Strategic Issues and Case Analysis Research Paper

Pages: 4 (1483 words)  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: Master's  ·  Topic: Business

High Tech Industry & Power Tools

Strategic Issues and Case Analysis

High Tech Industry and Power Tools Industry Analysis

Both the high tech electronics and power tool industries are heavily reliant on their supply chains, innovation practices and processes, and distribution channels for stability and growth. The intent of this analysis is to evaluate each of these industries from their legal, social and economic environments, management structure, operational and financial issues and the impact of strategic change factors on the structure of each industry as well. Included are extensive analyses of their five-year revenue projections. Both industries face significant challenges in growing beyond their traditional markets, and the use of social networking technologies holds potential for that growth. Finally, this analysis evaluates how the factors mentioned are reorienting the value chains of each industry and forcing greater levels of customer-driven innovation and supply chain performance as a result.

Introduction

The intent of this analysis is to evaluate the similarities and differences of the high tech electronics and power tools industries. Using the dimensions of their legal, social, and economic environments, management structures, operational and financial issues and the impact of potential change factors on these industries, they are compared and contrasted to each other in this analysis. The strategic intent of the dominant members of these industries is also illustrated in this analysis.

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Research Paper on Strategic Issues and Case Analysis Assignment

Both the high tech and power tools manufacturing industries are going through a very turbulent time right now as their cost structures are being redefined by global competition, their supply chains under increasing scrutiny for compliance to environmental standards (Casella, 2010), and the global recession drastically reducing the availability of capital for expansion. The impact of cost reductions and greater skill sets being available in China for high tech manufacturing is re-orienting the entire industry's value chain (Albrecht, Morgenstern, Xia, 2008) and the same is happening with the shift of tools production to India (Dangayach, Deshmukh, 2006). As the value chains of these industries drastically change, there will need to be more focus than ever on environmental compliance globally including the WEEE and RoHS standards (Casella, 2010) and product quality standards including ISO 9002 (Williams, 2004). This has become the greatest legal risk to both industries as each manufacturer varies in terms of their ability to manage the exporting and enforcement of their quality standards into the nations where the majority of production is migrating today.

Management Structure

The management structures of each of these industries vary significant as each has a drastically different approach to managing the innovation, product development, production, service and distribution channel aspects of their businesses. The innovation process that initiates the new product development cycles in tends to be more global in scope and oriented towards demographic segments (Graber, 1996) while innovation in high tech tends to be more insular and focused on technological gains over time (Tsai, Chang, 2008). These differences in how each approach innovation have a strong impact on the management structures of each industry. As innovation is more outward centric in tools manufacturing, the organizational structures are hierarchical and more concentrated on managing very specific product lines, functions, and services. In high tech as innovation is much more generated within an organization, the structure is flatter, wider, with more emphasis on cross-functional teams to ensure that expertise is shared throughout organizations' structure. The wider and flatter organizational structure of high tech firms also lead to smaller, highly concentrated teams spinning off onto special projects as expertise can be quickly re-assigned. In the case of tool manufacturers, the processes that lead to the development of new products is more externally based, often including channel partners, resellers, and construction companies using their products.

Operational and Financial Issues

In 2009, the machine tools industry experienced negative growth as the combination of tightening credit slowed new production and construction companies found it difficult to get credit to purchase new equipment. As a result, industry-wide sales dropped 2.4%. Inventory turns contracted at a rate of 15% in the high tech industry and across the consumer electronics sector, price reductions and bundling were commonplace as consumable incomes plummeted in 2009. Operationally for both industries, 2009 was however, an excellent year as manufacturers in each retrenched and sought out initiatives to make their operations more efficient, lean, and focused on customers. For the high tech industry, the focus on quality management and attaining higher-levels of quality in their manufacturing… [END OF PREVIEW] . . . READ MORE

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