Skilled Workers Vs. Cheap Labor

Listen to this postInternational producers, like China, are exporting  their products to sell them at or lower than the production cost (Vandenbussche & Zanardi, 2008). Local companies can compete with the low-cost labor by making the costly labor more efficient to produce the same product in less time and with less waste (time and material). Klempa (2006) states that productivity can be drastically improved when the roadblocks are removed. Productivity improve by improving management planning, making productivity a strategic initiative, aiming high, measuring progress and making changes as needed (Klempa, 2006). The same worker might cost more but he or she would produce high output with less reworks. Local business would face stiff competition from the international producers if the same quality could be produced with cheaper labor.

References:

Klempa, M. (2006). Eliminating productivity roadblocks. Financial Executive, 22(8), 32-35.

Vandenbussche, H., & Zanardi, M. (2008). What explains the proliferation of antidumping laws? Economic Policy, 23(53), 93-138. doi: 10.1111/j.1468-0327.2007.00196.x

Should We Outsource Pharmaceutical Products?

Listen to this postOutsourcing became almost a must for most of the organizations. The electronics producers are a good example for outsourcing where most of the parts are outsourced or sometimes the products is completely manufactured by a different company. If you flip you iPhone and check the writing on the bottom of the phone you will notice “Designed by Apple in California, Assembled in China”!! Outsourcing eelectronic is more acceptable than other products like pharmaceutical products. The risk in outsourcing pharmaceutical products is very high because of the products nature. Melamine-laced mile products were responsible for the death of six babies and  poison contaminants in cough syrup were responsible for the death of more than 100 people in Panama. About 80% of the prescription drugs sold in the U.S are made outside the U.S. (“Outsourcing safety,” 2009). Risk management is very important to overcome the risk in pharmaceutical products (Fiscus, 2009). Product liability lawsuit could wipe out the cost saving from outsourcing the product and have a permanent scare in the firm’s brand (Fiscus, 2009).

References:

Fiscus, P. W. (2009). Global risks for drug manufacturers. Risk Management (00355593), 56(4), 50-54.

Outsourcing safety. (2009). Editorial, Nature Medicine, pp. 221-222. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=36818298&site=ehost-live

What is ISO 9001

Listen to this postThe ISO 9001 certification is important for the organization to ensure consistent quality control on the products. ISO 9001 certification audit is simply checking if the organizations has a procedure and that procedure is implemented and documented. The organization would insure the high quality for its products and the customers would get the same quality every time they purchase a product from this manufacturer.

ISO 9001 is a set of standards that represent a significant initial step for manufacturing organizations on the way to Quality Management, since they involve a lower first degree of commitment to their principles (Gutiérrez, et al., 2010). ISO 9001 is simply confirming that the organizations has business processes and has procedures to implement them. Gotzamani (2010) state that “(1) quality management system; (2) management responsibility; (3) resource management; (4) product realization; and (5) measurement, analysis and improvement.” (p. 688) are required to make sure that the basic processes of a well controlled organization (Gotzamani, 2010)

Many activities and processes take place to manufacture a single product. These process efficiencies should be measured to decide if the product is worth the cost it incurs on the organization (Jones, 2007). Management needs performance indicators to measure the cost of the product and aims to optimize production cost.

References:

Gotzamani, K. (2010). Results of an empirical investigation on the anticipated improvement areas of the ISO 9001:2000 standard. [Article]. Total Quality Management & Business Excellence, 21(6), 687-704. doi: 10.1080/14783363.2010.483101

Gutiérrez, L. J. G., Torres, I. T., & Molina, V. B. (2010). Quality management initiatives in Europe: An empirical analysis according to their structural elements. [Article]. Total Quality Management & Business Excellence, 21(6), 577-601. doi: 10.1080/14783363.2010.483064

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How Philips Are Doing Now?

Listen to this postPhilips started with the simple production of a light pulp and concentrated its effort on that single product to have the advantage of product specialization. Global market was a good opportunity when Holland market became too small for Philips production. Philips established production centers around the world and research and developments centers around different locations to support its expansion strategy (Bartlett, Ghoshal, & Beamish, 2008). Philips innovation produced competitive products like the color TV, stereo TV and the first TV with teletext. Philips realized that some of the products are not profitable in the existing operational setting and chose to outsource them. Most of Philips competitors moved their electronic production facilities to low-cost production sites like East Asia and south America. However, Philips licensed its innovations to other producers which made it less competitive like its decision to abandon the VHS technology. I would recommend that Philips continue downsizing its operations and re-engineer its profitable production sites but close or sell the struggling one. Philips should concentrate its budget and effort on research and development to come up with new challenging products that can be produced in the low-cost manufacturing sites in East Asia and south America.

References:

Bartlett, C., Ghoshal, S., & Beamish, P. (2008). Transnational management: Text, cases, and readings in cross-border management (5 ed.). Boston: McGraw-Hill/Irwin.

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Example of An International Expansion Strategy

Listen to this postThe color TV market boomed after the introduction of color TV in the late 1979. China opened for commercial production and the electronics manufacturing moved steadily to China up to the 1990s because of the cheap labor cost. Growth in the TV market in the past 10 years was dominated by the flat screen TV. TCL is an emerging Chinese company which bought Thomson television business and Alcatel Mobil phones in line with its main business of multimedia , communications, home appliances and electronics. This accusations moved TCL from being the 60th in the 1995 to be the number one brand in China now. TCL vision is to strengthening their foundation by reforming their basics and continuously innovating . Acquiring the Thomson television and Alcatel Mobil brings in a proven and successful technology to TCL and widen the ambitions goal of the “top 10 in 10 year” globalization vision (“Vision”, 2007-2008).

Innovations is a strong part of TCL business and part of the organization vision. TCL set up the first Research and Development (R&D) center for audio research in 1992. Currently, TCL has 18 R&D centers with 20 manufacturing bases around the world. TCL operated as separate business units in 2004. Some of the business units are multimedia, telecommunications, personal computers, consumer electronics and CD/DV distribution. Multimedia and mobile handsets generated most of TCL’s revenues at the same period. Supply chain management is a key success factor for TCL, which employed 80 people for sourcing and quality management. TCL made substantial profit because of its efficient supply chain management while its competitors lost money although all of them are sourcing their material from china (C. Bartlett, Ghoshal, & Beamish, 2008). The perfect supply chain enabled TCL to integrate its businesses and R&D centers together to move faster than its competitors in selecting the promising innovations and convert them into competitive product distributed around the world (C. Bartlett, et al., 2008).

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References:

(“Vision”, 2007-2008). Vision  Retrieved Jun 10, 2010, from http://www.tcl.com/main_en/About%20TCL/Vision/index.shtml?catalogId=13047

Bartlett, C., Ghoshal, S., & Beamish, P. (2008). Transnational management: Text, cases, and readings in cross-border management (5 ed.). Boston: McGraw-Hill/Irwin.

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Which Market Segment the New iPhone Will Take

iPhone 4GListen to this postApple is introduced the new iPhone which nicknamed 4G and i find it fascinating but I do not think I would buy one soon. I just got my iPad which can do most of the iPhones function but with a better resolution displayed on a larger screen. I find the iPad to be a “Phenomenal device” that keep on amazing me every time I use it. I never used Apple’s products until I bought the iPhone model (3Gs) last year. I was amazed by its simplicity and ease of use. However I found its price to be a challenge especially for the regular users who use their phones as a simple device to communicate. Such users would not need the thousands of applications offered in the iTunes store. Many customers in the Far East and the Middle East need a mobile communication device at the lowest price possible, unfortunately Apple does not offer such mobile phones. Students in India who spend less than Rs. 600 ($13) use their mobile phones for sports updates, playing games and downloading software but spent less on local calling and SMS messaging (Jha, 2008). Mobile phone penetrations in the Far East countries (like Philippines) depend on the lower-income segments. The model for serving high income segment would not work for the low-income segment according to Anderson and Kupp (2008). So the new iPhone might be amazing but do we need that amusement?

References:

Anderson, J., & Kupp, M. (2008). Serving the poor: drivers of business model innovation in mobile. [Article]. Info, 10(1), 5-12. doi: 10.1108/148366908108501 20

Jha, S. (2008). Understanding mobile phone usage pattern among college-goers. [Article]. ICFAI Journal of Services Marketing, 6(1), 51-61.


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Acer SWOT Analysis

Listen to this postAcer was founded in 1976 under the name “Multitech” and had a significant role in popularizing the PC use in Taiwan. The Brand name was firmed in 1987 and then Acer switched from technology manufacturer to  world-wide recognized computer brand name.

Strength: Acer has many innovations like the Aspire One laptop that let the user connect to the Net almost anywhere with 8 hours of battery live. Acer presented the Tempo Smartphone series in 2009 to compete in the lucrative mobile phone market.  Acer main factory is located in Taiwan which has low-cost labor and distribution advantage in the US market and Asian market. Acer price its products with low competitive prices to compete with the strong rivals and acquire the low-priced laptop market share.

Weaknesses: the PC, laptop and mobile phone markets are extremely competitive and require frequent innovations to keep up or exceed the customers’ expectations. The laptop customers expect new functions and improved computing power at least once every year. Innovations and changing market demand needs strong and flexible supply chain to execute the successful innovations and deliver them to the market before the competition.

Opportunities: Acer had competed on delivering a reliable PC’s and laptops at a competitive price. Similar market entry model would be useful to enter the eBook Readr market and the iPad© market. Acer would be a good competitor in the eBook Reader market and had the ability to enter a new market of acquire an existing manufacturer. Acer was successful in acquiring Gateway©, emachines and pockard bell (Acer inc., 2010). This success will help Acer to integrate its existing assets or set up new manufacturer to producer eReders or similar products that does iPad functions. Acer can also compete in the Asian market by using its low price model. The Asian market is huge and would consume many of Acer’s products if marketed well.

Threats: the laptop and PC market are extremely competitive. Both products needs management support to invest in the Research and Development departments. Research and development departments would consult between each other to produce new competitive products that can be produced from the current integrated ability for Acer’s subsidiaries. The innovation will continue as long as the workers are compensated and the subsidiaries are willing to compromise for the sake of benefiting the holding company.

To know more on SWOT analysis and how to make one please click here.

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Corporate Social Responsibility (CSR)

Listen to this postCorporation’s responsibility to stakeholders representing the concerns of the people, the planet and the profit (Angus-Leppan, Metcalf, & Benn, 2010). Corporate Social Responsibility (CSR) depend on a moral framework that has four moral theories. The first theory is egoism which is the morally correct action that display the corporate social responsibility. The action is done to maximize the shareholder profits but not because of the obligations toward social responsibilities (Frederiksen, 2010). The organization stop the harmful acts and maximize the socially acceptable acts because such acts are in the organizations self-interest. The second theory is libertarianism. This theory state that libertarian believe in avoiding disturbing the negative rights but not doing the positive duties. The libertarian would avoid harming the society or deny the community its basic rights like freedom of speech or freedom of religion (Frederiksen, 2010). The libertarian is not obligated, according to the theory, to help anybody positively.

Utilitarianism theory state that utilitarian organization would always seek the best possible outcome from its actions. The best outcome can be helping a society in another country and not helping the close by society (Frederiksen, 2010). Utilitarian would target maximizing happiness regardless of the place. Common-sense morality theory is somehow in between the egoism and the libertarianism because the common-sense morality theory state that the organization should not violate the societies tights and should he same time act positively towards certain groups of the society (Frederiksen, 2010). Those groups can be the organization’s employees, members of the society or people closely related to the organization.

Lee (2010) state that businessmen are more honest than the preachers because the customer would test the products sold or recommended by the business person. Nobody would be able to come alive again and tell the community about the preachers claims validity. Similarly, the organizations cannot mislead the society in claiming that their products are not as advertised, they would be easily spotted while violating their claims.

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References:

Angus-Leppan, T., Metcalf, L., & Benn, S. (2010). Leadership styles and CSR practice: an examination of sensemaking, institutional drivers and CSR leadership. [Article]. Journal of Business Ethics, 93(2), 189-213. doi: 10.1007/s10551-009-0221-y

Frederiksen, C. (2010). The relation between policies concerning corporate social responsibility (CSR) and philosophical moral theories – an empirical investigation. [Article]. Journal of Business Ethics, 93(3), 357-371. doi: 10.1007/s10551-009-0226-6

Lee, D. R. (2010). Why businessmen are more honest than preachers, politicians, and professors. Independent Review, 14(3), 435-444. doi: http://www.independent.org/publications/tir/

Is Marketing Ethical?

Listen to this postI think the biggest ethical challenge for marketers would be the fact of capturing the customer’s attention while being ethical. This is a big marketing challenge that most marketers avoid taking. Marketing a product required presenting the benefits and the advantages of the product but sometimes exaggerating these benefits. The customer would equate the products benefits and advantages with the amount of money paid for buying it. Another ethical challenge in marketing and advertisement would be transparency in telling the customers the side effect of the products. The marketers either neglect or fine print the side effect of their products. Sometimes the harmful effect of the products are displayed on the product, such as the cigarettes,  but the marketing campaign is so strong that the customer would go ahead and use the product anyway. Sundaram & Mitra (2007) found that cigarette manufacturers are advertizing in magazines and internet sites with considerable number of young reader. The advertisement in these locations use young models and display smoking as fun activity to attract large segment of the population.

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References:

Sundaram, D. S., & Mitra, K. (2007). Ethical evaluation of marketing practices in tobacco industry. [Article].International Journal of Business Research, 7(2), 194-204.

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Does Music Artists Hate P2P?

Listen to this postFile sharing sites are delivering free music to users around the word. Most of the files are shred or downloaded freely. The media got the public to believe that the file sharing sites are negativity affecting the new artists and the recording companies. but, not every recording artist is upset because their music was downloaded without payment. The Peer-to-Peer (P2P) file sharing sites help exposing the new artist to the audience. The audience can search the artist and then download the music illegally to listen to it at their convenience. The file sharing sites are good advertising source that help the new artist to reach to the greatest number of audience. The newly downloaded files are a sampling opportunities for the users to test the music if its meets their taste. Research by Bounie, Bourrreau, and Waelbroeck (2007) showed that 93% of the  P2P users purchased new music after they have sampled it on the downloaded MP3 format. Further, the research also reviled that 67% of the surveyed participant purchased new CDs that they discovered by downloading from the P2P sites. That CDs they would not normally purchased if they did not discover it on the file sharing sites.

References

Bounie, D., Bourrreau, M., & Waelbroeck, P. (2007). Pirates or explorers? Analysis of music consumption in french graduate schools. [Article]. Brussels Economic Review, 50(2), 167-192.

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