EE204: Business Management for
Electrical Engineers and Computer Scientists



Flextronics: A Focus on Design Leads to India

Read

  1. Read: The New Practice of Global Product Development
  2. Read: Flextronics: A Focus on Design Leads to India

Case Summary

Flextronics, the world's largest contract manufacturing firm, made a strategic decision to expand its business to include original design and manufacturing (ODM) services. As an ODM supplier, Flextronics designed and built products that original equipment manufacturers (OEMs) purchased and sold under their brand names. Purchasing from an ODM allowed OEMs to bring new products to market quickly and efficiently. ODMs could sell the same basic product to many OEMs, providing substantial design and manufacturing efficiencies. Flextronics' first ODM products were cellular phone handsets. The company had substantial hardware capabilities, which grew out of its contract manufacturing experience. In 2004, Flextronics considered adding software design expertise and considered a number of approaches to accomplish this. Having learned of the outstanding reputation of Indian software companies, the company's CEO and the president of its Design and OEM Services operation visited India.

Discussion Questions

  1. What is Flextronics’ strategy? How do you measure its performance and success?
  2. What is driving Flextronics to add ODM SW capability and expand into software design work?
  3. Who is the ODM SW customer and what do they want from a supplier like Flextronics?
  4. Should Flextronics add ODM SW capability? List the qualitative and quantitative pros and cons.
  5. As CEO of Flextronics, decide whether you want to enter the ODM SW business.
    1. If you want to enter through acquisition, which firm and why?
      1. Describe a possible implementation plan that could maximize the chance of acquisition success?
    2. If you don’t want to enter the ODM SW business
      1. Why?
      2. What are the risks of not entering and what is your plan for dealing with them?
    3. If you want to enter the ODM SW business but not through acquisition, what is your plan? (for options, look at diagram on page 27 on article, “ The New Practice of Global Product Development”)