Scribd
Upload
22 views2 pages

Operation Strategy in Global Environment

Operation Strategy in Global Environment

Uploaded by

houtarou28042000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
22 views2 pages

Operation Strategy in Global Environment

Operation Strategy in Global Environment

Uploaded by

houtarou28042000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Operation Strategy in Global Environment

9. How does an OM strategy evolve with the changes in the product life cycle?
The operations management (OM) strategies must be reviewed at every stage in the product life
cycle since demand, production, and competitive environment are different at these stages:
 Introduction Stage: In this phase, the emphasis is on product development & quality
assurance followed by limited product manufacturing. The OM strategy should seek an
approach of low-cost flexibility and improvement of product design as well as high
quality.
 Growth Stage: More focused strategies should be employed as level of demand goes
up to enhance production levels, achieve process efficiencies, and/or grow into other
areas. Supply chain management becomes key in increasing production capacity.
 Maturity Stage: The most challenging stage in this regard. Increased competition, the
volume of sales stabilizes. Tactical OM policies in this stage should be centered on cost
reduction, productivity enhancement, and share consolidation. This may include
outsourcing activities, use of high production technology, etc.
 Decline Stage: As the sales register start going down, so would go the OM strategy
concerning the phase which calls for reducing sales output, trimming inventory and
cutting down operational costs to ends gainful essence.
11. Define an operations strategy for Southwest Airlines now that it has purchased
AirTran.
Discontinuation of the product or shifting resources towards other products might also be part of
the company’s plan. Finally, write down the operations strategy which would need to be adopted
by Southwest Airlines after taking over AirTran.
For a long time, focus on low fares and quick return has been the main strategy which has
shaped the competitive advantage of Southwest Airlines. With the acquisition of Air Tran, there
would be need of modification on Southwest’s operations strategy kutenga munandiizazina for
the consolidation of the two airlines and its advantages over competition. Their strategy might
not exclude the following as key figures:
 Fleet Standardization: Maintenance requirements and training were minimized by the
use of 737 aircraft exclusively by Southwest Airlines. Air Tran would most likely adopt a
fleet policy focused towards Southwest’s
 Route optimization: Unlike Southwest’s routes, Air Tran had many flights and served
various international as well as domestic cities. These new intra-Southwest Airlines
routes promote further growth without the added cost of services.
 Employee Integration and culture: Known for a strong internal corporate culture in
which employees are considered to be a vital part of the success. A drawback would be
that incorporation of Air Tran employees into the Southwests culture which is conducted
in secrecy might prove difficult.
 Operational Efficiency: Southwest might maintain operational practices such as quick
aircraft turnarounds and high aircraft utilization for their low costs. Apart from this, they
would separate efforts made by either of the two carriers towards operational
consolidation.
14. What are the possible cost-cutting benefits that the firms may derive out of
outsourcing?
There are several advantages with respect to cost that can be offered by outsourcing, for
instance:
 Labor Cost Reduction: In today’s global economy, labor cost is one of the biggest
expenditures a company incurs. Therefore, outsourcing to countries with lower wages
saves on labor cost as is the case of making shoes in China instead of Indonesia or
South Korea.
 Focus on Core Functions and Core Competency of the Firm: Instead of trying to
hang on to as many processes as they can of which some may be and are non- core
activities (such as production, IT, customer care), businesses can invest resources on
what matters most and where the firm has a competitive edge.
 Economies of Large Scale: Outsourcing service providers often provide services for
several client organizations. This makes them able to get economies of large scale
which other individual firms may not be able to get. This results in a cut down of the
costs incurred by materials purchase, labor and processes involved internally by the
organization.
 Expertise and Advanced Technology: Companies will acquire additional know-how
and modern equipment, which would be complicate and expensive to create inside the
organization.
 Flexibility and Scalability: Outsourcing makes it possible for the company to change
the level of production depending on market needs at a very short time without incurring
the cost of holding fort capacity at home with no internal production undertaking to do so.

You might also like