MT220 – UNIT 9

1) Lower costs, and

2) Add value for the customer?

WHERE?

Let’s take it step by step…

Internal control

Receipt of material from

suppliers

Inventory Control: LIFO &

FIFO

Lean manufacturing- JIT

Customers

The Supply Chain

Procurement and Physical transmission of materials from suppliers through to end customer = logistics (Hill, 2009, Glossary section)

Increased competition from two new companies entering your market

Your one supplier has been delivering the raw materials late to the plant

What can you do?

Cut production/labor costs

Have several suppliers

Institute Six Sigma

or ISO 9000Increase quality

W. Edward Deming- defect free output in Japan

Six Sigma- a statistically based program to boost productivity, reduce defects, eliminate waste and reduce costs

ISO 9000-An EU quality standard- A Firm’s manufacturing and products must be certified under the standard to do business in the EU.

Instituting a six sigma process:

Customers

Warrantyand ServiceReduced defects

& costs

Initially cheap labor manufacturing sites

Transitioned to thinking of these being future market economies due to projected population growth and growth of the middle class as consumers

According to the U.S. Bureau of the Census (2010): currently China has the largest population, followed by India and then the U.S. By 2050, India will be first, China second and the U.S. third (IDB section).

India size versus

China’s size

What does this tell you about the future in India versus China?

Prime Meridian

Location economies: Labor pool, Resources and Supporting industries

Route 128 outside Boston, Mass.-IT hub

Dulles Airport-outside Wash., DC IT hub –AOL

China

India

Singapore

Vietnam

South Korea

Location economies:

Country factorsTechnological factors

Fixed cost – how much will start up costs be

Minimum Efficient Scale – maxed out Flexible manufacturing and mass

customization

Advantages of Make Facilitating specialized investments Protecting proprietary product

technology Improving scheduling

Advantages of Buy Strategic flexibility Lower costs Offsets – capture more foreign business

Role of just-in-time inventoryRole of information technology and

the internet

Understand Global organizational structures

Understand how firms can profit by expanding globally

Be familiar with different strategies for competing globally and their pros and cons

Explain the pros and cons of using strategic alliances to support global strategies

Discussion Question: What kind of strategy (p. 395-400) is

evident at IKEA? Global Standardization Localization Transnational International

Assignment

Then decide what structure the two types of turbine companies have; Functional, Matrix, Divisional, Team or Networking, etc.? Explain what characteristics each company has that make you think it is the type you specified?

Are they centralized or decentralized?

Explain the three basic steps that firms contemplating foreign expansion must make: which markets to enter, when to enter those markets, and on what scale

Outline the advantages and disadvantages of the different modes that firms use to enter foreign markets

Identify the factors that influence a firm’s choice of entry mode

Evaluate the pros and cons of acquisitions versus Greenfield ventures as an entry strategy

Modes (table on page 426) Exporting Turnkey projects Licensing Franchising Joint ventures Wholly owned subsidiaries

Discussion question ING chose to enter the U.S. financial services

market via acquisitions rather than Greenfield ventures.

What do you think are the advantages and disadvantages to ING of doing this? What about the timing, scale, and mode involved?

Does this strategy make sense, why or why not? What are the disadvantages of Turnkey projects

and Licensing? For what kind of businesses are these two forms of entry mode most advantageous and why?

Assignment

What did you think about the power point process

How did you compare the Indian

family life to Mexican family life as well as comparing prices.

This is the last work weekThe final week is a week of reflection

What you have learned How will you use what you have learned

in your future classes and upcoming career

Looks like the hour is about up. You all have a great week and weekend. I wish you the best holiday season and good luck to you in y0ur future classes and up coming career.

Let me know when you graduate. I attend the January graduations in Florida. Hope to see you walk across the stage.