Examine the Key Influence on Operations Which Contributes to the Business Success sample essay
This Report will examine how the major influences on Operations which contribute to the success of the business with focus all of the major eight influences, these include Globalisation, Technology, Environmental Sustainability, Legal Regulations, Corporate Social Responsibility, Quality Expectations, Government Policies and Cost based Competition. This report will also examine the impact of the influences on businesses such as Billabong, Westpac, Holden, Woolworth and Coca-Cola.
Globalisation Globalisation is the internationalization of trade and often forces businesses to adopt new strategies for operations to suit different cultures and economies. The often easily saturated domestic market has triggered many large businesses to expand globally for the purpose of increased sales and profits. Globalisation allows businesses to enter new markets, increase the size of their product range and the size of their operations, thus leading to the successful business. One such business that has successfully undergone the process of Globalisation is Billabong. Billabong’s approach in their expansion into foreign markets has allowed the stakeholders of the business to access to the numerous advantages of globalisation, such as the expansion through new markets. New Markets
Billabong commenced with global expansion with the aim to increase revenue and profitability as their original domestic niche market became increasing hard to expand, as the surfing demographics geographically was limited to coastal areas. Today, Billabong is a major transnational surfing brand, producing mass customized outputs to meet the demand of the potential customers at the global market. This is done through the Global web strategy, which allowed Billabong to carefully select from a list of appropriate proximity global suppliers which can make up a predictable and reliable supply chain that is highly responsive to changes in demand that will be experienced by the business. It is evident that Billabong has successfully been influenced by Globalisation with over 70% of its revenue being generated from overseas markets.
Technology Many business use existing cutting edge technology to design, construct and or apply innovative devices, machinery and methods upon the operations process. The goal is to provide opportunities for their businesses to apply new breakthroughs, innovations, and inventions to both administrative and processing level of Operations, with aims to increase efficiency and logistics in production process, lower prices, increase their market share and a higher return for the business’s shareholders and thus gain competitive advantage in their target market and leading the business a path to success.
One particular business that has integrated very well with technology is Woolworths. Woolworths’s approach to technology, especially in its processing level has let opportunity for the business to increase efficiency of operations via improving the supply chain management. Woolworths Project refresh was put in place on the operation process in 1999 with aims to increase efficiency via utilising technology and is prove successful. An example of technology used in Woolworth is the IT system called AutoStockR. It is used to forecast when supermarket shelves need to be replenished. This type of technology can effectively prevent stock from running out, which leads to increase of customer satisfaction and reliability on the brand and ultimately leading the business to success. Quality Expectation
Consumers are becoming increasing orientated to the marketing process of a business; as a result, customers began to have an expectation to the level of quality that they will receive from the product outputs by businesses. These expectations involve: *Quality of design
*Fitness for purpose *Durability An operations manager needs to make sure that the goods produced are of the required quality that is expected by the consumers that is they are safe and reliable. For any businesses not able to achieve the expectations assumed by the customers on the quality of the product produced by the business, can lead to a decline in sales and ultimately business failure. Cost-Based Competition
Cost has traditionally being a major influence on all business as all businesses desire to achieve maximum efficiency as it is a vital factor for businesses in order to reach the ultimate goal and success. Businesses sees cost as the key value to success and aims to become as much cost efficient as possible, by implementing a cost-leadership style approach to the operations variable cost or fixed cost ,while maintain the expected profit margin, business is able to gain a competitive advantage over their competitors in their target market. This is called cost-based competition. By determining the break-even point and applying cost saving strategies, to reducing cost, businesses who apply cost-based competition in their operations is able to maximize the profits and lead business to success. Government Policies
Regardless of the nation of the business may be operating in, all aspect of any business must comply by the laws and policies of businesses set by the government of that nation in order to success. Political policies often alter business legal regulations and thus leading to business opportunity, such as taxation rates, WH&S standards, public safety and health policy, and environment policies all contribute to business success. An example of recent government policy is Carbon Tax. The introduction of the Carbon Tax in 2012 will see many carbon-intensive businesses, such as electricity companies, restructure their operations to more renewable energy sources, as this will reduce business costs and possibly allow them a competitive advantage thus leading business to success. Legal Regulations
The legal influence on the business is a complex issue as the legal system with each nation has a fundamental difference on how the legal regulation influences on the operations of a global business. The range of laws set by each individual nation which businesses must comply is collectively termed compliance. The cost of expenses to meet and integrate the legal regulations to meet the compliance is very influential on the business’s cost and ultimately the operations process. In Australia, the legal system recognizes the contemporary issues exists many large industries exploiting their workers and place upon businesses to protect the labor market and the public health and environment. Some of these laws include:
*Workers Health and Safety Act: *Anti-Discrimination and Equal Opportunity Act: *Fair work and Anti-discrimination law
Environmental Sustainability As global consumers became increasing aware of the current environmental problems, such as pollution, global businesses are required to identify the key structural changes needed, which may affect demand and supply conditions for their products and eventually their success. This is done through integrating the goals outlined by the environment sustainability laws into their resources and operations planning and practices in order to receive a good image with their target market and maintain their market share which leads the business to success.
One of the businesses has completely complied with the legal regulations to sustain the environment is Holden. Holden’s approach to sustain the world environment, such as the integration of the business goals with the goals outlined in the environmental sustainability laws has maintained a good image of the business assumed by the market.To comply with the legal regulations set by the government, and to maintain customer satisfaction, Holden focus on reducing energy, water and waste as operating performance indicators has successfully reduced their carbon footprint demanded by the government and consumers and maintained their market share.
Corporate Social Responsibility (CSR)
Business in the modern global market extends their objectives from just complying with the legal regulations in their operations to reach maximum financial gain to “service to society and community” by taking account of their business practices based on the respect for people, community and the broader environment. Businesses who have that change of objectives are aiming to achieve corporate social responsibility. Formerly known as the triple bottom line, corporate social responsibility places same value on profitability with social justice and environmental protection. Businesses with a positive CSR image will gain high reputations among the stakeholders, thus leading to business efficiency and ultimately business success. However, the notion of CSR can also be exploited as a marketing ploy, thus criteria and measures have been established for prevention. Some of these measures are:
*Ethical responsibility It is standard for many businesses to operate at the level of legal compliance permissible as it means to maintain cost efficiency and thus maintain profit at a maximum. However for businesses who truly integrate corporate social responsibility into their business practices aims to meet all legal obligations and taking into account broader social, community and environmental concerns. One of the businesses who have taken on ethical responsibility on their business operations practices is Westpac. Westpac demonstrate ethical responsibility in many ways, such as its target of 40% of senior management positions being held by women by 2014.
*Environmental Sustainability As mentioned earlier the principle of ecological sustainability requires business to evaluate their operations strategies affected by the environment and produce new and better products in an ecologically sustainable manner as the business focus coincides with stakeholder expectations. For example; Coca-Cola demonstrates corporate social responsibility in regards to environmental sustainability through its extensive water recycling program, which has significantly reduced water wastage at the company’s production facilities in Australia and around the world. This type of CSR actions by Coca-Cola has led the stakeholders’ good impression of the business which ultimately leads to business success.
Conclusion This Report has examined how each of the major influences such as: Globalisation, Technology, Environmental Sustainability, Legal Regulations, Corporate Social Responsibility, Quality Expectations, Government Policies and Cost based Competition on Operations contributes to the success of the business. This report also had examined the impact of the influences on the businesses such as Billabong, Westpac, Holden, Woolworth and Coca-Cola.
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