HSC Topic 1: Operations (RIPS) - aceh.b-cdn.net

 HSC Topic 1: Operations (RIPS)A. Role of Operations Management 1.1. Strategic role of operations management (IKEA)IKEA engages in cost leadership through its aim to price products at a minimum of 20% below competitors at all times, 50% being the goal. This is achieved partly due to control over design, manufacture, distribution and selling within a vertically integrated supply chain. Investments in leading edge technology e.g. automation, as well as Ready-to-assemble (RTA), flat-packed furniture and ‘self-serve warehouses’ contribute to cost savings. Savings → lower price for consumers → more demand → economies of scale. E.g. LACK side table incorporates ‘Board-on-Board’ materials → easier to manufacture, cheaper to transport → 40% price reduction.IKEA is a self-developed and strictly private label - 9500 product line differentiated from competitors via price. Product/service differentiation comes in the form of the opportunity for consumers to take home furniture on shopping day, without a waiting period. Value-add services (e.g. ‘picking service’, ‘assembly service’) available for customers to customise shopping experience according to financial capacities → appeals to a wide market.1.2. Goods and/or services in different industries (Apple)Goods that are mass produced on a production line such as Apple’s iPhone are referred to as standardised goods. They differ from customised products which are tailored to the customer’s needs, such as the customisation features of online ordering of Apple Watches (customised good) or post-purchase services (customised services).1.3. Interdependence with other key business functions (IKEA)Operations must incorporate implementation and recycling of ‘Loading Ledges’ into operations processes of transformation and transport. Finance provide initial funds to purchase Loading Ledges, and ongoing costs of recycling for future uses. Human resources must be retrained in technologies related to Loading Ledges and disposal methods (recycling). Loading Ledges must be marketed as a sustainable alternative to wooden loading pallets that were rigid and difficult to reuse or recycle.B. Operations of Operations Management 3.1. Inputs (IKEA)Transformed resources (Materials): monitoring of input sustainability, safety, ethics and origin major task to be met at IKEA to maintain positive brand image. Product/food safety/quality paramount towards consumer satisfaction and increased profits. Some achievements of IKEA include: IKEA stops using lead crystal in drinking glasses (1994), 100% sugar in jams is certified organic (2015).Transforming Resources (Human Resources): Deputy project leader for supply chain management in Sweden, Bimal Patel said that at IKEA “there is not much hierarchy, everyone is approachable”. Patel works in process development in the supply chain to foster an informal atmosphere which focuses on complaint yet collaborative workspaces. There is an “enormous flexibility in how to do things, and opinions are valued”.3.2. Transformation processes (IKEA)IKEA and Sequencing and Scheduling: IKEA utilises computer scheduling software, Kronos. This is a “fully automated employee scheduling system that analyzes historical trading data, labour standards, projected sales figures and employee availability to create optimum staffing schedules” for various operational activities. This is accessed via ‘ico-worker’ which is an online IKEA portal. Kronos boosts efficiencies!IKEA heavily invests in leading edge technology, many of which are patented designs, e.g. Their ‘Loading Ledges’ is substitute wooden packing pallets. The polypropylene plastic can be constantly used and re-used, and heavily reduces IKEA’s operational costs. IKEA’s operations are lean and efficient; the 100% automation of factories has allowed them to constantly produce vast quantities of goods which are uniform in construction.3.3. Outputs (IKEA and Apple)Customer Service: customer experience is quite unique; display items direct customers to RTA furniture stored in self-serve warehouse. Co-workers, signage and ‘how-to’ videos assist customers to shop at IKEA.Warranties: Apple gives at least 1 year of warranty as a complementary feature with the purchase of their products, but further services (Apple Insurance) can be purchased per month to insure the product further.C. Influences on Operations Management 2.1. Globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability (IKEA)The QueenGivesGummyLolliesEvery ChristmasEstablishment of Free Trade Agreements (FTAs) by World Trade Organisation (WTO) promote increased trade between countries due to decreased trade barriers (globalisation). IKEA globally sources rugs from India, wood from Poland and drinking glasses from China. Global sourcing results in decreased costs in operations decreased wages in operations; favourable exchange rates and more lenient govt. regulations.South Australia was the first state to phase the bags out back in 2009, punishable by fines of up to $5000 for distributing banned bags and retailer suppliers could be fined up to $20,000. Queensland, Victoria and Western Australia will ban them from July 2018. Woolworths announced that not only would it be abiding by the ban in those states, it would also withdraw the bags in NSW. Hours after Woolworths, Coles matched the pledge (government policies).Some legal regulations affecting IKEA include those regarding product safety, returns, operations auditing, waste disposal and sourcing. During 2013, European Commission declared that illegally sourced timber would be deemed officially ‘illegal’ to sell within the European Union (EU). IKEA response included involvement in Forest Stewardship Council (FSC) certified timber plantations → plan for 100% FSC certified plantations by 2020. IKEA heavily invests in leading edge technology, many of which are patented designs, e.g. Their ‘Loading Ledges’ is substitute wooden packing pallets. The polypropylene plastic can be constantly used and re-used, and heavily reduces IKEA’s operational costs. IKEA’s operations are lean and efficient; the 100% automation of factories has allowed them to constantly produce vast quantities of goods which are uniform in construction.Products need to not only be capable of being produced for a small cost, but also capable of being replicated in large volumes (quality expectations). ‘Quality Centres’ allow remote monitoring of product quality, possible through lasers, cameras and computer programs all used in real-time and automated to eliminate human error.IKEA engages in cost-based competition through their implementation of automated technology within factories enables them to undercut their competitors. IKEA aims for 20% lower prices than competitors, though 50% is the goal. This is achieved partly due to control over design, manufacture, distribution and selling within a vertically integrated supply chain. Investments in leading edge technology e.g. automation, as well as Ready-to-assemble (RTA), flat-packed furniture and ‘self-serve warehouses’ contribute to cost savings. IKEA uses 1% of the world’s commercially harvested wood and 0.7% of the world's commercially harvested cotton. IKEA’s ‘People and Planet Positive’ environmental sustainability strategy has ambitious environmental and social development goals, to be achieved by 2020. IKEA is developing idea of ‘closed-loop’ resource chains, which promote circular use, recycling and re-use of materials. IKEA’s Projs desk pad is an example of a closed-loop product. 2.2. Corporate social responsibility (SEE) (IKEA)The Westpac Group is considered one of the most socially responsible banks in Australia. Its 2011 Sustainability objectives included: to increase the % of women in senior management positions to 40% by 2014, to reduce Scope 1 and 2 emissions by 30% on 2008 levels by 2013, and to launch a major initiative to help address social disadvantage. D. Operations Management Strategies 4.1. Performance objectives (IKEA)Quality: IKEA’s Total Quality Management (TQM) framework allows KPIs to determine customer satisfaction. Dissatisfaction expressed through complaints and returns → negative influence on IKEA’s brand. Suppliers are randomly audited to ensure complete compliance towards best manufacturing practices. Service quality is measured by the expertise, service skills and product knowledge of IKEA employees.Dependability: customers depend on IKEA to provide them with solutions to furnishing problems. IKEA has high dependence on suppliers to meet demand → improved through vertical integration of supply chain. Dependability on logistics improved by strategically placed distribution stores near deep-sea ports and other IKEA stores, reducing reliance on road transport and inefficient handling of products.Flexibility: through decentralising of core businesses within the wider IKEA corporate structure. August 2016: IKEA Group finalises selling of IKEA Supply (logistics) and IKEA Industry (factories) to their owner, Inter IKEA Systems. → allows IKEA to focus on retail activities and makes business much more agile. adaptable and flexible. Cost: minimised through implementation of efficient processes. E.g. IKEA’s use of Chemical Leasing, whereby they pay for amount of output, not input, minimises costs and helps environment. IKEA are cost leaders. From FY 2000 to FY 2010, IKEA globally made 2-3% price reductions every year → accumulates globally. 4.2. New product or service design and development (Telstra)The telecommunications giant Telstra is constantly innovating their new goods and services. After being one of the pioneers of the 4G network in Australia, Telstra is hard at work building its 5G network, having switched on over 200 5G sites since August 2018. Telstra intends to launch 5G in 25 cities in 2019, including all major regional cities in Australia. This will bring Telstra 5G to a total of 35 cities.4.3. Supply chain management (IKEA, CostCo)Logistics: Costco, the retail giant making inroads into the market share of Coles and Woolworths, is building its first Australian warehouse distribution headquarters in Western Sydney at a cost of $77 million. The facility at Kemps Creek, near the site of the future Western Sydney Airport, will create up to 1000 jobs. Costco entered the Australian market in 2009 with a single store in Melbourne and with prices on average 20% cheaper than the major players.E-Commerce: IKEA has been extremely slow to act on consumer desires to shop from home. By going online, iconic IKEA shopping ‘experience’ is lost. Development of online shopping would require establishment of an entire new distribution channel within IKEA’s supply chain. eCommerce sales contributed 3% IKEA’s global sales in 2015 → over 1 billion euro. However, the implementation of e-commerce is expected to account for 10% global sales in 2020. Global Sourcing: sourcing of goods from China (25% in 2015) is advantageous due to decreased labour costs; favourable exchange rates; strategic positioning; access to greater talent; decreased overheads etc. Past few years has seen clear decrease in number of suppliers to IKEA and operating countries → greater control over supply chain due to supplier rationalisation.4.4.Outsourcing (QANTAS)Since 2014, QANTAS has outsourced its maintenance for 747s. Part of some measures to save costs and have more leverage. QANTAS sent two 747s to Hong Kong for maintenance checks, also initiating a “rigorous tender process to choose a suitable maintenance provider to maintain our Boeing 747 fleet for the long-term.”4.5. Technology (Telstra)Leading edge technology: The telecommunications giant Telstra is constantly innovating their new goods and services. After being one of the pioneers of the 4G network in Australia, Telstra is hard at work building its 5G network, having switched on over 200 5G sites since August 2018. Telstra intends to launch 5G in 25 cities in 2019, including all major regional cities in Australia. This will bring Telstra 5G to a total of 35 cities.Vs. the traditional copper wire networks and standard internet plans by other providers (established technology).4.6. Inventory management (IKEA, Woolworths)Supermarket chain Woolworths uses FIFO method of inventory valuation for fresh fruit and consumables. This is because vegetables will spoil and become obsolete in a shorter period of time, so the fresh stock must go out first. Inventory Valuation (Just-In-Time): Inventory is sold in large volumes and exist stores quickly, therefore it is essential that IKEA value inventory through the JIT methodology. SKUs or ‘stock keeping units’ are identification labels fitted onto every IKEA product with product information. IKEA uses these to realise the ‘cost-per-touch’ philosophy of inventory, meaning that the more hands that touch the product, the more costs associated with it. 4.7. Quality management (IKEA)Quality Control, Assurance and Improvement: Important facet of IKEA’s TQM program is the ‘IKEA Supplier Quality Standards’ or ISQS - name given to framework which consists of two essential processes that IKEA suppliers must conduct: ‘GO/NOGO’ requirements and the ‘Special Process Appendices’. Testing Laboratories that are third-party accredited towards ISO standard. Some of IKEA’s rigorous testing methods include: Climate Chamber, Fire, Assembly, Strength and Washing Tests.4.8. Overcoming resistance to change (IKEA, NAB)Purchasing new equipment: In January 2011, IKEA reduced reliance on 10 million wooden pallets per year by developing paper-based, corrugated-cardboard pallets that reduced transport costs by 10%, and were 90% lighter and smaller than traditional wooden pallets. In order to accommodate this change, IKEA had to purchase new forklifts to make the change → co-worker retraining. Financial Costs and Retraining: New and improved pallets gave savings of about 140 million Euros per year. Despite initial costs, IKEA would be able to save approximately 50 million Euro a year. The change also reduced carbon footprint, associated with product transport, by 6%.Inertia: Under BCI farmers in Pakistan and India were trained on how to reduce water fertiliser and pesticide use on their cotton crops. During 2015, 10% cotton was growth under BCI standards in over 20 countries. Inertia experienced by farmers demanding premium price for cotton, despite raised profits due to reduced input costs. Buyers of Better Cotton have had to ensure that they do not give in to demand for premium prices because in order for Better Cotton to become widely accepted commodity, it needs to be affordable.4.9. Global factors (IKEA, Boeing)Companies like Boeing source globally as international countries may possess expertise in specific areas of sourcing. For example, Italian firm Alenia Aeronautica makes the center fuselage, French firm Messier-Dowty makes the landing-gear system and German Diehl Luftfahrt Elektronik supplies the cabin lighting. As IKEA’s market share increases through store openings and e-commerce, they will experience a greater demand for goods and thus will benefit increasingly from purchasing in larger volumes (economies of scale). IKEA has a history of passing savings onto customers through price reductions. On average, IKEA China has made 54% price reductions in over 100 product categories since 2005.About 2500 products are added to IKEA’s product line every year. During 2010, IKEA opened their first ever test laboratory outside Sweden. As well as researching and developing their own products, IKEA also heavily invests in leading edge technologies to place their product range at the forefront of their competition.HSC Topic 2: Finance (RIPS)A. Role of Financial Management 1.1. Strategic role of financial management (McDonald’s)The Strategic Role of Financial Management for McDonaldsMcDonald’s corporate vision is “to move with velocity to drive profitable growth and become an even better McDonald’s serving more customers delicious food each day around the world”. They want long term growth and profitability and a distinguished competitive advantage. This strategic role of growth was evident in their 2017 annual report, “in 2017 global comparable sales increased 5.4% and global comparable guest counts increased 1.9%, with positive results achieved on all segments”.1.2. Objectives of financial management (Woolworths)Woolworths’ Wants to Reduce Reliance on External DebtIn Woolworth’s 2018 annual report, solvency was an objective made evident. Explicitly Woolworth’s Group wanted to limit their external financing. This was achieved, 2018 annual report, “Our balance sheet was also stronger with net repayable debt reduced by a further $677 million, through business growth and good working capital management”.1.3. Interdependence with other key business functionsC. Processes of Financial Management 3.1. Planning and implementing - financial needs, budgets, record systems, financial risks, financial controls (McDonald’s)McDonald’s and Financial Planning and ImplementationMcDonald’s continuously assesses their present financial position and determines their financial position. In 2015 McDonalds identified the need to reimage and modernise restaurants. The company budgeted for this, “The company expects capital expenditures for 2016 to be approximately $2.0 billion. About half of this amount will be used to open new restaurants...The remaining capital will be used to reinvest in existing locations.” In terms of maintaining record systems McDonald’s uses a POS system called NP6. McDonald’s uses an external auditor, Ernst and Young to assess the effectiveness of financial controls annually. 3.2. Monitoring and controlling - cash flow statement, income statement, balance sheet (Woolworths)Woolworth’s Financial Statements in Annual Report 2018The use of income statements are interwoven throughout the report. For example, through the use of income statements, in its Annual Report 2018, Woolworths via observing cost of sales, income tax expense, branch expenses etc.determined that its profit for the period 2018 was $1795 million, and increase from 2017 of $1593 million. As such Woolworth’s can monitor its performance and implement appropriate financial controls.3.3. Financial ratios 3.4. Limitations of financial reports - DR CEN has TINEA(Woolworths)Valuing Assets at WoolworthsWoolworth’ accordingly uses an estimation for intangible assets such as Goodwill. As reiterated by the 2018 Annual report, Woolworth’s valued its goodwill as approximately $5 million as part of its financial reporting.3.5. Ethical issues related to financial reports (McDonald’s)McDonald’s Independent Audit by Ernst & YoungMcDonald’s was independently audited by company, Ernst & Young in accordance with relevant legislation in the United States. It was declared that “the company’s international control over financial reporting is designed to provide reasonable assurance.” However “Ernst & Young, an independent registered public accounting firm” audited financial statements in 2018, 2017 and 2016”. “Management evaluates the audit recommendations and takes appropriate action”. This upholds ethical financial reporting.B. Influences on financial management2.1. Internal sources of finance - retained profits (Tax Review)Level of Retained Profits in Australian BusinessesAccording to a Tax Review conducted by the treasury in 2008, at that time retained earnings within a business totalled approximately $1 199 billion which in effect, acted as a form of internal investment for the large majority of businesses. Additionally, in 2019, approximately 50% of the profits of an SME are on average retained to be invested.2.2. External sources of finance (Australian Factoring Company and Woolworths)Australian Factoring CompanyIndependent companies, conduct factoring such as Australian Factoring Company. They are “automotive factoring specialists” who deal with “all Commercial invoices and not-at fault recoveries”. They provide debtor finance solutions for “manufacturers, importers, distributors and service industries”. The company identifies that clients “receive same-day payments to the full value of your voices less an agreed Debtor finance fee”.Ordinary Shares at WoolworthsObjective of “enhancing long-term shareholder value”. Woolworths utilises Employee Share Purchase Plans as reiterated in their Annual Report 2019. Woolworths developed a Dividend Reinvestment Plan (DRP). Eligible shareholders may participate in the DRP in respect of all or part of their shareholding. There is currently no DRP discount applied and no limit on the number of shares that can participate in the DRP. 2.3. Financial institutions - banks, investment banks, finance companies, superannuation funds, life insurance companies, unit trusts and the ASX (ABS)ABS Reports on Centrality of Financial InstitutionsABS reported on the influence of financial institutions to businesses. Overall, 16% of businesses sought debt or equity finance. Of these, 89% obtained finance. Second most common type of debt finance was a new loan with a term of more than one year (35%). Lack of access to additional funds was the most commonly reported barrier to the development or introduction of new or significantly improved gods, services, processes or methods (19%). This demonstrates the centrality of the influence of financial institutions to the success of a business.2.4. Influence of government - ASIC, company taxation (Federal Budget)Australian Federal Budget 2019-2020 Influences BusinessesThe company tax rate for SMEs with an annual turnover of less than $50 million has been lowered to 27.5%. This rate will be lowered to 25% by 2021-22. The federal budget seeks to “back SMEs through tax relief and by increasing and expanding access to the instant asset write-off”. The government is providing $1 billion to extend the ATO’s Tax Avoidance Taskforce, and to expand the Task Force's programs and market coverage.2.5. Global market influences - economic outlook, availability of funds, interest rates (McDonald’s)McDonald’s Acknowledges Impacting Economic OutlookMcDonald’s stated that it’s “substantially affected by economic conditions, which can vary significantly by market” across the globe. It acknowledges that “sustained adverse economic conditions or periodic adverse changes in economic conditions in our markets could pressure operating performance, and our business and financial results may suffer as a result”. This is all contained in McDonald’s Annual Report in 2018.D. Financial Management Strategies 4.1. Cash flow management (McDonald’s)McDonald’s Cash Flow ManagementAt current McDonalds is in a much lesser ideal cash flow position then the last financial period in 2017. With cash flow in 2018 at $866 million as compared to 2017 whereby it was $2468.3 million. Resultedly, McDonald’s should implement more cash flow management strategies. McDonalds has contractual agreements with franchisees for regular payments of rent and royalties. This ensures McDonald's maintains significant cash flow from franchisees.4.2. Working capital management (McDonald’s)McDonald’s Leasing Strategy & Control of Current AssetsAt McDonalds, the 2015 Annual Report shows McDonald's also built a further US $13 billion worth of buildings on land that it leases. This shows a heavy reliance on leasing as a working capital strategy. McDonalds also has a system where late payments of rent or royalties attracts high interest for franchisees. This helps McDonalds control its largest receivable.4.3. Profitability management (Woolworths)Increases in Revenue at Woolworths Since 2017Implemented several revenue controls through marketing objectives including their Lower Prices Always Campaign (pricing policy that Woolworths has engaged in) and selling a range of children’s promotional prizes. This has increased parental demand, accruing points towards promotional Prizes. Their Everyday Rewards Card (relationship marketing) has also acted as a revenue control. Cost controls have occurred through a decrease in traditional promotions and advertising, liquidation of Masters and associated assets as well as self serve checkouts.4.4. Global financial management (Kohler Bio Genetics)Kohler Bio Genetics and Natural DerivativesKohler BioGenetics Ltd. adopted the following natural hedging strategies to minimise risks associated with global finance. Arranging for import payments and export receipts denominated in the same foreign currency → therefore any losses from a movement in the exchange rate will be offset by gains from the otherImplementing marketing strategies that attempt to reduce the price sensitivity of exported productsInsisting on both import and export contracts denominated in AU dollars. Effectively transfers risk to buyer (importer).HSC Topic 3: Human Resources (RIPSE)A. Role of Human Resources Management (HRM)1.1. Strategic role of human resources management (CoatesHire)CoatesHire and Strategic Role of HRMCoatesHire establishes that their strategy of HRM is called The Coats Way. As dictated by their publications, “A key strategy is to engage its employees to achieve the company goals.” Additionally, “The Coats Way is designed to ensure that all employees whether they work in head office or at a regional branch, understand how the company’s vision, purpose and values apply to them on a day to day basis.”1.2. Interdependence with other key business functions1.3. Outsourcing (Precision Sourcing)Precision Sourcing and Outsourcing HRMPrecision Sourcing is a recruitment agency specifically for Technology and Data Staff. Precision Sourcing dictates that they “leverage unique collaborative events, technology, artificial intelligence, data analytics and social media alongside the traditional recruitment craft to identify dormant talent that others are unable to reach”. As such Precision Sourcing partners with other companies, essentially active as part of HRM.C. Processes of Human Resources Management 3.1. Acquisition (IKEA)IKEA and RecruitmentIKEA said that when acquiring employees the company looks for values of “togetherness, caring for people and planet, cost consciousness, leading by example and inclusion”, thus identifying their staffing needs. IKEA then developed a recruitment strategy, whereby they offered positions through their products. This resulted in no media spendage or postage but over 4280 quality applications, including over 280 careers assembled. Also established new media channel.3.2. Development (McDonald’s)McDonalds and Development McDonalds partnered with WorkStar to create a “Welcome to The Team” learning module. The module provides orientation for new crew (e.g. critical policies, requirements etc) and engaging, interactive digital media experiences for young employees. As dictated by Ana Curdija, HR Design Consultant at McDonalds Australia, “it aligns all new Crew to our core business values whilst introducing the new Crew to our fun and dynamic organisation culture”. 30 000 new users per year are ready to work on day one. The program won the LearnX Best Learning Program Gold in 2013.3.3. Maintenance (Canva)Canva and MaintenanceCanva has identified a targeted retention rate of 100% and consistently seeks to improve maintenance. The Canva office in Sydney was awarded the Best Place to Work in 2017. It is open, collaborative, including dogs, a bar, an in-house chef who prepares breakfast and lunch for all staff. Communal dining spaces, are “really open up dialogue, camaraderie” and “gives an informal window into what is happening in the company.”3.4. Separation (BOC Energy)BOC Energy and SeparationEnergy company, BOC had damaged reputation after an unfair dismissal through their separation processes. Caroline Power had approved maternity leave, but was fired 2 days prior to commencement. Instead of carrying out ‘redundancy’ at the same time as other employees, she was fired earlier. A report tabled by the AHRC Supporting Working Parents: Pregnancy and Return to Work (2014) found that 49% of women experience some form of discrimination, including unfair dismissal.B. Influences on HRM2.1. Stakeholders (Trade Unions)Trade UnionsThe Australian Council of Trade Unions is the peak body for Australian unions, made up of 38 affiliated unions whotogether represent about 1.8 million workers and their Families. A decline of around 1 million union members or 38% from. This decline can be attributed to the steady decline in employment in highly unionised industries e.g. manufacturing and the collapse of compulsory unionism. Unions play an active role in disputes, for example the Chemist Warehouse dispute and the National Union of Workers.2.2. Current Legal Framework (IKEA)IKEA WHS & Workers’ Compensation: No fatalities recorded during IKEA FY15. Annual ‘SecCheck’ involves auditing of IKEA facilities for safety/security matters. Employees receive safety training for bomb threats, robbery situations, fire prevention and evacuation procedures. In FY13, IKEA launched ‘Health and Safety Standard’ which addressed physical, mental and social well being; in FY13 there was a 37% improvement in accident rate vs. FY12.IKEA Diversity & Inclusion Approach: In FY13, IKEA launched the D&I Approach, promoting inclusivity. Part of the Approach are the Human Rights & Equality Policy & Standards (HREPS) featuring initiatives including the Women’s Open Network, and LGBT IKEA Project. From FY11 to FY15, women in managerial positions have ↑ 40% to 48%; IKEA has a strategic goal to have 50% of women as managers by 2020.2.3. Economic (IKEA)IKEA 2008 GFC Economic Response: 2008 GFC severely affected consumer and co-worker confidence; housing market closely linked to GFC, ∴ decreased demand for furniture ∴ decreased IKEA sales. During GFC, IKEA made 5 000 redundancies primarily for manufacturing and logistics operations, as sales were 7% below target. IKEA business model is firmly based on selling low-priced products; somewhat safeguards against economic influences. 2.4. Technological (Apple)Apple’s Technological Recruitment: High demand for Apple products creates employment opportunities; Around two-thirds of Apple’s employees in the USA are employed in Apple retail stores. Employment opportunities can be advertised globally using the company website and other internet resources. This broadens the potential pool of applicants as geographical boundaries become less relevant, giving rise to greater mobility of the labour force. 2.5. Social (McDonald’s)McDonald’s ‘Fight For $15’ Campaign (changing living standards): In 2013, US McD’s published a sample ‘personal’ budget, failing to include basics (e.g. groceries) and showed that, to cover expenses, employees would need to acquire a second job. ‘Fight for $15’ campaign argued for minimum wage in all US McD’s to be set to $15 per hour. Campaign claims that current wage levels are too low to live on. McDonald’s ‘Work From Home’ Policy: McDonald’s ‘work from home’ policy allows greater flexibility of when and how work is completed; offers 18 weeks’ parental leave for company employees. For returning parents, the policy offers discounted child care and designated breast-feeding rooms. McDonald’s reports that > 70% US workforce is either female or from a minority group. 2.6. Ethics and CSR (BHP Billiton)BHP Billiton’s BEE Initiatives (Diversity): BHP Billiton established Black Economic Empowerment (BEE) Procurement Policy and central BEE Supply Unit (SU) in South Africa. Addresses socio-economic im- balance by ↑ participation of previously dis- advantaged groups. Gives black suppliers opportunity to supply to BHP, who provide 50% funding for training of BEE suppliers. D. Human Resources Management Strategies 4.1. Leadership style (Facebook)Facebook FLIP and Participative Leadership StyleFacebook’s leadership style promotes respect and fosters a culture of “continual learning”. HRM provides employees with personalized experiences for individual learning. “Bootcamp” is a 6 week introduction to the website’s code base and allows engineers to determine and participate in how they want to contribute to the company. Their FLIP (Facebook Leadership in Practice) peer to peer program also enables leaders to receive feedback and coaching from peers and executives. Combines coaching and participative leadership style.4.2. Job design (Walmart)Job Design at WalmartWalmart’s job design is closely linked with job analysis. Walmart utilises the bottom up approach and trend analysis. The bottom up approach analyses human resources needs starting at the lowest level of the organisational structure. Trend analysis then predicts future HR needs based on current needs. Walmart’s job analysis is work-oriented and worker-oriented. Worker-oriented job analysis provides information on interpersonal, cognitive and perceptual abilities required and then develops jobs to meet these. This seeks to lead to a “a more motivated, focused workforce with specific abilities to perform the task at hand”. 4.3. Recruitment (IKEA)External Recruitment at IKEAIKEA said that when acquiring employees the company looks for values of “togetherness, caring for people and planet, cost consciousness, leading by example and inclusion”, thus identifying staffing needs and general skills. IKEA then developed a recruitment strategy, whereby they offered positions through their products. This resulted in no media spendage or postage but over 4280 quality applications, including over 280 careers assembled. This also established a new media channel.4.4. Training and development (KFC)KFC Training and Development ProgramsThe Global Emerging Leaders Programme provides targeted leadership development for permanent team members. It includes mentoring and coaching from senior leaders, with the intent to develop leadership skills. KFC also integrates the Master of Retail Management at the University of Wollongong Sydney Business School. This is an MBA program developed specifically for YUM which KFC is a part of. 550 employees have also received up to $1200 in tertiary study support, as it’s considered external training.4.5. Performance management (Deloitte)Deloitte and Performance ManagementEmployee response to the new system has been piloted by close to 40 000 staff around the globe. Staff are asked to answer ‘pulse’ surveys on their smartphones every quarter. Managers in turn fill in a short app-based performance snapshot - only eight questions - about their staff once a quarter. “We set out to develop a framework that was simple, local and focused on real-time data and on individuals’ strengths” thereby engaging with developmental performance management. It’s a cloud based framework called “Stand Out”. 4.6. Rewards (IKEA)IKEA ‘IWitness Program’ (Rewards) immerses co-workers in foreign countries within developing world to witness the positive impact of good cause campaigns e.g. Soft Toys for Education and Brighter lives for Refugees Campaign (campaigns donating a portion of funds from the sale of specific IKEA products to these initiatives). Co-workers can share their experiences on the ‘IWitness Global Citizens Blog’.4.7. Global E. Effectiveness of Human Resources Management 5.1. Indicators HSC Topic 4: Marketing (RIPS)A. Role of marketing 1.1. Strategic role of marketing goods and services (McDonald’s)McDonald’s and Strategic Role of MarketingFormer Chief Marketing Officer at McDonald’s Australia has said that marketing at McDonald’s is comprised of the team, consumer insights and business analytics, innovation of the menu, and a strong adaptation to changing trends in digital and media realms. The strategic responsibility and role of marketing is to invest money, drive activities and deliver sustained and real growth for the business in the long term, irrespective of the intensity of competition.1.2. Interdependence with other key business functions (Sukin)Operations and Marketing at SukinSukin Naturals, an Australian skincare brand has evident interdependence between marketing and operations. Appealing to an eco-conscious market, Sukin advertises their recyclable packaging. This requires more precision and different manufacturing processes, and shows the interdependence between the two. 1.3. Production, selling, marketing approaches (Coca-Cola)Coca-Cola and Marketing ApproachCoca-Cola uses the marketing approach, specifically by targeting small segments of the market and then providing specialised products for those markets. Thus, Coca-Cola is highly customer-oriented. For example Coca-Cola Classic, Coca Cola No Sugar, Diet Coca Cola are segmented brands under Coca Cola as a whole. They also intend to develop strong positive relationships with its consumers to encourage repeat sales. For example, they utilise relationship marketing in their Share a Coke campaign.1.4. Types of markets (McDonald’s)McDonald’s and The Intermediate MarketMcDonalds is involved in the intermediate market on a B2B basis when it purchases drink offerings from wholesalers and producers. This includes CoolRidge Water Bottles, Pop Tops, CocaCola products (Fanta and Diet Coke) and Goulburn Valley orange juice. McDonalds then adopts the role of advertising such products.C. Marketing processes3.1. Situational analysis - SWOT, product life cycle (McDonald’s)McDonald’s Swot AnalysisStrengths for McDonald’s SWOT analysis includes it’s strong financial position with a brand value of $88 billion USD in 2016. It is also a market leader, with a wide product range which is culturally adaptable to various markets. Weaknesses is that it has a poor public image regarding health and has an evident inability to appeal to older consumers. As such threats include the changing perceptions of health and diets as well as the reasons why people are not eating takeaway food (e.g. veganism). Statistically, from 2012 to 2016 the percentage of each generate visiting burger chains has decreased. Opportunities include an increase in online shopping and the ageing population of Australia.3.2. Market research (Sukin)Sukin and Market ResearchSukin utilised a combination of primary and secondary research to collate market research and best establish their marketing strategy. Figures include:Global beauty and personal care market gew +5% in 2016Australian market = USD $5.6 billion +Australian market recorded segment growth +4.6% (2016)Global segment of natural beauty and personal care grew at +9.7% in 2016, x2 of the mainstream market3.3. Establishing marketing objectives (Sukin)Sukin and GrowthSukin has a “vertically integrated business model” explicitly structured for growth and increased market share. With an interdependence with operations, the vertically integrated business model enables it to maximise margins, whilst quickly adapting to changes in consumer trends.3.4. Identifying target markets (Sukin)Sukin and Target MarketsSukin has identified their target market as a largely young, eco-conscious consumers who want to limit their carbon footprint. They are explicitly engaged with demographic and psychographic segmentation. This is reflected in product differentiation, such as recyclable packaging, vegan friendly and cruelty free.3.5. Developing marketing strategies3.6. Implementation, monitoring and controlling - developing a financial forecast: comparing actual and planned results, revising the marketing strategy (McDonald’s)Create Your Taste Menu at McDonaldsMcDonalds formulated the “Create Your Taste” Menu. They developed a financial forecast determining that each self service kiosk would cost $170 000 and franchisees were also required to purchase new equipment which included a special toaster, a new workbench, a heating cabinet and a new fridge, as well as various tools only available from one supplier. Overall customers created more than 1 million unique burger combinations and store traffic has increased. However in the United States in 2016 the menu discontinued and later in 2017 in Australia. In Australia, CYTmorphed into the ‘Gourmet Creations’ range where the most popular options chosen by customers were placed on the menu. In the US this was called ‘Signature Recipes’.B. Influences on marketing 2.1. Factors influencing customer choice (Coca-Cola)Coca-Cola and Socio-Cultural FactorsCoca Cola, as a mass market product, consistently communicates a message that transcends social class, culture and family roles. In 2014, through their marketing campaign “It’s Beautiful”, they had a television ad which emphasised the positivity of multiculturalism. In 2015, Coca Cola released their ad, “Happiness is always the answer” which emphasised family relationships and arrangements. However, Coca Cola has always relied indirectly on the pervasiveness of peer groups through their communication. For example, the “Share a Coke” campaign.2.2. Consumer laws (Nurofen)Misleading Advertising by NurofenIn proceedings commenced by the ACC, the Federal Court found that Nurofen contraved Australian Consumer Law by advertising that its Nurofen Specific Pain products were each formulated to treat a specific type of pain, when the products are identical. Misleading packaging resulted in excess of $6 million in fines. This had enormous implications on the business’s reputation.2.3. Ethical issues (Dolce & Gabbana)Dolce & Gabbana Advertisement Banned for Gang RapeThis famous fashion brand was under attack after an advertising campaign simulated a “gang sexual abuse’. The shooting occurred in 2007, and is landmarked as a highly unethical marketing campaign. According to the Advertising Self-Discipline Institute (which banned the advertisement), “the advertisement offended the dignity of the woman, in the sense that the feminine figure is shown in a degrading manner”. Additionally, it confirms “representations of abuse or the idea of violence” towards female characters. Reduction in sales, across the globe.D. Marketing strategies 4.1. Market segmentation, product/service differentiation and positioning (Coca-Cola)Coca-Cola and Market Segmentation & PositioningCoca-Cola has multiple streams of products, including the Coca-Cola Classic, Coca Cola No Sugar and Diet Coca Cola. These are all segmented at different markets which varying characteristics and motivations. In terms of positioning, for decades, Coca Cola has positioned itself as a product which is consistent, quality and refreshing. Accordingly, its branding and promotional strategies have reflected this. For example, the “Magic Taste of Coke” advertisement.4.2. Products - goods and/or services (McDonald’s)McDonald’s Changes Their PackagingMcDonald’s changed their marketing strategies, concerning products in 2016. This was motivated by the desire to make McDaonlds into a “modern, progressive burger company”. The new designs feature 4 new colours including Passionate Purple, Optimistic Orange, Ocean Fresh Blue, Zesty Lime and Magical Magenta, as well as the signature red and yellow. The aim is not only to refresh packaging but support the goal for all it’s fibre-based packaging to come from recycled or certified sustainable sources by 2020.4.3. Price including pricing methods (cost, market, competition-based, value based) (IKEA and Spotify)IKEA’s Cost Based Pricing MethodIKEA utilises cost-based pricing method in the sense that, “at IKEA we design the price tag first and then develop the product to suit that price. IKEA product developers and designers work directly with suppliers to ensure that creating the low prices starts on the factory floor.” Ipholds IKEA’s perception as an affordable, but high quality furniture provider.Spotify and Price PenetrationThe free service, then premium for $0.99 for the first three months, then for full priced premium. In a competitive market, with Apple Music and SoundCloud, penetration pricing can distinguish Spotify from its competitors. As of quarter 2 in 2019, Spotify has over 108 million Premium Subscribers globally. Spotify noted that though the end of June offering three months of “Spotify Premium for $0.99” saw “notable strength seen across emerging markets”.4.4. Promotion (McDonald’s)McDonald’s and Word of MouthIn 2010, McDonald’s developed a word of mouth strategy to increase sales of their McSpicy Wings in China. They announced they’d accept any discount coupons on chicken wings in China, and customers could receive a discount on McDonald’s McSpicy Wings. McDonald’s then publicly promised that if 1 million people pledged their love for McSpicy Wings online it would distribute free chicken wings for 7 days at selected restaurants. More than 2 million signed, and McDonald’s distributed thousands for free. Sales of McSpicy wings ultimately increased by 10% to 30% with revenue increasing in tandem.4.5. Place/Distribution (Sukin and McDonald’s)Sukin and Selective Channel ChoiceSukin Skincare utilises a selective channel choice, with the product available in Priceline, Coles and a few other stores to demonstrate accessibility to eco-friendly products, but still ensure a level of niche. They are able to develop the B2C relationship, as evident by branded product stands. Sukin is slowly intensifying their distribution, establishing their position but ensuring it is accessible to many.McDonald’s and Physical Distribution IssuesMcDonalds supply chain model is based on a culture of partnership and collaboration. In an average year Macca’s spends more than $650 million on Australian produce. Logistics giant Martin Brower, the supply chain partner to McDonalds Australia has signed onto a 20-year lease for an 18 559 sqm facility comprising of a large and advanced warehouse. They have had a long standing relationship with McDonalds since 1956.4.6. People, processes, physical evidence (McDonald’s)McDonald’s and Hamburger University“Fast-food giant McDonald’s is moving to cut down on order mistakes, even at the expense of lucrative upselling at the drive thru...rolling out a new initiative called “ask, ask, tell” during which drive-thru crew will repeatedly verify the correct order. Additionally employees can access Hamburger University to ensure that processes are efficient, and in line with the accessible image of McDonalds. Employees receive 32 hours of training in their first month and more than 5000 students attend Hamburger University each year with campuses across the globe.4.7. E-marketing (Sukin)Sukin Skincare’s E-Marketing ApproachWays in which Sukin has demonstrated e-marketing within the marketing mix:People: Active communications service between salespeople and consumers through personal selling on accounts such as InstagramProcesses: Digitised customer survey, which provides a personalised combination of products ideal to each consumers skin typePhysical evidence: Consistent earthy colours across social media platforms, website and packagingPromotion: The Sukin Squad (an online customer base), Emma Watson recently acknowledged her success with the brand and this was shared digitally, customers can partake in the “14 Day Sukin Challenge” which is accessed online.4.8. Global marketing (McDonald’s)McDonald’s Is A Successful Global BrandMcDonald’s has been coined the sixth most important brand in the world. The company operates in over 117 countries, successfully and it’s said that the key to that is segmentation and experimentation. Whilst the business uses global branding, with consistency in colour, logo and message, customisation occurs of products pending on culturally specific consumer needs and wants. For example in Japan there is “The TeriTama Burger” whereas in US there are “McRibs”. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download