Operations Management – Prepare a case study (on your own words) regarding a (consumer electronics) (in UAE) which analyses the operational strategies in terms of it product and service offering COVERING under the following headings:
• Corporate Vision
• Global Strategic Objectives
• Order Qualifiers and Order Winners
• Core Competencies
• Value Chain
• Product Chain using Porters Model
Instructions to follow:
• Plagiarism will be applied (Turnitin), copied allowed for 5% only.
• You must show evidence of research for this assignment. It is recommended that you use journal articles, newspapers/magazines, websites and books. In doing so acknowledge all sources of any facts and ideas which are not your own.
• Your case study should be formatted correctly with the headlines, tables and the body.
• Your writing should be professional, error-free, and conform to appropriate rules of English.
NOTE: (The words count should not including the words on the references)
Operations Management – Consumer electronics in UAE
UAE has developed as the world’s major producer and supplier of consumer electronics. A report by Dubai Chamber of Commerce and Industry indicate that UAE leads the world consumer electronics market (Gulf News, 2010). The position is influenced by the huge demand in the local market that is progressively growing and its strategic position at the traffic circle connecting Africa, Asia, and Europe. Multinational electronic companies have steadily chosen the UAE as the test center for launching new products or for marketing schemes. Gulf News (2010) explains that the UAE was first in consumer electronics in the region in 2009. The UAE electronics market is projected to grow further in the future owing to the rampant advances in information technology and as well as telecommunication.
At the heart of this consumer, electronic market is Jumbo Electronics Company Ltd (JEL). The company was started in 1974 as a flagship from the Jumbo Group and has since expanded across the UAE (Bloomberg, 2014). The firm boasts of its thirty retail outlets and nine service centers. The company retails and distributes a whole range of consumer electronics, IT products, and accessories. Some of the products from the company include freezers, cameras, mobile phones, monitors studio vision mixers, microphones among others. Some of the accessories produced by the company include carry cases, batteries, and chargers. The company is also a significant supplier of Sony products.
According to Cooper (2014), corporate vision defines the prospected achievements of a firm in the future by creating mental imageries of what the business wants to accomplish over time. The vision should be pragmatic and attainable. Realistic corporate vision acts a source of motivation to the employees.
Jumbo electronics company vision is “to bring the most technologically advanced and reliable electronic, communication and household products and related services of the highest quality to individual and institutional consumers in the country.” The company also aims to “make these products and services available at the most fair and competitive prices, creating and sustaining the long-term goodwill of the consuming public.” (Bloomberg, 2014). The mission of the company enhances the achievement of this vision. The mission of the company aims at continuously assessing global developments in electronics, communication, and domestic products. Jumbo Electronics also aims at improving the competence of its workers by training and motivating them. The company is also extending its sales network to reach more consumer segments as well as providing the best after sale services.
Global Strategic Objectives
As Cooper (2014) explains, the term ‘global strategy’ comprises of three areas namely global, multinational and international. These strategies refer to the tactics formulated to aid a business to venture and sustain its operations at an international level. The company’s global strategy is engraved on their combined individual potential that gives it the advantage to meet the need of its customers globally. The company aims at instituting values to cultivate fairness, teamwork and human creativity. The leading philosophy at Jumbo focuses on delivering high-quality products and services as well as offering positive customer experience.
Order Qualifiers and Order Winners
According to Cooper (2014), Order Qualifiers and Order Winners refer to how an organization can translate its internal operational capabilities to criteria that yields leverage and market success. Order Qualifiers are features that a product or service poses that might make a consumer consider purchasing it. On the other hand, Order Winners are the features that win a consumer’s offer. Order qualifiers are necessary for a firm to continue operating in the market. For a business to stay in the market, it needs to have a competitive advantage over its rivals. Order winners and order qualifiers differ across markets and are time specific. The two operate with varying combinations and in different ways on various markets and for different consumers. Cooper (2014) describes that there exists a ‘fit’ in the market when the business’ perception on order qualifiers and winners match the expectations of the consumers. However, this equivalence is hard to achieve in the market owing to changing consumer perceptions about different goods and services.
Jumbo Electronics Ltd. (JEL) has stayed in the market since inception because of its ability to provide quality goods at affordable prices. The company has maintained an efficient marketing team that since it is through this department that a firm can identify order winners and order qualifiers. This department maintains links with the production department to ensure that information flows smoothly. JEL has several points of sale locally and internationally which are well interlinked. Views from customers concerning particular products are communicated from these outlets to the headquarters in the UAE (Lala, 2013). Therefore, the company can communicate with suppliers such as Sony and Acer to reflect the perceived features on their products.
Lala (2013) further clarifies that JEL has over time taken price and quality as the key factors in the company’s operations. Price has served as the crucial order qualifier while quality supplement as the order winners. Although the two factors highly influence each other, other factors such as completion and consumer tastes and preferences affect the pricing policies of the company. The company devices various strategies such as product customization and rebranding to maintain customers and attain product differentiation. Lala further notes that succeeding firms can maintain flow shops stocked with low-cost but high-quality products. These characteristics have proven to be critical order winners for firms translating this into high revenues.
Through effective market study, the company partnered with Flipkart to launch Yotaphone that is affordable and solves the consumer frustrations with dark screens (Bloomberg, 2014). The phone was launched in India and provides users with a new experience in mobile phones. The device contains a second screen that utilizes white paper technology. The screen allows users to access their information without necessarily waking up the screen. This feature also allows the phone to preserve battery power, which has remained a big problem for other mobile devices. The most stunning feature of the phone is the ability to allow reading –on- the go even in the brightest sunlight. The phone also adds e-reader capability and smartphone features in one device. Bloomberg (2014) explains that it is through a consistent and efficient market investigation that made the company identify this gap. As a result, JEL and Flipkart produced an order winning mobile device.
Core Competences A company’s competencies describe its ability and commitment as well as skills that are indispensable in acting decisively during certain times in the market (TurkishWeekly, 2006). Companies need to be flexible and fast in responding to the various events in their environment. These events may arise from competition, advances in technology and changes in consumer tastes. A company’s ability to respond to these occurrences depends on its competencies. Cooper (2014) illustrates that corporate competences are drawn from the management, employees as well as external forces that place a company in a better position compared to the competitors.
A major competence of JEL comes from the company’s ability to apply intensive IT techniques in running the company. In fact, IT forms one of the principal divisions of the company. Others include Telecom, Supra, Sony and Agencies. The use of IT by the firm is evident in the company’s state of the warehouses in Dubai, Abu Dhabi and Bahrain. The warehouses have fully automated systems that reduce paper and printing costs. The firm uses RF software to pick, load, add a serial number and transfer goods (Lala, 2013). The company has also invested in its workforce by providing intensive training. Mr. Nair, the Chief Operating reinstated the fact the company is the most favored place to work in the UAE for its ability to train employees on adopting new technology.
The concept of the value chain is imperative in any business especially those dealing with production. The chain describes all the activities that take place in a straight from receiving raw materials to sales. A set of operations forms the chain that a firm undertakes to produce and deliver a valuable commodity or service to consumers. As a retail giant, JEL has a well-organized and managed value chain. The company deals majorly with retailing hence its value chain focus more on transporting and warehousing than production. JEL has a network of warehouses as mentioned earlier. Goods sourced locally are transported to the warehouses by vehicles fitted with GPS systems. Air or water transport is used for transportation of products from abroad. The size, degree of perishability and urgency determine the mode of transport used. Major suppliers come from the Us, Europe, and China. The company uses the latest vehicles from Japan that include Toyota, Isuzu, and Nissan. The fleet consists of 53 vehicles with loading and delivery based on LIFO approach. The modes of transport that deliver products to the warehouses undertake the reverse logistics Lala (2013).
Product Chain using Porters Model
The Porters model, devised by Porter in 1985, describes the primary and secondary activities that take place in an organization from taking inputs to converting them into outputs (Cooper, 2014). The activities of JEL can be analyzed by utilizing the model as follows.
Primary Activities and Secondary Activities
|Marketing and sales|
|Procurement Human Resource Development
Infrastructure Technological Development
The Value Chain
- Inbound Logistics defines the supplier relationships, and it includes the activities the activities that take place when receiving, storing and distributing inputs. JEL receive its inputs, which finished products, in their warehouses. The LIFO model to record all goods received.
- Operations involve all the activities that convert inputs into either product or services. As a retail business, JEL only applies branding and product customization.
- Outbound Logistics explains all the operations involved in collecting, storing and distributing finished goods. JEL utilizes its large fleets of vehicles with trained drivers to transport goods and services from the warehouses to outlet points. Drivers are ready to undertake any arising transportation.
- Marketing and Sales involve activities that attract buyer’s attention about a certain product or service and persuade the buyer to purchase them. The main activity undertaken by Jumbo at this point is advertising. An example is the ‘Jumbo Laptop Mania-Ticket to Favorite Destination’ avert on gcmedia.com.
- Service refers to all services provided after a sale has taken places. The company has a well-trained crew to handle after sale services to clients. A 24-hr customer care ensures that all customer complaints are attended to soonest possible. The company also dispatches engineers to assist in the installation of technical products where necessary or at customer request.
Secondary activities are:
- Procurement includes the services involving the acquisition of resources. The company ensures that it has a fast and sustainable logistic system to source products required for sale. The company drivers are adequately trained to handle goods from collection points to distribution outlets.
- Human Resource management involves the activities such as hiring, training, and motivation of employees. The company lays emphasis on hiring the right personnel and undertaking intensive training as well.
- Technological Development describes the technology used by the company as well as the technical knowledge involved in using the equipment. This fact is evident from the company’s application of RF software in handling goods in the warehouse
- Infrastructure defines how different sections in the company are interlinked together for a smooth running of the firm. JEL departments are interconnected to ensure the functioning of the company runs uninterrupted.
Bloomberg. (2014, May). Jumbo Electronics Company Limited (LLC): Private Company Information. Retrieved April 21, 2016, from http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=9709665
Cho, D., & Moon, H. (2013). From Adam Smith to Michael Porter: Evolution of competitiveness theory. Singapore: World Scientific.
Cooper, C. L. (2014). Wiley encyclopedia of management. Chichester: Wiley
Gulf News. (2010, August). UAE tops region’s consumer electronics market. Retrieved April 21, 2016, from http://gulfnews.com/business/sectors/retail/uae-tops-region-s-consumer-electronics-market-1.674522
Lala, A. (2013, April). Supply Chain Case Study: Jumbo Electronics. Retrieved from http://www.arabiansupplychain.com/article-8589-supply-chain-case-study-jumbo-electronics/
TurkishWeekly. (2006, March). Jumbo Electronics outlines key initiatives and plans for 2006. Retrieved from http://www.turkishweekly.net/2006/03/07/news/jumbo-electronics-outlines-key-initiatives-and-plans-for-2006/