How does an understanding of the influences on operations contribute to business success? Executive Summary: Santa is Australia’s largest domestic and international airline. Although Santa is primarily a passenger airline, air freight is also an integral part of its core business. Other Santa operations include catering, tourism and E-commerce devoted to transport and travel. In order to have an effective business and operations process, a company, like Santa must be aware of the influences that can affect it.
By being aware of the influences it enables the business to make decision and choices that an get the most out of each influence, by doing this it can assist the business in its endeavourers for success. The following report will reveal how an understand of the influences on operations; globalization, technology, quality expectations, cost based competition, government policies, legal regulations, environmental sustainability as well as the factors Involved with corporate social responsibility such as knowing the difference between legal regulation and ethical responsibility and social responsibility, will contribute to business success.
Globalization – Globalization has changed the world as we know it, as it has allowed for integration of different national markets into a single market where goods and/or services can be traded easily. Globalization has enabled Santa to access new markets overseas. More than 70% of Santa’ assets are geared to the global market. Expansion into new and emerging overseas markets is essential for Santa to achieve its potential growth. Globalization is a critical Influence that businesses must be aware of as It opens up the door for new growth, such as Santa announcing Its Intention to set up a new premium airline In Japan.
McDonald’s Is the leading global foddering retailer with more than 33,500 local restaurants serving nearly 68 million people in 119 countries each day. Globalization has allowed for the continual growth of McDonald’s throughout the world. If businesses don’t take advantage of globalization, through growth, materials, skills it may lead to the end of the business. Technology – In the current dynamic business environment, keeping up with change is key to business success. Continual advancements and new technology allows genuineness become more efficient, cost-effective, timely and have higher quality.
In order to stay competitive Santa have ordered new planes that have a greater capacity and are more efficient, by being half as noisy and using less fuel. By being aware of what technological developments are happening, It can enable business management to make decisions regarding the technology, as all business will require the established technology but regarding the leading edge technology which has the ability to gain the business a competitive advantage. Apple Inc. Is a prime example of reading and releasing leading edge technology products such as the phone and pad series.
Quality expectations – First and foremost what makes or breaks a company is its customers. Every customer is different but all purchase decisions are based on quality expectations. By understanding what expectations customers have it can enable the business to make changes or improvements in order to better fulfill the desires of the customers. The constant pressure on operations at Santa is to ensure customer expectation is fully met by, arriving and departing on time, comfort based eaters, online check in and specially designed menus.
Cost-Based competition -In most cases business face competitors fighting for growth, which affects market share and profitability. A way of gaining a competitive advantage is by reducing costs. To achieve the lowest competitive cost Santa has sought to introduce technology, seek alliances, outsource, reform human resources practices and restructure.. McDonald’s has recently introduced a Value picks’ meal which is a strategy where they offer certain products at a lower price than competitors.
Cost minimization however, cannot be pursued without attention to quality – there must be a balance between the two Government Policies -All businesses operating in Australia are subject to policies applied by the three different levels of government – local, state, and federal. Government policies have a big impact on Santa. For example their economic policies (monetary, fiscal policy) have a direct impact of the level of economic activity and therefore demand for its service. The federal government’s new policy the Fair Work Act is a lot more pro worker which has increased Santa’ operating costs.
All businesses must be aware and understand all government policies in order that they are abiding by the law. Legal regulation – The aim of government regulation of business is to promote safety and fair business conduct. To remain in operation, a business like Santa must comply with these regulations. Penalties for non-compliance can be severe. Examples include, Santa is subject to the regulatory control of Civil Aviation Authority and is required to hold operating licenses, State government regulations on labor such as OH;S, anti-discrimination, workers compensation etc.
Being in the food industry it is critical that McDonald’s meet and go beyond the food safety laws; that include food being cooked and stored at the right temperatures and the correct food handling procedures. Environmental sustainability – growing public concern and awareness has put pressure on businesses to maximize use of renewable resources. Success comes from gaining customers, by showing that your company is being environmentally friendly it can increase the businesses good reputation. Santa has ordered the Boeing and Airbus AWAY which are significantly more fuel efficient that the ones Hough their packaging designs and recycling.
Ethical and Social responsibilities -It is not enough for managers to simply satisfy customers with legal compliance. There is an over-riding public expectation as to how business behaves within society. Operations management must take into account the consequences of their decisions on stakeholders and ensure those decisions are socially and morally responsible, examples for Santa include: In respect to cultural diversity, Santa’ Reconciliation Action Plan is a program which focuses on employing Indigenous Australia’s. They donate over $2 million to charitable causes in 2011.
Conclusion In order to be able to gain and maintain business success, managers and owners need to be able to understand how significant the influences are that affect the business. With the world of trade now being one, technology ever changing the world as we know it, quality, customer’s expectations and greater awareness of their power and expectations on how businesses should act. By understanding these factors a business can make the right decisions and take the right necessary steps in order to achieving business success.
