SERVICE OPERATIONS GLOBALISATION GROWTH STRATEGIES FRANCHISING Expand using

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 - Purchase source/quality - No deviation from product - Franchise fee

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

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

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

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

GENERIC STRATEGIES

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

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

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

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

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

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

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

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

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 (

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

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

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

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

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

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

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

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