23rd September 2014

An incredibly interesting section of business and its fundamental concepts is the idea of operations management, which Mahesh kindly talked to us about today. Learning about the process of Input > Operations Management > Output has allowed me to realize the importance of this process. One of the most important concepts is the Days of Inventory, which can be defined as the no. of days that it takes for the product to be created. Because today’s world is all about substitutes and consumer behavior, getting a product out to the consumers as quickly as possible has become a top priority for many companies.

For example, on the 23rd of September (the date of the lecture), the news reported that SMA Solar Technology AG had taken over the OPERATIONS MANAGEMENT of Canada’s largest photovoltaic plant in Ontario. The president of Kingston Solar addressed the fact that the company was looking to select an O & M provider, and believed that SMA had technological and management expertise in this area.

Possible consequences in the future would be lower energy costs due to higher efficiency, as well as more efficient services during power outages (if there are any).

Source:
PV Magazine

The building of a business model can seem like a tall order. However, based on the reading material given before today’s class, I’ve managed to take some simple notes on how to break down the process of creating a model. Essentially, it is split into 9 building blocks, and all contribute to the different areas that a business needs to address in order to run smoothly.

Zooming into the headphone/earphone market, a company called Master and Dynamic is beginning to make strides. As the ‘anti-Beats’, they serve to use combine a relatively older yet classic design with clear sound which can be considered their Value Proposition. Entering the market versus Beats is a challenge, as recently Apple purchased the audio company for 3 Billion, which will significantly increases Beats’ R&D, funding as well as advertising capabilities. With their flagship pair of headphones called the ‘Modern Thinking Cap’, this is certainly a model for those who want to stand out among the conventional Beats. As it isn’t very prominent in Asia at the moment, a wise choice would be for Master and Dynamic to expand product channels to Asia and increase marketing, if it truly wants to challenge the empire that is Beats Audio, which is already well established across the globe. They could also look to other major companies for collaboration if they want to expand, such as Samsung or Sony (which are all companies which are incredibly strong in the Asian Market), as Beats now do (following Apple’s acquisition).

Sources:
Forbes
Bloomberg

Buying a 1.5 litre of bottled water from Nestle will cost $1.19, which is $1.19 more than what Nestle Canada pays British Columbia for water extraction. Referring to Milton Friedman’s book Capitalism and Freedom, the definition of the ‘social responsibility’ of a business is actually fulfilled- Nestle is engaging in open competition without deception or fraud (at least to the BC government). However, one must keep in mind that exercising social responsibility does come at his/her own expense, and that Nestle is extracting 265 million litres of water. It seems that while Nestle has always stood by a stance of working with the local government, it is actually a cloak of deception – in effect it only is an argument in the short run.

Executives also have to report to their shareholders, and by the point of being socially responsible at one’s own risk, the businessman should instead look a the bigger picture of BC as a whole (as well as the people in Hope). This would allow him/her to consider the social responsibilities before making decisions with the shareholders and their money. One could do good, but only if they find out all the details first.

Source: http://www.timescolonist.com/news/local/wild-west-of-groundwater-billion-dollar-nestl%C3%A9-extracting-b-c-s-drinking-water-for-free-1.587568

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