Cambridge Cooling Systems: Global Operations Strategy Harvard Case Solution & Analysis

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/ outcomesAlternative 1Alternative 2Alternative 3
Operational efficiency

 

865
Cost Saving

 

786
Strengthen the business process

 

956
Total score231917

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

PoliticalEconomicSocialTechnologicalLegalEnvironmental
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 ValueRareDifficult to ImitateOrganizationalCompetitive Implication
Brand recognitionYes,NoNoYesCompetitive Parity
Efficiency improvementsYesYesYesYesSustained Competitive Advantage
Global R&D resource integration capabilities, continuing lead in technical innovation YesYesYesYesSustained Competitive Advantage
Mature ManagementYesYesNoYesTemporary Competitive Advantage
Expansion in the overseas marketYesYesNoYesTemporary Competitive Advantage

Appendix D – Porter Five Forces Model

Bargaining power of buyersBargaining power of suppliersThe threat of new entrantsThreat of substitutesIntensity 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

 

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