Ch 2: The Global Environment and Operations Strategy

Question 1

What are the six reasons why domestic operations decide

Answer 1

Reduce Costs (labour(low-skilled, taxes(tax breaks in JA/free), tariffs(NAFTA/EU-trading groups), etc.)

Improve the supply chains- locate facilities that have access to better resources- labour, raw material, expertise

Provide better goods and services- Meet cultural needs; reduce response time to customers

Understand markets- locate new opportunities for products and services. Also, you can extend the product life cycle- a “mature” product in US, maybe state-of-the-art

Learn to improve operations- glean ideas from collaborations with oversees

Attract and retain global talent - Through offering moe employment opportunities

Question 2

Cultural and Ethical Issues

Answer 2

Bribery, child labour, environmental issues.
Many reforms- WTO made policies to protect govt and industries from foreign firms that engage in unethical conduct.

Question 3

Developing Missions and Strategies- what is a mission?

Answer 3

The purpose of the organization- it will contribute to society

Question 4

Strategy

Answer 4

The org. action plan to achieve its mission

Question 5

Three ways that firms can achieve their mission

Answer 5

1. Differentiation- uniqueness
2. Cost Leadership- adequate quality, lowest cost-value
3. Response-flexible, reliable,quick: ability to match changes in volatile market place; scheduling; speed in design, production, and delivery

Question 6

10 decisions and strategy- Strategy can be achieved when you managers make effective decisions in 10 areas of OM

Answer 6

Goods and Service Design:
Quality
Process and Capacity Design
Location Selection:
Layout Design
Human Resource and Job Design
Supply-chain man
Inventory Man
Scheduling
Maintenance

Question 7

Issues in Operations Strategy-OM is a key player- perspectives useful before implementing a strategy

Answer 7

Resources View- If financial, physical, human and technological resources available and ensuring that the potential strategy is compatible with the resources

Value-chain analysis- looking at those activities with the opportunity/[potential opportunity for the firm to have competitive advantage.- Areas where the firm add its unique value through product research, design, hr etc.

Five Forces model - analysing competitors. Potential competing forces include immediate rivals, potential entrants, customers, suppliers, and substitute products

Must also consider other forces- political, legal, cultural

Firm also undergoes constant change

Question 8

Strategy Development and Implementation Using SWOT

Answer 8

SWOT- Formal review of internal strengths, weaknessess, opportunities and Threats

Question 9

Key Success Factors

Answer 9

Those Activities that are necessary for a firm to achieve its goals

Question 10

Core Competencies

Answer 10

Unique skills, talents, and capabilities that a firm does at a world-class standard. (Allow firm to set itself apart)

Question 11

Three-step process of OM manager’s job

Answer 11

1. Identify key success factors and strategy
2. Group the necessary activities into an organizational structure.
3. Staff with personnel who will get the job done.

Question 12

What is the OM’s Job essentially?

Answer 12

To implement OM strategy, provide competitive advantage, and increase productivity.

Question 13

OM with other activities

Answer 13

OM is likely to be more successful when the operations strategy is integrated with other areas like marketing, finance, IT, and HR.

Question 14

Types of Global operations startegy

Answer 14

International Strategy- uses exports and licenses to penetrate global arena

Multi-Domestic Strategy:

Global Strategy

Transnational Strategy

Question 15

International Business

Answer 15

any firm that engages in international trade or investment

Question 15

Multinational Corporation

Answer 15

Firm with extensive international business involvement

Question 16

International Strategy

Answer 16

• Uses exporst and licenses to penetrate the global arena

Adv
Leat advantageous, little responsiveness and little cost advantage- far from new market- costs to export, waiting time

However, it is often the easiest as it requires less change to existing operations, and licensing agreements usually leave much of the risk to the licensee

Question 17

Multi-domestic Strategy

Answer 17

decentralized authority with substansial autonomy at each busness- to enhance responsiveness

-Basically the company was successful at home, so all they do is alter the product to suit needs of global market- McDonalds- give beer in Germany and beefless burgers in India

Dis
Little/no cost advantage

Question 18

Global Strategy- review

Answer 18

Operating decisions are centralized and headquarters coordinates the standardization and learning between facilities ( Like Dufry)

-Appropriate when the aim is cost reduction
-Not good when demand for local responsiveness is high
-

Question 19

Transnational Strategy

Answer 19

-Combines the adv of global-scale efficiencies and local responsiveness- Core competence can exits beyond “home”

-these firms Have the potential to pursue all 3 strategies

-Goes beyond borders
-At a stage where country identity is not as important as the network of worldwide operations- Like Nestle (its swiss, but most sales occur outside of Switzerland)

Question 19

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