CH 2:Operations Strategy in a Global Environment Flashcards
(35 cards)
reasons to globalize
Improve the supply chain
Reduce costs/exchange rate risks
Improve operations
Understand markets
Improve products
Attract and retain global talent
Improve the supply chain
Locating facilities in countries closer to where unique resources are available
Resources may be low cost labor, raw material, etc
Ex: perfume manufacturing in france
Reduce costs/exchange rate risks
Reduce risks associated w exchange rates
Lower direct and indirect costs
Trade agreements can lower tariffs (EU, WTO)
Operational hedging:
Operational hedging:
building extra capacity in different countries and then shifting production from country to country
Improve operations
Operations learn better understand management in diff countries
Ex: germans use robots
International operations can improve response time and customer service
Understand markers
Interacting w foreign customers, suppliers, competition can lead to new opportunities
Can extend product life cycle (smth bad here may be smth still good somewhere else)
Improve products
Open to free flow ideas can help improve products
Attract and retain global talent
Offer better employment opportunities
Can relocate unneeded ppl to other locations where they are needed
Cultural and ethical issues in globalization
Social and cultural behavior differs
International laws, agreements, codes of conduct for ethical behaviors
Companies want to consider
Work ethic
Availability of raw materials
Rate of innovation
#of skilled workers
Interest rates
Language variation
what is mission and strategy
Mission statements tell an org where it is going and the strategy tells the org how to get there
Mission
Where the org is going
The purpose
Answers what they contribute to society
Provides boundaries and focus
Factors affecting mission
Philosophy and values
Profitability and growth
Public image
Benefit to society
Customers
Environment
Strategy
How an org will achieve its mission and develop a plan
Exploit opportunities and strengths, neutralize threats, and avoid weaknesses
3 conceptual ways
Differentiation
Provides uniqueness
Experience differentiation for services
Ex: disney
Cost leadership
Cheaper
Ex: walmart
Response
More responsive
Pizza hut
competitive advantage
unique advantage over competitors
Issues in operations strategy
Resource view
Value chain analysis
Porter’s 5 forces
Operating in a system w many external factors
Constant change
Product lifecycle
Introduction→ growth→maturity→decline
Strategy development process
Analyze environment
Determine corporate mission
Form a strategy
Analyze environment
Identify strengths, weakness, opportunities, and threats
Understand env, customers, industry, and competitors
Determine corporate mission
State reasons for firms existence and identify the value it wishes to create
Form a strategy
Build competitive advantage weather its low price, quality, quick delivery, etc
