22 global environment operations strategy in afaculty.unlv.edu/kleong/scm352powerpoint_files/chapter...
TRANSCRIPT
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2 Operations Strategy in a Global Environment2
SCM 352
Outline
• Global Company Profile: Boeing• Global View of Operations• Developing Mission and Strategies• Achieving Competitive Advantage Through
Differentiation, Cost, Response• Four Worldwide Operations Strategies
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Examples of Global Strategies
• Boeing – both sales and production are worldwide.
• Haier – A Chinese company, produces compact refrigerators (one-third of the US market) and wine cabinets (half of the US market) in South Carolina
• Sony – purchases components from suppliers in Thailand, Malaysia, and around the world
Boeing 787 Dreamliner
http://www.boeing.com/commercial/787family/
Boeing 737 Assembly Plant
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Reasons to Globalize Operations
Tangible
Intangible
1. Reduce costs (labor, taxes, tariffs, etc.)2. Improve the supply chain3. Provide better goods and services4. Attract new markets5. Learn to improve operations6. Attract and retain global talent
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Cultures can be quite differentAttitudes can be quite different towards
PunctualityLunch breaksEnvironmentIntellectual property
ThieveryBriberyChild labor
Cultural and Ethical Issues
Ranking Corruption
http://www.transparency.org/
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The Role of
• Maquiladoras
• World Trade Organization (WTO)
• North American Free Trade Agreement (NAFTA)
• European Union (EU)
• Mercosur
• APE
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Match Product & Parent
• Braun Household Appliances• Firestone Tires• Godiva Chocolate• Haagen-Dazs Ice Cream• Jaguar Autos• Lotus Autos• MGM Movies• Lamborghini Autos• Alpo Petfoods
1. Volkswagen2. Bridgestone3. Campbell Soup4. Tata Motors5. Proctor & Gamble6. Nestlé7. Pillsbury8. Sony9. Proton
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Match Product & Country
• Braun Appliances• Firestone Tires• Godiva Chocolate• Haagen-Dazs Ice Cream• Jaguar Autos• Lotus Autos• MGM Movies• Lamborghini Autos• Alpo Pet Foods
1. Germany
2. Japan
3. United States
4. Switzerland
5. India
6. Malaysia
7. UK
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Developing Mission & Strategy
Mission statements tell an organization where it is going
The Strategy tells the organization how to get there
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Mission
• Mission - where are you going?
Organization’s purpose for beingAnswers ‘What do we provide society?’Provides boundaries and focus
• Xerox?
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Mission of the Hard Rock Café
• To spread the spirit of Rock ‘n’ Roll by delivering an exceptional entertainment and dining experience. We are committed to being an important, contributing member of our community and offering the Hard Rock family a fun, healthy, and nurturing work environment while ensuring our long-term success.
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Strategy
© 1995 Corel Corp.
• Action plan to achieve mission
• Functional areas have strategies
• Strategies exploit opportunities and strengths, neutralize threats, and avoid weaknesses
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Strategies for Competitive Advantage
Differentiation – better, or at least differentCost leadership – cheaperResponse – rapid response
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Safeskin gloves – leading edge products
Competing on Differentiation
• Uniqueness can go beyond both the physical characteristics and service attributes to encompass everything that impacts customer’s perception of value
Walt Disney Magic Kingdom –experience differentiationHard Rock Cafe – dining experience
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• Provide the maximum value as perceived by customer. Does not imply low quality.
Southwest Airlines –secondary airports, no frills service, efficient utilization of equipment
Competing on Cost
Wal-Mart – small overheads, shrinkage, distribution costs
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Competing on Response
Flexibility is matching market changes in design innovation and volumes
A way of life at Hewlett-PackardReliability is meeting schedules
German machine industryTimeliness is quickness in design, production, and delivery
MotorolaFedExPizza Hut
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Product Life Cycle
Best period to increase market
share
R&D engineering is critical
Practical to change price or quality
image
Strengthen niche
Poor time to change image, price, or quality
Competitive costs become criticalDefend market
position
Cost control critical
Introduction Growth Maturity Decline
Com
pany
Str
ateg
y/Is
sues
Internet search engines
Sales
Drive-through restaurants
CD-ROMs
Analog TVs
iPods
Boeing 787
LCD & plasma TVs
Avatars
Xbox 360
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Product Life Cycle
Product design and
development critical
Frequent product and
process design changes
Short production runs
High production costs
Limited modelsAttention to
quality
Introduction Growth Maturity Decline
OM
Str
ateg
y/Is
sues
Forecasting critical
Product and process reliability
Competitive product
improvements and options
Increase capacityShift toward
product focusEnhance
distribution
StandardizationFewer product changes, more minor changes
Optimum capacity
Increasing stability of
processLong production
runsProduct
improvement and cost cutting
Little product differentiation
Cost minimizationOvercapacity
in the industry
Prune line to eliminate items not returning
good marginReduce capacity
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Strategy
Analysis
Internal Strengths
Internal Weaknesses
External Opportunities
External Threats
Mission
SWOT Analysis
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Southwest Airline’s Low Cost Competitive Advantage
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4 Worldwide StrategiesC
ost R
educ
tion
Con
side
ratio
nsHigh
Low
HighLowLocal Responsiveness Considerations
(Quick Response and/or Differentiation)
Standardized productEconomies of scale
Cross-cultural learning
Examples:Texas Instruments
CaterpillarOtis Elevator
Global Strategy Transnational StrategyMove material, people, ideas across national boundaries
Economies of scaleCross-cultural learning
ExamplesCoca-Cola
Nestlé
International Strategy
Import/export or license existing
product
ExamplesU.S. Steel
Harley Davidson
Multidomestic StrategyUse existing
domestic model globallyFranchise, joint ventures,
subsidiaries
ExamplesHeinz The Body ShopMcDonald’s Hard Rock Cafe
Thank You
Questions? ?