BSB119 T W11

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Management and Human Resources
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1 BSB119 – GLOBAL BUSINESS TUTORIAL 11: GLOBAL PRODUCTION  Tutorial and assignment marks are available on Bb under Assessment  You can seek a review of your marks if you disagree with your result  In the final exam there is usually a question re this lecture  Consider location advantages – important “buzz term” to use in your responses to the questions The case study describes Dell’s global manufacturing operations. Dell saw its revenues and market share rise in 2003 while other companies suffered. Dell credited its success to a cost structure that was the lowest in the industry as a result of the efficiency of its global supply chain and manufacturing operations. However, by 2005, Dell had lost its market dominance as it was rivals began to match its manufacturing cost efficiencies. To build a more sustainable source of competitive advantage, Dell has turned to improving the quality of customer service. It hopes to exploit a service to order business model just as it has relied on its build to order, direct sales model for its early success.  Global Market  Decentralised production  Large global operations – ground breaking in their use of technology. Only sell via the internet. Previously used kiosks in major shopping centres. Are, now also sold via Officeworks.  Visit Dell’s website to look at the product. Please read the case “Restoring DELL’s Competitive Advantage”, the closing case in chapter 13 (pp. 531 to 534) of your textbook and answer the questions below. 1. What are the advantages to Dell of having manufacturing sites located where they are? What are the potential disadvantages? In addition to its US location, Dell as manufacturing sites in Brazil, China, India, Ireland, Malaysia and Poland. These manufacturing sites were chosen for low labour costs, the high productivity of the local workforce and their proximity to important regional markets. Certainly, by relying on foreign operations, Dell is vulnerable to political and economic factors which could disrupt production.  Nations have been chosen with specific ideas  Consider education levels  2 operations in the EU – could be to ensure company avoids tariffs  Produced locally – people like this. Gives brand and product credibility.  All of these places would have “location advantages”  Location advantages:  Labour = skilled, cheap, size of the work force, availability o Write a few sentences on these factors o You do not need to know stats for the final exam – use general knowledge. EG South East Asia has a big work place with little regulation  Suppliers – closer to supplies geographically, more suppliers, quality of suppliers, cost of supplies  Mention info regarding high value to weight and low value to weight here  Political and economic factors – struggling. Eg Dell in Ireland, product might be moved to Poland.  Eg Greece was badly impacted by the GFC. Decentralisation and diversification allows you to move to suit economic conditions 
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