Today’s Topic: Business Strategy Development
Henry Mintzberg once said, “We can’t know anything about the future because it hasn’t happened yet.” Given the unpredictable nature of the future, many corporations are faced with serious dilemmas concerning their strategic planning. However, corporations must not give up on forecasting and thereby leave strategy to chance. People, just like corporations, need a clear direction in order to maximize their potential. Therefore, many successful corporations operate under the fundamental thesis that it is indeed possible to plan your way to long term success.
However, forward planning is fraught with risks. Many corporations look for trends in the past with expectation that they will continue on into the future. Extrapolation of previous conditions can be useful in formulating strategy. Nevertheless, basing all decisions on the past is like walking through the world with blinders on. Corporations must take into account the changes in the business environment if they wish to be sustainable.
In order to reduce the risk of strategic planning, many firms have come to rely on two models of thought. The Planning School model consists of step by step procedures for planning and evaluating performance. The first step in the planning school model is to develop the concept of a Corporate Mission. This is a general statement that can include basic information about the corporation. In this statement firms can stipulate the exact industry they wish to operate in. They can clarify what products and services they will offer. They can also establish an ethical framework for the corporation.
The second step is to Develop Goals. These goals are more specific and intensive than the mission statement. Goals must be both quantifiable and realistic. For example, corporations can stipulate the level of market share they wish to have in their given industry. They can also set quotas for profits and Rate of Return. Clear, concise goals are critical to the development of the firm. The Third step is to Develop Plans and Strategies. This is the roadmap to the achievement of the firms’ goals. The fourth step consists of implementation of policy and procedures that will follow strategies to meet goals. Lastly, each corporation must evaluate their performance with a focus on achievement of goals. Upon evaluation, corporations will begin the process once more to fix possible shortcomings.
There are several impediments to the planning school approach. For example, corporations that have been in business for a while may have trouble implementing changes. These firms must take into account what is; namely, how their infrastructure is set up. Firms must take into account that previous strategies may have allocated resources in a fashion that is inconsistent with new goals. Therefore, disengaging these resources to pursue a new strategy may not be cost effective. Consequently, corporations must find a commonality between what “is” and where they wish to go.
Another approach to developing strategy is the learning school approach. The learning school takes into account both intended and emergent strategies. A corporation begins with intended strategies. After implementation these strategies become deliberate strategies. However, through everyday interactions with the business environment corporations may be presented with emergent strategies. By combining deliberate and emergent strategies the corporation can obtain realized strategies. This school of planning understands that flexibility is critical to continued success. Sometimes strategies are just born and corporations can learn from them.
While both of these strategies have great potential for increasing the effectiveness of future planning, perhaps a multi-faceted approach is the best. By combining the school, corporations can get the best of both worlds. They can have the structure of the planning school in addition to the flexibility of the learning school.
In order for corporations to be sustainable they must plan for the future. They must have a clear vision of where they are going and what it will take to get there. Through the process of strategic management corporations can allocate scarce resources to ensure a successful future.
Friday, September 25, 2009
Personal Positioning Techniques
Today’s Assigned Topic: Personal Positioning Techniques; Discuss three or four things you can do between now and the time you graduate to position yourself for your desired career.
As I am quickly approaching the end of my undergraduate academic career, it is becoming increasingly clear that there are still things I can do to position myself for my future. Positioning yourself for success is a never ending endeavor. In order to accomplish this, I must have a clear vision of where I am now in relation to where I want to be. In addition, a well defined sequence of steps that I will take to achieve my end objective is critical. I have always liked the adage, “proper planning prevents poor performance.” Therefore, I have chosen several steps that, I believe, will help me to position myself for future success. These are: GMAT preparation, internship opportunities, networking, and continuing education.
One current area of focus, during these last few months before graduation, is effective preparation for the GMAT exam. The GMAT is a prerequisite to entrance into graduate school. Therefore, currently I am enrolled in the Jon M. Huntsman School of Business GMAT Prep Course. Every Wednesday, I attend three hours of lecture consisting of the strategies and skills necessary to succeed on the GMAT. I have taken several practice exams and have seen improvement. I have also established a benchmark for myself. My goal is to obtain a 700 or above on the GMAT. This will not be easy, but I believe that it can be done. A 700 or higher will provide me with access to many top level graduate programs all over the world. This will increase my options concerning continued education.
Another area that is essential to positioning myself before graduation is internship opportunities. Internships are an extremely effective avenue to build effective resumes. Therefore, I have applied for an internship with ASAP International Holdings Inc. Through correspondence with them I have been accepted into their internship program. I will be moving to Guangzhou China on January 15 for a time period of at least six months. While there I will continue to gain experience in the arena of international business. I will learn many facets of hotel management and have an opportunity to continue my study of the Mandarin language.
In addition to building my resume, my internship will also provide me with an amazing opportunity to network. While in china I will be able to meet and work for many individuals with incredible international experience. These individuals will be an avenue for future employment. Therefore, I must do all in my power to impress these individuals with my knowledge and experience.
The last thing I can do to position myself for a future job is plan now to attend graduate school. As discussed previously, I am preparing to take the GMAT entrance exam. This preparation, in addition to my normal course work, will help me prepare for grad school. I will also be focusing on keeping my grades at acceptable levels during this last semester. Perhaps even more important than grades, I will be maximizing the knowledge and theories presented in my classes so that I might apply them in the workplace.
There is still much to be done to continue my preparation to enter into the international business arena. However, I believe that my dedication to excellence in my academic progress and my international experiences will be of great importance in positioning myself for the future.
As I am quickly approaching the end of my undergraduate academic career, it is becoming increasingly clear that there are still things I can do to position myself for my future. Positioning yourself for success is a never ending endeavor. In order to accomplish this, I must have a clear vision of where I am now in relation to where I want to be. In addition, a well defined sequence of steps that I will take to achieve my end objective is critical. I have always liked the adage, “proper planning prevents poor performance.” Therefore, I have chosen several steps that, I believe, will help me to position myself for future success. These are: GMAT preparation, internship opportunities, networking, and continuing education.
One current area of focus, during these last few months before graduation, is effective preparation for the GMAT exam. The GMAT is a prerequisite to entrance into graduate school. Therefore, currently I am enrolled in the Jon M. Huntsman School of Business GMAT Prep Course. Every Wednesday, I attend three hours of lecture consisting of the strategies and skills necessary to succeed on the GMAT. I have taken several practice exams and have seen improvement. I have also established a benchmark for myself. My goal is to obtain a 700 or above on the GMAT. This will not be easy, but I believe that it can be done. A 700 or higher will provide me with access to many top level graduate programs all over the world. This will increase my options concerning continued education.
Another area that is essential to positioning myself before graduation is internship opportunities. Internships are an extremely effective avenue to build effective resumes. Therefore, I have applied for an internship with ASAP International Holdings Inc. Through correspondence with them I have been accepted into their internship program. I will be moving to Guangzhou China on January 15 for a time period of at least six months. While there I will continue to gain experience in the arena of international business. I will learn many facets of hotel management and have an opportunity to continue my study of the Mandarin language.
In addition to building my resume, my internship will also provide me with an amazing opportunity to network. While in china I will be able to meet and work for many individuals with incredible international experience. These individuals will be an avenue for future employment. Therefore, I must do all in my power to impress these individuals with my knowledge and experience.
The last thing I can do to position myself for a future job is plan now to attend graduate school. As discussed previously, I am preparing to take the GMAT entrance exam. This preparation, in addition to my normal course work, will help me prepare for grad school. I will also be focusing on keeping my grades at acceptable levels during this last semester. Perhaps even more important than grades, I will be maximizing the knowledge and theories presented in my classes so that I might apply them in the workplace.
There is still much to be done to continue my preparation to enter into the international business arena. However, I believe that my dedication to excellence in my academic progress and my international experiences will be of great importance in positioning myself for the future.
Saturday, September 19, 2009
"The Effective Utilization of People"
Today's Topic: Using Lean Management Principles to Increase Worker Productivity.
Remarks drawn from a Conference given at Utah State University Partners in Business Seminar by Norman Bodek, President, PCS Press.
Partners in Business Report
Norman Bodek, President of the PCS Press, presented training on a subject he called “The Effective Utilization of People.” The utilization of people can be presented in many ways, depending on a firms’ given industry. However, regardless of industry, corporations in the United States need to implement strategies to increase the quality of work life. Increasing the quality of work life for employees is directly related to the principles of lean management and “quick and easy kaizen”.
In order to raise the quality of work life a company must establish a clear vision of the “ideal”. Most corporations today understand the underlying message of lean management. They know that by reducing any of the “seven wastes” described in kaizen, they are able to increase efficiency and maximize employee output. Nevertheless, corporations are woefully lacking in areas that actually raise the quality of work life for employees. Mr. Bodek asked questions pertaining to this issue. “Why don’t we love Mondays?” “What is missing?” The lack of inspiration in this area is directly linked to an unclear vision of what the “ideal” is in your given industry.
Each corporation must have an ideal and strive to achieve it. There were several suggestions given that were very pertinent to succeeding in this area. First, “Be the best in the world at whatever you do.” Second, “I have a goal…this goal is that everyone improves .1% everyday in their assigned tasks.” When corporations, and more importantly the people in them, are dedicated to being the best in the world at whatever they do; a culture of innovation will be created and productivity will increase. If everyone in a corporation were to improve .1% everyday, productivity can be doubled in three years. With doubled productivity, corporations would no longer need to outsource. This would result in shorter supply chains and an increase in profits. Therefore, such exemplary corporate goals can greatly benefit corporations monetarily and create a culture filled with quality of life. However, most people have a wall that prevents them from trying new things. In order to increase the quality of work life, people must be allowed to work in an environment that pushes them to overcome their own resistance to change.
One possible way to break through these “walls” is to allow employees to actively participate in the process of innovation and implementation. This process is called “Quick and Easy Kaizen”. Bodek explained this process very adeptly by asking the question, “If I (as a worker) am waiting for management to change my life, how long am I going to be waiting?” The answer is a long time. Therefore, corporations must get employees to change their own work environment. Empowering employees to provide autonomous improvement suggestions is one of the most effective ways to increase quality of life. For example, during the previous year Autoliv Inc. received 64 suggestions related to increasing efficiency from each and every one of its’ workers. Autoliv has a goal to receive 96 ideas each from employees in the coming year. Each of these ideas has saved money for the corporation, but they have also done something more. These ideas have allowed employees to feel that their creativity and ideas are worthwhile; moreover, employees feel pride in their accomplishments.
In order to maximize their potential, corporations must: improve the quality of work life, have a clear vision of the ideal, ask “what can we do to improve?”, and allow employees to change their own work environment. By so doing, Monday will no longer be the worst day of the week. People will go to work and perform their tasks efficiently, innovation throughout the corporation will be increased, and productivity will be maximized. Controlling the factors of production can and will provide great benefits for companies with enough courage to break down their walls and allow their people to shine.
Remarks drawn from a Conference given at Utah State University Partners in Business Seminar by Norman Bodek, President, PCS Press.
Partners in Business Report
Norman Bodek, President of the PCS Press, presented training on a subject he called “The Effective Utilization of People.” The utilization of people can be presented in many ways, depending on a firms’ given industry. However, regardless of industry, corporations in the United States need to implement strategies to increase the quality of work life. Increasing the quality of work life for employees is directly related to the principles of lean management and “quick and easy kaizen”.
In order to raise the quality of work life a company must establish a clear vision of the “ideal”. Most corporations today understand the underlying message of lean management. They know that by reducing any of the “seven wastes” described in kaizen, they are able to increase efficiency and maximize employee output. Nevertheless, corporations are woefully lacking in areas that actually raise the quality of work life for employees. Mr. Bodek asked questions pertaining to this issue. “Why don’t we love Mondays?” “What is missing?” The lack of inspiration in this area is directly linked to an unclear vision of what the “ideal” is in your given industry.
Each corporation must have an ideal and strive to achieve it. There were several suggestions given that were very pertinent to succeeding in this area. First, “Be the best in the world at whatever you do.” Second, “I have a goal…this goal is that everyone improves .1% everyday in their assigned tasks.” When corporations, and more importantly the people in them, are dedicated to being the best in the world at whatever they do; a culture of innovation will be created and productivity will increase. If everyone in a corporation were to improve .1% everyday, productivity can be doubled in three years. With doubled productivity, corporations would no longer need to outsource. This would result in shorter supply chains and an increase in profits. Therefore, such exemplary corporate goals can greatly benefit corporations monetarily and create a culture filled with quality of life. However, most people have a wall that prevents them from trying new things. In order to increase the quality of work life, people must be allowed to work in an environment that pushes them to overcome their own resistance to change.
One possible way to break through these “walls” is to allow employees to actively participate in the process of innovation and implementation. This process is called “Quick and Easy Kaizen”. Bodek explained this process very adeptly by asking the question, “If I (as a worker) am waiting for management to change my life, how long am I going to be waiting?” The answer is a long time. Therefore, corporations must get employees to change their own work environment. Empowering employees to provide autonomous improvement suggestions is one of the most effective ways to increase quality of life. For example, during the previous year Autoliv Inc. received 64 suggestions related to increasing efficiency from each and every one of its’ workers. Autoliv has a goal to receive 96 ideas each from employees in the coming year. Each of these ideas has saved money for the corporation, but they have also done something more. These ideas have allowed employees to feel that their creativity and ideas are worthwhile; moreover, employees feel pride in their accomplishments.
In order to maximize their potential, corporations must: improve the quality of work life, have a clear vision of the ideal, ask “what can we do to improve?”, and allow employees to change their own work environment. By so doing, Monday will no longer be the worst day of the week. People will go to work and perform their tasks efficiently, innovation throughout the corporation will be increased, and productivity will be maximized. Controlling the factors of production can and will provide great benefits for companies with enough courage to break down their walls and allow their people to shine.
Friday, September 18, 2009
The intrinsic Risks and Rewards of Globalization
Globalization References:
Beyond Offshoring: Assess your Company's Global Potential, Farrell.
New Practice of Global Product Development, Eppinger and Chitkara.
Is Your Innovation Process Global? Santos et al.
Making the Most of Foreign Factories, Ferdows.
Shifting Globalization, Yuva.
How Intel Got Inside, Vogelstein.
Shanghai Auto, Taylor.
Big Mac's Local Flavor, Gumbel.
The world is becoming smaller. Advances in technology, communication, and transportation are allowing businesses to expand into diverse markets across the globe. Outsourcing, Foreign Direct Investment, Partnerships, and Global Product Development have the potential to create incredible profits for corporations. However, there is also a large amount of risk inherent with increased globalization.
Through analysis of the articles presented on this subject, one fact became very clear. In order to gain the benefits of globalization, a corporation must be flexible. This flexibility may be represented in many forms depending on your given industry. However, regardless of your industry each business needs to ensure that their “supply chain strategy can support their business in the face of rising volatility.” (Yuva, 09) Several examples illustrate this point. For many years, McDonalds based supply chains around an ethnocentric business strategy. Each operation, across the globe, was standardized according to the successful American model. Menus had little or no variation, and restaurant design was uniform.
However, as McDonalds reached critical mass in its global operations, things had to change. The McDonalds brand was vilified for being the epitome of westernization and; therefore, was stuck in a losing image battle. To correct this, McDonalds began to decentralize management and create a flexible culture of openness throughout each market. This increased customization has provided great dividends for the company. For example, McDonalds has adapted menus to coincide with local cuisine. They have also allowed flexibility concerning the interior design of their restaurants. Today, this flexibility has led to increased brand loyalty as well as innovation across cultural boundaries.
Flexibility must be a prevailing factor in the formation of corporate business strategy. Previous class discussion has shown that adaptability and agility are critical to successful supply chain management. Adaptability and agility are the essence of flexibility. Therefore, integration of flexibility into the decision making process will create huge dividends for corporations in the future. This coincides with research done in the paper “Is Your Innovation Process Global?” The main premise of this paper was that in order for an organization to be truly successful it must allow for innovation. Corporations are now able to utilize knowledge and skills from around the world in their production processes. However, the sheer volume of information can lead corporations to an inadvertent overload, which results in stagnant ideas and change. Thus, corporations must maintain focus on the core competencies of the firm and process flexibility, while attempting to maximize innovation.
Corporations must take into considerations hemispheric locations of their subsidiaries and supply chains. Political climate, local economics, and transportation costs all contribute to supply chain volatility. In response to these risks, many manufacturers are “reworking their within-a-line strategy to have multiple categories run within the plant to allow for optimal flexibility.” (Yuva, 09) Such changes represent innovation of corporate strategy as well as production in response to global market requirements. Flexibility and innovation are complimentary principles. A corporation must be able to view the global market and identify opportunities. They must also possess the flexibility of management and processes to implement change for the betterment of the corporation.
Another key concept presented throughout the readings is that, in order to be effective, organizations must examine the total cost of globalization and its impact throughout the supply chain. In the past, many companies found that offshoring decreased their costs. Therefore, companies like Intel and GM began outsourcing production capacity to countries with relatively low labor and raw material costs. However, as the global business climate changes, these businesses are facing new challenges to their revenue streams. “Companies are learning that other costs, including transportation and supply chain costs, can quickly escalate. Volatile fuel costs, along with increased foreign wages, new laws and regulations, and increased costs of raw materials have all contributed to the new realized costs-thus lessening the appeal of offshoring.” (Rutgers, 09)
To further illustrate the evaluation of cost, three articles provided in-depth discussion stating that the current trend of offshoring is slowly being replaced with nearshoring. Because of the aforementioned reasons, organizations have realized that moving supply chains closer to home is more economical. Nearshoring provides the ability to gain greater control over your supply chain through increased visibility and understanding. Visibility and understanding stem from the fact that many neighboring countries share cultural and economic similarities. These similarities provide a sense of security for many organizations. Nearshoring also provides an increased level of flexibility. John Yuva states that nearshoring “results in a more regional network from which corporations can source product as well as deliver to local demand.” Microsoft’s recent shift to nearshoring brought great benefits to the company. By shifting production from Asia to Mexico, Microsoft was able to use pre-established IP infrastructure and decreased shipping to get their product, the X-Box, to market with incredible speed for the Christmas season. Through evaluation of global supply chain costs, Microsoft was able to increase flexibility and maximize the value of the firm.
To further illustrate this point, in the article “The Practice of Global Product Development”, Steven Eppinger warns that businesses must fully consider the cost of globalization in order to not fall into the “outsourcing trap”. This trap occurs when organizations lose the ability to produce core technical abilities internally; therefore, becoming reliant on their foreign supplier for this critical portion of their business. Corporations that lose sight of their core competencies will soon be at the mercy of market fluctuations. One corporation that has done a good job avoiding this lack of foresight is Intel.
Intel has entered into a joint venture with Chinese companies and the Chinese Government in order to enter the Chinese market. While Intel predicts that their future success relies heavily on the expansion of the Chinese market, they also understand that they cannot outsource their core capacities. For example, Intel has not built a “fabs” chipmaking plant in China because of the lack of IP protection available there. This provides a level of protection for the firm. In contrast, VW has fallen prey to the outsourcing trap by sharing some of its’ intellectual property with the Shanghai Auto Group. As a result, Shanghai Auto is now developing its own line of cars that one day may supplant VW from dominance in the Chinese market.
Several important lessons can be learned from the business interactions of Intel and VW with the Chinese Government. These lessons contain the core message of the readings on globalization. Namely, if organizations are not constantly vigilant in applying good corporate strategy to global expansion, they will fail. Organizations must: establish flexible supply chains, account for the total cost of globalization, and avoid falling prey to the dangers of outsourcing. By so doing, organizations can reap the benefits of globalization, while, at the same time, avoid the inherent risks.
Beyond Offshoring: Assess your Company's Global Potential, Farrell.
New Practice of Global Product Development, Eppinger and Chitkara.
Is Your Innovation Process Global? Santos et al.
Making the Most of Foreign Factories, Ferdows.
Shifting Globalization, Yuva.
How Intel Got Inside, Vogelstein.
Shanghai Auto, Taylor.
Big Mac's Local Flavor, Gumbel.
The world is becoming smaller. Advances in technology, communication, and transportation are allowing businesses to expand into diverse markets across the globe. Outsourcing, Foreign Direct Investment, Partnerships, and Global Product Development have the potential to create incredible profits for corporations. However, there is also a large amount of risk inherent with increased globalization.
Through analysis of the articles presented on this subject, one fact became very clear. In order to gain the benefits of globalization, a corporation must be flexible. This flexibility may be represented in many forms depending on your given industry. However, regardless of your industry each business needs to ensure that their “supply chain strategy can support their business in the face of rising volatility.” (Yuva, 09) Several examples illustrate this point. For many years, McDonalds based supply chains around an ethnocentric business strategy. Each operation, across the globe, was standardized according to the successful American model. Menus had little or no variation, and restaurant design was uniform.
However, as McDonalds reached critical mass in its global operations, things had to change. The McDonalds brand was vilified for being the epitome of westernization and; therefore, was stuck in a losing image battle. To correct this, McDonalds began to decentralize management and create a flexible culture of openness throughout each market. This increased customization has provided great dividends for the company. For example, McDonalds has adapted menus to coincide with local cuisine. They have also allowed flexibility concerning the interior design of their restaurants. Today, this flexibility has led to increased brand loyalty as well as innovation across cultural boundaries.
Flexibility must be a prevailing factor in the formation of corporate business strategy. Previous class discussion has shown that adaptability and agility are critical to successful supply chain management. Adaptability and agility are the essence of flexibility. Therefore, integration of flexibility into the decision making process will create huge dividends for corporations in the future. This coincides with research done in the paper “Is Your Innovation Process Global?” The main premise of this paper was that in order for an organization to be truly successful it must allow for innovation. Corporations are now able to utilize knowledge and skills from around the world in their production processes. However, the sheer volume of information can lead corporations to an inadvertent overload, which results in stagnant ideas and change. Thus, corporations must maintain focus on the core competencies of the firm and process flexibility, while attempting to maximize innovation.
Corporations must take into considerations hemispheric locations of their subsidiaries and supply chains. Political climate, local economics, and transportation costs all contribute to supply chain volatility. In response to these risks, many manufacturers are “reworking their within-a-line strategy to have multiple categories run within the plant to allow for optimal flexibility.” (Yuva, 09) Such changes represent innovation of corporate strategy as well as production in response to global market requirements. Flexibility and innovation are complimentary principles. A corporation must be able to view the global market and identify opportunities. They must also possess the flexibility of management and processes to implement change for the betterment of the corporation.
Another key concept presented throughout the readings is that, in order to be effective, organizations must examine the total cost of globalization and its impact throughout the supply chain. In the past, many companies found that offshoring decreased their costs. Therefore, companies like Intel and GM began outsourcing production capacity to countries with relatively low labor and raw material costs. However, as the global business climate changes, these businesses are facing new challenges to their revenue streams. “Companies are learning that other costs, including transportation and supply chain costs, can quickly escalate. Volatile fuel costs, along with increased foreign wages, new laws and regulations, and increased costs of raw materials have all contributed to the new realized costs-thus lessening the appeal of offshoring.” (Rutgers, 09)
To further illustrate the evaluation of cost, three articles provided in-depth discussion stating that the current trend of offshoring is slowly being replaced with nearshoring. Because of the aforementioned reasons, organizations have realized that moving supply chains closer to home is more economical. Nearshoring provides the ability to gain greater control over your supply chain through increased visibility and understanding. Visibility and understanding stem from the fact that many neighboring countries share cultural and economic similarities. These similarities provide a sense of security for many organizations. Nearshoring also provides an increased level of flexibility. John Yuva states that nearshoring “results in a more regional network from which corporations can source product as well as deliver to local demand.” Microsoft’s recent shift to nearshoring brought great benefits to the company. By shifting production from Asia to Mexico, Microsoft was able to use pre-established IP infrastructure and decreased shipping to get their product, the X-Box, to market with incredible speed for the Christmas season. Through evaluation of global supply chain costs, Microsoft was able to increase flexibility and maximize the value of the firm.
To further illustrate this point, in the article “The Practice of Global Product Development”, Steven Eppinger warns that businesses must fully consider the cost of globalization in order to not fall into the “outsourcing trap”. This trap occurs when organizations lose the ability to produce core technical abilities internally; therefore, becoming reliant on their foreign supplier for this critical portion of their business. Corporations that lose sight of their core competencies will soon be at the mercy of market fluctuations. One corporation that has done a good job avoiding this lack of foresight is Intel.
Intel has entered into a joint venture with Chinese companies and the Chinese Government in order to enter the Chinese market. While Intel predicts that their future success relies heavily on the expansion of the Chinese market, they also understand that they cannot outsource their core capacities. For example, Intel has not built a “fabs” chipmaking plant in China because of the lack of IP protection available there. This provides a level of protection for the firm. In contrast, VW has fallen prey to the outsourcing trap by sharing some of its’ intellectual property with the Shanghai Auto Group. As a result, Shanghai Auto is now developing its own line of cars that one day may supplant VW from dominance in the Chinese market.
Several important lessons can be learned from the business interactions of Intel and VW with the Chinese Government. These lessons contain the core message of the readings on globalization. Namely, if organizations are not constantly vigilant in applying good corporate strategy to global expansion, they will fail. Organizations must: establish flexible supply chains, account for the total cost of globalization, and avoid falling prey to the dangers of outsourcing. By so doing, organizations can reap the benefits of globalization, while, at the same time, avoid the inherent risks.
Saturday, September 12, 2009
Governing Principles of Effective Supply Chains
Today's Topic: Supply Chain Essentials
Cited Rferences:
Ten Guiding Principles for High‐Impact SCM, Fawcett & Magnan, 2004.
Best Value Supply Chains: A Key Competitive Weapon for the 21st Century, Ketchen et al., 2008
Triple‐A Supply Chain, Hau L. Lee, 2004.
The landscape of business is in continual flux. Business practices and methodologies that have been effective in the past, may lead to economic ruin in the future. One area of business that is experiencing such a transition is the arena of supply chain management. In recent years, most businesses have focused on leveraging resources and materials to maximize speed and cost-effectiveness. However, in order for companies to attain competitive dominance, a more encompassing approach needs to be implemented.
The three readings provided in class have presented several key themes and messages aimed at improving supply chain management. For example, each article articulated the fact that best value supply chains all possess similar qualities that ensures success. First, great supply chains “align objectives and share resources across the company to deliver greater value” to customers. (Fawcett, 04) In addition to simply providing alignment across the company, the most effective supply chains are able to “align the interests of all the firms within the supply network so that companies optimize the chain’s performance when they maximize their interests.” (Lee, 04)
Effective supply chain alignment begins with the alignment of information. In order for companies to align their interests, they must first understand the needs and interests of each link in the supply chain-especially consumers. Open communication about forecasts, sales data and plans will expedite alignment in this area. Companies can use technology in order to “eliminate uncertainty, reduce inventory, and boost responsiveness to customers’ requests.” (Fawcett, 04)
Next, companies must align identities. This consists of employing relationship management tools to build value added bridges all along the supply chain. This also includes defining roles and responsibilities of each member of the chain to avoid conflicts. Third, companies need to align incentives to maximize supply chain performance. Saturn, Seven Eleven, and R.R. Donnelly are examples of companies that did a good job in this area. For example, whenever a supplier’s suggestion saved R.R. Donnelly money, the firm splits the savings with the supplier.
The articles also provided information of possible ways to implement this process. David Ketchen claims the key transition to the best value alignment of supply chain is that “Executives must view problems from the supply chain level of analysis rather than just the firm level”. By broadening the focus of management decisions to mainly focus on supply chain interactions, executives can add value and improve profits.
Another key theme from the readings is that best value supply chains are agile. Each author feels that it is critical for companies to have good capacity to react to change. Ketchen and Lee describe agility as being able to manage the cost of buffers. Fawcett, however, provides insight into agility by warning companies to beware role shifting. I think the key to being agile is explained very well in his paper. “Ultimately, leaders know that someone, somewhere, is working to make them obsolete. So they are meticulous scanners, always monitoring market and competitive conditions…This allows them to (1) grasp the ramifications of constantly changing consumer and supply environments, (2) recognize channel alternatives, (3) assess wide ranging tradeoffs, and (4) balance short-term and long-term company requirements.”
I especially liked the example of Dell Computers agile supply chains. In response to an earthquake, Dell changed the prices of PC configurations over-night. In contrast, competitors did not have established plans and therefore did nothing. While competitors scrambled to adapt, Dell was able to steer consumer demand away from products that required the chips delayed by the earthquake. This allowed Dell to gain market share in the aftermath of the earthquake.
Another theme I wish to mention is that effective supply chains are adaptable. Great supply chains are able to adapt to the changing demands and needs of customers by reacting to unexpected changes in supply and demand smoothly. They also are willing to change to take advantage of changes in technology, political change, and economic variability. The example of Lucent Technology was especially interesting to consider.
Perhaps the most overriding theme of these articles can be explained in the quote by Roger Blackman. “Competitive dominance will be achieved by the entire supply chain, with battle fought supply chain versus supply chain.” The old methods of lowering cost and speeding up delivery will no longer be applicable to the long-term success of corporations. In order to compete, executives must begin to pay increased attention to the science of supply chain management.
Cited Rferences:
Ten Guiding Principles for High‐Impact SCM, Fawcett & Magnan, 2004.
Best Value Supply Chains: A Key Competitive Weapon for the 21st Century, Ketchen et al., 2008
Triple‐A Supply Chain, Hau L. Lee, 2004.
The landscape of business is in continual flux. Business practices and methodologies that have been effective in the past, may lead to economic ruin in the future. One area of business that is experiencing such a transition is the arena of supply chain management. In recent years, most businesses have focused on leveraging resources and materials to maximize speed and cost-effectiveness. However, in order for companies to attain competitive dominance, a more encompassing approach needs to be implemented.
The three readings provided in class have presented several key themes and messages aimed at improving supply chain management. For example, each article articulated the fact that best value supply chains all possess similar qualities that ensures success. First, great supply chains “align objectives and share resources across the company to deliver greater value” to customers. (Fawcett, 04) In addition to simply providing alignment across the company, the most effective supply chains are able to “align the interests of all the firms within the supply network so that companies optimize the chain’s performance when they maximize their interests.” (Lee, 04)
Effective supply chain alignment begins with the alignment of information. In order for companies to align their interests, they must first understand the needs and interests of each link in the supply chain-especially consumers. Open communication about forecasts, sales data and plans will expedite alignment in this area. Companies can use technology in order to “eliminate uncertainty, reduce inventory, and boost responsiveness to customers’ requests.” (Fawcett, 04)
Next, companies must align identities. This consists of employing relationship management tools to build value added bridges all along the supply chain. This also includes defining roles and responsibilities of each member of the chain to avoid conflicts. Third, companies need to align incentives to maximize supply chain performance. Saturn, Seven Eleven, and R.R. Donnelly are examples of companies that did a good job in this area. For example, whenever a supplier’s suggestion saved R.R. Donnelly money, the firm splits the savings with the supplier.
The articles also provided information of possible ways to implement this process. David Ketchen claims the key transition to the best value alignment of supply chain is that “Executives must view problems from the supply chain level of analysis rather than just the firm level”. By broadening the focus of management decisions to mainly focus on supply chain interactions, executives can add value and improve profits.
Another key theme from the readings is that best value supply chains are agile. Each author feels that it is critical for companies to have good capacity to react to change. Ketchen and Lee describe agility as being able to manage the cost of buffers. Fawcett, however, provides insight into agility by warning companies to beware role shifting. I think the key to being agile is explained very well in his paper. “Ultimately, leaders know that someone, somewhere, is working to make them obsolete. So they are meticulous scanners, always monitoring market and competitive conditions…This allows them to (1) grasp the ramifications of constantly changing consumer and supply environments, (2) recognize channel alternatives, (3) assess wide ranging tradeoffs, and (4) balance short-term and long-term company requirements.”
I especially liked the example of Dell Computers agile supply chains. In response to an earthquake, Dell changed the prices of PC configurations over-night. In contrast, competitors did not have established plans and therefore did nothing. While competitors scrambled to adapt, Dell was able to steer consumer demand away from products that required the chips delayed by the earthquake. This allowed Dell to gain market share in the aftermath of the earthquake.
Another theme I wish to mention is that effective supply chains are adaptable. Great supply chains are able to adapt to the changing demands and needs of customers by reacting to unexpected changes in supply and demand smoothly. They also are willing to change to take advantage of changes in technology, political change, and economic variability. The example of Lucent Technology was especially interesting to consider.
Perhaps the most overriding theme of these articles can be explained in the quote by Roger Blackman. “Competitive dominance will be achieved by the entire supply chain, with battle fought supply chain versus supply chain.” The old methods of lowering cost and speeding up delivery will no longer be applicable to the long-term success of corporations. In order to compete, executives must begin to pay increased attention to the science of supply chain management.
Friday, September 11, 2009
What can professional blogs fo for businesses?
Today’s topic: How can professional blogs benefit your business?
In the world’s ever more complex business environment, businesses are always searching for methods to increase their competitive advantage in their respective markets. This is especially true given the current economic crisis experienced by organizations across the globe. This crisis has influenced many organizations’ profit margins to decrease well below forecasted expectations. In the wake of decreasing profits margins, companies have two options to stabilize the value of their firm. First, companies can increase sales to bolster positive cash flows. Given the current state of the economy, this first option is not incredibly viable for most corporations. The second option is to reduce operating costs. Some firms accomplish this by firing workers or cutting back on production. While this may increase the firms EBITDA for a period, it can also lead to losses in the future. Another possible avenue for firms is to reevaluate their cost structure. This culminates with organizations becoming more “lean” in their processes.
One idea that many firms have begun to implement is that of a professional blog. This type of blog is very helpful to the company because professionally designed blogs can do so much more than a conventional web site. They allow your site visitors to interact with you directly through your site with comments. Registered visitors can even contribute to your site by entering text, pictures videos and whatever else you choose to allow.
Through superior customer interaction ad service, businesses are able to better provide for long term customers. Professional Blogs also cut down on operating costs required for a traditional company website. Traditional websites take time and money to update. In contrast, professional blogs are extremely inexpensive and fluid.
Additionally, CEO and Entrepreneur Cory Miller stated that his professional blog has benefitted his company in many ways. For example, he listed these eight areas specifically.
Professional Blogs can and will:
1) Attract new clients and customers
2) Demonstrate your expertise
3) Showcase your products or services, and
4) Reach a global audience.
5) Transform your traditional website - from a static site to a dynamic, regularly updated one filled with customer-centered value.
6) Encourage return customer visits to your website
7) Raise your visibility in search engines - particularly local searches
8) Give you and your business exposure to a worldwide audience
Many businesses in Ireland have also found professional blogs to be very beneficial to their respective firms. They claim that many businesses use blogging effectively to generate business.
“According to the IIA, they use blogging for:
• a source for sales leads (here at Pro Blog Service, we get at least 2 leads per blog post. That’s why we do it.)
• improving their company’s ranking in Google (nothing beats blogging for search engine optimization)
•showing customers they’re experts in their sector (we write about blogging and social media.)”
They continue by stating, “Blogging is the best way to answer the “how” questions your customers have. You can create an entire knowledge base with a blog, doing nothing but answering questions from your customers, and dominate search results for your field. Because if one person has the question, others do too. Many others, and those others are looking for the answers. They’re going to Google to find the answers, and Google is checking you out to see if you’re answering the question. If you’re not, they’re going to find someone who is.”
Professional Blogs can be of great benefit to firms during these troubled economic times. They can lower operating costs for a firm and thus increase firm value. They can also attract new customers and demonstrate expertise.
For more information of studies by the IIA look to their website.
http://problogservice.com/american-business-bloggers-learn-irish/
In the world’s ever more complex business environment, businesses are always searching for methods to increase their competitive advantage in their respective markets. This is especially true given the current economic crisis experienced by organizations across the globe. This crisis has influenced many organizations’ profit margins to decrease well below forecasted expectations. In the wake of decreasing profits margins, companies have two options to stabilize the value of their firm. First, companies can increase sales to bolster positive cash flows. Given the current state of the economy, this first option is not incredibly viable for most corporations. The second option is to reduce operating costs. Some firms accomplish this by firing workers or cutting back on production. While this may increase the firms EBITDA for a period, it can also lead to losses in the future. Another possible avenue for firms is to reevaluate their cost structure. This culminates with organizations becoming more “lean” in their processes.
One idea that many firms have begun to implement is that of a professional blog. This type of blog is very helpful to the company because professionally designed blogs can do so much more than a conventional web site. They allow your site visitors to interact with you directly through your site with comments. Registered visitors can even contribute to your site by entering text, pictures videos and whatever else you choose to allow.
Through superior customer interaction ad service, businesses are able to better provide for long term customers. Professional Blogs also cut down on operating costs required for a traditional company website. Traditional websites take time and money to update. In contrast, professional blogs are extremely inexpensive and fluid.
Additionally, CEO and Entrepreneur Cory Miller stated that his professional blog has benefitted his company in many ways. For example, he listed these eight areas specifically.
Professional Blogs can and will:
1) Attract new clients and customers
2) Demonstrate your expertise
3) Showcase your products or services, and
4) Reach a global audience.
5) Transform your traditional website - from a static site to a dynamic, regularly updated one filled with customer-centered value.
6) Encourage return customer visits to your website
7) Raise your visibility in search engines - particularly local searches
8) Give you and your business exposure to a worldwide audience
Many businesses in Ireland have also found professional blogs to be very beneficial to their respective firms. They claim that many businesses use blogging effectively to generate business.
“According to the IIA, they use blogging for:
• a source for sales leads (here at Pro Blog Service, we get at least 2 leads per blog post. That’s why we do it.)
• improving their company’s ranking in Google (nothing beats blogging for search engine optimization)
•showing customers they’re experts in their sector (we write about blogging and social media.)”
They continue by stating, “Blogging is the best way to answer the “how” questions your customers have. You can create an entire knowledge base with a blog, doing nothing but answering questions from your customers, and dominate search results for your field. Because if one person has the question, others do too. Many others, and those others are looking for the answers. They’re going to Google to find the answers, and Google is checking you out to see if you’re answering the question. If you’re not, they’re going to find someone who is.”
Professional Blogs can be of great benefit to firms during these troubled economic times. They can lower operating costs for a firm and thus increase firm value. They can also attract new customers and demonstrate expertise.
For more information of studies by the IIA look to their website.
http://problogservice.com/american-business-bloggers-learn-irish/
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