OBJECTIVES
As a person with knowledge of international business, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of the statement ‘Think globally: act locally’ and at times fails to understand the reasons or logic behind certain strategic implementations imposed on it.
By delving into this project paper, the author intends to have better insights into how the analysis of the statement ‘Think globally: act locally’ is thought up, formulated and then imparted down into different companies and organizations. The author hopes to have an in-depth understanding as to how the value of the statement ‘Think globally: act locally’ enables companies and organizations to compete effectively and profitably in this era of internationalization where competition is extremely intense.
In order to reinforce the learning objectives, two key focal issues were focused upon i.e. innovation and diversity. Innovation was discussed with regard to the analysis of the statement ‘Think globally: act locally’ where it was renowned for its developmental capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.
EXECUTIVE BRIEF
This essay utilized Cathay Pacific Airways as the model organization to review its present operations management and how it dealt with critical situations in applying the implications of the statement ‘Think globally: act locally’. From the analysis, key trends in the impacts of the statement ‘Think globally: act locally’ in the operations management of Cathay Pacific Airways were then identified, how it worked and its effectiveness in dealing with critical situations was ascertained. The paper then moved on to assess these operation management strategies with regard to its suitability to critical situations, during which the internal capabilities of these operations management in relation to the strategy being followed by Cathay Pacific Airways was determined also. An overall analysis of the performance and effectiveness of the implementation of the statement ‘Think globally: act locally’ in the operations management of Cathay Pacific Airways was also conducted to assess and compare the capabilities of these operations management strategies with those of others. Gaps in the operations management capabilities and winery environment were then identified.
Finally, several choices of strategies to improve the operations management of Cathay Pacific Airways through the application of the statement ‘Think globally: act locally’ as effective means in critical situations were recommended and evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out the options and acceptability within the key stakeholders and decision makers. Several key implementation issues related to managing strategic change were also addressed as well.
INTRODUCTION
It is said that the proper understanding of the statement ‘Think globally: act locally’ helps companies and organizations in the efficient and effective implementation of the policies and tasks necessary to satisfy their customers, employees, and management. Nowadays, the implications of the statement ‘Think globally: act locally’ are seen in the operations management of companies and organizations, where its focus is on the careful management of the processes involved in the production and distribution of products and services ( 1998).
More often than not, small companies don’t really have the capabilities to understand and implement the statement ‘Think globally: act locally’ in their operations management. Instead, these companies engage in activities that various schools of management typically associate with merely implementing the statement ‘Think globally: act locally’. These activities include the manufacturing of products, product development, production and distribution.
However, the statement ‘Think globally: act locally’ deals with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with this statement. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, the statement ‘Think globally: act locally’ includes the analysis and management of internal processes.
Cathay Pacific Airways will be the model business entity that will be used in this research based on their history in the application of the statement ‘Think globally: act locally’ in their operations management.
CURRENT SITUATION ANALYSIS
A. Company Mission / Corporate Objectives
Cathay Pacific Airways aims for sustainable growth as a broad market leader in the airline industry as well as for segment leadership. In both cases, the airline services of the company will play a crucial part. Cathay Pacific Airways is able to establish its broad leadership usually by acquiring other strong airline companies and their services, which are then combined into a new, larger company. Offering training to its employees, improving the company operations, and the introduction of new technologies then reinforces the positions of the various airline services. This practically results in economies of scale that is able to create a distribution network for both the local and international airline services of the company. If a market is already in the control of other airline companies, Cathay Pacific Airways devotes its attention towards the development of a premium segment with its various airline services.
The mission of Cathay Pacific Airways is to secure the growth of the business in a sustainable manner, while at the same time constantly improving the company’s profitability. The strategy to achieve this involves four elements:
‘Think globally: act locally’
Among the competitive advantages enjoyed by Cathay Pacific Airways upon the integration of the statement ‘Think globally: act locally’ in its company policies include:
· Economies of Scale and Scope in manufacturing and research and development arising from its numerous facilities situated in Hong Kong.
· Unique Quality Technology owing to heavy emphasis on research
The company’s commitment to research & development activities has always been one of its top strategies to remain competitive in the market.
· Differentiated Airline Services Through the production and marketing of differentiated airline services originating from their research and development activities, Cathay Pacific Airways is able to create its own firm-specific advantages. The continuous pursuit of research and development processes enables the company to produce a steady stream of originally differentiated airline services which makes it difficult for competitors to find substitutes. Because of this differentiated approach, Cathay Pacific Airways is able to market their airline services within Hong Kong and China, which enables them in turn to maximize the returns on research and development expenditures.
The company’s competitive advantages could be sustained provided the company would continue to focus on its core competencies (inside-out approach). However, the company also has to be aware of the latest technological changes (outside-in approach).
‘Think globally: act locally’ means EXPANSION
Expansion is a key factor especially in countries where a broad leadership position has yet to be fully developed (1994). In these countries Cathay Pacific Airways strives for strong positions especially in the premium/import and specialty segments.
Good examples here include Cathay Pacific Airways’ leading position in Hong Kong as well as the recently established market in China. In those examples, Cathay Pacific Airways shows its desire to establish autonomous growth through the introduction of excellent airline services and expansion through the distribution networks as well as growth through acquisitions.
Chinese Airline Industry
The Chinese Airline Industry has been showing steady signs of growth and progress for a couple of years now. This consistent progress can be attributed to the change in strategic directions that was implemented several years ago and is still being further structured up to now. Basically, the critical element of the strategy was that the government started looking at things from the perspectives of the consumers and the customers.
China possesses a strong airline industry that enables it to be easily targeted by the world’s leading airline companies. China’s market value has even increased over the recent years especially with the steady increase of their presence. Cathay Pacific Airways must be the first to strike a deal with China in order to strengthen its foothold as the top airline company in Hong Kong ( 2001).
STRATEGIC OPTIONS
Deriving from the analysis between the airline industry, operations management and capabilities of the airline company involved, many strategic options would become imperative. It is therefore essential to evaluate these strategic options as to whether they are appropriate to the issues addressed, whether they are feasible enough to be implemented and their acceptability to key stakeholders.
A. Business Level Strategy
There is definitely a need to reconcile both the inside-out and outside-in capabilities. While Cathay Pacific Airways’ operations management strategies involve focusing on their core competencies with market position following its resource base, the company will be put into a disadvantageous position should they choose to neglect both the macro as well as airline industry environment. Therefore, Cathay Pacific Airways has to be aware of the latest operations management changes, as well as changes in political, economic, legal and even demographic trends in order to develop the outside-in capabilities, such as airline market sensing, customer linking, channel bonding and technology monitoring.
The advantages enjoyed by Cathay Pacific Airways may come in the form of increased revenues. Knowing what the market demands and the latest trends could help the company fully exploit its research and development capabilities to come out with airline services which are not only cost-effective but also high in quality. The strategic option can even be used as marketing tool where the focus is on staying close to the airline’s customers and listening to their feedbacks. On the flip side of the coin, there will be a huge mobilization of resources involved, and the associated risks bestowed on Cathay Pacific Airways.
Nevertheless, the mentioned strategic option seems the most practical in the wake of globalization, since there is a sudden shift towards a more integrated and independent world economy. The key stakeholders too should not have any objections so long as Cathay Pacific Airways’ core business is not threatened. By virtue of the company’s centralized control of its business, it is being expected that major barriers should not exist in carrying out such an option except additional time may be required given the scope and span of the airline’s operations.
Understanding the strategic importance of production and marketing is something that Cathay Pacific Airways has to be familiar with. This airline company normally practices a centralized and globally scaled configuration of operations and capabilities. This allows information dissemination to be retained.
CONCLUSION
The results of the analysis carried out on the implications of the statement ‘Think globally: act locally’ in the operations management of Cathay Pacific Airways indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the operations management of Cathay Pacific Airways could still be expected to improve faster than average as their understanding of the statement ‘Think globally: act locally’ grows also.
The review of Cathay Pacific Airways’ operations management capabilities and resources revealed very little inconsistencies regarding the company’s strategies in integrating ‘Think globally: act locally’ as one of its core policies. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the company.
The analysis among the statement ‘Think globally: act locally’ as well as its implications on the operations management and capabilities of Cathay Pacific Airways revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the company’s competitiveness.
REFERENCES
Credit:ivythesis.typepad.com
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