Virtual Technology: Creating Change

           

             Companies are now realizing the endless amount of opportunities that virtual teams can bring to a business.  Virtual teams are “teams in which members may be a great distance from each other, but still are able to collaborate intensively” using technology such as chat programs, email and video-chat.  The article “How to Manage a Virtual Project Team” discusses how this growing trend, could lead to a demand for workers that are skilled in virtual communication.  In turn, this could lead to major changes in education, businesses and employees lifestyles in general, which      

            By implementing virtual teams in a company, they can tap into various resources that otherwise would have been impossible.  Location is no longer an issue, so if there are talented individuals located across the world they can become part of the team.  Virtual teams can also help employees by enabling them to work from home, and allowing them to avoid transportation time and costs.  Without having to worry about this employees gain more family time, free time and can even save money.  Although this could cause problems too such as employees not feeling included in the company or slacking off on work which can cause major setbacks for the company.

            I think that this is a great new tool, but it is best in most cases with limited usage because I think that would equal the greatest amount of productivity.  Employees who are allowed to work at home face far too many distractions and too much freedom isn’t always good.  Although on certain days, such as in the case of inclement weather this is a great tool because the employees are safe and dont need to worry about getting to work, yet the productivity of the company is still performing up to standards.  On the other hand, in reference to communicating internationally, I think this is a great tool because the benefits are overwhelming, companies no longer need to travel internationally or deal with long distance phone calls when they can skype online in an instant.  Ultimately this growing trend has and will continue to drastically change the way business works. 

http://www.cio.com.au/article/368495/how_manage_virtual_project_team/

QFD Online

                 Quality Function Deployment is a “comprehensive process for improving the communication and coordination among engineering, marketing and manufacturing personnel.”  It helps compare what the customer wants against product attributes to help them make decisions.  Using quality function deployment a company can look at all of the potential improvement projects and then see how they will impact the different things a company needs to achieve to drive improvement within a business.  By going through a scoring matrix, and organizing them a business can see what is most important and allows them to easier prioritize what to do first. 

                QFD helps to provide a framework for the decision making, and many maintain that one of its “most valuable characteristics is its positive effect upon cross-functional communication and, through that, upon cycle time and the product/customer fit.”  QFD Online is a company who has taken these ideas and turned them into a business idea where they have developed programs to help companies easier implement quality function deployment.  They have recently announced the beta release of their online QFD software, which is browser based and allows companies to build unlimited rows and columns, sort by many different functions and allow multi-user collaboration.  The company currently offers free trials of their software and asks for feedback from customers.  I think that this is a great way to get information back on how the program is working as well as recruit companies to use it in their daily work. 

http://www.qfdonline.com/qfd-builder-online-software/

http://www.youtube.com/watch?v=qfD3oZgZN5c

Schilling, Melissa A. Strategic Management of Technological Innovation. New York: n.p., 2008.

Organizing for Innovation: India

In a recent story entitled “Enterprises en Route Growth and Innovation: Survey, published by Silicon India on October 17^th, 2010, they demonstrate how important companies in India deem innovation to be as they try to rise from the recent global recession.  During a recent survey 84 percent of executives agreed that innovation was very important to their company’s strategies.  Yet many of the survey’s respondents indicated that their “companies don’t make good use of specific tactics” and only a third said that their companies were “effective in setting formal priorities for innovation during the strategic planning process.”

This means that the degree of formalization in these firms may be what is causing them to be less successful at innovation.  According to the textbook, Strategic Management of Technological Innovation, by Melissa Schilling, “if a firm codifies all of its activities with detailed procedures, it may stifle employee creativity” and likewise if they lack structure, they can also lose employee motivation.  Many times firms found that when human and financial resources worked together the companies were able to achieve better results, so by decentralizing and spreading out who was making decisions, the outcome was more beneficial to everyone.

Almost all of the respondents thought that more organization would lead to a more innovative company if the company’s were more standardized, yet the textbook mentions that this can also be stifling.  As the solution can differ depending on the company, each would have to work to achieve the correct balance of standardization and freedom so that they would feel free to be creative, yet they also would not become careless, creating a situation where innovation fails to flourish.      

http://www.siliconindia.com/shownews/Enterprises_en_route_growth_and_innovation-nid-72754-cid-3.html

Outsourcing Effects on American Business

              Outsourcing, which is “when a firm hires another firm to manufacture its products,” has been increasing rapidly in the last 20 years.  There are many effects of outsourcing which can be both positive and negative so companies must think carefully before they choose to outsource.  Some positive effects of American Businesses outsourcing include cost savings, access to operational expertise, a reduction in the time to market, tax benefits and many more.  Yet there are also some negative effects such as decreased data protection, different time zones and heavy internet reliance.   

            According to a prediction by Forrester Research, “despite the fact that only 60 percent of Fortune 1000 companies have yet begun off-shoring, over the next 15 years 3.3 million U.S. service-industry jobs and $136 billion in wages will be relocated abroad.”  This could well be true and the effects of this on the American Economy as well as foreign countries’ economies will be tremendous.  There could be numerous jobs that could potentially be outsourced, which could increase profits dramatically for companies, yet there are bound to be problems that surface as well.

Boeing, who was set to release their 787 Dreamliner, ran into all sorts of problems when they decided to outsource.  Their approach was intended to result in a simpler assembly line as well as reduce final assembly time from 12 days to 3 days, yet they encountered major setbacks when their global contractors did not perform as expected.  They ran into problems concerning language barriers such as directions written in Italian and many of the companies they outsourced to decided to outsource the work to even smaller companies.  This resulted in parts being manufactured in over 15 different locations in 10 countries.  Currently the planes release has been delayed till early 2011.

This exemplifies the negative effects that outsourcing can have on a company if it is not done right.  Boeing stretched themselves too thin, and with manufacturing so spread out it is not too surprising that they encountered problems.  If other companies learn one thing from this, I think that they need to realize that communication is one of the most important things that they must have with the businesses that they are collaborating with.  If they are unable to communicate effectively, then their chances of being successful are significantly slimmer.   

 http://www.youtube.com/watch?v=v88S5sYzHjI

Joint Ventures Grants Companies Opportunities They Could Not Achieve Alone

              Joint ventures are a type of “strategic alliance that entails significant structure and commitment.”  To help get across the types of results one can accomplish utilizing this structure, I have researched the joint venture between Walmart and Bharti and also why they are more likely to achieve prosperity working together as opposed to going solo.  

            Bharti Enterprises is a large business conglomerate located in New Delhi, India that has decided to go into a joint venture with Walmart to help set up hypermarkets, neighborhood stores and supermarkets across India.  Bharti chose Walmart to pair up with because they fit into Bharti’s aggressive strategies and growth plans.  In addition, Walmart has been trying to focus on emerging markets, but in India you must be an Indian company to own a department store, so by starting a joint venture with Bharti, an Indian company, Walmart is going to be able to break into the emerging Indian market.  Bharti also can achieve greater prosperity because they will be working with a company that already has the plans for success mapped out.  Additionally, India is currently dominated by small neighborhood stores right now, so by launching these new giant retail stores with extremely low prices, they will most definitely be one of the top competitors in the market.  

           

            Walmart and Bharti are hoping to have launched 10 -15 companies by 2014.  The companies predicted sales are expected to reach 55 billion in annual sales and are\ expected to grow at an annual rate of 22% for the next ten years.  I think that this is a great idea for the companies because for Bharti to try and start it up on their own they may run into problems with obtaining low priced merchandise and in addition Walmart could not even enter the market on their own.  Yet together, with Walmart’s reputation for selling brand name products at low prices and their “logistics, distribution and sourcing expertise” partnered with Bhardi supplying the money for the launching of this project and running the retail aspect they are setting themselves up for success.

http://www.forbes.com/2006/11/27/wal-mart-bharati-markets-emerge-cx_rd_1127markets03.html

Porter’s Five Forces and how they relate to Apple's computer market

Porter’s five forces model is a commonly used tool that businesses can use to analyze their external environment, and I am going to look at how they have been applied to a company that is already thriving, namely Apple.   The first of Porter’s forces is the degree of existing rivalry, which is based upon the number of competitors that are of comparable size.  For Apple, some of their existing rivalry would be other computer companies such as Dell, HP, ASUS, ACER, Sony, and other computer manufacturers.  The next force is the threat of potential entrants.  In Apple’s case some entry barriers for new companies could be brand loyalty, and large startup costs, yet because Apple’s computers are highly priced there could also be an opening for computer companies that market towards customers with a lower price range. 

Porter’s third force is the Bargaining Power of Suppliers.  This means that the ability of a firm to negotiate good terms is influenced by the number of firms a company relies on.  Apple has a high bargaining power over their suppliers because they are able to outsource much of their manufacturing and they also have been able to vertically integrate, which means produce some of their own supplies, which has allowed Apple a great advantage in the competitive market.  Bargaining power of buyers is the next force which a firm is reliant on customers.  There is a very high demand currently for Apples products and what gives them a great advantage is that customers see them as a unique product, where the substitutes (i.e. other computers) just do not compare.  The last force is the threat of substitutes.  These are products that are not competitors, but could “fulfill a strategically equivalent role for the customer.”  The great thing about Apple is that they have already considered these substitutes and have branched out their company to support substitutes such as the iPad and iPhone.

http://www.youtube.com/watch?v=3yn9J3EVs-A&feature=related

Better to be a follower?

                Normally one might assume that being the first to enter a market you would have a great advantage because that meant that you were further along with the new technology and also that you could own the market because you had no competition.  But in reality sometimes companies that enter as a follower come out on top and the original product fades into the past.  Being the first to develop a product means that you must spend more money on exploratory costs to see if there is a need for a product, yet even then you can never be sure exactly how the public will react to it once it is released.  On the other hand, if you are the first mover to a market you can “shape customer preferences by establishing the precedent for product design” which hopefully means that you will ultimately come out on top.

            Visicalc was the first spreadsheet software and after it was introduced in 1979 it became an instant success.  It was an incentive for many business workers and corporations to purchase computers and the market for this program was quickly expanding.  This was followed by the release of the new IBM PC that used an Intel computer chip, but Visicalc was not able to keep up with this new technology.  As they rushed to sort out problems with their software, companies such as Microsoft had already surged into the market with Microsoft Excel, which was easier to use and quickly became the new standard.  In just a short time Visicalc had dropped out of the market entirely making a profit of around one million dollars.  Meanwhile, Microsoft Excel’s profits exceeded 156 million in just two years. 

            It is difficult to predict whether a company will be able to stay on top because they must be prepared to follow the market’s needs with whichever direction it takes.  Early entrants to a market set the precedence for a new product but they must be careful of other companies who are always trying to advance faster and take advantage of the new opportunity.  I think it is easy for newcomers to enter the market because they do not have to deal with exploratory research and they can focus more on the consumers needs and target their product development towards that.  This gives them a bigger benefit and they can quickly attract consumers who are ready to move forward with new technology. 

http://dssresources.com/history/sshistory.html