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OPERATION STRATEGY IN A GLOBAL ENVIRONMENT - Coggle Diagram
OPERATION STRATEGY IN A GLOBAL ENVIRONMENT
Reasons to Globalize
Improve the supply chain
Reduce cost and exchange rate risks
Improve operations
Understand markets
Improve products
Attract and retain global talent
Developing Missions and Strategies
Mission
statements tell and organization where it is going
organization's purpose for being
provides boundaries and focus
Factors affecting mission
philosophy and values
profitability and growth
public image
public image
benefit to society
customers
environment
Strategy
action plan to achieve mission
strategies exploit opportunities and strengths, neutralize threats and avoid weaknesses
Strategies for competitive advantage
differentiation
cost leadership
response
Issues in operation strategy
resources view
value-chain analysis
porter's five forces model
operating in a system with many external factors
Strategic Planning, Core Competencies and Outsourcing
Outsourcing
transferring activities that traditionally been internal to external supplier
Outsorcing activities
payroll
surgery
it services
travel services
Theory of comparative advantage
external provider can perform activities more productively than the purchasing firm, then the external provider should do the work
purchasing firm focuses on core competencies
Advantage of outsourcing
cost savings
improving operations and service
accessing outside technology
maintaining a focus on core competencies
Disadvantage of outsourcing
increased logistics and inventory cost
loss of control
negative impact on employees
potential creation of future competition
Global Operation Strategy Options
global strategy
standardized product
economics of scale
cross-cultural learning
example: Catterpillar, Otis Elevator
multidomestic strategy
use existing domestic model globally
franchise, joint ventures, subsidiaries
example: MCD, Heinz The Body Shop
international strategy
import/export or license existing product
example: U.S. Steel Harley-Davidson
transnational strategy
move material, people or ideas across national boundaries
economies of scale
cross-cultural learning
example: Coca-Cola, Nestle