Chapter 2 Flashcards
What are the six reasons domestic business operations decide to change to some form of international operation:
- Improve supply chain
- Reduce costs (labor, taxes, tariffs)
- Improve Operations
- Understand Markets
- Improve products
- Attract and retain global talent
The supply chain can often be improved by:
locating facilities in countries where unique resources are available
Relocating to another country can reduce what types of costs?
Direct and indirect, along with tax liability and tariffs.
What are three advantages to shifting low-skilled jobs to other countries
- Reduce labor costs
- frees higer cost workers to do more expensive tasks
- money saved on wages can be reinvested
An international organization that promotes world trade by lowering barriers to the free flow of goods across borders
World Trade Organization
What are two ways operations can be improved by going overseas?
- Learn new and better ways of doing things
2. Be closer to customers for better service
Firms that go overseas inevitably learn what?
about new opportunities for products and services because of interactions wih new people
One reason firms go overseas is to ______ the product life-cycle
increase
Why can global firms recruit and retain good employees?
- They provide greater growth opportunities
2. They are more insulated from unemployment
successfully achieving a competitive advantage means maximizing
all the possible opportunities–tangible and intangible–that international operations can provide.
What two things must an effective operations management effort must have?
A mission and a strategy
What is a mission?
Purpose or rationale for an organization’s existence
what are the major disciplines required by the firm, such as accounting, marketing, and production?
Functional Areas
What must each functional area have?
supporting missions
What is a strategy?
How an organization expects to achieve its missions and goals
What must be taken into account while the firm is preparing its strategy?
(SWOT) Strength, Weaknesses, Opportunities, Threats
Firms achieve their missions in three conceptual ways:
- differentiation
2 cost leadership - Response
These three ways of following the conceptaul ways are:
- better or different
2 cheaper
3 more sponsive
what is competitive advantage?
The creation of a unique advantage over competitors
Differentiation is concerned with:
providing uniqueness
What is differentiation?
Distinguishing the offering of an organization in a way that the customer perceives as added value
What is experience differentiation
Engaging a customer with a product through imaginative use of the five senses, so the customer “experiences” teh product
What is low-cost leadership?
Achieving maximum value, as perceived by the customer.
What is on specific way companies can become low-cost leaders?
effective ulization of resources (ie high productivity/efficiency)
What are the two main types of response”
Flexible and reliable/quick
Response is
a set of values related to rapid, flexible, and reliable performance
What are some OM perspectives that can be helpful in planning a mission and strategy
Resources view, value-chain analysis, five forces model
What is the resources view?
thinking in terms of the financial, physical, human, and technological resources available and ensuring a potential strategy is in line with these resources
What is val-chain analysis?
a method used to identify elements in the product/service chain that uniquely add value
What is the five forces model
Analyzing the five competitive foces in the environment
- immediate rivals
- potential entrants
- customers
- suppliers
- substitute products
What are the four stages of the product life cycle?
Introduction, Growth, Maturity, Decline
What are the company strategy issues related to the introduction stage of the product life cycle?
- Best period to increase market share
- R&D engineering is critical
What is the OM strategy issues related to the introduction stage of the product life cycle?
- Product design and development critical
- Frequent product and process design changes
- Short production runs
- High production costs
- Limited models
- Attention to quality
What are the Company Strate/Issues related to the growth period of the product life cycle?
Practical to change price or quality image
-strengthen niche
What are the OM Strate/Issues related to the growth period of the product life cycle?
- Forecasting critical
- Product and process reliability
- Competitive product improvements and options
- Increase capacity
- Shift toward product focus
- Enhance distribution
What are the Company Strategy/Issues related to the maturity stage of the product life cycle?
- Poor time to change image, price, or quality
- Competitive costs become critical
- Defend market position
What are the OM Strategy/Issues related to the maturity stage of the product life cycle?
Standardization
- Fewer rapid product changes, more minor changes
- Optimum capacity
- Increasing stability of process
- Long production runs
- Product improvement and cost cutting
What are the Company Strategy/Issues related to the decline stage of the product life cycle?
Cost control Critical
What are the OM Strategy/Issues related to the decline stage of the product life cycle?
- Little production differntiation
- Cost minimization
- Overcapacity in the industry
- Prune line to eliminate itesm not returning good margin
- Reduce capacity.
What are KSFs?
Key succes factors–those activites or factors that are key to achieving competitive advantage
KSFs are often necessary, but not _____ for competitive advantage
sufficient
What are core competencies
A set of skills, talnts, and capabilities in which a firm is particularly strong
What is an activity map?
A grpahical link of competitive advantage, KSFs, and supporting activities
What is outsourcing?
Transferring a firm’s activities that have traditionally been internal to external suppliers.
What firm activities are good candidates for outsourcing?
Non-core activities
What three trends have led to greater outsourcing?
- Increased tech expertise
- more reliable and cheaper transportation
- Better communication
What is the theory of competitive advantage?
A thoery which states that countires benefit from specializing in (and exporting) goods and services in which they have relative advantage, and they can benefit from importing goods and services in which they have a less competitive advantage
What is the most common reason for the failure of oursourcing agreements?
Insufficient analysis
What provides an objective way to evaluate outsource providers?
factor-rating method
What is any firm that engages in international trade or investment?
an international business
What is an MNC?
a firm with extensive international business involvement
What are the four strategies for approaching global opportunities by international business/MNCs?
international, multidomestic, global, or transnational
What is an international strategy?
global markets penetrated with exports and licenses; less advantageous, higher cost, easiest
What is multidomestic strategy?
Operating decisions are decentralized to each contry to enchance local responsiveness; very responsive, little cost advantage
What is a global strategy?
operating decisions are centralized and hq coordinates the standardization and learning between facilities; economies of scale,
Transnational strategy
A strategy that combines the benefits of global-scale efficiencies with the benefits of local responsiveness. world companies
