How Philips Are Doing Now?

July 3, 2010 1 Comment

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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Maintain Longterm International Relationship

June 21, 2010 Leave a comment

Listen to this postBusiness should target long term  strategies to grow up the profit gradually while maintaining healthy profit and satisfying the stakeholders. Business should use the corporate social responsibility model to serve the community by meeting the national and international obligation and the ethical standards. Self regulation would be a good tool to meet the internal ethical standards and the local ethical responsibilities. The ethical issues and the ideas of being right or wrong are governed by the religious, cultural or professional value base believes as stated by O’Donohue and Nelson (2009). Around the world, organizations may set rouls and regulations to cover ethical issues but the individuals behavior and his background would limit his or her ethical behavior.

Grotenhuis (2009) state that 50% and up to 80% of the mergers and acquisitions fail to make the expected benefits. The main reasons for the failure is weak research of the target company and its context, unfocused strategic issues on the intended merger and acquisitions and finally the leadership and cultural issuers that lead to cultural clashes and fatal misunderstanding (Grotenhuis, 2009). Cultural differences should be studied in earlier stages of the merger or acquisition to expect the problematic areas and sort them out before they develop to culture clash that slow bonding of the two organizations. In a merger between Dutch and Japanese organization the Japanese felt that the Europeans are “person-oriented” that look for short-term profit while the Japanese are more group-oriented and always explore and target the long-term profit (Grotenhuis, 2009).

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References:

Grotenhuis, F. D. J. (2009). Mergers and acquisitions in Japan: Lessons from a Dutch-Japanese case study. [Article]. Global Business & Organizational Excellence, 28(3), 45-54. doi: 10.1002/joe.20258

O’Donohue, W., & Nelson, L. (2009). The Role of Ethical Values in an Expanded Psychological Contract. [Article]. Journal of Business Ethics, 90(2), 251-263. doi: 10.1007/s10551-009-0040-1

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Airbus Supply Chain Management

June 19, 2010 7 Comments

Listen to this postHeizer (2009) define supply chain management as the “integration of the activities that procure materials, transform them into intermediate goods and final products then deliver them to the customers”(p. 360). Supply chain management integrates the transportation activates that include the distributions methods with the suppliers and venders then setup a payment system that manage the account payable and account receivables (Heizer, 2009). Supply chain management set up and manage the order fulfillment with the warehousing and inventory control then share necessary information with the suppliers, venders, distributors and the customer when needed (Heizer, 2009).

Ayadi (2009) affirm that part of Airbus success is because of their efficient supply chain management. The supply chain management provides general visibility for the different actors of the organization (Ayadi, 2009). Airbus had more than 1500 contractors distributed in 30 countries and the supply chain management used ensures right parts, systems and hardware are delivered at the right place on time. Airbus supply chain system allows the suppliers and the buyers to exchange the needed information online. The suppliers can display their ability to deliver by filling the right information on the secured website. The supply chain cycle is cover on web site from the first order through procurement to the invoicing and payment finalization (Anonymous, 2010). The suppliers data and their transactions are stored in a “foundation” data bank that help in the decision-making in future transactions (Anonymous, 2010).

Supply chain management has its disadvantages like most of the automated systems.  The Bullwhip effect could affect the Airbus supply chain cycle because of the cycle length and number of steps that go through it. The bullwhip effect is the increase in fluctuation in orders while the orders are steady with minimal fluctuation (Heizer, 2009).

References:

Anonymous. (2010). Airbus for Suppliers  Retrieved Jun 10, 2010, from http://www.airbus.com/en/airbusfor/suppliers/

Ayadi, S. (2009). Externalisation et creation de valeur au sein de la ‘Supply Chain’: L’entreprise etendue. (Outsourcing and Value Creation within the Supply Chain: The Extended Enterprise. With English summary.). La Revue des Sciences de Gestion, 44(236), 85-93. doi: http://www.larsg-revue.com/

Heizer, J., & Render, B. (2009). Operations management (9 ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

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Example of An International Expansion Strategy

June 12, 2010 1 Comment

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

June 9, 2010 1 Comment

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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Perfecting the Supply Chain

May 18, 2010 2 Comments

Listen to this postInventory management and the difference between good and bad performances are some of the principles that being lectured to Dell’s employees through multiple presentations (Stewart & O’Brien, 2005). Reword and punishment are some of the performance techniques used by most of Dell’s rivals, but Dell’s employees set the rewards and punishment for themselves to drive their performance. Dell Inc. has the “no excuse” culture since the management will not accept excuses for low performance or the failure to make money. Dell’s top management believe that if the expectation are set high enough then the performance will be high and the opposite is true. Dell’s General Managers have to find the reason for their poor performance and fix it, or the General Manager will be blamed for the failure (Stewart & O’Brien, 2005).

Dell Inc. became famous for its innovative supply chain model that allowed Dell to carry out successful mass customization. Dell is using Build-to-Order model to cut off the dealers’ fees and the inventory cost (Magretta, 1998). The computers are built according to the end user’s specifications which are placed in the company’s portal. Dell’s innovative supply chain insures the required parts availability when needed for the right assembly point at the exact time and place. Kumar and Craig (2007) state that Dell’s success is not only fueled by its supply chain but other processes made it more competitive than its rivals. The following are the main four processes that made Dell Inc. competitive:

  1. Postponement: Dell will postpone assembling the computer until the order is placed and customer credit is cleared. This postponement enables Dell to decrease its inventory and use the latest products from its suppliers. Dell’s rivals have to push their finished product inventory before marketing the new parts for their customers (Kumar & Craig, 2007).
  2. Modularity: means that each part of the computer is managed separately which allow the assembler to connect different parts together. This flexibility allowed Dell to excel in mass customization and overcome the last-minute changes (Kumar & Craig, 2007).
  3. Vendor Managed Inventory: Dell does not stock the required inventory in its stores. The suppliers manage the inventory in small warehouses, called revolvers, near Dell’s plants. This technique help Dell focus on the customers and the suppliers focus on innovation (Kumar & Craig, 2007).
  4. Supply chain partners: Dell sign contracts with the suppliers and service providers and share with them the available information to guarantee future order volumes.

Dell’s innovative supply chain and unique culture will keep it competitive as long as it can keep up the low production cost. Dell will lose its competitive edge once its rivals perfect their supply chain management and start to offer innovative computers at the same price.
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References:

Dell Inc. (2009). Dell Worldwide. Retrieved August 29, 2009, from http://www1.euro.dell.com/content/topics/global.aspx/about_dell/company/dell_worldwide/index?c=ae&l=en&s=corp

Kumar, S., & Craig, S. (2007). Dell, Inc.’s closed loop supply chain for computer assembly plants. Information Knowledge Systems Management, 6(3), 197-214.

Magretta, J. (1998). The power of virtual integration: an interview with Dell Computer’s Michael Dell. Harvard Business Review, 76(2), 73-84.

Stewart, A., & O’Brien, L. (2005). Execution without excuses. Harvard Business Review, 83(3), 102-111.

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Financial Disclosure: How Much is Enough?

May 16, 2010 4 Comments

Listen to this postI had a chance to research the “financial disclosure” subject and I found an important article which discusses the information overload related to financial disclosure. Radin (2007) argues against “excessively long financial statement disclosures.”  He cites reasons the accounting profession should be worried about financial statement disclosure overload. He then asserts that there is significant anecdotal evidence that the footnotes to a company’s financial statements are read only by the registrants’ drafters and accountants.  The article is fascinating and surfaces old questions like “How much information is enough?” and “Where should we stop?” the article provokes the need to analyze the usefulness and effectiveness of the current financial disclosures.  Information redundancy and repetition like “If our customers stop buying our product,  sales may decrease” (Radin, 2007, p. 9) should be eliminated and an effective reporting method maybe created to communicate the important disclosed information to the readers. Lately,  marketing expert are able to pass their massages to the public in 30 seconds and cartoonist are able to simplify a complicated issue into a funny drawing, however, accountants are still writing a longer and more complicated reports (Radin, 2007).
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References

Radin, A. (2007). Have we created financial statement disclosure overload? CPA Journal, November, 6-9.

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Multinational Organizations Role in Human Rights

May 13, 2010 2 Comments

Listen to this postI witnessed a heated discussion over the human rights and one of the discussion points was around the question “Should multinational organizations work in countries that are accused of human rights violations?”

Multinational organizations may work in countries that are accused of human rights violation. The organization should not intentionally violate human rights or encourage it. However, the organization should help the local community by paying them a fair wage to the amount of work done by the labor. Lam (2009) surveyed Chinese executives working for American multinational organizations in China and the executives felt that “Corporate Social Program” are human resources department job. The Chinese executives did not see their ethical responsibility or feel the obligation toward the society because their functional strategies did not incorporate social responsibilities (Lam, 2009). Multinational organizations, similar to domestic  organizations, are influenced by three conflicting needs, the organization, the industry and the society (Labbai, 2007). The ethical conflict between personal ethics and the organization would have strong effect on the organization operations in the international market (Labbai, 2007). The executives’ and the line managers’ ethical responsibilities would be the deciding factor for the multinational organization to behave ethically in countries that violate human rights.
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References:

Labbai, M. (2007). Social Responsibility and Ethics in Marketing. Paper presented at the International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK.

Lam, M. (2009). Beyond Credibility of Doing Business in China: Strategies for Improving Corporate Citizenship of Foreign Multinational Enterprises in China. [Article]. Journal of Business Ethics, 87, 137-146. doi: 10.1007/s10551-008-9803-3

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At What Age We Can Work?

May 2, 2010 3 Comments

Listen to this postChildren under the age of 16 should not work, rather, they should be at school learning to be a better and effective community members. The sad fact is that children cannot afford schooling or at least have enough to feed themselves in the underdeveloped countries. Families in the underdeveloped countries teach their children  to read and write by sending them to the community educators, but they will be learning their parents crafts when they are strong enough to work (at the age of 8-12). The children would help their parents at the farm (or workshop) and then learn how to perfect the required skill to start supporting themselves and their families. Our parents went through the same 60 years ago, but when the oil was discover in Kuwait they went to night-school to educate themselves and work in better jobs. There is nothing wrong with children working instead of learning because working is educational activity also. The problem would be if the children work in harsh condition or got underpaid. Otherwise, working children are better off in a secured factory than attracted to do other illegitimate or criminal jobs. I would suggest that children should work for 8 hours then go through few hours of education provided by their multinational employer.

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Does Music Artists Hate P2P?

April 22, 2010 2 Comments

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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