Chapter 2

Operations Strategy in a Global

Environment

Mira Meilia Marka, SE, MM

• Reduce costs (labor, taxes, tariffs, etc.)
• Improve the supply chain
• Provide better goods and services
• Attract new markets
• Learn to improve operations
• Attract and retain global talent
 Global Strategies
Operating decisions are centralized and
headquarters coordinates the
Global Strategy
• : and learning between
standardization
facilities
• Operating decisions are decentralized to
Multidomestic each country to enhance local
Strategy responsiveness

Transnational • Combines the benefits of global-scale

efficiencies with the benefits of local
Strategy responsiveness

International • uses exports and licenses to

Strategy penetrate the global area
Four International Operations
Strategies
 Achieving Global Operations
-Four Considerations-
• Global product design
• Global process design and technology
• Global factory location analysis
• Impact of Culture and Ethics
 Factors Affecting Mission

Philosophy &
Values
Profitability
Environment
& Growth
Mission

Customers Benefit to
Public Image
Benefit to Society
Society
Mission and Strategy

Mission • where you are

going

• how you are

going to get there
Strategy • an action plan
 Strategy
 Action plan to achieve mission
 Shows how mission will be achieved
 Company has a business strategy
 Functional areas have strategies
 Strategy Process
Company
Mission

Business
Strategy

Functional
Functional Area
Area
Strategies

Marketing Operations Fin./Acct.

Decisions Decisions Decisions
Strategies for Competitive Advantage

Cost Quick
Differentiation
leadership response
(Better)
(Cheaper) (Faster)
OM’s Contribution to Strategy
Operations Specific Strategy
Decisions Examples Used
Quality FLEXIBILITY
Sony’s constant innovation of new products Design
Product
HP’s ability to follow the printer market Volume
Process
Southwest Airlines No-frills service LOW COST

Location
DELIVERY

Layout Pizza Hut’s five-minute guarantee at lunchtime Speed

Federal Express’s “absolutely, positively on time” Dependability
Human Resource
QUALITY
Supply Chain Motorola’s automotive products ignition systems Conformance
Motorola’s pagers Performance
Inventory

Scheduling
IBM’s after-sale service on mainframe computers AFTER-SALE SERVICE

Maintenance
Fidelity Security’s broad line of mutual funds BROAD PRODUCT LINE
Reference : Principles of Operations
Management, 5e, and Operations
Management, 7e