Introduction to Omron and the objective of the research
ISM signifies an ongoing planning method of management which is aimed toward creating strategies which enable organization to develop and compete internationally. Moreover, strategic planning might be applied in the mechanism of building a specific global strategy. The paper primarily focuses on the strategic approach implemented by Omron. In order to identify a detailed process of the ISH within the organization an interview has been conducted with a manager of the company. The interview looks at the different ways in which the company is achieving its international strategy. This has been highlighted in the way Omron has separated each pillar where the automation business consumers 50% of the expenses that the company uses. In this study those information have been discussed so that the strategy of the business can be elaborated. From the interview it is evident that all businesses require access to talent of technology. It ensures that innovation pace and the subsequent implementation remains sustained. The company maintains and runs its business operations from Japan and every activity needs to be approved from Japan. The universality and sanctioning of products from one location makes it easy to deal with the business problems that the company faces with an international strategy. The organization today should possess technological fluency for understanding the total disruptions they face. In this chapter, the company Omron will be introduced in detail and the objective of the research will be explained together with the problem that has led to this study. After that, the research questions will be stated.
The first question asked to Omron representative was that of sales strategy followed by the company in the Middle East. The manager said that Omron was a Japanese company and they have followed the Japanese traditions for a long time but now they have introduced global strategy after 10 years. So starting from the new fiscal year, Omron has decided to follow the global strategy and it has been made into a policy which will be followed till the fiscal year 2030. 10 years strategic planning is the way of developing goals for managing international business globally following the principle of “Achieve Everything” which is one of the key pillars to the business operation of Omron. The integration of “Global Strategy” has helped the business in growing in the Europe and presently it is expanding to the Middle East starting with UAE.
The business strategy ruins every ten years and once the ten years are over, the company starts over again. The ten year period is separated into two parts. The first half of the ten years is preparing the strategy and the last half is used to accelerate the strategy so that the core issues and core missions of the organization can be achieved. The global strategy is also broken down regionally so that it can be easily achieved. For example, there is the European strategy which is further broken down into the local strategy that represents the country where the strategy is being implemented. The operations run in a functional way since each regional team needs to come up with its own budget and strategic needs that reflect the business needs of the organization. This then needs to be defended in Japan so that the mother company leaders can approve the funding for the different activities.
Omron’s sales strategy in the Middle East
The company has divided the ten years of global strategic planning into two halves where for the first half, they are preparing global strategy and for the second half the process of global strategy would go a full swing.
Question was asked on the current core operation of Omron. Replying to it the represented said that the core business of Omron is Automation. It has been mentioned in the interview conducted with the manager of Omron that the 50% of the total revenue comes from Automation business. The business has been established in 1933 and since then it is following global strategy to grow internationally. This is the reason a global website is being maintained irrespective of the fact that the business is a core Japanese business. The manager also included that Local Guidelines are being followed for international operation. However, the company also has interests in health care component where there are activities that take place in the organization too.
Strategic decisions mainly the budgeting is being approved from Japan; however, the process of budgeting is being framed within the nations it is operating. Since the operations are more of functional, global teams operate in certain local locations where their business needs vary. For example, in a European country, those doing business will draft a budget of what they need and then seek approval from Japan. This means that the business operations are global but the resources are managed in the Japan, thus the reason why approval must be sort before spending. All the budgeting decisions are finally sent to Japan for board decisions. The reason why the budgeting decisions are made in Japan is to ensure that the mother company understand the activities that take place outside Japan. This is a way of managing resources and ensuring that they align with the core business of the organization. Followed to it question was asked on their role in corporate social responsibility. Mainly the question is about how much they are sacrificing their profit margins in maintaining corporate responsibility and social roles. In response to it, the company representative said that Omron is currently not focusing on any such initiatives. Though they have plans for strategizing goals as per social needs. On asking about global partnership, the company responded mostly on their relationship with ventures. But the question specially designed to ask about their relationship with importers and exporters and the possible partnerships for business improvement. Omron focuses on developing prolific society through solving problems across the OMRON principles. They introduced their efforts which targets developments within sustainable value through implementing principles of OMRON. The principles of Omron serve as the primitive cornerstone of their actions and decisions. They bind them effectively and they remain same driving generation behind growth of Omron. Their values focus upon pursuing latest challenges with courage and passion. Challenging ourselves remain the generating force behind their unprecedented solutions, latest value along with active transformation. Challenges remain with the products as Omron never sell personalized goods by tweaking certain changes but the goods are the same. To which the manager answered that they wanted to maintain universality of the goods. The product they got at Japan will be the same at any other country. This limited differentiation is both an advantage and disadvantage. However, the company uses this as an advantage since a customer can buy the company product from any location around the world and find the same quality as the one supplied in Japan. This universality is also a way of maintaining the company image since there is no variation that is allowed on the company products.
Ten-year global strategy and its regional breakdown
For attaining the target, Omron emphasizes upon accelerating their implementation of code system for building a consumer database. Through handling consumers, they might implement cross-reference issues and processes through their total consumer base. It will serve them to approach consumers depending upon region. Through the aid of Global strategy of IT, Omron focuses on creating effective utilization of information along with strengthening IT governance. They are planning toward leveraging IT that provides them a competitive lead in their sales activities. Omron have generated a proprietary MES across 13 factories globally. Future plans indulge incorporating technology of IoT for capturing a greater range of data production. Kusatsu Factory has witnessed productivity gains through associating real-time information with wide visibility. Concern to VG 2020 fundamental strategy, Omron develops platform of Cross-division for larger efficacies. Analyses for cross-region might be performing missed sales along with addressing latest scales upon worldwide scale. As far as qualitative goals of Omron are concerned, it focuses on developing a world value developing group which remains quantitatively and qualitatively superior. Concern to their quantitative targets, Omron focuses on generating about 1 trillion Japanese yen.
Strategic management proves crucial since it is essential monitor the increasing diversified operations within a continuous transforming culture. In addition to industrial automation and electrical components, OMRON’s business areas include social systems, such as automated ticket gates and solar power conditioners, as well as healthcare. OMRON goods and services are now available in over 120 countries and regions. OMRON’s goal is to make it possible for patients to get medical treatment tailored to their specific needs by evaluating their health data and behavioral patterns. To achieve this aim, the company provides new goods and services in three areas: cardiovascular health, respiratory care, and pain management. Additionally, OMRON Industrial Automation serves as a business partner in the global manufacturing industry (Rego et al. 2021).
Manufacturers benefit from our experience in sensing and control technologies by operating at higher productivity and efficiency levels with fewer resources. Industrial Automation; Electronic Components; Societal Systems, Solutions and services; and Healthcare, continue to be motivated by social requirements for a better society. Create value for customers while also giving back to the community. A broad range of sectors and applications rely on OMRON electronic components. These include power tools, smart homes, and the energy industry.
Omron contributes toward resolving social problems with the aid of their prolific businesses. The organization’s mission serves in developing lives along with contributing to better society. The business field gradually covers a wide spectrum, which ranges from electronic components and industrial automation to the social systems. Currently, the company generates services and products in around 120 regions and countries. While setting the issues of sustainability, OMRON have successfully taken on-board social problems through their businesses. In the view of Fitzgerald and Lai (2015), the evaluation was adopted depending upon indices of sustainability from the third-party. A policy of sustainability has been built and it will conduct oversight and monitoring functions concerning initiatives toward responding to issues of sustainability. In the context of HR strategy, the company have trained and secured leaders of upcoming generation. It serves in fostering self-motivated employees who tends to attain development and self-transformation. They provide a workplace culture which can empower and attract the diversified talent essential for increase of business. They have inducted OSH system of management for investigating risks of occupation. The organization’s manufacturing policy is composed of three principles- 3F, quality first along with H&E. Concern to VG2.) goals, the company has adopted and defined the process of due diligence. The firm has promoted risk management which integrates every risk-associated activity across global level. These are essential for ensuring business continuity and the goals achievement. Through disseminating the rules and policies, the company OMRON focuses on developing longer term association with stakeholders. Concern to strategy formation, OMRON has examined the financial statements of organizations apart from historical approaches. OMRON has utilized strategic formulation for periodization, resource allocation, and organization-wide alignment along with business targets validation. In the words of Kodama (2018), they have developed wide network which is composed of procurement departments of HR, manufacturing facilities, business units, cascading and sharing procurement by staff meetings. They emphasize on expanding initiatives associated to procurement tasks that indulges sustainable procurement. For ensuring sustainability of supply chain, the company has inducted particular action guidelines and promotes these guidelines observance. OMRON has strengthened business associations with their critical suppliers, thereby enhancing their purchase ratios. For fulfilling their attributes to stakeholders, they might manage personal information. As stated by Simandan (2019), Quality Management and global procurement contain a well-developed structure for supporting quality increase on worldwide scale. The group of OMRON will focus on continuing their efforts for preventing silent changes through enhancing the processed items. OMRON companies focus on implementing safety systems of management across each phase of business method. Through doing such, OMRON strives toward ensuring supply of safe products. OMRON feels that quality should be supported through every group member irrespective of their belongings. In the words of Bindra et al. (2019), they primarily belong to planning, sales, procurement, R&D, quality assurance or manufacturing. It is applied even to officers and directors. Stricter implementation of PDCA serves in ensuring the prevention and quality of quality-related issues. The Group focuses on conduction of auditing which serves in evaluating efficiency of QMS.
Omron’s core operations
The effective innovation strategy adopted by Omron has served in clarifying targets and priorities. OMRON focuses upon redefining their business strategically through holding their competitors off guard. Concern to inclusion and diversity, OMRON emphasizes over initiatives and policy for diversity promotion to display potential. The group of OMRON is engaged in environmental workplace and certain measures. They are emphazing to develop and foster resources of human. OMRON has commercialzed the innovations as services and products for their consumers. In the words of Mats et al. (2019), their model of value creation leads to sustainable corporate culture and business growth. They produce greater management capital in building innovation through latest social requirements. They are focused on designing business models and evolving technologies which are essential for achieving the vision in forthcoming days.
International Strategic Management (ISM) is a strategic planning process to align an organization’s capabilities and resources with the global context in which it operates. When it comes to international competition, it’s a continual process. Improving an organization’s global competitiveness may be achieved via International Strategic Management (ISM), a continuous management planning process. Developing a specific international strategy requires strategic planning. It is OMRON’s goal to contribute to building a sustainable society and creating corporate value by employing OMRON Principles to tackle social problems in all of their business operations. As a result, they believe that OMRON must identify the material sustainability concerns on which it should concentrate, integrate them into medium- to long-term objectives, and then build particular efforts to fix these problems via its commercial operations (Westney, 2021).
A vital management goal for OMRON is to maximize corporate value, defined as the total value provided by the company’s actions and the company’s ability to continue addressing societal concerns in the future. Management’s primary goal is to meet the company’s mid-and long-term objectives. If achieving a financial objective will cause long-term harm to the firm, it could be sacrificed. A business unit will provide a period to increase return on invested capital and achieve growth potential before divestment is considered if ROIC falls below OMRON’s expected capital cost of 6%. Non-financial value and performance must be continually validated and responded to be understood and communicated by stakeholders like customers, partners, workers, and investors. This demands constant checks and balances (Buckley and Casson, 2021).
Recent decades have seen an increase in interest in global strategy and governance. The topic has been examined from various viewpoints, and so have a variety of solutions for enterprises that face global competition. On the one hand, these viewpoints have improved our knowledge of the complexities of competing on the international stage. On the contrary, when it comes to how to compete globally or the definition of global strategy, there is an excellent lot of uncertainty and misunderstanding because of the vast range of viewpoints in the corporate world. Because of this, multinational firms like OMRON that cater to specific country markets will be phased out in favor of global corporations that offer uniform goods all over the globe due to globalization. Therefore, it is increasingly essential for companies to manufacture high-quality goods at the lowest possible cost to have a viable edge in the global marketplace. According to the research, globalization has ramifications for worldwide company strategy. Only firms who can adjust effectively to global developments will survive and thrive in the long run (Goniet al. 2021).
References
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Buckley, P. J., and Casson, M. 2021. Multinational enterprises and international cartels: The strategic implications of de-globalization. Management and Organization Review, 1-21.
Fitzgerald, R. and Lai, J., 2015. Strategic capabilities and the emergence of the global factory: Omron in China. Asia Pacific Business Review, 21(3), pp.333-363.
Goni, F. A., Chofreh, A. G., Orakani, Z. E., Klemeš, J. J., Davoudi, M., and Mardani, A. 2021. Sustainable business model: A review and framework development. Clean Technologies and Environmental Policy, 23(3), 889-897.
Kodama, M., 2018. E-healthcare Service Innovations: In Depth Case Studies in Japan. In Collaborative Dynamic Capabilities for Service Innovation (pp. 91-111). Palgrave Macmillan, Cham.
Mats, T.P., Kulyk, V., Serohina, S. and Serohin, V., 2019. Integration of strategic management and process modeling in the activities of international companies.
Rêgo, B. S., Jayantilal, S., Ferreira, J. J., and Carayannis, E. G. 2021. Digital transformation and strategic management: A systematic review of the literature. Journal of the Knowledge Economy, 1-28.
Simandan, D., 2019. Iterative lagged asymmetric responses in strategic management and long-range planning. Time & Society, 28(4), pp.1363-1381.
Westney, D. E. 2021. MNCs and cross-border strategic management (pp. 301-318). Oxford University Press: New York, NY.
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