Experimental Entrepreneurship: Offshoring Polaris Inc.

Hanbin Wang
William Shimer
Experimental Entrepreneurship
April 2, 2017
Offshoring Polaris Inc.
Currently, organizations and manufacturing companies in developed nations have opted to outsource their production to other countries in Asia and Latin America. Before coming to that decision, the senior officials of these companies usually weigh the benefits of such actions over the consequences. Developed countries such as America boast a strong and stable economy, meaning that the buying power of commodities and services are high. Countries in Latin America and Asia, on the other hand, their economies are still developing, however, at a rapid rate compared to that of America, which has plateaued. This growth is boosted by the low-wage workforce and availability of manufacturing companies both local and internationally owned providing employment to the masses. In the case of Polaris, offshoring its assembly and production lines, possess more advantages to the company than remaining onshore. If the company opts to refrain from outsourcing its production and assembly line, it will be forced to raise the price of its products. This will have a negative impact on the sales, as they will plummet both locally and internationally with clients opting for the next best alternative.
Qualitative Tradeoffs
When offshoring is opted, the company will be able to save on cost due to cheaper labor and specialized skills. From the data collected by Suresh Krishna, the vice president of operations and integration, Mexico portrayed optimistic factors as the better offshoring State compared to China. In any production line, control is one of the key factors, whether in international or local soil. Supervision should be maintained so that set targets can be achieved. Secondly, trade tariffs and capital expenditure for each country should be observed. In the case of Mexico, the nation has trade agreements with American under NAFTA (North American Free Trade Agreement) which allows American companies to import products free from the nation (Caliendo and Parro). Finally, the annual wage growth in Mexico has been able to maintain a speci...