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Global Operations Management -à

Diagrams / Graphs / Ratios / Tables used in G.O.M.

Terms and Topics Covered in G.O.M.

Case Studies

Project:

Learning Curve

 

 

 

 

 

Marketing Management à

 

Terms and Topics Covered in Marketing Mgmt.

MBA Marketing Text

Case Studies

 

 

 

 

 

University of Advanced Research MBA listed coursework click here

 

 

 

 

Global Operations Management

Terms and Topics Covered in G.O.M.

 

Introduction Global Operations Management.

 

Ch 1 Introduction, History, Globalization

Ch 2 Operations in Global Business Strategy

Ch 3 Improving Operations Performance

Ch 4 ...Improving Global Supply Chain .....................Performance

Ch 5 ...Pushing The Limits of Global ..............Operational Performance.

Notes below, with Case Concerns.

 

 

 People Experience globalization differently depending on their occupation, home

country, company, industry and understanding.

For a NIC newly industrialized country or Developing country it can mean economic freedom or depletion of their natural resources.

Worldwide collaboration on CAR design.

GOM it must happen to learn from customers and to line up their work between parts of the organization.

GOM must make more and better products a lower cost. Serving customer’s world wide with common production processes and component design.

Elimination of many middle management jobs and Industrial engineers also are cut back.

Now the key players are experts arranged in teams. It used to be money and physical labor.

Effects of GO are bringing in money from outside sources, selling outside of it, sell more, and to invent product.

Computer and microprocessors are a key reason here along with lowering of trade barriers.

New approaches, new technologies.

Must use mind and hands.

Successful with senior mgmt support. OM mgmt must also learn new mindset and methods. ~japan took over.

ROOTS

Trade supplemented by investment for compliment of the trade.

Managerial influenced the local biz more as time went on.

Traders usually sought these for cheaper cost or for being available. Also to support THEIR trade.

Invested locally to support colonies.

Returns on investments were higher but riskier. Huh…

In 1914 direct foreign investment to world GDP reached a level it has not matched since.

DFI managers have direct influence from corp.office.

Portfolio investments do not.

Reason for trade was is getting resources,Tariffs made local mfg a needed evil…

European saved material while Americans saved labor.

After WWII USA *4 its DFI.

In 1973 over ½ of the worlds biggest companies were USA. 2/3 of worlds DFI and exports.

SHIFTING

NIC rapid growth. JAPAN growth less than 1/3 of USA. By 1992 it was 10% more… where was our leaders ??

World DFI and trade increased by factor of 4 1978-1990.

Most of DFI still to developing countries. Others investing in USA.

1963 4 TIGERS of Republic of Korea,Hong Kong,Singapore,Taiwan. From 1% to 7% from 1963-1990.

Growth will be from DC.=developing countries.

Exchange rates are determined more by private operation than government.

DFI into China increase.

Volume of currency increased exponentially after 1986 and controls ant tariffs loosened by governments.

European front also did this and worked in harmony with local countries.

NAFTA for us.

GATT agreement on trade and tariffs lowered barriers 38 percent.

NAFTA and CHILE in 1994 and former Soviet Union is getting involved also.

Multi Nationals completing within the traid.

300 businesses do 80% of worlds foreign production. 90% have headquarted in Developed Countries.

6 firms accounted for 66 percent of the firms on the fortune 500 list.

1993 this dropped to 58 percent. Many of these were around in 1914 when DFI was king.

TRIAD=JAPAN,WESTERN EUROPE, and USA.

Game name is to not give competitor a free "net profit " ride anywhere. It will use these funds to attack you later.

Global Competition in Industrialized Markets.

Human and Technological resources available in all economies are becoming more similar.

RATIO of foreign sales to TOTAL SALES.

FOREIGN ASSETS TO TOTAL ASSETS.

They have more assets than growth, this shows growth. Mcdonalds is expanding outside USA faster than inside.

America has more than ½ of worlds MNC in 1973 NOW 30%…Voting helps?

Sometimes some companies need to be global.

GOAL is to produce new product quicker..

1980 alliances with competitors were a common way to stay on cutting edge. Firms were forced to. Or left behind.

Global competition in the NIC’s.

Government supported them. It is said that Japan would of not happen without support by govt.

These counties were hungry for info on knowledge.

The 4 TIGERS grew fast. 1966-1977 10 to 27 % imports to USA. European to USA increased 2%..

JAPAN cost now raises while the NIC come up to bat with homework done.

MORE new kids are Brazil,Poland,India,IrelandPortugal,Thailand, Spain etc…………..

OPERATION FOUNDATIONS OF GLOBALIZATION.

Managers must learn this area from basic knowledge to culture changes needed for it.

Common corporate goal across all boundaries. Global competition is fierce and nobody can wait to see…

 INNOVATIONS IN INFORMATION AND COMMUNICATION TECHNOLOGIES.

 INNOVATIONS IN THE MANAGEMENT OF MANUFACTURING AND TECHNOLOGY.

 DIFFICULTY OF IMPLEMENTING INNOVATIONS IN OPERATIONS AND TECHNOLOGY MANAGEMENT.

TWO MAJOR TRANSITIONS IN OPERATIONS,TECHNOLOGY AND MANAGEMENT IN 20TH CENTURY.

MANAGERS CHALLENGES DURING GLOBALIZATION.

OPERATIONS IN GLOBAL BUSINESS STRATEGY.

IMPROVING OPERATIONS PERFORMANCE.

PUSHING THE LIMITS OF GLOBAL OPERATIONS PERFORMANCE

Evolution of global operation manager and their work.

Evolution of purchasing.

EVOLVING SKILLS OF GLOBAL OPERATION MANAGERS.

OBJECTIVES AND STRUCTURE OF BOOK.

CHAPTER 2

INTRODUCTION.

STRATEGIC CHANGES REQUIRED BY GLOBALIZATION.

OPERATIONS IN MULTINATIONAL BUSINESS STRATEGY.

GLOBAL PRESSURE TO COMPETE ON SEVERAL DIMENSIONS AND TO CONTINUALLY IMPROVE.

GLOBAL OPPORTUNITIES AND PRESSURES TO OPERATE IN MORE COUNTRIES.

GLOBAL OPPORTUNITIES TO INTEGRATE INTERNATIONAL OPERATIONS.

DIFFERENCES BETWEEN MULTINATIONALS AND GLOBAL BUSINESS STRATEGIES.

OPERATIONS STRATEGIES REQUIRED BY GLOBALIZATION.

MULTINATIONAL AND GLOBAL APPROACHES TO OPERATIONS STRATEGY.

TABLE 2-2

MULTINATIONAL.

GLOBAL.

MARKET SELECTION.

PRODUCT DEVELOPMENT AND TECHNOLOGY CHOICE.

HOW MANY MCDONALDS FORMULA.

RESOURCE ALLOCATION.

SUMMARY OF OPERATIONS STRATEGY CHANGES REQUIRED BY GLOBALIZATION.

DIFFICULTIES IN MANAGING GLOBALIZATION.

EXAMPLES.

SOURCES OF DIFFICULTIES IN GLOBALIZATION.

TRADE OFFS IN GLOBALIZATIONS.

APPROACHES TO MANAGING GLOBALIZATION.

CHANGES IN ORGANIZATION STRUCTURE.

CHANGES IN MANAGEMENT UNDERSTANDING AND BRAIN WORK NEEDED.

DEVELOPMENT OF CORE COMPETENCIES FOR GLOBAL LEARNING.

OPERATIONS IN GLOBAL BUSINESS STRATEGY.

CHAPTER 3 IMPROVING OPERATIONS PERFORMANCE.

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Marketing Management

Terms and Topics Covered in Marketing Mgmt.

selected text

MBA Marketing.

Chap 1

The role of marketing in the organization.

The business has 2 main objectives.

Marketing.

Innovation.

get the same respect.

LEVELS:

Corporate Marketing. Advocate for customer. Analyze customer needs and requirements.

Analyze competitive offering in that market. Assess competitive effectiveness.

 

Carry 11 hats.

FIGUREHEAD.

LEADER.

LIASON.

MONITOR.

DISSEMINATOR.

SPOKESPERSON.

ENTREPRENEUR.

DISTURBANCE HANDLER.

RESOURCE HANDLER.

RESOURCE ALLOCATOR.

NEGOTIATOR.

 Chap 7.Product development and testing.

Why development new products?

Boost Profits.
Product Life Cycle
New Product Development = NPD
NPD strategy
Search and Screening.
Sources of product Ideas.
Imitation.
Acquistion.
Licensing of New Products.
New Product Scouts.
Screening Procedures..
Revenue and Cost Analysis.
 Summary.

Chap 8….Product and Brand Management.
What is a Product.
Product Components.
Product Classifications.
Product Mix Strategy.
Assortment Dimensions.
Optimizing The Product Mix.
…Advantages of growth.
…Effects of Time.
Brand Strategy.
Brand Equity.
….Brand Asset Management.

Chap 9…Services Marketing.
Nature of Services.
Recent Trends.
…Less Regulations.
…Privatization.
…Creation of Service Profit Centers.
…Financial Pressure on Non Profit Organization.
Customer Participation.
Public or Private.
Major Service Industries.
Services are all around.
Service Marketing Characteristics.
Intangibility.
 
Chap 11…………..Selecting and Managing Distribution Channels.
What is a distribution Channel.
When Should Intermediaries be used.
Marketing Channel Jobs.
Distribution Alternatives.
Direct Distribution.
Adding Retailers.
Using Wholesalers.
Agents and Brokers.
 
Chapter 12 ……..Personnal Selling and Sales Force Mangement.

The Role of Personal Selling.
Reps vs Own Sales Force.
The Selling Job.
How Many Sales People.
What can You afford.
The Work Load Approach….calculation p.661
Sales Force Turnover.
Organizing The Sales Force.
Recruiting and Selecting Salespeople.
 Mailing Lists.
Catalogs.
Mass Media.
Broadcast.
…Cable Shopping.
…Infomercials.
Integrated Direct Marketing.
Summary…

Chapter 14………Designing Advertising Programs.
….Select Advertising Objectives.
…Developing An Advertising Budget.

Chapter 16….International Marketing.
Environment of International Marketing.
Trade Barriers.
Tariffs and Quotas.
Currency Exchange Problems.
Unstable Goverments.
Cultural Factors.
Which Markets to enter.
Market Entry Strategies.
Exporting.
Licensing.
Joint Ventures.

 Chapter 17…………..Marketing Planning and Implementation.
Brand Manager as Planner.
Building the Marketing Plan.
Executive Summary.
Company Situation.
Enviroment.
Target Markets.
Objectives.
Strategy.
ActionPrograms.
Anticipated Results.
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Diagrams / Graphs / Ratios / Tables used in G.O.M.

 

Introduction:

Direct Foreign Investment, Trends.

Real per Capita, Growth of World GDP.

Exchange Rate Histories.

Enrollment Ratios in Schooling.

Scientists and Engineers employed in R & D.

Foreign Assets vs Foreign Sales.

Fraction of MNC's by region.

Percent of US-Others Joint Ventures.

Growth of GNP ~ Internationally.

Chapter 2

Operations in Global Business Strategy.

Strategic actions 2 create Competitive Advan.

Configuration Patterns for International Biz.

Comparisons of Strategies in Global Era.

How many McDonalds can be built.

Coordination of MNC toward Globalization.

Configuration Patterns in Internation Operation

CASE STUDY INFORMATION.

Market Trends, Competitive Positions.

Cross-Border Product Flows by Industry.

Product and Country Characteristics.

Low Factor Cost Locations.

Material costs after re-Sourcing.

Productivity Index Model.

Sourcing Options. Start up Expenses.

Operating cost per location. & Total Costing.

ROI by location, ROI vs.Change in Volume.

ROI vs.Productivity adjusted wage.

ROI vs change in tax rate.

ROI vs Direct Labor Percentage

ROI vs Original Allocated Overhead.

Exports/Imports by region.

Organization Charts

Transportation Cost a among Plants.

History of Exchange, Inflation and Wage rates.

Cost buildup of a product.

Historic Price Reductions

Plant Rationalization

In house Mfg. Incremental Costs.

Maximum in house Mfg. Volume and Var cost

 

Chap 3

Improving Operation Performance

Productivity and Quality Performance History

Control charts-Different stages of knowledge

Stages of Knowledge

Key Elements and Working relations.

Technical and business success.

Schedules and business success.

CASES

Percentages of new orders placed.

Inspection Acceptance Ratios.

Worker hours per unit of measure.

Education support programs.

Translation of an improvement proposal.

Mechanisms for achieving Mgmt. Objectives.

Key event Scheduling.

Structure of the Industry.

Competitive Benchmark Summaries.

Shipping Matrix. / Degree of Automation.

 

Chapter 4

Improving Global Chain Performance.

Changes in Supply Chains w/ Rationalization

Consolidation Evidence in Supply Chains.

Domestic vs International Supply Chains.

Cost categories for Global Supply Firms.

Operations Analysis of Performance Improv..

Timing of Operations and Orders.

Inventory costs-service-Short-Long chain.

Proportion of Scheduled Shipments Missed.

Inventory as Cost of Goods Sold.

Coordination Cost as Factor of COGS.

Freight Rates As % of GOGS.

Pipeline times.

Incremental cost of Sourcing w/% of COGS.

Inventory sales ratio and pipeline time.

Cost of Defectives.

Map of Facilities.

Planning and Production Cycle.

Forecast distributions.

Sample buying Committees forecast.

Bill of Materials in supply Chain.

Chapter 5

Pushing Limits of Global Operations Mgm

Internationl joint ventures formed by usa co's

Interfirm Agreements by function.

Cooperation agreements.

Framework for managing Value creation.

Latent support network in cust-supplier part...

Exchange and Inflation rate what ifs.

Consumers Utility Values

Consolidated Statements of Income/Balancesh

Diversification Information

Investment Information.

Distribution of sales and assets.

Material flow configurations.

 

Case Studies

 

Lance Lawson Emerson Electric Company

Air Comfort Products

Executive Summary

The Organization.

 

ACP is a division of the EEC. It is one of fifty divisions.

Sales of the parent company is five billion per year. Eighty three percent

of the parent companies products hold the first or second position. Company

Growth has occurred for 30 years. Emerson Electric has over 200 manufacturing

Locations worldwide in 16 countries.

 

In response to a strong dollar and declining exports EE gears up

for a world assault with an increasing Engineering and Development budget.

 

EE wants 20 percent of sales to come from new products. Their E & D

budget is increased from 2 percent of sales to 3.1 percent.

 

EE also wants sales growth of 15 percent and each division must pay

as they go for their expenses.

 

They (EE) has just went through some layoffs and had sold off 100 million

worth of their non producing units.

 

ACP was a consumer product division and its size overall compared to

the others was small. ACP had started in 1895.

 

EE philosophy was to produce the best produce at the best price. Huh?

 

The Ceiling Fan Market.

 

Seasonal and Mature.

Competition (because of imports) is fierce.

 

The ACP Product Line.

 

Two lines of models.

Sizes from 36 to 56 inches.

One Line Assembled in Taiwan. One in America.

One Line middle-notch and the other at the lower end.

A total of 17 models were produced.

The assembled one in America had the components acquired from Asia.

These "Kits" came to America to be Assembled. called "subpacks"

 

The Sub-Packs.

 

Assembled from many over sea vendors.

Auditor assigned for quality control with one vendor having overall

authority and responsibility of the contract.

Subpacks arrived in lots of 2000-4000 to Tennessee.

Motor and Misc. was installed in USA.

ACP bought contracts based on lowest cost.

Logistical problems were rare. But must add cost to assure this.

 

Facts related to present Operations.

 

Sub pack quality is having some problems with the overall quality.

One month transport time can create problems with the above.

Sourcing product from Taiwan limited their knowledge to Taiwan.

Currency exchange rates were beginning to work against ACP.

 

The Alternatives.

 

1. Continue with existing operation. This had no major problems and

had several benefits.

 

PRO's

Deep Water port, Past relationship, Works with other ACP Products.

CON's

Two assemble sites, Manual Operations, Out-dated Operations~Painting.

Worker health did not cause concern with caustic chemicals used.

Had to sub-out undoable operation.

Quality did suffer but concern was minimal by existing mgmt.

EE had to buy tools and misc.

Cannot have ownership of operation.

 

2.Change to alternative Taiwan Vendor.

 

PRO's

More modern operation. Single site operation. More Worker concern.

Did not require any sub-out work. ~better control.

Company was more vertically integrated. Made own tools and fixtures.

Plating and anodizing was automated and timed.

Capacity seemed to be running below what was capable of it.

Could easily be switched to ACP needs.

 

 

CON's

Not proven. No past relationship. Some analysis can not be factuated.

By accepting this fabricator, ongoing relationship with above might

suffer.

Can not have ownership of operations.

 

3. Full Assembly in America.

 

PRO's

Control on all aspects of assembly and fabrication.

Cost could possibly be lower. Transportation cost savings.

 

CON's

Existing relationship with original vendor. ~ other products.

Make shipping cost go up for other products sourced from Taiwan.

Sourcing and labor costing unknowns exist.

How would "overhead" be handled by corporate.

 

4. Sourcing from Mexico.

 

PRO's

No import duties on incoming materials.

Labor rate about 75 cents an hour.

Hiring and management personnel were "supplied" by "infrastructure".

Exchange rate in our benefit is continuing. ~1987

Savings over Taiwan in Transportation costs.

Operation could be completely foreign owned, unlike Taiwan.

Closer to corporate.

CON's

Work force would require training.

Work force had high turnover and high absenteeism.

Would have to supply all tools and related equipment.

Poor developed infrastructure.

 

Data Not provided but Crucial.

 

1. What are further cost estimates of operations in America.

2. What percentage are these components overall in the products

sourced from this vendor. ~ lose shipping cost present pricing.

3. Is existing Vendor willing to update operations and facilities.

4. What is the cost of brokers, auditors, and related costs now.

5. What are their long-term desires and strategies with product.

AKA.. is it necessary to have 17 models of a product.

 

First Overview and Analysis.

 

Problem.

Number of products (17) and parts (50).

Solution.

Reengineer ~ reduce number of parts by reinvention.

 

Problem.

The 5 unknowns listed above.

Solution.

Only the Author knows. ~ answer them.

 

First Analysis of Alternatives.

 

  1.  
    1. Staying Put.
    2. Manufacturer must update facilities to reduce variation and increase quality.
    3. Alternative Taiwan. Cost Analysis, See added sheet, looks good.
    4.  
    5. American Operations. Get more data, Do trial run, See added sheets.
    6.  
    7. Mexico. Training analysis, Site visit, Move more products here ?

 

·  ·  ·  ·  ·  ·  ·  ·  ·  · 

Recommendations.

  1. If concerned about exchange rates in Asia then only have 2 options, stay or leave.
  2. What is current and planned status of rates.
  3. Can existing Vendor improve quality and get less variance in production.
  4. What are our exact ~ better estimates of America and Mexico operations.
  5. With data I have read, I would stay put until next season when a full assessment would be complete. Simulations done etc….

My calculations reveal between 50 and 150 grand difference. 3x safety factor.

Would not risk operation when time is running out on this season to make decision.

  1. Linear Programming Model to optimize capacity usage and economies of scale.
  2. Above and then built to order special models if desired.
  3. Get feedback from consumer.
  4. Reengineer product to use more universal parts and accessories.
  5. Work with suppliers and distributors.

·  ·  ·  ·  ·  ·  ·  ·  ·  ·  Final Analysis

Linear programming model to optimize usage of resources. Regardless of supplier.

 

Final decision of supplier to be made at later date with more data and information present.

 

Case Studies

 

 

Marketing Management

Marketing 5410

Spring 1997

Dr. Al Petrosky

 

 

Case 10-3...Horizon Travel

 

Basics:

By 1983 Horizon was involved in all stages of the package tour business. ~including airline.

Horizon expected to offer more "holidays" than ever before in 1983.

Forecasting is completed six months ahead of departure. Horizon has own travel agents even though this is a small fraction of overall sales. Horizon also owns hotels and villages.

 

Horizon is not the largest and must now react to new trends by the "Industry Leader".

"Industry Leader" will soon release a new brochure with new prices and others in the industry are using other methods which are of concern to Horizon.

 

Horizon can add travel agents, buy assets ~ hotels, reduce prices, do nothing, add a "new customer focus", etc... and / or a combination of all.

 

 

Overview

Up-Down market, Forecasting very important role.

Best year ever, even when industry was down in general....numbers good. Except for money tied up in assets.

 

Objectives

Continue growth. React to industry leader in positive way.

 

SWOT

 

S

Been in business 20 years before present.

 

Strategy of quality and consistency.

 

Airline new but increasing profits on ever increasing scale.

 

Involved in all facets of tourist industry.

 

W

Problems of planning...due to big part of forecasting and environmental variables.

 

Travel agent child company doing poorly on selling holidays.

 

Smallest of big four.

 

Airline division new.~ least experienced.

 

Assets tied up and increasing each year.

 

 

 

 

O

Expanding on available holidays 16 % this upcoming year.

 

Holidays abroad increasing ~ total.

 

Clientele of executives in 30's were chosen optimal by authors.

Authors attitude was positive on the company.

If courts reverse existing method of travel agents operations in UK. Will create new industry.

Leaders had collapsed before.

 

Thompson used a split brochure, good idea. ~ Instead of a single printing which sets "prices in stone".

Company has been growing ~ doing something right and now is the time to continue doing it.

 

 

T

Economies and the industries thin margins.

Fuel prices, weather, Exchange rates.

Cultural factors at other locations. ~ big one.

Probability of price war.

Competition bigger..head start in areas of operation.

Competition is better diversified. ~ larger.

Competition continuing to inovate..growing.

Inclusive tours decreasing as a whole.

Competition increasing travel agent division.

Brand Loyalty with customer low.

Independent travel agents can alienate you with small or no ill-effects.

Others discount prices, Horizon does not.

 

Some estimations ~ hotels, are done years in advance.

 Newcomers and veterans alike are trying new techniques from direct selling to "discounting".

  

Issues impacting alternatives.

Court decision on ABTA and present method of operations.

 Price War.....Fuel Cost....Economies...Other environmental areas~weather.

 

New brochure by industry leader. What will they do.

 Competitors moves.

 

Money is tied up in assets making some an increased possibility of "cash strapping".

 

Alternative Solutions

 

1. Improve existing operations with existing travel agents.

 

Pro Agents can add much to overall sales and return customers.

 

Con Agents can sell any product and customers have little brand loyalty.

 

 

2. Be happy with existing operations~except travel agents~not acceptable. ~ best year yet.

 

Pro No added cost.

 

Con Could lose more share. Market demands dynamics ?

 

 

3. More travel agents and improvement of existing.

 

Pro Increase sales and market share.

 

Con Increased money out and no one can own them all. Might obtain backlash from existing agents. Court decision plays here however.

 

 

4. Be a trend setter and figure out problem of setting operations so far ahead of actual usage.

 

Pro Better overall final estimates. Better use of cash flow.

 

Con Unproven method in market. Risky. If easy everyone would be using it. Seasonal and a "planning" type of thing.

 

 

5. Become a "discounter" to react to others. Discounts can mean several techniques.

 

PRO I believe this would add customers.

 

CON But would it add to increased profits.

6. Start a separate division which uses a different customer base and different marketing methods.

 

Pro Increase sales and share.

 

Con Money out, Risk, Copycat by others.

 

 

7. Continue to diversify with car rentals, Entertainment packages, and other methods.

 

Pro Increased profits.

 

Con More money in assets, risk. Market downturn and cash would be tied up.

 

 

 

Recommendations

 

Continue existing operations...Improve travel agent division...Look into expanding travel agent division.

 

Watch competition....Work on forecasting methods...

 

Watch court rulings....Watch industry environment.

 

Start WEB operations to attract customers. Have "virtual travel" with computer multimedia and 3D applications.

 

Keep abreast of technology and apply it to keep ahead and gain on the competition.

 

The major problem I see here is the cash flow tied up in assets. Horizon profits and new airline are doing well except for the first stated fact.

 

Use some linear programming or other modelings to find optimal combinations of entities to operate.

 

 

Direct mail to established customers to repeat business and notify of specials and suggestions.

 

 

Use media vehicles such as magazines, TV channel infomercials and similar means for market share.

 

Contingency plans UP-Down, Forecast ahead makes this area fuzzy.

 

1. Be ready to discount if necessary. ~ others do.

 

2. Be ready to adjust quickly. Become the first mover.

3. Have a "cash acquiring plan" and or be ready to increase cash holdings.

 

 

 

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