Introduction The focus of this case study is on the Vizio company and market for flat-panel TVs. However, most importantly Vizio’s unique use of globalization of production which gave them a competitive advantage in the market just as it was peaking. I found it important to do some research on the Vizio company to get a solid understanding of their background and history. The unique blend of origin, ethnicity and country of residence through much of his youth may have played a strong role in CEO, William Wang’s success with globalization. What started as a consultant business in 2002, later helped Gateway launch the first flat-panel TV under $3K and then Vizio found a niche in the flat-panel TV market which set them apart from their competitors. Globalization makes them successful today which is highlighted in the case. Their products are manufactured in Mexico with parts from across the world. Even their core mission and business model states, “VIZIO® lowers cost and increases efficiency by creating and orchestrating mutually desirable global partnerships.” This is definitely a company with a goal of producing affordable producing and passing on efficient manufacturing costs is exactly how they do it.

Question #1: Why is the manufacturing of flat-panel TVs migrating to different locations around the world? Flat-panel TV technology is much like other products being manufactured around the globe in that the companies that are manufacturing the products are trying to find the cheapest and most efficient method for manufacturing possible. This can be in the form of labor, energy, land or capital. Companies are looking to find parts and labor as inexpensive as possible that can be utilized in the production of their goods. With technology making communication easier around the world, it is opening up new opportunities for manufacturing that were possibly not even options decades ago. If hard materials are more accessible in a country for example, but labor is much less expensive in another; sometimes it is less expensive to ship the goods and have them assembled or constructed where the labor is cheapest.

Question #2: Who might benefit from the globalization of the flat-panel display industry? Who are the losers?

The benefits of globalization should be seen by those companies taking advantage of it as they are keeping their costs lower hopefully by utilizing the strengths and efficiencies of different countries. By keeping their costs lower, the companies will see greater margins and profits if their globalization strategies are well planned and implemented.
Customers purchasing flat-panel TVs that are made utilizing globalization should see discounted prices if the manufacturers are indeed taking advantage of the efficiencies and passing it along in the prices of their products. There are not a lot of products that are 100% made in a single country anymore because of globalization efforts.
Globalization should be a win-win strategy, however if flat-panel manufacturers exist that insist on using local materials and labor to keep the product “Made in the USA”, then those companies might lose in the marketplace as their products will undoubtedly be priced higher due to higher input costs. This will likely price them out of the market unless they can find a customer niche which is loyal to the “home brand” and is willing to pay for it.

Question #3: What would happen if the US government required flat-panel displays sold in the US to also be made in the US? Would this be a good or bad thing?

This refers to my example above which simply states the loss of the benefits of globalization which would drive the costs of production up and also the prices of the TVs to consumers. Depending on whether this is referring to materials and labor involved in the production of the flat-panel TVs, costs could be affected under each. Materials and labor have been outsourced overseas currently by Vizio which is the most cost effective and efficient method under their business model. Labor in Mexico would definitely be less expensive than if the TVs were built in a US plant. The biggest question in my mind is if Vizio could move their headquarters to another country and still sell their products to US customers via their key outlets (Sam’s Club and Costco) and the internet. This would give them a way to work around the “selling IN the US” by selling TO the US. That would be my recommendation to their CEO if the US government was to try to implement such a requirement.
In an article in Inc. magazine, CEO of Vizio, William Wang was quoted saying, “the U.S. duty for TVs from Asia is 5 percent. So the duty is a little higher than the labor cost. There is no duty from Mexico.” He is very well aware of the costs associated with each component in his production and is using each as efficiently as possible to keep production costs low. For most companies that have been utilizing and benefiting from globalization of production and marketing, foreign investments or outsourcing; this change would be a bad thing. A global economy and marketplace has allowed companies such as Vizio to take advantage of less expensive materials and labor to bring the least expensive flat-panel TV that they can to their customers. If governments get involved and begin to restrict this activity, companies and consumers will suffer as will the economy.

Summary

Vizio is one company that has been taking advantage of globalization of production with their flat-panel TVs. They have been extremely successful doing so, because they hit the market at the right time and are providing a product which is affordable to most consumers. The main reason that they are able to keep their prices low is due to their approach to input materials, labor and sales. Utilizing the techniques and strategies of globalization, Vizio is mastering the marketplace by finding the least expensive material options, shipping them to the most affordable labor and then using partner outlets such as Costco and Sam’s Club to sell their products in the US. Mr. Wang has mastered the market with his business model for flat-panel TVs and has a profitable business to prove it.
Unrelated to the topic of globalization, but also quite fascinating is the story of William Wang and his business background and philosophy. I found it particularly interesting that the flat-panel TV business was not specifically a planned enterprise for him. Mr. Wang was running a fairly successful computer monitor business when he was involved in the crash of Singapore Airlines Flight 006. He only suffered carbon monoxide poisoning, however half the passengers died in the dramatic crash. This was a life changing moment for him. His computer business was on a slight downward cycle when he contracted with Gateway computer to build an inexpensive flat-panel TV option for them under $3k. This proved to be so successful that he decided to pursue the flat-panel TV market. His philosophy and mission has always been to find the most efficient and lean way to operate his production of products and services in order to make products that everyone can afford. It is possible that his personal drive and philosophy is what fuels his desire to utilize globalization. Global management involves many facets and Mr. Wang credits his success not to himself alone but to the team that he has developed around him.
References

Hill, Charles W.L.. (2014). Global Business Today 8th Edition

Ogg, Erica. "The Secret of VIZIO's Success". CNET.com. CNET. 10 Feb 2011.

Wang, William (June 1, 2007). "How I Did It: William Wang, CEO, Vizio". Inc.

William Wang. (2014, May 20). In Wikipedia, The Free Encyclopedia. http://en.wikipedia.org/w/index.php?title=William_Wang&oldid=609449373