Research Objectives
The selected research paper has discussed on the current shortcomings of the organizations to select the best international locations while the expansion of their business. The importance of international location decisions for the organizations has been addressed through the following paper. The paper has addressed the following problems by means of an exploratory study and by the development of special models and frameworks. The models and frameworks have been created based on the findings of 17 different business organizations of Denmark (Schmidt, Touray & Hansen, 2017). Schmidt, Touray & Hansen (2017) in the paper has identified the main features of the following paper which has been the development of the different kinds of MECE principles and the development of different ILD tools and process to facilitate the operations of the organization.
The report will deal with a critical review of the selected paper and will be highlighting the limitations of the research paper. Apart from this the report will be highlighting the research questions and also find out the methodologies and discuss on the main findings of the research.
Earlier researches on the international location decisions of modern business firms have shown that companies have struggled to come up to a decision on setting up their new business in the right place internationally. Coeurderoy & Murray (2014) in their study about International Location Decisions has stated that, the management of the companies has rarely taken scientific decisions and has rather chosen the locations in a casual manner. This has often led to problems while operating the organization of the business. Therefore the following research paper has made its aim to clear all these problems by means of the formulation and the application of different frameworks that can easily mitigate the existing problems of the business. However the main aim of the following report prepared by Schmidt, Touray & Hansen, (2017) has critically evaluated the selected research aims. The critical evaluation has been completed by means of the citation of a number of different articles related to the international location decision process of the organizations.
The research questions arising from the analysis of the following paper are as follows;
- What is the importance of the location decision on the operations of the business management?
- Does cost of operating in a certain location and the infrastructure present in the location can be a major consideration for the business organizations and how?
- How can the application of the different frameworks like Scope Model change the operational perspectives of the organizations?
The report has been prepared through a descriptive analysis of the paper. The descriptive analysis of the paper has helped to develop a much deeper understanding of the cause and the effect of the research issues. The analysis of the paper was followed by the selection of a particular organization and then application of a number of frameworks to determine the operational effectiveness of the business organization.
The research paper has constructed a compact research on the International Location Decisions. The scope model used to identify the effectiveness of the operations management and the choice of the locations has been important as because the four different quadrants identified in the following model has ensured the reinforcement of each other to create a sound and scientifically structured analysis to evaluate the goals in an effective manner. The models shown in the structure has proved that they need excess flexibility to be able to tailor a situation in a particular framework. The organizations which will be implementing the scope model must pass through the following stages namely;
- Assembly of an execution team-Selection and assembling a team from within the organization that will be involved in selecting the location and bring in the change.
- Reviewing the current state of the business enterprise-It is important to understand the current condition of the financial enterprise as because the proper understanding will help to execute the plans of the business easily.
- Identify the requirements for the change-According to, (Blyde & Molina, 2015) the identification for the requirements of the change is necessary as because without the requirement of change the execution of the change is not needed.
- Identify the capabilities for change-The capabilities of the organization to handle the change will be essential for the success of the change management.
- Creation of a plan-A proper plan will be needed to execute the change easily.
- Allocation of roles and going into different details-The allocation of business roles and identification of the details is also needed for the success of the change management plan.
Research Questions
The paper provides an insight into the main shortcomings of the current practices of the International Location Decisions by the Danish organizations. The scope model has been used in the research for the identification of how the business operations are performed in the scope of selecting the locations for enhancing their business outside London. Though the use of Scope Model can be said to be quite justified, the absence of application of other models, especially when a large number of organizations have been considered brings out the largest weakness of the organization. There are also different problems that have been identified in the paper itself. The assumptions based on the location decisions being related to limited options stresses on the inclusion of more compact options to verify the total process in a proper manner.
Conclusion:
The following paper has highlighted the importance of the selection of the exact location for the business to set the business in a proper manner. A thorough analysis of the business will help to identify the gaps in the paper and will also help the readers to get an idea of the scope model and its impact on the decision making process on the selection of the correct location of the firms.
The selected organization to study the operation management aspects of the business is “GlaxoSmithKline plc”.
“GlaxoSmithKline plc” is a British Pharmaceutical Company that has its headquarters in Brentford, London. The company was established recently in the year 2006. The establishment of the company was completed as a result of the merger of Glaxo Wellcome and SmithKline Beecham (gsk.com, 2018). The company was quick to establish its supremacy in the pharmaceuticals market when in a few years it turned out to be one of the largest medicine manufacturing companies of the globe. The company has its shares both in London Stock Exchange in Europe as well as the New York Stock exchange of USA (gsk.com, 2018). Being a pharmaceutical company the main products of the organization are a large range of medicines, vaccines, over the counter medicine, vaccines and many more different critical drugs which are quite rare in the modern world. The large range of products and huge scope of reach ing out to a considerable number of different markets across the globe is one of the major advantages for the company.
The large scale reach of the organization helps them to earn revenue of more than pound 30 billion. The presence of close to 1, 00,000 employees in the organization is another major benefit for the business enterprise and clearly highlights the influence power and the financial strength of the organization (gsk.com, 2018). The management of the company is also involved in new business and opening new firms. The investment of the company in new biotechnology firms and other state of the art scientific companies proves the organizations wish to become the top Pharmaceutical Company (gsk.com, 2018). The company has also marketed brands like Sensodyne, Aqua fresh and Horlicks to other countries. Presently with 115 different business locations across the world, the company holds a large base of customers who are loyal to the organization.
Methodology
Business Strategies are the long term planning by the management of the organization to achieve the different kind of goals of the business organization. The strategies determines on how the business operates in the market in the long run. The strategies followed by the management of GSK are generally segregated into a number of different values. This includes the likes of, Diversification, Delivery of superior value, simplification and the responsibility of a business (gsk.com, 2018). The pharmaceutical products of the organization are generally diversified and are allowed to grow in a continuous rate that helps the organization to expand the business. It is also required for the Company to provide a superior value to the organization by means of continuous innovation and research of the market.
The products of the company are generally upgraded to deliver the most superior value and simplify the products accordingly to make the customers easily fall for the products delivered by the business enterprise (gsk.com, 2018). Apart from this the operations of the management must be highly responsible because of the sector that the organization deals in. The management of the operations of the business is generally little complicated as because it undertakes a large number of complex and different operations under each section. The application of the “Delphi Approach” and the “Cost Modeling Framework” on “GlaxoSmithKline plc” will analyze the effectiveness of the operations management of the business by the identification of the different strengths and weaknesses of the organization.
The applications of different models and frameworks can be the best way to analyze the effectiveness of the operations management of the business by assessing its strengths and weaknesses. The first model selected for the analysis is the “Delphi Approach” shown in the study of MacCarthy & Atthirawong, (2003) which has been generally used as a qualitative forecasting technique or is involved to investigate the factors to understand the influence of the factors in the decision making process for the location of the business. On the other hand, the research of Blanc-Brude, Cookson, Piesse & Strange (2014) on the Delphi Approach has a huge impact on the locational decision of the business as because it is seen that the particular model considers a number of different factors that are important for GlaxoSmithKline plc.
This includes Cost, Labor characteristic, Proximity to suppliers, proximity to other facilities, locational proximity of the competitors, legal and other frameworks and many more similar as such. The costs that will be considered in the case of the pharmaceutical company are the cost of transporting the medicines, health care products to the retail stores of the organization. Costs that will be incurred to handle the labor force are also critical because the transportation of the medicines and pharmaceutical products are complicated and requires more attention as well as precaution. This will escalate the costs of the products. According to, (Hernández, Nieto & Boellis, 2018) the organization has to choose the location of the production unit close to the retail stores and the warehouses to ensure least cost of transportation and least labour charges.
Main Findings
According to, Hernández, Nieto & Boellis (2018) the legal arm of the business has to take the necessary measures to ensure the compliance with all the legal and other regulating factors. The compliance of all the environmental measures is also equally important for a company like “GlaxoSmithKline plc” where the manufacturing of the end products may lead to the degradation of the environment. Apart from this the study of, Sara & Abdellah (2016) has given importance to the following of the different social norms and choosing a particular location is a must for the organization. The selection of a vast area can facilitate future expansion plans for “GlaxoSmithKline plc”. On the other hand, the study of, (Tate, Ellram, Schoenherr & Petersen, 2014) has identified that the Delphi Approach can be said to be one of the best frameworks to help “GlaxoSmithKline plc” identify a proper location for expanding their business in the future.
On the other hand considering the study of (Windmark & Andersson, 2016), the application of the “Cost Modeling Framework” is another similar framework that can be applied to select the best possible locational choice for the company in the global market. The minimization of the cost which has already been discussed in the “Delphi Approach” has been further analyzed. On the contrary, Khalid & Herbert-Hansen (2018) has said that the management of “GlaxoSmithKline plc” must give prior importance to the cost awareness as because dealing in pharmaceutical business involves quality care and strict regulations. The cost of implementing the organizational changes within the company is also considered as a main factor for “GlaxoSmithKline plc” and therefore the business enterprise must ensure the effective presence of the marketing department, sales department, IT department, production units and other different units to ensure smooth selection of the location of the business.
References:
Arrigo, E. (2015). The role of the flagship store location in luxury branding. An international exploratory study. International Journal of Retail & Distribution Management, 43(6), 518-537.
Blanc-Brude, F., Cookson, G., Piesse, J., & Strange, R. (2014). The FDI location decision: Distance and the effects of spatial dependence. International Business Review, 23(4), 797-810.
Blyde, J., & Molina, D. (2015). Logistic infrastructure and the international location of fragmented production. Journal of International Economics, 95(2), 319-332.
Coeurderoy, R., & Murray, G. (2014). Regulatory environments and the location decision: Evidence from the early foreign market entries of new-technology-based firms. In Location of International Business Activities (pp. 226-260). Palgrave Macmillan, London.
Gsk.com. (2018). Home | GSK. [online] Available at: https://www.gsk.com/ [Accessed 14 Dec. 2018].
Hernández, V., & Nieto, M. J. (2014). International location and foreign operation mode combinations along the value chain: effects on firm’s innovation propensity _. Iberian multinationals driving the crisis recovery, 243.
Hernández, V., Nieto, M. J., & Boellis, A. (2018). The asymmetric effect of institutional distance on international location: Family versus nonfamily firms. Global Strategy Journal, 8(1), 22-45.
Khalid, W., & Herbert-Hansen, Z. N. L. (2018). Using k-means clustering in international location decision. Journal of Global Operations and Strategic Sourcing, 11(3), 274-300.
MacCarthy, B. L., & Atthirawong, W. (2003). Factors affecting location decisions in international operations–a Delphi study. International Journal of Operations & Production Management, 23(7), 794-818. (DOI: 10.1108/01443570310481568)
Sara, H. A., & Abdellah, A. (2016). A Combined Approach for Workspace Location Selection Decision Problem: A Linguistic-Mathematical Modeling Methodology. International Journal of Applied Engineering Research, 11(5), 3728-3732.
Schmidt, A. S. T., Touray, E., & Hansen, Z. N. L. (2017). A framework for international location decisions for manufacturing firms. Production Engineering, 11(6), 703-713.
Snyder, G. H., & Diesing, P. (2015). Conflict among nations: Bargaining, decision making, and system structure in international crises. Princeton University Press.
Tate, W. L., Ellram, L. M., Schoenherr, T., & Petersen, K. J. (2014). Global competitive conditions driving the manufacturing location decision. Business Horizons, 57(3), 381-390.
Theyel, G., Hofmann, K., & Gregory, M. (2018). Understanding Manufacturing Location Decision Making: Rationales for Retaining, Offshoring, Reshoring, and Hybrid Approaches. Economic Development Quarterly, 32(4), 300-312.
Windmark, C., & Andersson, C. (2016). Cost modelling as decision support when locating manufacturing facilities. International Journal of Production Management and Engineering, 4(1), 15-27.
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