Cambridge Cooling Systems: Global Operations Strategy Case Study Solution
Contracting
For the expansion of business in Mexico, the organizations should consider the option of contract manufacturing. This will significantly provide the organization with cost-saving due to the economies of scale and the increase in low wage labor content. It can also be advantageous in the effective management of quality standards. While the key issues associated with contracting manufacturers, true contract manufacturers are difficult to find.
Decision criteria
| Goals/ outcomes | Alternative 1 | Alternative 2 | Alternative 3 |
| Operational efficiency
|
8 | 6 | 5 |
| Cost Saving
|
7 | 8 | 6 |
| Strengthen the business process
|
9 | 5 | 6 |
| Total score | 23 | 19 | 17 |
Recommendation
After taking into consideration the analysis of each alternative, it is recommended that the company should outsource the production operations in Mexico. The inexpensive workforce in Mexico would help in the optimal utilization of processes, tools, and equipment. The company should also utilize the foreign company’s procedure, supply chain, equipment combined with in-house expertise in order to produce the products in foreign countries in exactly a similar manner the foreign corporation produces it themselves. Outsourcing would lead to operational efficiency, cost-saving, seized market share, improved the bottom line, staffing flexibility and reduce labor & overhead cost.
Action plan
The company should figure out the ways by which it would likely provide products at relatively low cost, thus undercutting their market competitors on price through production efficiency. The company can use economies of scale for the purpose of increasing the bargaining power with the suppliers. Furthermore, the high volume of the compliant plan should be created and custom reports for a transaction and goal monitoring and the management summary report should be developed by a company to ensure that the business is running smoothly on its production operation in a foreign country.
Appendix A – SWOT Analysis
|
Strengths |
Operational efficiencies
High quality and in-exclusive cooling system for harsh environment Improved expansion capacity Strong brand image Strong financial performance Wide range of products Largest cooling system producer in North America In-depth knowledge and understanding of customer demand Efficient distribution system |
|
Weaknesses |
Weak planning for customized product manufacturing
High operating expenses |
|
Opportunities |
Operation consolidation
Efficient use of resources The rise in efficient smart cooling system demand |
| Threats | Rigorous market competition
Environmental and political threat |
Appendix B – PESTLE Analysis
| Political | Economic | Social | Technological | Legal | Environmental |
| Lower taxation policies lead to the development of high profits.
Labor laws
|
Devalued currency. Increase in mortgage loans.
Increase in disposable income Increased employment rate with the increase in GDP after the NAFTA |
Flexible immigration system
The rise in demand fora high quality product Social stability provide fertile ground for entrepreneurship advancement |
More investment in research and development. | Inefficient and slow laws and regulations system
Protected employee rights |
Complete reliance on natural resources.
Weather conditions Climate change Stringent environmental laws |
Appendix C – VRIO Analysis
| Resources/capabilities | Value | Rare | Difficult to Imitate | Organizational | Competitive Implication |
| Brand recognition | Yes, | No | No | Yes | Competitive Parity |
| Efficiency improvements | Yes | Yes | Yes | Yes | Sustained Competitive Advantage |
| Global R&D resource integration capabilities, continuing lead in technical innovation | Yes | Yes | Yes | Yes | Sustained Competitive Advantage |
| Mature Management | Yes | Yes | No | Yes | Temporary Competitive Advantage |
| Expansion in the overseas market | Yes | Yes | No | Yes | Temporary Competitive Advantage |
Appendix D – Porter Five Forces Model
| Bargaining power of buyers | Bargaining power of suppliers | The threat of new entrants | Threat of substitutes | Intensity of competition |
| Seek quality product at low cost
Many choices available in the market |
Uniqueness of service
Potential to increase prices
Strength of their channel of distribution |
High initial investment
High entry barriers
Requirement ofproduct diversification & differentiation
Technical and financial constraints |
The high cost of customer switching
Innovative research & development capacity of giants in the industry |
Rigorous market competition
Competitor absolute advantage in management, size, technology, and capital |
This is just a sample partical work. Please place the order on the website to get your own originally done case solution.
How We Work?
Just email us your case materials and instructions to order@thecasesolutions.com and confirm your order by making the payment here
Related Case Solutions & Analyses:
Symbian Google & Apple in the Mobile Space (A)
Analyzing Work Groups
Grove Street Advisors
Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets Technical Note
Sellars Market
Arbitrage in the Government Bond Market?
Royal Dutch/Shell: A Shell Game with Oil Reserves–Governance Overhaul after Scandal (B)
Bosch Group in India: Transition to the interpersonal organization
Tax Planning
Medical Assignment
