With the advent of flexible manufacturing technologies and mass custom

QUESTION

With the advent of flexible manufacturing technologies and mass customization, establishing manufacturing facilities in each major market in which the firm is active is becoming less attractive.

Indicate whether the statement is true or false.

ANSWER

TRUE
Most important for international business, flexible manufacturing technologies can help a firm customize products for different national markets. The importance of this advantage cannot be overstated. When flexible manufacturing technologies are available, a firm can manufacture products customized to various national markets at a single factory sited at the optimal location. And it can do this without absorbing a significant cost penalty. Thus, firms no longer need to establish manufacturing facilities in each major national market to provide products that satisfy specific consumer tastes and preferences, part of the rationale for a localization strategy.