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SERVICE OPERATIONS

SERVICE OPERATIONS. GLOBALISATION. GROWTH STRATEGIES. FRANCHISING. Expand using own resources Franchising is an alternative Independent owner operators bound by a contractual agreement Initial investment varies Market or region is specified Franchiser dictates operating policies

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SERVICE OPERATIONS

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  1. SERVICE OPERATIONS GLOBALISATION

  2. GROWTH STRATEGIES

  3. FRANCHISING • Expand using own resources • Franchising is an alternative • Independent owner operators bound by a contractual agreement • Initial investment varies • Market or region is specified • Franchiser dictates operating policies - Purchase source/quality - No deviation from product - Franchise fee

  4. BENEFITS : FRANCHISEE • Management training • Brand name • National advertising • Acquisition of proven business • Economies of scale

  5. GLOBAL DEMAND • Service from centralized location • Open service centers in new locations

  6. OPERATIONAL ISSUES • Government regulations • Bureaucratic red tape to protect local operators • Tight centralized control • Working hours - 8 hrs with minimum break - 12 hours with long mid day break

  7. OPERATIONAL ISSUES • Language • Culture • Operating standards • Local firms to handle marketing & deliveries

  8. GENERIC STRATEGIES

  9. GLOBAL STRATEGIES • World is one large market • Homogenous approach • Integrated across countries • Strong brand name /special identity • Example : Citibank allows customers to do banking anyway, anywhere & anytime

  10. MULTIDOMESTIC • Operation in each country is autonomous serving the needs of the local country • Staffed /manned by local nationals • Confederation

  11. TRANSNATIONAL • Service is homogenous : Fast food chains offering local menus • R&D (Specialized expertise) centralized • Centralized procurement

  12. BORDERLESS WORLD • Customer :Availability of information • Competitors : - Nothing stays proprietary for long - First mover - Timely delivery - Operating with partners (not alone)

  13. BORDERLESS WORLD • Company : Reduce unit fixed cost • Airlines & communications • Huge investments in equipments & facilities • Focus shifting from variable cost to fixed cost • Search for a larger market

  14. BORDERLESS WORLD • Currencies • Fluctuating exchange rates • Hedging & options • Forced in to global expansion to become currency neutral

  15. BORDERLESS WORLD • Country • Economic downturn in one country offset by operations in other countries • Compete in competitors country • Global localization • Understand the unique service needs • Local units to be able to modify to meet the local needs

  16. TRANSNATIONAL OPERATIONS • Cultural transferability : • Global standardization vs local customization (Banking – Islamic countries) • Language barrier • Behavioral customs ( non smoking zones in Restaurants)

  17. TRANSNATIONAL OPERATIONS • Worker Norms : • Power Distance Index : equality • Individualism : Focus on individual achievement • Masculinity : • Uncertainty Avoidance index : Tolerance • Long Term Orientation : Long term commitment & respect for tradition ( strong work ethic & reward in long term). Change takes time

  18. TRANSNATIONAL OPERATIONS • Host Government policies • Repatriation of profits • Entry barrier for certain operations (insurance) • Delays in licensing agreements • Foreign airlines landing rights • Preferential treatment to local shippers • Nations may perceive threat (economic & cultural). • Labor intensive services welcome : creates more job opportunities

  19. GLOBAL SERVICE STRATEGIES • Efficient delivery system • High quality product • Flexible cost structure

  20. GLOBAL SERVICE STRATEGIES • Multi country expansion • Importing customers • Following your customers • Service offshoring • Beating the clock

  21. GLOBAL SERVICE STRATEGIES Multi country expansion • Customer travels physically to the service facility • Franchisee route • Clone the service rapidly in multiple locations • Customer contact & front office requires sensitivity to local culture • Recruit & train locals • Cultural adaptation a major issue

  22. GLOBAL SERVICE STRATEGIES Importing customers • Multi service single-site strategy • Customer to travel long distance or substitute travel with communication tools • Example : Universities Medical centers Places of tourist attraction

  23. GLOBAL SERVICE STRATEGIES Following your customers • Follow corporate clients & provide service in other countries • Attracting local business may need modification in the service package • Examples : Travel agents Consultants Auditors Hotel chains

  24. GLOBAL SERVICE STRATEGIES Service offshoring • Global service strategy • Back office operations to cheaper locations • BPO • Examples : Customer service, Financial analysis, software development

  25. GLOBAL SERVICE STRATEGIES Beating the clock • Bypass the constraint of domestic time zones, working hour regulations • Combining the demand from multiple time zones can improve productivity of Reservation clerks • Example : Telemarketing

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