Reference no: EM131238006

Part 1:

Operations and the Economy:

The US economy is clearly a lot better than the collapse in 2008. The big three automakers are actually all profitable. The Maryland state budgets are dismal but you can see the growth in terms of new construction all over the state, both residential and commercial. However, there are serious problems still with the economy. Naturally, like any other American (or Chinese, or Latvian, or any other people) you are most concerned with what affects you directly. For example, I am thrilled with the discounts I am getting at Burger King, or with the special deals at Checkers. It is known that McDonalds is doing well and Burger King is not. An operation must adjust to the economy around it in order to survive. Some of the operational measures taken in hard times are offering discounts, offering a new range of low cost products, cutting hours to reduce costs, layoffs to reduce production and cost, reducing staff, etc. Can you give some examples of these that you have observed? You should also discuss how effective these measures are. For example, if staff is laid off and there is neither a person nor a system to help a customer, you end up with an irate customer and lost sales.

Talking about cheap products, have you seen any new cheap offering from Apple? And yet, Apple is doing very well with billions of dollars in profits. My explanation is that Apple is a differentiated product, just like Mercedes Benz. People who buy high-end differentiated products are not troubled by economic situations. Has Nordstrom dropped its prices? Discuss these economic situations in the light of operational decisions.

All eyes are now on Europe as one country after another goes on the skids. I am sure the USD (US Dollar) is doing very well with respect to the EUR (Euro). This could be a great time to travel to Europe. I wonder if the travel industry is promoting Europe travel. US manufacturing is hurt by the Europe economy and canceled or postponed projects and orders. Discuss Europe vis-a-vis the US economy, and operational decisions that it leads to.

Part 2:

Here is one of the students view on the same discussion. I want you to reply to his view either agreeing or not and to add some comments.

Since living in Baltimore and being a retail/ fast-food employee for the past three years, I have seen a tremendous amount of changed within the business places that I have worked at, and these changes are not all terrible, but they aren't so good either. For example, since being laid-off by my former employee The Sports Authority, they have officially closed the doors, and shut down their operations at ever location world-wide. For us consumers who were looking to get a last-minute deal, this was great! Items were at an all-time low, which was basically a steal of a bargain. On the downside, thousands of Sports Authority employees were laid off, pensions were lost, and a financial crisis was at hand within this industry. One other plus side that it has done has create a better opening for its competitor, Dicks Sporting Goods, considering they are their main competitor. They were given the ability to purchase all of Sports Authority's goods at an extremely discounted price, to help Sports Authority pay for their Bankruptcy bills.

Another example of a fallen business is another business that I am currently employed in, which is Panera Bread. Panera is a locally nationally owned and operated fast-food franchise offering low calorie sandwiches, soups, and salads. Most recently the store hours have been cut tremendously, this being due to the lack of customers lately, and the lack of business due to said customers not coming in. This is great for some people who don't like to work, because they'll get to come in less. But for people like me who enjoy working, it is quite the shame, coming in less, and getting less money than you're typically use to.

These effect other people other than ourselves, they effect the customers as well. For instance, if there isn't a salesperson at The sports Authority, than that is a lost sale, due to the lack of workers, and a lack of productivity. If there isn't a cashier at a Panera Bread, then it could turn into a dissatisfied customer, calling up headquarters, and demanding compensation for such a terrible experience.

In the light of Apple, even though they are having deals with free phones, accessories, and music, they are still a multi-billion dollar company due to their release of yearly new products, brand loyalty customers, and innovations that easily surpass their competitor, such as Samsung. I believe they are still a huge company because they have such a well known reputation, and customers trust their products, and any new products that they may currently releasing.