Homework 3.docx - Chapter 3 HW3 pg83-84 Electra Bicycle...

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Chapter 3 HW3 pg83-84 Electra Bicycle “Video Case” answer questions 1, 2 & 3 1. What major advantages did Electra gain by using a contract manufacturer in Taiwan to produce its bikes? By using a contract manufacturer in Taiwan, Electra could simply export bikes to neighboring Asian countries like China where bikes are most popular. This gives them an opportunity to gain many new possible customers worldwide. Another advantage is that Electra was able to lower costs because producing in Taiwan was cheaper than producing in California. And can in turn feed its domestic demand by importing bikes into the United States at a lesser cost. 2. When Electra produced its bikes in Taiwan, did the company have to follow the laws of Taiwan or the laws of the United States? Electra had to follow the laws of Taiwan when producing its bikes in Taiwan. However, once the bikes have been imported into the United States, they must follow the laws of the United States

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