Upload
sai-srikar
View
214
Download
0
Embed Size (px)
Citation preview
Globalization in OperationsGlobalization in OperationsBy Tharun(15)
Abhilash(5)Saheth
Chaitanya
ObjectiveObjectiveo As foreign competition in the service sector
increases, domestic services must develop a global service strategy.
o Develop a methodology to assist service managers in developing strategies for entering and competing in global markets.
Article 17
Objective cont.Objective cont.o To develop a strategy consider the following
questions:• What are the factors that we can use to classify services in
terms of their potential for moving globally? Service Globalization Factors.
• How do these factors translate into strategies for the globalization of specific services? Globalization Strategy.
Article 17
Service Globalization FactorsService Globalization Factorso Elements of service operations that need to be
considered when selecting a process as a possible candidate for outsourcing.
o For service operations consider the level of the following 6 factors:• Customer Contact (front-room)• Customization (front/back-room)• Complexity (back-room)• Information Intensity (back-room)• Cultural Adaptation (front/back-room)• Labor Intensity (back-room)
Article 17
Customer ContactCustomer Contacto Front-room operations based.o Contact personnel speak or trained in native language.o For success, the service must be adapted to the culture as
well.o Example: Euro Disney
• Main changes were both French/English used and adaptation to the French culture. The major challenge was training the “independently-minded” French employees to act out the roles of Disney characters and perform their duties in a courteous manner.
o Adapting the service contact to native culture, one of the more challenging tasks for service managers.
Article 17
CustomizationCustomizationo Language and distance create barriers to effective
communication, which detracts from ability to customize service to customer needs.
o Coopers & Lybrand• Opened an office in Hungary, found clients to be more
comfortable working with Hungarian auditors.o Customer contact elements also effect
customization.o Front/back-room oriented.
Article 17
ComplexityComplexityo Globalization of back-room tasks fall under two
categories:• Make existing work routine such as data entry.• Technical but mundane work such as reprogramming or file expansion
that can lead to more complex tasks.o Workers in other countries
• Are often eager for such jobs and are content being compensated according to the local job market.
• Often approach work with different mindset resulting in more motivation and creativity.
• When workers have more motivation and creativity they can take on more complex tasks which can lead to increased outsourcing of back-room activities. (Like training new employees.)
Article 17
Information IntensityInformation Intensityo Once information is digitalized, it can be globalized.o International communication using satellites make
up for poor infrastructures.o Telecommunications and air freight have opened up
many information-intensive services to globalization.o Example: Stock and financial markets, consulting
service.
Article 17
Cultural AdaptationCultural Adaptationo Adapt services to customer culture or deliver service that
built the reputation in the home country?• Will changes still align with service strategy and mission?• Realign strategy?
o Both front and back-room activities can be impacted.• Culture can effect customer service and scheduling.• Culture and economy can effect back-room tasks, scheduling, and
employee compensation.o Small town workers accept lower compensation to avoid
disrupting the fabric of community.• Culture can be individual or group oriented.
Article 17
Labor IntensityLabor Intensityo Seek less-expensive, well-educated labor.o Labor-intensive tasks can be supported by major
investment in communication and computer systems to transfer information.
o Labor rates in some countries are fractions of domestic labor rates.
o Labor and time intensive activities are often the prime candidates for globalizing.
Article 17
Other ConsiderationsOther Considerationso Technology is improving worldwide.o Distance is becoming less of a factor.o Governments are becoming aware of global market
changes and offer incentives for businesses to provide work.
o Decreasing technical and legal restrictions.
Article 17
Taking Services GlobalTaking Services Globalo Five basic Globalization Strategies
• (1) Multi-country expansion• (2) Importing customers• (3) Following your customers• (4) Service unbundling• (5) Beating the clock
o These major strategies have been used by companies that have entered global markets.
o The Globalization Strategies are compared with the Service Globalization factors in a matrix to identify strengths and challenges for each strategy and factor. • Displayed in Table II
Article 17
Taking Services GlobalTaking Services Globalo These strategies are not all mutually exclusive. o Strategies can be combined such as multi-country
expansion with beating the clock. o Table II contains a summary of key opportunities and
potential problems that each (6) service globalization factor (left) contributes to each (5) global service strategy (top).
Article 17
Taking Services GlobalTaking Services Global
Multi-Country ExpansionMulti-Country Expansiono Exporting a successful service to another country
without modification can sell “a country’s cultural experience.”• McDonald’s• Benihana
o Duplicating a service worldwide is easiest accomplished if business is based on routine services. (McDonald’s)
Article 17
Multi-Country ExpansionMulti-Country Expansiono Some modifications must be made to better
accommodate foreign markets.• McDonald’s in Germany serving Beer
McHefeweizen anyone?• Federal Express in Spain
Midday Siesta extends business and pickup hours later into evening.
o The level of cultural adaptation determines if a service will succeed or fail.
Article 17
Importing CustomersImporting Customerso Customers come to location of service because of
unique features:• Yosemite, Hawaii, Yellowstone• Disneyland/World• Universities, Museums
o Provide extended services for lodging, student loans, discounted transportation.
o Works best when customers are willing to travel long distances or stay for extended amounts of time.
o How can your service make it easier and more enjoyable for you customers?
o Must also adapt to customer cultures.
Article 17
Follow Your CustomersFollow Your Customerso Services can follow previously global customers
around the world.• Any additional foreign customers acquired while serving
the primary customer adds opportunity for growth.o This leaves the service manager with interesting
choices:• Design the service to follow customers and their needs?• Design it to adapt to the local culture?• Or make a compromise between the two, hoping to have a
successful straddle?
Article 17
Follow Your CustomersFollow Your Customerso Straddles may not be very successful due to
increased variation or complexity of the service.• We know what variation leads to: quality and consistency
problems.o Elements also fall under Multi-Country Expansion.
Article 17
Service UnbundlingService Unbundlingo Break-up elements of service processes to determine
what can be contracted out.o Efficiency and labor savings can result from focusing
on specific back-room tasks.o Labor-intensity of a process is also a factor.o Managers need to identify the parts of the process
that are physical from those that are informational to make service unbundling work.
Article 17
Beating The ClockBeating The Clocko The competitive advantage gained by:
• Bypassing the constraints of the clock. • Constraints of domestic time zones.• Differing time-based domestic work rules and regulations. • 24 hour operations.• Result in economies of operation.• Provide better access for foreign and domestic customers.• Support time-based competition in operations.• Add to the creativity available in the process without
slowing it down.
Article 17
Beating The ClockBeating The Clocko Analyze service operations to determine strategy:
• Defensive Strategy: Involves forming strategic alliances in other time zones. Help support and maintain operations.
• Offensive Strategy: Activities might involve moving to, or modifying, operations in non-
domestic time zones to tap new markets or improving existing ones. More competition and growth oriented.
o Operations infrastructure will need to improve:• Increased coordination and reliability between time zones.• Additional training.• Methods of operation.• Communications infrastructure.
Article 17
ConclusionConclusiono Movement of information is easier and less costly
than the movement of goods.o Cultural adaptation will prove to be the biggest
challenge for the front-room operations.o Economic and workforce factors in various countries
will increase opportunities.o Service operations managers should use these
various dimensions to analyze their own process.o From analysis a globalization strategy can be formed.
Article 17
Thank YouThank Youo Questions?