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Examine the impact of each of the following on the operations of one multinational company that you have studied: - The product life cycle - Developments in information technology. - Leaving Cert Geography - Question 7B - 2018
Question 7B
Examine the impact of each of the following on the operations of one multinational company that you have studied: - The product life cycle - Developments in informa... show full transcript
Worked Solution & Example Answer:Examine the impact of each of the following on the operations of one multinational company that you have studied: - The product life cycle - Developments in information technology. - Leaving Cert Geography - Question 7B - 2018
Step 1
The product life cycle
Answer
The product life cycle (PLC) refers to the stages a product goes through from introduction to decline. This can have several impacts on a multinational company's operations:
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Marketing Strategies: As a product moves through its PLC, the marketing strategies must adapt. For instance, during the introduction stage, significant investments in promotion and communication may be required to build awareness. Conversely, in the decline stage, the company might reduce marketing expenditures or consider phasing out the product.
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Production and Supply Chain Management: The PLC informs decisions regarding production rates and inventory management. For example, in the growth stage, there may be a need to scale up production volumes, requiring adjustments in supply chain operations and supplier relationships.
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Resource Allocation: A company must allocate resources efficiently depending on the stage of the product life cycle. Resources may be shifted toward more profitable products during the maturity or decline phases of less successful products.
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R&D Investments: The PLC also impacts research and development efforts. Companies may invest heavily in R&D during the introduction and growth phases but may withdraw investment as the product matures or declines.
Overall, the PLC necessitates continuous internal adjustments to maintain competitiveness and profitability.
Step 2
Developments in information technology
Answer
Developments in information technology (IT) have a profound effect on the operations of multinational companies. Here are some key impacts:
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Operational Efficiency: Advances in IT, such as automation and cloud computing, enhance operational efficiencies. Companies can streamline their processes, reduce costs, and improve delivery times.
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Communication and Collaboration: IT developments facilitate better communication among global teams. Tools such as video conferencing and collaborative platforms enable seamless teamwork across different time zones and locations.
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Data Management and Analytics: Modern IT systems allow firms to collect and analyze vast amounts of data, leading to better decision-making and improved customer insights. Companies can tailor their products and marketing strategies based on data-driven insights, enhancing customer satisfaction.
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Market Expansion: IT has made it easier for companies to enter new markets. E-commerce platforms and digital marketing allow multinationals to reach global customers without the need for a physical presence in each market,
In summary, developments in information technology bolster the efficiency, communication, and analytical capabilities of multinational companies, ultimately enhancing their competitive edge.