This can provide great insight into current markets, trends, and customer demands that can help your organization plot a course for the future. One of the best side effects of participating in international business is the requirement to interact with foreign customers. Working together on a product line may improve efficiency for both parties - something that translates into lower prices or improved quality for your customers. One country may excel at production, while your firm has excellent inventory control. Look for opportunities to partner or exchange one strength for another. Customers benefit from this the most, as do the firms that actively participate.
#10 OM STRATEGY DECISIONS FREE#
It is best served when encouraging the free flow of ideas. Some such trade agreements are NAFTA (USA, Canada, Mexico), APEC (the Pacific Rim countries), MERCOSUR (Argentina, Brazil, Paraguay and Uruguay), and SEATO (Australia, New Zealand, Japan, Hong Kong, South Korea, New Guinea, and Chile), just to name a few.
This is a huge cost savings and should be explored. The World Trade Organization (WTO) has helped reduce tariffs to an average of 3 percent today, down from 40 percent in the 1940s. Agreements between the United States and other countries that make trade free, lower tariffs, or otherwise reduce costs may be less visible to the general public, shareholders, and other stakeholders, but are something of which operations managers need to be aware.
There are also advantages in trade agreements. Such savings can be used as capital investment funds, another variable in productivity. It also frees higher skilled workers to perform more high-skill jobs, instead of tasks that are less challenging and make inefficient use of their time. Low-skill jobs shifted to countries with lower wage costs saves money. Moving production to international locations can save money. There are very evident ways to reduce costs, and then some not-so-visible ways that exist when looking at global possibilities.
Smart operations managers are looking for ways to get their inputs better or faster across the entire spectrum of resources. Much like the Silicon Valley in the 1980s was known for its computer expertise, such center points of knowledge or technology are all over the world. There is significant benefit to moving or locating new facilities in countries that are close to unique resources, such as expertise, materials, or workforce. The supply chain is a critical piece in an organization's success. The same applies when a customer is satisfied with a good and keeps buying more of the same. Providing new customers with quick and adequate service creates returning customers. Taking advantage of being in their location, especially for service industries, can open whole new markets and provide the next level of quality in service provision.
#10 OM STRATEGY DECISIONS HOW TO#
Learning from businesses in other countries can provide insight into how to do that. The goal of every business is to provide the best goods or services they possibly can. Employ top-of-the-line contributors from all over the world. Reduce costs, such as labor, tariffs, taxes, and more.Ħ.
Improve the organization's supply chain.ģ. When taking a worldwide look - take what is currently performed domestically and move it to another country or countries - there are six main reasons why an organization might change to an international organization:Ģ. This article will discuss various strategies involved in operations, such as the strategy to change to an international organization.
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