Documente Academic
Documente Profesional
Documente Cultură
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Outline
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Outline Continued
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Outline Continued
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Outline Continued
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Country Component
Latecoere
conversion system
and integrated
Germany
Interior lighting
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Country Component
Cobham
UK
Rolls-Royce
UK
Engines
Smiths Aerospace
UK
system
BAE SYSTEMS UK
Central computer
Electronics
Alenia Aeronautics
Italy
Upper center
fuselage &
horizontal stabilizer
Toray Industries
Japan Carbon fiber for
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Country Component
Fuji Heavy
Industries
Japan
Kawasaki Heavy
Japan Forward fuselage,
Industries
fixed section of wing,
Teijin Seiki
Japan
Hydraulic actuators
Mitsubishi Heavy
Industries
Japan
Wing box
Chengdu Aircraft
Group
China
Rudder
Hafei Aviation
Parts
China
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Country Component
Korean AviationSouth
Korea
Saab
Wingtips
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Global Strategies
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Global Strategies
% Sales
Outside
Home Home Home
Company
Country
Citicorp
ColgatePalmolive
Dow USA
Chemical
Gillette
Honda Japan
IBM USA
USA
USA
34
72
46
63
60
50
NA
USA
63
57
62
36
47
53
NA
51
% Assets
Outside
% Foreign
Country
Country
NA
NA
NA
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% Sales
Outside
Home Home Home
Company
Country
ICI
Britain 78
50
Nestle Switzerland
98
Philips
Netherlands
Electronics
Siemens
Germany
Unilever
Britain &
Netherlands
% Assets
Outside
% Foreign
Country
NA
95
94
97
85
82
51
95
NA
70
38
64
Country
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Reasons to Globalize
Reasons to Globalize
Tangible
Reasons
Intangible
Reasons
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Reduce Costs
Foreign locations with lower wage rates can lower direct and indirect
costs
Maquiladoras
World Trade Organization (WTO)
North American Free Trade Agreement (NAFTA)
APEC, MERCOSUR, CAFTA
European Union (EU)
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Understand Markets
Interacting with foreign customers and suppliers can lead to new
opportunities
Cell phone
design from
Europe
Cell phone
fads from
Japan
Extend the product life cycle
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Punctuality
Lunch breaks
Environment
Intellectual
property
Thievery
Bribery
Child labor
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Work ethic
Tax rates
Inflation
Availability of raw
materials
Interest rates
Population
Number of miles of
highway
Phone system
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Braun Household
Appliances
Firestone Tires
Godiva Chocolate
Haagen-Dazs Ice
Cream
Jaguar Autos
MGM Movies
Lamborghini Autos
Alpo Petfoods
1.Volkswagen
2.Bridgestone
3.Campbell Soup
4.Tata Motors Limited
5.Proctor and Gamble
6.Nestl
7.Pillsbury
8.Sony
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Braun Household
Appliances
Firestone Tires
Godiva Chocolate
Haagen-Dazs Ice
Cream
Jaguar Autos
MGM Movies
Lamborghini Autos
Alpo Petfoods
1.Volkswagen
2.Bridgestone
3.Campbell Soup
4.Tata Motors Limited
5.Proctor and Gamble
6.Nestl
7.Pillsbury
8.Sony
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Braun Household
Appliances
Firestone Tires
Godiva Chocolate
Haagen-Dazs Ice
Cream
Jaguar Autos
MGM Movies
Lamborghini Autos
Alpo Pet Foods
1.Great Britain
2.Germany
3.Japan
4.United States
5.Switzerland
6.India
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Braun Household
Appliances
Firestone Tires
Godiva Chocolate
Haagen-Dazs Ice
Cream
Jaguar Autos
MGM Movies
Lamborghini Autos
Alpo Pet Foods
1.Great Britain
2.Germany
3.Japan
4.United States
5.Switzerland
6.India
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Mission
Organizations purpose
for being
Answers What do we
provide society?
Provides boundaries and
focus
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Merck
Figure 2.2
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Figure 2.2
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Figure 2.2
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Philosophy
and Values
Profitability
and Growth
Environment
Mission
Customers
Public Image
Benefit to
Society
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Sample Missions
Figure 2.3
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Sample Missions
Sample OM
Department
Missions
Product design
Quality management
Process design
Sample Missions
Sample OM
Department
Missions
Location
Layout design
Human resources
Sample Missions
Sample OM
Department
Missions
Supply-chain
management
Inventory
Scheduling
Maintenance
Strategic Process
Organizations
Mission
Functional Area
Missions
Marketing
Operations
Finance/
Accounting
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Strategy
Action plan to
achieve mission
Functional areas
have strategies
Strategies exploit
opportunities and
strengths, neutralize
threats, and avoid
weaknesses
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Competing on Differentiation
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Competing on Cost
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Competing on Response
Timeliness is quickness
in design, production,
and delivery
Johnson Electric,
Pizza Hut, Motorola
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10 Operations
Decisions Approach Example
Product
Quality
Process
Location
Layout
Human
resource
Supply chain
Inventory
Scheduling
Maintenance
Competitive
Advantage
DIFFERENTIATION
Innovative design Safeskins innovative gloves
Broad product line
Fidelity Securitys mutual
funds
After-sales service
Caterpillars heavy
equipment service
Experience
Hard Rock Cafs dining experience
COST LEADERSHIP
Low overhead
Franz-Colruyts
warehouse-type stores
Effective capacity
use
Southwest Airlines
aircraft utilization
Inventory
management
Wal Marts sophisticated
distribution system
RESPONSE
Flexibility
world market
Reliability
time
Quickness
at lunchtime
Differentiatio
n
(better)
Response
(faster)
Cost
leadership
(cheaper)
Figure 2.4
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10 Strategic OM Decisions
1.Human resources
and job design
2.Supply-chain
management
3.Inventory
4.Scheduling
5.Maintenance
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the 10 OM Decisions
Goods
Operations
Decisions
Goods and Product is
service
usually tangible
design
Services
Product is not
tangible
Quality
Many objective
standards
Many subjective
standards
Process
and
capacity
design
Customers not
involved
Customer may
be directly
involved
Capacity must
match demand
Table 2.1
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Operations
Decisions
Location
selection
Layout
design
Human
resources
and job
design
the 10 OM Decisions
Goods
Near raw
materials and
labor
Production
efficiency
Services
Near customers
Enhances
product and
production
Technical skills, Interact with
consistent labor
customers, labor
standards, output standards vary
based wages
Table 2.1
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Operations
Decisions
the 10 OM Decisions
Goods
Services
Supply
chain
Relationship
critical to final
product
Important, but
may not be
critical
Inventory
Raw materials,
work-in-process,
and finished
goods may be
held
Cannot be stored
Meet immediate
customer demand
Table 2.1
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the 10 OM Decisions
Goods
Services
Operations
Decisions
Maintenanc Often preventive Often repair
e
and takes place
and takes place at
at production site customers site
Table 2.1
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Process Design
High
Moderate
Low
Process-focused
JOB SHOPS
(Print shop, emergency
room, machine shop,
fine-dining
restaurant)
Variety of Products
Low
Repetitive
(modular) focus
ASSEMBLY LINE
(Cars, appliances,
TVs, fast-food
restaurants)
Mass Customization
Customization at
high Volume
(Dell Computers PC,
cafeteria)
Product focused
CONTINUOUS
(Steel, beer,
paper, bread,
institutional
kitchen)
ModerateHigh
Volume
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Competitive
Advantage
Product
Heavy R&D investment; Low R&D investment;
Selection and extensive labs; focus on focus on development
Design
development in a broad of generic drugs
range of drug
categories
Quality
Competitive
Advantage
Process
Process focused;
general processes; job
shop approach, shortrun production; focus
on high utilization
Location
Competitive
Advantage
Scheduling
Centralized production
planning
Many short-run
products complicate
scheduling
Layout
Layout supports
automated productfocused production
Layout supports
process-focused job
shop practices
Table 2.2
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Competitive
Advantage
Human
Resources
Supply
Chain
Long-term supplier
relationships
Tends to purchase
competitively to find
bargains
Table 2.2
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Competitive
Advantage
Inventory
Table 2.2
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Introduction
GrowthMaturity
Decline
Best period to
increase market
share
Practical to
change price or
quality image
Poor time to
change image,
price, or quality
R&D engineering
is critical
Strengthen niche
Competitive costs
become critical
Defend market
position
Internet search
engines
iPods
LCD &
Xbox 360
plasma TVs
Sale
s
Avatar
s
Boeing
787
Twitter
Company Strategy/Issues
Cost control
critical
Drivethrough
restaurants
CD-ROMs
Analog
TVs
Figure 2.5
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Introduction
Product design
and
development
critical
Frequent
product and
process design
changes
Short
production runs
High production
costs
Limited models
Attention to
quality
GrowthMaturity
Forecasting
critical
Product and
process
reliability
Competitive
product
improvements
and options
Increase
capacity
Shift toward
product focus
Enhance
distribution
OM Strategy/Issues
Decline
Standardization
Fewer product
changes, more
minor changes
Optimum
capacity
Increasing
stability of
process
Long production
runs
Product
improvement
and cost cutting
Little
product
differentiation
Cost
minimization
Overcapacity
in the
industry
Prune line to
eliminate
items not
returning
good margin
Reduce
capacity
Figure 2.5
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SWOT Analysis
Mission
Internal
Strengths
External
Opportunities
Analysis
Internal
Weaknesses
External
Threats
Strategy
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State the reason for the firms existence and identify the
value it wishes to create.
Form a Strategy
Marketing
Service
Distribution
Promotion
Channels of distribution
Product positioning
(image, functions)
Decisions
Product
Quality
Process
Location
Layout
Human resource
Supply chain
Inventory
Schedule
Maintenance
Finance/Accounting
Production/Operations
Leverage
Cost of capital
Working capital
Receivables
Payables
Financial control
Lines of credit
Sample Options
Customized, or standardized
Define customer expectations and how to achieve them
Facility size, technology, capacity
Near supplier or near customer
Work cells or assembly line
Specialized or enriched jobs
Single or multiple suppliers
When to reorder, how much to keep on hand
Stable or fluctuating production rate
Repair as required or preventive maintenance
Chapter
5
6, S6
7, S7
8
9
10
11, S11
12, 14, 16
13, 15
17
Figure 2.72 - 62
Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
Lean,
Productive
Employees
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
Lean,
Productive
Employees
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited Passenger
Service
No meals (peanuts)
Competitive Advantage:
Low Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
High number ofCourteous,
flights reduces
but
employee idle time
between
flights
Limited
Passenger
Saturate a city with flights,
lowering
Service
administrative costs (advertising, HR,
etc.) per passenger for that city
Lean,
Pilot training required on only one
Productive
type of aircraft
Employees
Reduced maintenance inventory
required because
of only one
type of
Competitive
Advantage:
aircraftLow Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Lean,
Productive
Employees
Competitive Advantage:
Low Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Courteous, but
Limited
Passenger
Reduced
maintenance inventory
Service
required
because of only one type of
Lean,
Productive
Flexible
union
Employees
contracts
High
Aircraft
Utilization
aircraft
Flexible employees and Short
standard
Haul, Point-toplanes aid scheduling
Point Routes, Often to
Maintenance personnel trained
only Airports
Secondary
one type of aircraft
20-minute
gate turnarounds
Competitive
Advantage:
Low Cost
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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Activity Mapping at
Southwest Airlines
Lean,
Productive
Employees
Competitive Advantage:
Low Cost
High
Aircraft
Utilization
Standardized
Fleet of Boeing
737 Aircraft
Frequent,
Reliable
Schedules
Figure 2.8
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International
Strategy
Import/export or
license existing
product
Figure 2.9
Examples
U.S. Steel
Harley Davidson
Cost Reduction Considerations
Low
Low
High
Figure 2.9
International Strategy
Import/export or
license existing
product
Cost Reduction
Low
Examples
U.S.
Steel
Considerations
Harley
Davidson
Low
High
Global
Strategy
Standardized
product
Economies of scale
Cross-cultural
learning
High
Figure 2.9
International Strategy
Import/export or
Examples
license existing
product Texas
Examples
Instruments
U.S.
Steel
Cost Reduction Considerations
Caterpillar
Harley
Low
Davidson
Otis Elevator
Low
High
Figure 2.9
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
International Strategy
Import/export or
license existing
product
Cost Reduction
Low
Examples
U.S.
Steel
Considerations
Harley
Davidson
Low
High
Multidomestic
Strategy
Global Strategy
Use
existing
Standardized product
Economies
of scale
domestic
model
Cross-cultural learning
globally
Examples:
Texas Instruments
Franchise,
joint
Caterpillar
Otis Elevator
ventures,
subsidiaries
High
Figure 2.9
Examples
Import/export or
Heinz
license
existing
product
McDonalds
Examples
U.S.
The Body Shop
Steel
Cost Reduction Considerations
Harley
Hard Rock Cafe
Low
Davidson
International Strategy
Low
High
Figure 2.9
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
International Strategy
Import/export or
license existing
product
Cost Reduction
Low
Examples
U.S.
Steel
Considerations
Harley
Davidson
Multidomestic Strategy
Use existing
domestic model globally
Franchise, joint ventures,
subsidiaries
Examples
Heinz
The
Body Shop
McDonalds Hard
Rock Cafe
Low
High
Transnational
Strategy
Global Strategy
Standardized product
Move
Economies
of scalematerial,
Cross-cultural learning
people, ideas across
Examples:
boundaries
national
Texas Instruments
Caterpillar
Economies
Otis Elevator
of scale
Cross-cultural Multidomestic Strategy
International
Strategy
learning
Use existing
High
Import/export or
license existing
product
Examples
Examples
Examples
Coca-Cola
U.S.
Body Shop
Cost Reduction Considerations
Steel
Nestl
Harley
Low
Davidson
Figure 2.9
Heinz
The
McDonalds Hard
Rock Cafe
Low
High
Figure 2.9
Global Strategy
Standardized product
Economies of scale
Cross-cultural learning
Examples:
Texas Instruments
Caterpillar
Otis Elevator
Examples
Coca-Cola
Nestl
International Strategy
Import/export or
license existing
product
Cost Reduction
Low
Transnational Strategy
Examples
U.S.
Steel
Considerations
Harley
Davidson
Multidomestic Strategy
Use existing
domestic model globally
Franchise, joint ventures,
subsidiaries
Examples
Heinz
The
Body Shop
McDonalds Hard
Rock Cafe
Low
High
Ranking Corruption
Rank
1
2
3
5
8
12
14
17
19
37
39
56
79
89
146
Country
2009 CPI Score (out of 10)
New Zealand 9.4
Least
Denmark
9.3
Corrupt
Singapore, Sweden
9.2
Switzerland
9.0
Australia, Canada, Iceland
8.7
Hong Kong
8.2
Germany
8.0
Japan, UK
7.7
USA 7.5
Taiwan 5.6
South Korea 5.5
Malaysia
4.5
China 3.6
Most
Corrupt
Mexico 3.3
Russia 2.2
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