Question 2: What are the drivers of the average profitability of the Original Design and Manufacturing industry? Questions 3: What are the key factors that a company like Inventec needs to manage to earn above-average profits in this industry? 1. Cost Because of the severe competition, maintaining a low cost base is the most important factor to earn above-average profit. This can be achieved by 2.
It would be beneficial to have him take the What Time of Day am I Most Productive survey to see if his poor decision making is based on his ability to focus. The characteristics of the employees make up the characteristic of the company, and both of these are a direct reflection of their leadership. Keeping employees happy is a key element to success, as noted in (Robbins & Judge, 2011), “Therefore, companies implement programs; such as piece-rate pay where workers are paid a fixed sum for each unit production completed”. It is imperative that a company can attract and retain a skilled workforce. Ensuring that their compensation is competitive with the market and valuing the employee’s opinions are just two ways to accomplish this.
The ability to tap into the global labor market will make the company more competitive by being able to offer competitive prices on products due to lower overhead cost associated with the offset in the labor cost. Attracting employees to join the company is the better option unless there is a management position that requires exceptional talent to fill the position. Relocation of prospective employees can be costly to the company and there is no guarantee that they will be long term employees of the company. With the company's plans for expansion I would recommend overstaffing. This will allow the company to stock pile talent for future
1 Devdatta Bhattacharya, Section B Nucor at a crossroads Arena: Nucor has been very successful with its existing steel minimills, achieving consistent profits and maintaining worker productivity The steel industry is suffering from significant overcapacity; while total US capacity alone stands at about 133 million tons of production per year, the market consumed only 70 million tons of steel in 1986, leaving over 60 million tons of idled capacity The low-end structural products market is saturated with numerous small minimills competing against each other in a stagnant or shrinking market Nucor's only option for continued growth is to invest in new technology, an unproven thin-slab cast plant that would allow it to enter the market for flat sheet steel with a low minimum efficient scale and marginal cost of production Cost Advantage: Exhibits 12A and 12B of the case present information on costs and profitability for the production of hot and cold rolled sheet as produced by the proposed thin-slab minimill and by the integrated mills, the only current producers of flat-rolls. Table 1: Construction Costs for Flat-Rolled Product Plants Type of sheet Hot-rolled Cold-rolled Thin-slab Minimill $236 $450 Modernized Integrated: $451 $675 % Savings with Minimill: 48% 33% Table 2: Comparative Operating Data for Flat-Rolled Product Plants Thin-slab Minimill Cost per ton Revenue per ton Profit contribution per ton HR $225.00 $306.50 $81.50 CR $283.00 $390.50 $107.50 Modernized Integrated HR $261.50 $326.00 $64.50 CR $349 00 $454.50 $105.50 lJnmodernized Integrated HR $300.00 $325.00 $25.00 CR $403.00 $453.00 $50.00 So, the costs of introducing new capacity in the form of thin-slab minimills is significantly lower than in form of an integrated mill with savings of 48% or 33%, depending on the type of sheet (hot-rolled or cold-rolled) Advantage of
Do you think Altera’s new strategy will be successful? What are some advantages and disadvantages of the new strategy? Yes, I think their new strategy will be successful, because their new strategy offsets some of the risk associated with carrying too much inventory, since they only build finished products to customer orders and build die banks to stock. The intent of this strategy was to improve visibility into customer information, inventories and build plans, facilitate product development collaboration, and improve Altera’s inventory management. This allows them to reduce safety stock levels and inventory holding costs as well.
Business Strategies Finding a Niche and fill it: A manufacturing company is an operation that produces product to meet customer demand. A successful manufacturing company feels a niche by choosing to make products that they can offer for a better price than its competitors or items that provide a superior experience for the customer. Build Competent Staff: A successful manufacturing company must have a trained and competent staff that understands the fundamentals of manufacturing in general as well as the particulars of manufacturing the particular company`s products. Your staff must understand how to prioritize manufacturing tasks by understanding which orders are most urgent, and which processes must be completed before others can begin. Staff members must be able to troubleshoot equipment, keep materials in stock and deal with idiosyncrasies such as the quirks of different machines and materials.
The important business competitive strategies are lower cost strategy and differentiation strategy. The lower cost strategy helps an organization compete efficiently in the industry by designing, producing and marketing a similar product from its rivals but at a lower cost. Differentiation strategy helps an organization develop and market a different product from its rivals. Our team understands these two competitive strategies because we can relate with always being different to stand out or try to purchase the same products and services at a lower cost instead at a higher cost (Wheelen & Hunger, 2014). To create value and sustained competitive advantage through business strategy, organization must be able to design, produce, and
Companies will have an opportunity to choose among the best talent on the market. Without fictional unemployment people would tend to stay in their current jobs for life and create a stagnant system that could create a negative effect like subduing innovation. Fictional unemployment is also important because it matches the demand for workers with the supply from companies and helps bring equilibrium into the labor
Consumers are demanding chemical free homegrown products. It is easy for consumers to find other companies who can provide comparable services. However, new technology is only a fraction of what makes Gene One stand out over their competitors. Consumer loyalty and strong leadership will give them a major advantage. The challenge for Gene One will be to maintain their cohesiveness as a management team and maintaining a high level of social responsibility while expanding the company to a publicly traded organization.
There are significant gains to be made in emerging markets as they are not saturated and first mover advantages are significant. The second source of P&G’s success is its internal strengths. The company’s internal strengths include innovation, branding, go-to-market and its scale of operations. These internal strengths give P&G a competitive edge over its competitors. The company’s ability to innovate for instance enables it to have a differentiated product and charge a small premium prices for its products.