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Performance Cycle Length
Longer performance cycles for international operations
• Domestic is measured in days
• International is measured in weeks or months
• E.g. fashion merchandise takes 30 to 60 days
Reasons for longer order cycle to delivery cycle times
• Communication delays
• Financing requirements
• Special packaging requirements
• Ocean freight scheduling
• Slow transit times
• Customs clearance
Overall this change requires higher asset commitment
Inventory is in transit for longer periods
Regional Strategies
Easier to create and operate separate regional strategies
, Duplication of activities led to:
• Loss of economies of scale
• Poor asset utilization
Growth oriented firms are integrating their regional strategies into global
business strategies to eliminate duplication
• Requires global integration of the entire enterprise
• Regionalization will remain viable for some firms
Risk
a situation involving exposure to danger, you can't see it coming
Volatility
1 Costs change more rapidly
2 Costs change with greater magnitude
3 Greater need for coordination
Supplier Disruption Risk
Fire at Phillips plant (Albuquerque) affecting Nokia and Eriksson
Sole Sourcing Risk
Paint shortages for automakers after Fukushima