Issues in businesses
Part 1
Question 4
Wilson should be worried about the factory’s technological issue in France, which is said to be outdated compared to modern technology, making the firm less competitive in the market.
Question 2
The economic issue at hand is that the European manufacturers had had time in competing with other foreign camera makers. Further, increment in warrant cost is costly for the company’s economic performance; hence, it is an issue that Wilson should be concerned about.
Question 5
Wilson should worry about the demand made by Chinese Foreign Investment authorities to establish a design lab in China for the development of next-generation cameras. He should evaluate the advantages and disadvantages of such an investment in the company.
Part 2
Question 3
In the case where two organizations at varying levels of production merge, vertical integration happens. The advantages of vertical integration for a firm include; it permits the firm to invest in highly specialized assets. It enables the firm to differentiate the business from its competitors, which offers the firm a substantial competitive advantage. Further, vertical integration helps firms in having more control over their businesses. They gain more control over their production and distribution processes, such as controlling how they present their products and selling them in the market. Vertical integration in firms permits positive differentiation, like having more production inputs and retail channels. All these elements help the firm in differentiating the firm from its competition. It also requires a low cost of transactions and offers more control. When it comes to quality, vertical integration ensures high levels and offers more competitive advantages.
The disadvantages of vertical integration in firms are that it possesses capacity balancing issues, which might endanger the primary production. It also reduces flexibility affected by upstream and downstream investments. It creates barriers for any market entry, limiting competition, and protecting the customer base. Further, for vertical integration to be implemented, it demands high capital since it requires firms to buy new facilities and hire a large number of employees.
Question 1
The multi-domestic strategy involves the delegation of management and decision making power to the local host business units. All the local business unit managers possess the authority and responsibilities to make decisions and market-friendly products to satisfy the clients. The multi-domestic strategy is used by firms that utilize the same brand name for the branches and stores in the world.
Global strategy is composed of top-down management, where a firm makes minor adjustments of services offered considering local market peculiarities even though the products are technically the same. In the case where these firms operate, they ensure they use the same marketing and communication strategies. Global strategy is used by companies that have the same marketing and communication strategies.
Question 7
Specific steps have to be followed if any manager is to design an effective control system. The first step is establishing performance standards, which include different goals of how the company operates, and they can be physically measurable or human-based standards. Further, there is a measurement of actual performances through attaining quantitative amounts. It is then followed by having a comparison of the actual accomplishments with the standard one. It helps in tracing whether the set goals have been achieved. The last step involves taking a right corrective action. When these steps are carefully followed, they generate an effective control system.
Part 3
A company like Microsoft used a four-step process in designing of its control system. The four steps include establishing performance standards, measuring the actual performances, and comparing actual performances to the set basic standards. The last step includes taking of the right corrective action.