Business Concepts

Question 27: How does an understanding of the influences on operations contribute to business success?
An understanding of the influences on operations will contribute to business success because it allows managers to deal with a range of external influences that impact on operations. These main influences include globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, and environmental sustainability as well as corporate social responsibility. It is important to understand these influences as they can cause businesses to undergo change and to continually adjust to external factors. It can also act as a threat and opportunity to the operations processes of businesses such as Jamba Juice Pty Ltd and Gems Juicebar Pty Ltd.
It is important for businesses to understand how globalisation can influence and contribute to business success. Globalisation refers to the removal of barriers of trade between nations and by increasing integration between national economies and causing a higher degree of transfer of capital, labour, intellectual capital and ideas, financial resources and technology, globalisation can provide a source of market opportunities, such as a larger customer base. When Jamba Juice Pty Ltd expanded to North America and Europe, it also experienced the threat in effectively applying cost leadership principles to undercut the market and dominate. Having to orient their practices towards the global market, Jamba Juice had to adjust their ingredients to incorporate local ingredients to meet the needs of global consumers. Other operations that Jamba Juice had to adjust were product design – translating their menu board into other languages, quality management, logistics and altering their inventory management processes to suit a significantly larger global market.
Businesses also need to understand how technology can influence operations management. Technology refers to the design, construction and/or...