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flextronics

 flextronics Composition

9-604-063

REV: APRIL 13, 2010

ROBERT S. HUCKMAN

GARY L. PISANO

Flextronics International, Limited.

Michael Represents, chairman and CEO of Flextronics International, Ltd., selected the load of mobile phones on his office. While every single one carried the brand brand of a distinct company, they all had been made by Flextronics, the world's second-largest provider of electronics manufacturing services (EMS) and the most significant manufacturer of cell phones. Markings was pleased by the common appearance and performance of these mobile phones, perhaps since that similarity spoke towards the reliability of Flextronics' manufacturing process.

Signifies was especially intrigued by one of the devices on his desk, a model that he and his co-workers referred to as Phone 4. As opposed to the different phones—which had been manufactured by Flextronics on a deal basis employing designs created by their customers—Phone 5 was designed and manufactured completely by Flextronics. Phone 5 was the finale of a application program that promised as a strategic watershed for Flextronics. This program represented the first time in the contract manufacturer's 33-year background that it had initiated and developed finish product models on its own with out a sponsoring client. Given that Flextronics was the world's largest agreement manufacturer of cell phones, that already acquired excellent and long-standing interactions with most of the industry's leading cell phone players. Thus, rather than trying to company and market Phone four on its own, Flextronics planned to sell its mobile phone to existing players—companies just like Motorola, Nokia, Kyocera, Sony-Ericsson, and others—that would after that brand, industry, and spread. Marks, nevertheless , was already beginning get a impression of the difficulties that might rest ahead. Even though Phone 5 cost less when compared to products, simply no cell phone company had however agreed to order it. Signifies commented:

This is a really distinct business for all of us than developing services. With manufacturing, the customers don't really care who else we work with. They not anymore view making as a source of competitive benefits and seldom ask for a unique relationship. With design, we are going to getting much closer to what our consumers care about. They're interested in each of our designs, but some companies desire an exclusive offer. They no longer want us selling the same product to others in the market. But if we carry out an exclusive handle one consumer, the others get upset. We do a wide range of manufacturing business with all of these businesses, so you will find clearly hazards to us in this organization. Finding the right approach in this marketplace is probably the most interesting intellectual issue I have confronted in my business career.

________________________________________________________________________________________________________________ Professors Robert S. Huckman and Whilst gary P. Pisano and Analysis Associate Eli P. Strick prepared this case. HBS instances are designed solely since the basis intended for class discussion. A few data are disguised. Situations are not intended to serve as endorsements, sources of main data, or perhaps illustrations of effective or perhaps ineffective managing.

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604-063

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