Scotts Miracle-Gro Case Solution Essay
Scotts Miracle-Gro is the largest company in the North American lawn and garden industry. It is also the world’s leading supplier and marketers of consumer products for do it yourself lawn and garden care, including products for professional horticulture. This paper is mainly centered on two decisions which include either to make and or buy. In other words whether Scotts Miracle-Gro should keep manufacturing in Temecula located in California, outsource production to a contract company in China or to build a company in China and relocate production there. The paper will be divided into three parts in …show more content…
• High initial cost for set up (US$8 million)
• About a year is needed for set up, assuming that everything goes as planned which in the world of business is never the case.
• The high transition costs from the United States to China
• Possibly loss of customers due to the approximate one year set up period to be fully functional.
Therefore, upon reviewing of the pros and cons of either outsourcing or relocating, regardless of the initial savings associated with either decision, it has become clear that disadvantages and uncertainties of government action and the sudden change in policies could extremely impact the projected initial savings. Hence, without a second thought, it is of my opinion that the benefits are far outweighed by risks, thus, staying in the United States should be a first priority.
Staying in Temecula, California
How, would we reduce costs in California to remain competitive? This is a question everyone is asking themselves and the answer to that would be innovation. Looking at Table 2: Cost Analysis, you will realize that Scotts Miracle-Gro could possibly, save approximately $4