The Strategy of International Business - Critique:
The environment of companies with international business is affected by independent forces like culture, politics, law, trading, government structure, institutions and monetary policies of the players involved in international business. A company needs to add value to its products in order to stay in the competition. Value addition through cost leadership reduces the costs of producing products, whereas addition through differentiation makes the product unique in the market. Both the strategies have their pros and cons, and are being used in order to add value and increase the sales of their products. A company should divide value addition process into primary and support activities to ensure maximum addition in the value of a particular product. Product design, operations, logistics, marketing and service should be given proper consideration in order to maintain a firm as a perfect value chain.
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A value chain process can never keep its pace without proper management, and by management, it means the value addition process should be configured and distributed around the world for maximum productivity. Concentrated value addition will reduce cost of collaborating with the parties involved as they will be in the same location, dispersed configuration will help to find perfect parties for the given task. However, the firm has to handle pressures like local responsiveness and global integration, and select a strategy accordingly, be it global strategy, transnational strategy, international strategy, or multi-domestic strategy. The evolution of multinational firms and their future depends on how well it is connected to the outside world and the quality of its value addition process.
A real life example of international business and value addition is Arla foods incorporation, which processes milk into cheese. The merger of Danish MD foods and Swedish Arla resulted in an American firm, Arla foods. It has created a network of 22 subsidiaries and is effectively maintaining a profitable value addition business (Walters & Rainbird, 2004). It has helped the company to create synergies and deliver the best value to customers. Moreover, the creation of financial and operation synergies have allowed the company to create technical knowledge bank and learn good management practices from each other (Walters & Rainbird, 2004).
Text from the Author:
The article discusses different environmental frameworks, such as political, cultural, legal and economic environments. These forces have tremendous implications on the business activities of the company (Barnes, 2002). The author discusses about the link between international trade theory, government influence, regional integration and foreign direct investment and comprehensively explains the operations involving international business in the world (Barnes, 2002).
Global Management and Supply Chain Management - Critique:
Supply chain management refers to the processes involved in getting the product to the end consumer. Effective and efficient supply chain management results in reduction of costs and increase in revenues. A firm has to look for effective logistic planning and focus on the transporting and storing of final goods in order to enjoy the benefits of good supply chain management. The 4 C’s of supply chain affect the manufacturing strategy of any firm i.e. compatibility, configuration, coordination and control. Supply chain management greatly depends upon global information system, which works when the information gathered from around the word is in a timely manner. Outdated information does not benefit the firm in any form, and thus a firm should avail available technologies like electronic data interchange, material requirement planning, radio frequency or e commerce to ensure timely information from the international market maintaining the quality of information.
Customer expectation should be given due consideration at all times, and policies such as zero defect policy or warranties should be introduced in order to gain the confidence of the customer. Managers have to take the responsibility of total product quality management using a six sigma approach and abiding by the quality standards enforced by the ruling government and institutions. A firm may, outsource some of its functions, or supply chain its components depending upon the benefits of both the processes. Purchasing materials should be finalized after proper market research, and once it has been finalized, then the firm should maintain supplier relations for a long term period of buying from them. Improvisation in the transportation networks is the key to a successful supply chain process.
A real life example of supply chain management can be effectively explained through Wal-Mart, where customers can find almost everything for their daily household use. The cycle starts when a customer enters Wal-Mart to buy a carton of milk, Wal-Mart stocks its shelves by its milk inventory, supplied by logistics department (Lee, So, & Tang, 2000). The customer selects a brand of his choice, produced by another company, packaged by a third party, and distributed by another. The Wal-Mart has learned from the purchasing trends of the customers and has been successful in forecasting the right quantity of the product according to the customer consumption pattern (Lee, So, & Tang, 2000).
Text from the Author:
The paper discusses the nature of supply chain management and debates on its nature being an extension of logistics; it demands activities and processes in any firm to go beyond logistics in order to stand out in the field of supply chain management ( Ketchen Jr & M .Hult, 2007). Research and development in this subject can lead into effective supply chain management for firms. The paper also talks whether companies should rely on responsive or follow the efficient supply chain strategy ( Ketchen Jr & M .Hult, 2007).
Ketchen Jr, D., & M .Hult, T. (2007). Bridging Organization Theory and Supply Chain Management: The Case of Best Value Supply Chains. Journal of Operations Management , 573-577.
Barnes, J. S. (2002). The Mobile Commerce Value Chain: Analysis and Future Developments. International Journal of Information Management , 91-94.
Cooper, M. C., Lambert, , D. M., & Pagh, J. D. (1997). Operations and Logistics Management. International Journal of Logistics Management, , 5-7.
Lee, H. L., So, K. C., & Tang, C. S. (2000). The Value of Information Sharing in a Two-Level Supply Chain. A Journal for the Institute for the Operation Reserach and Management Sciences , 42-45.
Walters, D., & Rainbird, M. (2004). The Demand Chain as an Integral Component of the Value Chain. Journal of Consumer Marketing , 50-52.
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