Global Operations Management

Dr. Md. Mamun Habib Assistant Professor

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Some Operations Strategies

International Strategy: uses exports and licenses to penetrate the global area. U.S. Steel, Harley Davidson. Multidomestic Strategy: uses decentralized authority with substantial autonomy at each business. Heinz, McDonalds. Global Strategy: Uses a high degree of centralization, with headquarters coordinating to seek standardization and learning between plants. Caterpillar, Otis Elevator. Transnational Strategy: Exploits economies of scale (refers to the cost advantages that a business obtains due to expansion) and learning, as well as pressure for responsiveness, by recognizing that core competencies reside everywhere in the organization. Coca-Cola, Nestls.

Four Operations Strategies

High Global Strategy Standardized product Economies of scale Cross-cultural learning Caterpillar Otis Elevator International Strategy Import. Export or license existing product U.S. Steel Harley Davidson Low Transnational Strategy Move material, people, ideas, across national boundaries Cross-cultural learning Coca-Cola Nestls

Cost Reductions

Low

Multi-domestic strategy Use existing domestic model globally Franchise, joint ventures, subsidiaries Heinz McDonalds High Local Responsiveness

To Establish Global Services

Determine if sufficient people or facilities exist to support the service Identify foreign markets that are open - not controlled by governments Determine what services are of most interest to foreign customers Determine how to reach global customers
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Managing Global Service Operations

Must take a different perspective on Capacity planning Location Planning Facilities design and layout Scheduling

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Strategic Changes Required by Globalization

Three major changes in international business strategies could be observed in many globalizing industries: 1. Companies needed to compete on several dimensions, not just one; they needed to continually improve business performance and often to extend their product lines. For many American firms, operations performance began to be much more important in business strategy. 2. Companies had more opportunities for international operations and more competitive pressures to operate in more countries. 3. Companies were able to adapt and integrate their networks of international operations to create greater value than they could create with independently run subsidiaries.