Business Strategies and Globalization

Competitive Position

• A business can achieve a competitive position in terms of price through:
  • Using less expensive inputs
  • Maximising efficiency by minimising waste and saving time
  • Producing more outputs from less inputs
  • Using technology
  • Producing faster
  • Having lower quality outputs
  • Increasing the size of operations to reduce the average cost of making each item
• Differentiation aims to obtain an advantage over competitors by having outputs that are different, unique, or use leading-edge technology
• Product Differentiation: distinguishes products (goods or services) from those of competitors

Globalisation Advantages and Disadvantages

• Advantages
  • Larger source of market opportunities
  • Source and choice of materials and labour
  • Opportunity for outsourcing (reduce production costs)
• Disadvantages
  • Increased competition in the global market
  • Changes in global/regional economies can negatively impact businesses
  • Changes to currencies and trade agreements can negatively impact businesses

Implications of Globalisation on Operational Strategies

• Access to larger markets for cheaper or better quality overseas resources influences input decisions.
  • This is driven by a need to global source, buying from overseas suppliers, and outsourcing, where a function is fully performed by an external party
  • These strategies lead to cheaper overseas labour
• Integration of overseas suppliers adds complexity and requires a global web strategy for supply chain management.
• Increasing volume impacts all aspects of the transformation process.

Legal Compliance vs. Ethical Responsibility

• Legal Compliance: follows the letter of the law and prescribed standards of behaviour
• Ethical Responsibility: goes above and beyond legal requirements, considering the impact on stakeholders

Operations Management in a Globalised World

• Labour Law Compliance: Minimum wages, award wages, working hours, breaks, leave pay, employee benefits, workers compensation, and health and safety laws.
• Environmental and Public Health Compliance: Regulations on dumping, pollution (air, land, water), and waste disposal.
• Business Licencing Rules: Requirements for training and certification, and operational conditions (such as restricted working hours, zoning restrictions, and content and disclosure restrictions)
• Taxation: Levies, duties, taxes on profits, and superannuation.
• Trade Practices and Fair Market Dealings: Addresses market power, misleading conduct, price collusion, monopolies, market concentration, and product safety.
• Migration and Rules around Offshore Skilled Labour: Minimum standards are applied to labour brought from other nations
• Intellectual Property: Copyright, patents, trademarks, designs, and original ideas
• Financial and Accounting Regulations: Standardising methods and rules for financial records, reports, and company directors' responsibilities as fiduciaries.
• Human Rights: Rules restricting discrimination on various grounds such as disability, culture, sexual preference, gender, age, or any other distinguishing feature.

Scheduling Techniques

• GANTT Charts: outlines activities to be performed, their order, individual duration, and total project duration
  • Advantages: simple planning, easy to understand, monitor, and compare progress against planned activities.
  • Disadvantages: not suitable for complex projects
• Critical Path Analysis (CPA): technique that maps tasks, duration, and necessary order for completion
  • Advantages: visualises dependencies and potential delays

Production Processes

• Process Production: Machines and equipment are grouped by function (e.g., hospital with dedicated wards)
  • Advantages: High-variety, low-volume production
• Product Production (Mass Production): High volume of goods with consistent quality
  • Common Layout: Assembly line for optimal personnel and machine use
  • Focus: Sequencing of tasks between work stations
• Product Layout: Equipment arranged based on the manufacturing sequence
• Fixed Position Production: For heavy or bulky products that remain stationary during production

Example Production Systems

• Apple (Foxconn) Production: Assembly line production with geographically efficient suppliers
• Foxconn Employment: 1.2 million employees, including 200,000 for iPhones, to promote efficiency.

This quiz explores competitive positioning strategies in business, focusing on price competition and differentiation. Additionally, it examines the advantages and disadvantages of globalization, highlighting market opportunities and increased competition. Test your knowledge on these crucial business concepts.