-Internal Customers: one or more employees or processes that rely on inputs from other
employees or processes in order to perform their work
-External Suppliers: the businesses or individuals who provide the resources, services, products
and materials for the firm’s short term and long term needs
-Internal Suppliers: employees or processes that supply important information or materials to a
firm’s processes
-Two Major Processes
-Services and Manufacturing
-Differ:
-the nature of their output- manufacturing gives physical products and can be produced,
stored, and transported, services are intangible and perishable
-the degree of customer contact- services much higher and customers have an active role
-manufacturing: capital intensive, quality easily measured, long response time
-services: labor intensive, quality not easily measured, have short response time
-Similar:
-service providers don’t just offer services and manufacturing providers don’t just offer
products ex. Restaurant- good food and good service wanted
-any gap between a competitive priority and the capability to achieve that priority must be
closed by and effective operations strategy
-Corporate Strategy: coordinates the firm’s overall goals with its core processes, specifies
businesses it will pursue, isolates threats, and identifies growth objects
-4 considerations:
-Environmental Scanning: process by which managers monitor trends in the environment
for potential opportunities or threats in order to stay ahead of competition ex. Economic
trends, new entrants into the market, social changes, political conditions
-Developing Core Competencies: unique resources and strengths that and organization’s
management considers when formulating strategy, reflects the collective learning of the
organization-how to coordinate processes and integrate technologies
-Workforce
-Facilities
-Market and Financial Know-How
-Systems and Technology
-Developing Core Processes: should drive its core processes-customer relationship, new
service/product development, order fulfillment, and supplier relationship- some companies
have all 4 while others focus on only a few; want to provide the greatest competitive
strength
-Global Strategies: ex. Buying foreign services or parts, combating threats from foreign
competitors, planning ways to enter markets beyond traditional national boundaries,
-strategic alliance: an agreement with another firm that may take one of 3 forms:
-collaborative effort: arises when one firms has core competencies that another
needs but is unable to duplicate
-joint venture: 2 firms agree to produce a service or product jointly-often to gain
access to foreign markets
-technology licensing: one company licenses its service or production methods to
another
-locate abroad in another country- must recognize customs, preferences, and economy
in other countries
-Market Analysis: divides the firm’s customers into market segments and then identifies the
needs
of each segment
-Market Segmentation: process of identifying groups of customers with enough in common to
warrant the design and provision of services or products that the group wants and needs, must
determine characteristics that clearly differentiate each segment and then can develop a sound
marketing program
-Needs Assessment: identifies the needs of each segment and assesses how well competitors
are
addressing needs, then incorporates needs into design of product or service
-service or product needs: price, quality, degree of customization
-delivery system need
-Firms can increase their market penetration by locating in foreign countries because it gives
them a local presence that reduces customer aversion to buying imports
-allows firms to balance cash flows from other regions of the world when economic conditions
are less robust in home country
-5 developments have stimulated the need for sound global strategies
-improved transportation and communications technologies
-loosened regulations on financial institutions
-increased demand for imported services and goods
-reduced import quotas and other international trade barriers due to formulation of
regional trade blocks ex. NAFTA
-comparative cost advantages ex. In China (known for manufacturing) and India (known for
service, software companies, technology companies) cheaper cost of labor
-Disadvantages of globalization
-political risks
-nationalization-government may take over a firm’s assets without paying compensation
-may have to relinquish proprietary technology
-employee skills may be lower
-Ethical, Workforce Diversity and Environmental Issues
-ethical dilemmas have been intensified by increased global presence and rapid technology
change
-some countries are more sensitive to conflicts of interests, bribery, discrimination against
minorities and women, unsafe workplaces
-need to be environmentally conscious, taking sustainability initiatives