Discuss about the Global Business Management for Value Chain Analysis.
ABB PBS is a leading engineering company in the modern world. Since its inception, the company has increased its industrial productivity sustainably. It has also allowed its clients to use electrical power efficiently thus maximize their performance. The ABB PBS serves water, gas, and electric utilities. It also serves its customers with commercial and industrial systems, products, and services for distributing and transmitting power (Cullen & Parboteeah, 2011). The products offered have enhanced power plant automation. The ABB PBS is critical to this research because it delivers automation systems that have been used to control, measure, protect, and optimize plans across industries.
The company is worth study because it focuses on improving operating performance; productivity and grid reliability thus save energy and reduce environmental impact. The company has also focused on driving innovation and quality of systems, products, and services. The company has further responsible actions and attracting talents because of its global and attractive work environment (Hansen & Mowen, 2009). Given the current debate on the climate change, ABB has opted to act responsibility thus invest in business ethics and lower environmental impact. Therefore, the value chain analysis provides the best approach to determine the role of the company in meeting its mission. This report has selected the ABB PBS, as it provides the best example of an organization that is managed globally. With its joint venture operations, it shades light to the challenges and opportunities the current businesses experience (Cullen & Parboteeah, 2005). Therefore, the report investigates these challenges and opportunities thus making it possible to understand the situation in the market.
The value chain analysis is the process undertaken to evaluate ABB-PBS’s value chain elements. This process helps the company to identify the strengths and weaknesses of various elements of the value chain (Cullen & Parboteeah, 2011). However, the value chain analysis can never be used to determine the threats and external opportunities. The SWOT analysis is critical in analyzing the situation. It involves the groundwork thus match the strategy of the organization to internal resources and external market. According to studies, the value chain analysis focuses on the value chain (Peng, 2009). It disaggregates the views of ABB-PBS. This systematic approach encompasses various activities of firms to providing products to the customers. Without a doubt, the value chain consists of support and primary activities.
These are activities involve the after-sales services, distribution and marketing, and physical creations of its products (Cullen & Parboteeah, 2011). The leading primary activities encompass the marketing and service, outbound logistics, operations/production, and inbound logistics.
The inbound logistics have also been part of ABB’s strategy to meet the expectations of clients. Through the inbound logistics, the company has received, stored, and handled inputs. The inbound logistics focuses on a return to suppliers, material handling, scheduling of transporting products, and storing products in warehouses (Bamford & West, 2010). Through the joint venture, the company needed to improve its supply chain system by improving the flow of products.
The operations of the company have defined its success and performance in the industry. The operations focus on maintenance, machining, assembly, packaging, testing, and equipment. Following the company’s move to merge, its operations improved (Cullen & Parboteeah, 2014). The activities transformed inputs into the company’s outstanding products. However, the operations were below the expectation because of the joint venture. The joint venture introduced new perception and operations.
The conversion of inputs into outputs, the processes involved are different. Outbound logistics have helped ABB to collect, store, and distribute inputs. Conversely, some of its logistics processes have failed to serve its interests and address the concerns of customers.
ABB-PBS has relied on its marketing strategies to improve its market opportunities. Given the fierce competition in the market, ABB-PBS used proper advertising, public relations, sales promotion, pricing of products, and sales force. Personal selling and selection of distribution have defined the company’s success (Bensoussan & Fleisher, 2012). The joint venture created an opportunity for the company to improve the distribution of its boilers. However, ABB needed IT systems to facilitate the marketing activities. Without relevant resources like markets, it became difficult for the organization to improve its market position and improve sales.
ABB had invested in various services to improve its market position. The most important services included the supply of parts, installing machinery, repairing machines, and training its dealers and suppliers. The organization also took the responsibility of responding to the customer query promptly. The economic outlook has been bad thus affecting the outflow of the organization.
The company focuses on acquiring resources and inputs for its operations. Through proper procurement systems, ABB has managed to support its operations because its suppliers have distributed the inputs as ordered. However, the organization needed to consider new systems and infrastructure to improve performance.
ABB focused on improving its operations by investing in physical capital improvements, information systems, and plant logistics. This involved restructuring the company including renovating the engineering facilities and transferring technology (Powell, 2010). However, the impact of this technological development will be a costly affair. The firm will have to increase its budgets to install and use new systems to improve performance.
The company has scored high regarding the HR practices and employee satisfaction among its enterprises. The company has invested in an inclusive approach to improve the relations within the workplace (Peng, 2009). It offers workers financial security using its pension schemes. Importantly, it has opted for share acquisition options thus use internal and external training mechanisms to develop its human resources (Powell, 2010). Recently, the organization increased its training budgets instead of cutting the spending. This has justified the consciousness of the employees as it offers them better tools and benefits for personal growth. However, the company has to address the management issues to retrench the irrelevant workers to avoid wastage.
The infrastructure of ABB-PBS has been designed to accommodate its enthralling operations. The turnkey, for instance, used the delivery system to enhance transporting the industrial steam. ABB-PBS has designed its steam turbines thus generate boilers and power thus facilitate the recovery of its power. Harnessing power is the greatest objective of ABB-PBS because the facility engineers are responsible for managing these systems. By 1995, the organization established the greatest infrastructure that made it the giant in its business, boiler. Despite these strengths, the company’s job turnouts emerged as the critical constraints. This has promoted the emergence of competitors from the domestic market. Similarly, the European boiler market has declined thus affecting the company’s operations leading to the retrofitting surge. In 1995, the company witnessed the worst decline in the boilers orders.
Based on the value chain analysis of this company, ABB needs to improve the way it undertakes its business operations. This company has to identify new niches in emerging markets to serve the international community thus expand the export activities. Following the fall of the Soviet Union, the sustainability of the economy is no more. Therefore, ABB-PBS has to seek solace in new niches overseas to substitute for the Soviet Union market. As such, the company can maintain the firm’s financial strength.
The company should also focus on improving its technology base. Currently, the organization has limited technology thus making ABB PBS vulnerable to rivals. It is critical for the company to use new and efficient technologies to improve its earnings (Mayoux, 2005). The use of the technology will see ABB-PBS introduce the just-in-time ordering system. This implies that the firm maintains its strong ties with stakeholders including customers because many customers expect the company to respond to their needs frequently. The approach will ensure the company reduces unnecessary to lock up and slacks that can disrupt the value chain.
The company operates different units that must operate in cooperation. The collaboration among the units will increase their synergy. These units must work together to better the results and outcomes (Sekhar, 2010 ). This makes the need for connection and cooperation with various units relevant. Besides, the outsourcing is becoming an important element that can improve the firm’s performance and value chain. The firm’s in-house workers have proved problematic because most of them are unproductive. The company needs to eliminate the costs regarding its value chain operations (Cullen & Parboteeah, 2014). It is critical to retrench some workers and pay the external entities a smaller percentage to offer similar services. Finally, the company needs to re-examine the unproductive businesses and abandon them if necessary (Sekhar, 2010 ). For example, the boiler business is threatening the company’s economy and productivity. Therefore, re-examining the businesses will make it possible to determine the most profitable business line thus directs its investments on these profitable business lines.
Conclusion
ABB-PBS entered into a joint venture business after they addressed the contractual and legal constraints. The merger made it necessary for the company to consider restructuring. However, the aspects of restricting and governance defined the core operations of the company. The company experienced challenges in its operations globally. Since ABB is an international organization, its operations and supply chain becomes important to analyze. Indeed, the supply chain analysis has helped to identify the strengths and weaknesses of the company.
References
Bamford, C. E., & West, G. (2010). Strategic Management. Mason, OH: Cengage.
Bensoussan, B. E., & Fleisher, C. S. (2012). Analysis without Paralysis. London: FT Press.
Cullen, J. B., & Parboteeah, K. (2011). Multinational management: A strategic approach. Mason, OH: South-Western Cengage.
Cullen, J. B., & Parboteeah, K. (2014). Multinational management: A strategic approach (6th ed.). Mason, OH: South-Western Cengage.
Cullen, J. B., & Parboteeah, P. (2005). Multinational management: A strategic approach. Mason, OH: South-Western Cengage.
Hansen, D. R., & Mowen, M. M. (2009). Cost Management: Accounting and Control. Mason, OH: Cengage.
Mayoux, F. (2005). Value Chain Analysis. New York: Searchlight Publishing.
Peng, M. W. (2009). Global Business. Mason, OH: Cengage.
Powell, B. (2010). Fundamental Principles of Management. London: Sage Publications.
Sekhar, G. V. (2010). Business Policy and Strategic Management. Delhi: IK International Publications.
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