STRATEGIZING

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STRATEGIZING

Background Check

You need to analyze and scan the environment of your organization to be able to create a basis for your strategy. With this, you’ll be able to determine the effects of the external forces to your organization and be able to adapt to its changes and survive. This is important for it gives you an idea on how to operate, makes you aware of your environment and be able to offer your product at the right place. Failure to examine the outside forces might just lead to a misfit or downfall of your business.

Based on the article “How to Use Environmental Analysis in Strategy Making”, it says that “An environmental analysis helps an organization achieve compatibility with its environment.” Some organizations are said to be strategically located as it fits in, may it be with the place, the people living within the area, less competitors and other factors that contribute to the viability of the business. If you have successfully evaluated the environment of your organization, you’ll know if your business will sell or not in your chosen area.

Scanning the environment helps you to decide and turn the threats into an advantage. According to Kendra Albright’s “Environmental Scanning: Radar for Success”, it mentioned that “…Environmental scanning is a method for identifying, collecting, and translating information about external influences into useful plans and decisions.” The information you have gathered through the environmental scanning can become your basis in creating your strategies where you can start planning and making decisions. In knowing those informations and being updated with your environment through monitoring, you’ll be able to use the strengths and weaknesses of your organization to respond to the threats or issues of the external forces.

In the same article “Environmental Scanning: Radar for Success”, it also says that “Influences of [external environments] can negatively affect an organization, resulting in poor performance or ultimate failure.” This is why scanning is important as it determines the effects of these influences, may it be positive or negative, to your organization. You can anticipate certain contingencies and be able to plan and prevent it for the future and resulting to the survival of your business.

Therefore, scanning and analyzing the environment of your organization is a must. You don’t just build your business in one place but you also check if it will survive in the area and know the pros and cons if you put it there. As an entrepreneur, it is important for us to determine if our business will be viable in our chosen area to operate. Knowing the external forces will help us adapt, plan and create strategies that will suit the industry’s environment and from there we will be able to organize and strategize for the growth and survival of our business.

Background Check

Constant Thinking for Constant Improvement

To compete in business, you have to think of ways to be unique and being unique means you stand out from your competitors. It requires continuous thinking for constant improvement and organizing your plans to enhance your strategies for the present and develop and update your strategies for the future. Your strategies are based not only on your current state but also looking into the future and thinking ahead of possibilities and preventive measures which could help in the sustainability of your business.

According to Michael Porter’s article, “A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both.” You need to be distinct in the market for you to be able to gain competitiveness and this will allow you to be noticed more bringing in more customers. As we all know, customers always find something new or different and their tastes change from time to time.

You have to have reserved strategies that you could use when everything goes down. In another article, The Theory of the Business by Peter Drucker, it says that “Some theories of the business are so powerful that they last for a long time. But eventually every one becomes obsolete.” As what I have mentioned, you need constant improvement, enhancing and/or developing new strategies that could work for your business from time to time. This will help you to not just catch up with other companies but to maintain your uniqueness that set you apart from your competition.

Karl Abrecht, in his article The Power of Bifocal Vision, says that “Every business needs to have a bifocal vision -…this ability to see the far field as well as the near field…” and “…have the skill and discipline to continuously interpret that future into strategic actions and responses, and then use your planning skills to accomplish the plan that make sense.” If you have developed a good strategy, you must see that in the near future your competitors will try to copy it so you formulate and think of another strategy that would prevent that to occur or have a backup plan if ever that happens. Thinking of the present and future situations allows you to view possible changes that would interrupt the sustainability of your business.

If you want your business to keep running for a long time, you must establish your competitive advantage. This helps to get the attention of the customers especially when you have quality goods or services as one of your advantage. But it doesn’t stop there because you have to maintain it and look forward to the future and picture your business if it’s still standing. As an entrepreneur, having a good idea and product is not enough. You need to think hard of ways on how you can be able to compete in the market as well as thinking of where your business will be in the next five to ten years or so.

Constant Thinking for Constant Improvement

Asia’s Manufacturing Strength

Asia may hold the key to the world economy right now, at least from a manufacturing standpoint. They say that Asia has been the most stable global region that even if there is crisis, it doesn’t fall nor rise which I think is somehow similar to playing safe. Some companies are already choosing Asia for manufacturing their products for its low labor costs but still it doesn’t beat America and Europe as these countries are the top ones who holds a strong manufacturing industry. But Asia can be the best alternative companies could choose if ever U.S. and Europe fails and their economy fall down. Entrepreneurs are weighing their opportunities in these countries on where to invest safely and with less cost. Can Asia be another best option next to the big countries?

According to the article Everyday Finance, “Manufacturing, however, has since shifted to the developing nations of the world. This has occurred because manufacturers can pay workers substantially lower wages to produce goods in developing countries than they can in places such as the United States, England, and Germany.” Labor wages in Asia like in China is cheaper than the other developed countries and this is the reason why it is chosen to be the place where manufacturing plants are built.

As mentioned in Business Credit, “Asia has the ability to stimulate the global economies fiscally. They can drive the world out of a downturn. They can drive the growth and provide stimulus for the world.” Asia can survive well during recessions and even search for opportunities during these hard times. They can still make money out of economic problems that are occurring even if it doesn’t give back a lot.

Another mentioned in Business Credit, according to Chris Khuel, PhD, “The customers are still in Europe and United States, and without them (buying at normal levels) it’s going to be hard on export-heavy countries like Korea and China and Japan. I don’t think you’re going to see a major decline, but I don’t know if there’s enough strength to pull other countries along with them.” Sometimes  you are on top, sometimes you are not. The Manufacturing Industry may seem big and profitable but for some countries, they only prosper in a few years then fall maybe due to the economic problems of the country, high currency values or slowing growth rates.

Therefore, Asia can still be a home for a better and stronger Manufacturing Industry especially that now its economy is rising. Soon more and more companies will move back to Asia and could be in line with the top countries. Entrepreneurs have a lot of opportunities in engaging in manufacturing as it provides work to people and in order to industrialize, a developing country must first establish manufacturing industries to provide the products it needs to build an infrastructure.

Asia’s Manufacturing Strength

As US Fight for its Dreams

As the global economy is concerned, manufacturing industry serves as the backbone of it. It serves as a fuel of each local economy in the West and Asia. Manufacturing is synonymous to China in Asia while on the other part of the globe manufacturing is defined by the United States of America both of which is leading the pack with United States chasing the tail of China and as the sleeping giant continues to be ignorant to what the latter could bring into the table, Will China still be the default option as US is finding its way to rise?

China was the default option for companies wishing to outsource production in order to lower cost. According to an article, “Since opening its doors to foreign investment and trade, China has offered a virtually unbeatable combination of seemingly limitless cheap labor (less than 1 dollar per hour), growing a pool of engineers, a fixed currency, and local governments willing to offer inexpensive land, free infrastructure, and generous financial incentives.” China dominated the Manufacturing industry because of these factors which they use as their competitive advantage against their bitter rivals United States. Those factors cited earlier won’t have any competitors who can fight side-by-side with them and because of that they gain the peak of the industry but now China’s manufacturing cost advantage is slowly shrinking as wages are starting to rise.

The U.S. is already becoming a lower-cost country. According to an article from Boston Consulting Group, “Wages have declined or are rising only moderately. The dollar is weakening. The workforce is becoming increasingly flexible. Productivity growth continues.” Now, United States has been awakened to sad reality that they are losing to China which triggered the greatest turnaround for United States to follow the trademark of China, which is going cheap. It seems like there’s a bigger possibility that cost advantage will shift to the U.S making it an attractive option for companies.

 Is it enough that US is now a low-cost country compared to China? According to Boston Consulting Group, “When all costs are taken into account, certain U.S states…will turn out to be among the least expensive production sites in the industrialized world. As a result, we expect companies to begin building more capacity in the U.S. to supply North America.” Their moves and decisions are enough to regain investors, entrepreneurs and businessmen’s confidence over stability of their company if they will again invest at United States compared to their cheap investment at China.

The resurgence of U.S. will not diminish China’s role as a global manufacturing power. The manufacture of goods with relatively high labor content that are produced in high volumes will likely remain in China. More strategic decisions will have to be made when the times comes to consider where to build new manufacturing capacity to serve markets outside of China. According to Boston Consulting Group, “Our analysis suggests that the U.S. will become an increasingly attractive option…As long as it provides a favorable investment climate and flexible labor force, the U.S can look forward to a manufacturing renaissance.” Therefore, No matter how hard America tried to fill up their deficits they still can’t take the driver seat from China as the leading nation in manufacturing. Precisely because China has the momentum compared to America who recently regained their footing from their 2008 economic slowdown.

Co-writers: Medina, Justin Raphael M., Tan, Michael Jelo C.

As US Fight for its Dreams

Quality Control Basis

How is quality control being implemented to assure consumers’ satisfaction? According to Japanese Industrial Standards (JIS), “Quality control is a system of production methods which economically produces quality goods or services meeting the requirements of consumers…” There are some factors we must consider in quality control. Consumers are on the top of the list being the potential buyers of every product so we must know their requirements. As for the product, controlling quality standards and determining possible problems and defects could help create solutions and improve the product.

Having control over quality standards will help achieve good quality but not all the time as consumers taste change from time to time. As to what Dr. Deming emphasized in a seminar, “he spoke of a cycle of design, production, sales, and market research, which is to be followed by another cycle that begins with redesigning based on the experience obtained in the previous cycle.” Quality must be redesigned and improved continuously w the goal is to meet the customer’s requirements and not to meet the standards.

We need to know what the consumers will buy but not how Ford handled it. According to Management Today, “Ford was convinced that he knew what customers wanted. But Ford’s failure to offer customers variety was the flaw in his strategy.” Not because we know what our consumers will buy doesn’t mean we don’t need to know their requirements. Based from Juran, “he believed quality is associated with customer satisfaction and dissatisfaction with product…” Customers want a lot of choices choosing the best quality they can get.

Anticipating potential defects and complaints is another big factor. Dr. Kaoru Ishikawa made many contributions to quality and one of these is the Ishikawa Diagram. According to an article I read, “The diagram systematically represents and analyses the real causes behind a problem or effect. It organizes the major and minor contributing causes leading to one effect or problem, defines the problem, and identifies possible and probable causes by narrowing down the possible ones.” This also helps determine the life span of a product and improve the next products produced.

Therefore, there are things we must keep in mind to be able to achieve quality control. As an entrepreneur, creating products come with proper process or procedures that meet certain standards to be able to produce quality goods and services. Our basis in creating products is mostly our customers because we must meet their needs, demands and requirements for them to buy our products and to be loyal to us. We must learn from Ford, Taylor and the American and Japanese gurus as they contributed a lot to the improvement of quality.

Quality Control Basis

Made in Japan

 How did Japan turn from inferior to high quality producers? We all know that Japan produces innovative and high quality goods but behind their recent success and development of quality management are quality concepts that originated from the Americans. A lot of philosophies, ideas, and theories on quality management were presented by different American gurus in which were used as basis by the Japanese for further development of a better quality. 

 

The quality of leadership is important as the quality skills of each individual helps produce quality goods or services and customer satisfaction. According to Armand V. Feigenbaum, he defined quality control as “an effective system for coordinating the quality maintenance and quality improvement efforts of the various groups in an organization so as to enable production at the most economical levels which allow for full customer satisfaction.” If individuals are well-trained and their skills are developed, they will be able to perform well thus leading to quality goods and services and bringing satisfaction to customers.

 

As to what Dr. Joseph M. Juran had developed, “Good quality management requires quality actions to be planned out, improved and controlled”; “Juran believed quality is associated with customer satisfaction and dissatisfaction with the product, and emphasized the necessity for ongoing quality improvement through a succession of small improvement projects carried out throughout the organization.” You need to make plans to improve the quality. It could be setting some standards and testing what works that would make further quality improvements and such improvements need to be controlled to preserve good quality. Improvements are made step by step or little by little to somehow focus on the mistakes and areas that needs more development and to avoid conflicts. 

 

According to an article, W. Edwards Deming taught Japanese engineers and top management statistical methods and how to view production as a system that included suppliers and consumers. Using those methods, previous product failures and technical problems became the basis of improving and in making their next creations through some certain calculations. Japanese manufacturers applied Deming’s measurement techniques to production and operations, and by the middle of the twentieth century, Japan had become a leading economic power on the world stage. 

 

Therefore, Japan’s way of thinking and discipline towards their workers brought a big impact in developing the American based concepts and theories. Taking care of their workers through proper training and removing barriers between individuals starting from the top management has brought them to being high quality producers. Good quality workers results to more profit as they are able to perform well and meet levels of overall quality and bringing customer satisfaction. Entrepreneurs should learn from this and apply such techniques. Working in unity and with discipline can help improve the relationship of groups and individuals in an organization thus, resulting to a more productive and quality work. It’s not always about profit and you must also learn that even your worker’s opinions count. 

 

Made in Japan