saving money in China, more money can subsequently be plowed back into the technology research and development division. These allocations will ultimately help Techy to better compete not solely on price, but on quality. If the company can innovate effectively, it will not be subject to the price wars and lower margin business that many of its competitors will. Customers have proven they will pay premium prices for innovations that provide value to them. By saving money with operation in China, Techy can provide better innovations which ultimately generate higher margins and profits for the business. In short, I believe it is in