Bachelor of Business

Answer all questions.

Question 1:

Explain why many Service Sector companies have moved their back office operations to India, Philippines and South Africa? What are the key advantages? What potential disadvantages and risk factors exist in this decision?

Answer:

The Service Sector companies have moved their back office operations to India, Philippines and South Africa due to various reasons that offers consistency in growth and development of the business. India, Philippines and South Africa are actually the hub of English speaking people. Due to difference in exchange rate the currency value of these three nations is much lower. Therefore it becomes rather economical to have the human resources from these countries. That is the human resources with equal capabilities, skills and above all English speaking proficiencies could help in saving huge bucks by the companies. That is the service sector companies in the international arena had to deploy employees in their country and do the business. With the passage of time, the competition rises and the cost of deploying human resource also rises. At such time, these companies look for cost effective deployment of human resource without affecting their quality and output. The need to fulfill these two objectives of quality maintenance and consistent growth in output, the companies look out for moving the business in the other country where equal skills, capabilities and English speaking proficiency is available in the human resource. After looking at the opportunity to deploy the similar skill and proficient employees in other country they go ahead for hiring human resource for service sector in the international arena. Thus human resources are deployed at lower pay scale due to currency exchange rate, business owners to move their back office to these countries.

The key advantages of having the back office operations in India, Philippines and South Africa therefore includes the followings.

It make business become cost effective.
Opportunity awaits for the businesses to deploy the most efficient human resource from the global arena.
The business stays alive for 24*7.
Expenditures on the business are checked wisely without affecting quality output.
The efficiency of the business increases with the deployment of different human resource in different countries offering round the clock assistance.

The potential disadvantages and risk factors that exist in this decision include the followings.

The control over the business process recedes by manifolds. That is the human resource works in different global locations. Therefore directing and controlling them at various point of time becomes difficult.
The business could face serious loss due to the loss of information. That is the information transfer occurs through online medium which is a platform of viruses, malware and hackers. Therefore the information transfer may have to pass through these threats which may add to the worries of the management and a little mistake could cause a big loss.
The decision taken in the head office may not correctly reach the office places. That is the human resource may misinterpret the business decisions and may not take appropriate actions towards the accomplishment of targeted goals.
The delay may be faced during the transfer of information and knowledge sharing. This could bring in issues or halt or delays in the regular business working.
The deployment of the human resource may not prove cost effective. This is so because the cost of labor is rising at rapid pace in these countries. Moreover the government regulations backing the interest and rights of the employees are actually bringing out additional costs over the business.

In conclusion, the Service Sector companies have moved their back office operations to India, Philippines and South Africa due to reason that it offers consistency in growth and development of the business. India, Philippines and South Africa are actually the hub of English speaking people.

This way the service sector has number of advantages and disadvantages. The key advantages of having the back office operations in India, Philippines and South Africa therefore includes the making business become cost effective and deployment of the most efficient human resource from the global arena. This way the business stays online and effectiveness in business operation can be achieved. However a number of potential disadvantages and risk factors that exist in this decision which includes the control over the business process which recedes by manifold. Also directing and controlling them at various point of time becomes difficult. Along with that the business could face serious loss due to the loss of information.

Question 2:

Explore the Websites of Coles and Woolworths and examine their Business Models. Are they following a market driven or market driving approach to Competition? Explain your answer.

Answer:

Coles and Woolworths are the supermarket giants of Australia. These companies have more than 100 outlets just in Australia. The recent competition has led to the shift in the business model of the company. The websites of Coles and Woolworths clearly depicts the application of the retail outlet business model. That is the companies are purchase the products from different distributors and wholesalers. This way an effort is made to make bulk purchase that could help retrieve the benefit of cost effectiveness in the procurement process. Later the same products are offered for sale to the general public through retail outlets. An additional effort is made by these companies in transferring the cost effectiveness achieved through bulk buying to get transferred to the general public or customers. That is the customers are offered discounts in making purchase. This way heavy sale proceeds are looked into by offering value formoney to the customers by offering them cheap purchase.

The websites of Coles and Woolsworths also demonstrates that these companies tries to achieve cost effectiveness in their regular business operation by offering online purchase facility to its customers. That is the customers are allowed to sit back, relax and give order from ever they feel comfortable. This way the online applications helps in reaching out to number of customers. This saves the time and efforts that are to be spent by the customers for making purchase of the desired goods.

The company enjoys various benefits through online business development. These include the followings.

The work pressure on the available work force and resources declines by manifolds.
Reach to number of persons and regions increases.
Customer satisfaction can be attained easily.
The customer trend in purchase and preferences can be easily be figured out.
Future references to attract more customers towards the company.

The number of benefits to the customers also increases which are stated as below.

The customers are offered value added services which brings out customer satisfaction.
The customers are allowed to place orders from their comfortable area and source.
The benefits of cost effectiveness in procurement process are transferred to the customers.
Customers get a variety of goods and services under one banner.
Comparison with other company’s rates and services become easier.

This way Coles and Woolworths are following the market driven approach instead of market driving approach. The market driving approach occurs if the rates and trend setting is done by the company. However in this case of retail outlets businesses of Coles and Woolworths, there exist perfect competition conditions. That is there exists a number of sellers and number of buyers. The products are also homogenous. Therefore the chances of leading the market or market driving approach does not apply at all. Instead to fight back the competition and retain the existing customers the company hast o follow the market driven competition. That is, it has to follow the rate cuts, extra offers, discounts trending in the industry. This way the efforts are made to maintain the flow of existing customers and attract potential customers. For instance, the recent drops in rates by an average of 5% is an example of market driven competition that is affecting the business of these two companies. The companies followed the same trend and therefore offered the similar benefits to the customers. Due to high competition and homogenous products, there exist lesser chances of developing (IPA.org.au, 2016).

In conclusion, Coles and Woolworths depicts the application of the retail outlet business model. That is the companies are purchase the products from different distributors and wholesalers. This way an effort is made to make bulk purchase that could help retrieve the benefit of cost effectiveness in the procurement process. Later the same products are offered for sale to the general public through retail outlets. An additional effort is made by these companies in transferring the cost effectiveness achieved through bulk buying to get transferred to the general public or customers. That is the customers are offered discounts in making purchase. This way heavy sale proceeds are looked into by offering value formoney to the customers by offering them cheap purchase. The various benefits to the company includes the work pressure on the available work force and resources that declines by manifolds. Also the reach to number of persons and regions increases and also the customer satisfaction can be attained easily. On the otherh and the number of benefits to the customers also increases including the customers are offered value added services which brings out customer satisfaction and they are even allowed to place orders from their comfortable area and source. This way huge benefits of cost effectiveness in procurement process are transferred to the customers and they are offered with a variety of goods and services under one banner.