Under contract manufacturing company doing international marketing contract with firm in foreign country to manufacture of assemble the product while retaining the responsibility of marketing the product this is common practice in the international business contract manufacturing is the following advantage the company does not have to complete resources for setting up production facility is it free the company from the risk of investing in foreign country if I tell production capacity is really available in a foreign country it enabled emarketer to get it started immediately in any case is the cost latest obtained by the contract manufacturing is slower than if it were manufactured by the international form for example the product cost in the small scale sector is much more slower than the larger scale factor for any product because of the novel which is slower over head and tax concession more over if excess capacities are available with existing unit it maybe even possible to get products applied on the marginal cost basis contract manufacturing how has the following disadvantage in some cases where will be the loss of potential profit from manufacturing lesson 4 the manufacturing process contract manufacturing also has the risk of developing potential competitors it will not be suitable in the case of Hi-Tech road accident cases which involve technical secret etc
