2. Is a process that
establishes a working
agreement between
two companies. As
part of the agreement,
one company custom
produces parts or
other materials on
behalf of their
customer.
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5. * Advanced Skills
* Focus
* The company does not have to
commit resource for setting up
production facilities.
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6. * If frees the company from the
risk of investing in foreign
countries.
* Less risky way to start with.
* Contract manufacturing may
enable the international firm to
enlist national support.
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7. * Lack of Control
* Relationships
* Quality concerns
* Intellectual Property Loss
* Loss of Flexibility and
Responsiveness
* There will be the lost of
potential profits from
manufacturing.
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