MGTC44e Outline, Section E

MGTC44H3S

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Int'l Business Management

A 3rd year undergraduate course in the Division of Management, University of Toronto at Scarborough

changes were last made to this web page 2005 March 31

Section A Section B . Section C . Section D. Section E .

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This is a major section for which you are responsible for reading - and will be discussed in class

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. The purpose of this section is to introduce the student to the important of the Supply Chain in International Business. Upon completion of this section, students will be able to

explain the basic activities of an Intranet and Extranet in the context of a Supply Chain and international business

understand the role that Customer Relationship Management plays in enhancing the effectiveness of the Supply Chain

appreciate the increasing role of Human Resource Management in the context of the "environments" being equal

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Countertrade - see www.witiger.com/internationalbusiness/countertrade.htm
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Chapter 18
page 631-633

Global Mfg. Strategies

"The success of a Global Manufacturing Strategy depends on four key factors
1. Manufacturing Compatibility
2. Manufacturing Configuration
3. Coordination
4. and Control"

1. Manufacturing Compatibility
cost minimization strategies - AKA trying to save money

economies of scale

"low-cost labour areas"

- labour the biggest component so this is how companies save money

2. Manufacturing Configuration
three basic configurations

centralized in one country - like heavy machinery company Caterpillar

manufacturing facilities in specific regions to service those regions - like IBM

multidomestic facilities in each country - like Bata shoes

3. Coordination
"the linking or integration of activities into a unified system"
4. and Control"
"... one aspect of control is the organizational structure"
org charts

by geography - Latin America division

by product - men's clothes, women's clothes

by customer - wholesalers, government accounts, institutional accounts

by function - shipping dept. mrkgt dept., accounting dept.

control is also - for lack of a better word, bossing, - that's telling people what to do and when and how

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Global Manufacturing Strategy
Plant Location Strategies
"Once MNEs determine that they will engage in FDI to supply foreign markets, they need to determine which countries to invest in and where within each specific country" text page 633
Textbook discusses General Motors choice of Thailand over the Philippines
text notes "... there are more auto suppliers..."
They don't say this explicitly, but it refers to the fact that in Thailand, there are a critical number of First Tier Suppliers and Second Tier Suppliers - which we in MGTC44 have discussed earlier in this section as being important.
Attracting large MNEs to invest is a bit like a country winning the Olympics - a very contentious issue and raises many questions - some having to do with ethics.

Plant Location strategies is not a frequent consideration for Canadians in international business since our medium and large sized companies are more involved in resource extraction compared to manufacturing consumer goods.
Global Manufacturing Strategy
Layout Planning Strategies
Text discusses Samsonite using the manufacturing technique of autonomous cells - which has also been used to great success by Japanese auto manufacturing companies in Japan, and to some small extent in North America.

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www.witiger.com/internationalbusiness/intranetsextranets4IB.htm
This is a Unit on Intranets and Extranets which is used in the context of international business

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http://www.witiger.com/ecommerce/intranets~extranets.htm
This is a Unit on Intranets and Extranets which is mostly used for e-commerce classes - however since many medium and large sized companies involved in international business have online situation, the use of Intranets and Extranets has become a part of "doing International Business"

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CRM is a part of Supply Chain Management.

Why?

Because in a Market Oriented company -customers voting with their wallets, lead the direction of what products will be successful with particular FABs. The process of satisfying the customer leads to taking information about that relationship, and using it to affect production and delivery of the product.

WTGR

Basics of CRM

"Customer Relationship Management (CRM) is developing into a major element of corporate strategy for many organisations. CRM, also known by other terms such as relationship marketing and customer management, is concerned with the creation, development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value....Narrow functionally-based traditional marketing is being replaced by a new form of cross functional marketing - CRM.... the focus is shifting from customer acquisition to customer retention"

Why is time and money spent on CRM worthwhile, Payne notes "Research shows that a 5% points increase in customer retention yields a profit, in net present value terms, of between 20% and 125%"

http://www.ittoolbox.com/peer/AP_website.htm
Professor Adrian Payne,
Director Centre for Relationship Marketing, Cranfield University

CRM for Dummies
http://www.crmassist.com/peer/docs/crm_dummies.asp
by Sambasivan TN for Origin Information Technology

"...why the sudden talk about CRM?... With a general slowdown of the global economy companies are finding it hard to get going....Gone are the days where you had a technological edge over your archrival. With new and affordable technologies your competitor is just a matter of days behind you in terms of product launch. So what are you left with as a key-differentiating factor? ...customers need to be looked at more seriously than ever before ... information is the key to success. Information about the customer made available to the person coming in contact with the customer can go a long way not only in clinching the deal but also creating a very good relationship with the customer for future business...
Organizations over the past had products as their key focus. The way an entire organization works would be built around this focus area. Since this cannot be used as a key-differentiating factor anymore, companies have begun to focus on the customers. This not only brings about a change in focus, but also changes the way the entire organization works"

WTGR - does this mean you torture yourself to satisfy every single customer as best you can? Answer, no. You use various software tools and information tracking methods to determine which customers spend the most money on particular products, and you then focus on them

Sambasivan adds
"not all customers are equally profitable. The key herein lies in identifying the customers who pay you more for the kind of services that you offer and focusing your valuable efforts into taking special care of those customers. This not only helps by improving your bottom line, but also helps you to focus your efforts where it is required the most."

WTGR - in the past companies relied on sales people with good personal contacts and networking skills to build up good will with customers and create CLV - Customer Lifetime Value - problem was, when these people left the organization, all these contacts went with them (in fact many good salespeople are often headhunted to obtain new accounts). These situation became one of the weakness of organizational information structure - that being the point that people possessed information, not institutions. CRM is an attempt to build "institutional knowledge" regardless of the individual salespeople's personal contacts and information.

Sambasivan concludes
"The need for accurate and timely information to the sales team is really important. The advantages being that the knowledge gathered by a particular person who has been interacting with the customer, now lies with the organization and not with the person alone."

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KAISEN see www.witiger.com/internationalbusiness/kaizen.htm

TQM and Kaizen are mentioned briefly in the text - we value these discussions so we have expanded on this. In addition; these two concepts are based on the fact that consideration of the customer is more and more important; therefore we will take a brief space to talk about relationship building with the customer - AKA C.R.M.

FYI - CRM is increasingly more and more important when you consider the international customer base of many consumer product companies.

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