Sounds like the classic strategy of good-customer-service.
85$ is not a lot of money in China either. Double so for English speaking help. Triple so when you get assembled PCBs at the end.
The theory I've heard is that where American business culture prioritizes profit, Chinese businesses are chasing market share. Thus you get combinations like Rumba and Kin Yat. Roomba subcontracts all manufacturing to China, earns incredible gross margins, while the Chinese manufacturer is free to make competitors. In time the competitors tech reaches and exceeds the original. Now Roomba is left with low/mid tier product lines and Chinese companies control the majority market share.
Great while it lasted. Lots of profits for over a decade. The profit maxing strategy just lacks a future.
That's pretty much it. The best way to make a strict "profit" in many cases is to buy large messy bundles of assets/debts (companies), destroy the integration, and sell off the individual assets; that is, the private equity playbook.
85$ is not a lot of money in China either. Double so for English speaking help. Triple so when you get assembled PCBs at the end.
The theory I've heard is that where American business culture prioritizes profit, Chinese businesses are chasing market share. Thus you get combinations like Rumba and Kin Yat. Roomba subcontracts all manufacturing to China, earns incredible gross margins, while the Chinese manufacturer is free to make competitors. In time the competitors tech reaches and exceeds the original. Now Roomba is left with low/mid tier product lines and Chinese companies control the majority market share.
Great while it lasted. Lots of profits for over a decade. The profit maxing strategy just lacks a future.