C H A P T E R
Operations Strategy in a Global Environment
1. Global seems the better label for Boeing since authority and responsibility reside in the U.S.—the home country.
2. Six reasons to internationalize: Reduce costs, improve supply chain, provide better goods and services, attract new markets, learn to improve operations, attract and retain global talent.
3. No. Sweetness at Coca-Cola is adjusted for the tastes of individual countries. 4. A mission is an organization’s purpose—what good or service it will contribute to society.
5. Strategy is an organization’s action plan—how it is going to achieve its purpose.
6. A mission specifies where the organization is going and a Strategy specifies how it is going to get there.
7. The answer to this question will depend on the establishment studied, but should probably include some of the following considerations: The mission: diagnose automobile problems and make the necessary repair at a fair price for the local customer. Points to consider, or options, within the 10 decision areas are: Decision:
Repair work of American and/or foreign vehicles; specialized (tune-ups, lubrication, wheel alignment, etc.) versus general repair;
frame and body repair versus engine and
power train repair; repair and maintenance
only, versus repair, maintenance, and sales of
fuel; professional staffing versus rental of
tools and space for do-it-yourself repair work
Appropriate level of quality; warranty;
method of measuring and maintaining quality
(customer complaints, inspection by supervising mechanic, etc.) Use of general versus special purpose diagnostic and repair equipment (in particular, the degree to which computer controlled
diagnostic equipment is employed)
In-town, shopping mall, highway
Single bay/multibay; general-purpose bay
versus special-purpose bay (lubrication/tire
repairs and installation/wheel alignment/
engine and power train repair, etc.)
Employment of certified versus noncertified
repair persons; employment of specialists
versus general mechanics
Choice of supplier(s) for both general and
original manufacturer parts and supplies
Hours of operation (8:00 A.M.–5:00 P.M.;
24-hour towing; weekends/holidays), repairs
versus motor vehicle safety inspections, etc.;
service by appointment versus walk-in (or
Quantity and variety of repair parts (fan belts,
filters, mufflers, headlights, etc.) to stock;
whether to stock generic or original manufacturer parts
8. Library or Internet assignment: Student is to identify a mission and strategy for a firm. Business Week, Fortune, Wall Street Journal, and Forbes all have appropriate articles.
9. OM strategy change during a product’s life cycle: During the introduction stage, issues such as product design and development are critical, then during the growth stage the emphasis changes to product and process reliability; from there we move to concern for increasing the stability of the manufacturing process and cost cutting; and finally, in the decline stage pruning the line to eliminate items not returning good margin becomes important. Figure 2.5 provides a more expansive list.
10. The text focuses on three conceptual strategies—cost leadership, differentiation and response. Cost leadership by Wal-Mart—via low overhead, vicious cost reduction in the supply chain; Differentiation, certainly any premium product—all fine dining restaurants, up-scale autos—Lexus, etc.; Response, your local pizza delivery service, FedEx, etc.
11. The PIMs research suggest that high ROI results from
(1) high product quality, (2) high capacity utilization, (3) high operating effectiveness, (4) low investment intensity, and (5) low direct cost per unit. 12. An operations strategy statement for Southwest Airlines
would include a focus on...
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