Foxconn Analysis

Broad Environment

Sociocultural: During the course of a society transition in developing countries, the current working class will grow and evolve into the middle class. Those workers who, once forced by circumstance to stand for fourteen hours a day, are the workers that no longer need or want what seemly meager financial benefits employer has to offer. In the past year, Foxconn’s image has been tarnished by reports of labor protests and employee suicides. These were the result of harsh working conditions, unfair wages and a lack of communication with the media. The sociocultural trend has driven Foxconn to improve its working surroundings and its impeccable image in society. In the recent years, Foxconn has started changing its company’s image by providing higher compensations, showing improved working surroundings to external stakeholders, and being involved in community activities. Since the company was founded, Foxconn has remained highly confidential on its internal information. Today’s society has required the company to communicate frequently with external stakeholders. This foreseeable trend will require Foxconn to become a more transparent company in the future.

Political: Foxconn’s manufacture sites are located in developing countries. These countries have the trend to change in laws and regulations frequently. For example, China has changed its labor regulations in recent years. It therefore becomes important for the company to foresee the trend and be ready to adjust its business when necessary. In the future, the company will see a political trend that the developing countries will pay more attention to labor working conditions and environments. This will increase the production cost since the company needs to spend more money taking care of employees and environments. Furthermore, contracts with the local governments are valuable resources to create competitive advantages, such as establishing tax exemptions while initiating capital investments....