Case 1: TruckLabs The opening case explores how globalization influenced strategic decision-making at TruckLabs, a U.S. company producing panels designed to improve cargo trucks' aerodynamics, generating fuel cost savings. In 2015, TruckLabs set up manufacturing operations in Asia, where labor costs were relatively low and skilled technicians were readily available. Low tariffs and efficient shipping options facilitated the outsourcing strategy. Activities essential to TruckLabs competitive advantage remained in the United States. In 2017, recently elected Donald Trump levied 25 percent tariffs on imports from China, including TruckLabs panels. Because the tariffs effectively raised prices by 25 percent, the cost advantages of outsourcing production to Asia that had been present in 2015 disappeared. After considering moving production to other countries in Asia, TruckLabs concluded that it made more sense to move production to the United States, where most of its customers were located. An unanticipated benefit of the change in manufacturing strategy emerged in 2021 when domestic production enabled TruckLabs to avoid many of the pandemic-related supply chain disruptions challenging companies relying on manufacturing in Asia. Discussion of the case can begin with the following questions:

QUESTION 1: Reflect on the decision by TruckLabs to outsource production to Asia initially. How has globalization created opportunities for companies like TruckLabs to optimize their supply chains?

QUESTION 2: Consider the globalization of production related to China and other Southeast Asian countries. Is Chinas role as the worlds factory floor slipping away? Explain.

QUESTION 3: How has geopolitics influenced strategy at TruckLabs?