Operational Differences in International Companies Resources Depending on whether a firm produces tangible (products that require manufacturing or processing) or intangible goods (services), its resource requirements will differ greatly. Production management of tangible goods requires supply chain management to acquire production materials in the most efficient and cost-effective manner possible. The successful management of a firm's supply chain utilizes a defined set of process and steps to acquire the resources necessary for production. This may also require operations managers to decide the degree to which they can or should use vertical integration to optimize supply chain efficiencies. Vertical integration is the degree to which a firm decides to use its own resources (by making them) or to purchase the resources from an external supplier. If a firm decides to make the resources it needs to produce its end product, it may purchase a supplier firm and take the resource production "in-house" (Backward Vertical Integration). If a firm decides it would be best to distribute their products themselves, rather than lose the profit margins to a distributor, they may desire to purchase a distributorship and move that function "in-house" (Forward Vertical Integration). Conversely, firms may decide that the best efficiencies for production and pricing occur when they purchase their resources for production. In this case, procurement operations are a critical facet of ensuring that resources are purchased at the most favorable terms possible. In the international marketplace, this function relies on strong multinational communications techniques and continual foreign currency analysis in order to optimize pricing. These operational decisions are complex and require astute business analysisLocation When determining the location for an international firm's various facilities, operations managers must consider: Country-related issues · Resource availability - abundance and quality of workforce, raw materials, clean water, etc. · Cost - prohibitive or supportive of locating a business in that location · Infrastructure - technology, transportation systems, regulations · Branding - various nations have brand images associated with them that can either enhance or diminish brand reputation Product-related issues · Transportation costs relative to the weight of the product can impact profitability such that a specific location is not suitable for production. · Appropriate and efficient facility size (relative to anticipated product sales) Government policies · The decision to locate a facility in a foreign nation is greatly impacted by the stability of the political system. · Tariffs and taxes can force firms to locate a facility within the borders of a nation. · Location decisions can be influenced by economic incentives offered by certain host nations. Operational issues · Firms that have a low-cost strategy may locate in low-cost locations, but a f.

1. Operational Differences in International Companies
Resources
Depending on whether a firm produces tangible (products that
require manufacturing or processing) or intangible goods
(services), its resource requirements will differ greatly.
Production management of tangible goods requires supply chain
management to acquire production materials in the most
efficient and cost-effective manner possible. The successful
management of a firm's supply chain utilizes a defined set of
process and steps to acquire the resources necessary for
production. This may also require operations managers to
decide the degree to which they can or should use vertical
integration to optimize supply chain efficiencies. Vertical
integration is the degree to which a firm decides to use its own
resources (by making them) or to purchase the resources from
an external supplier. If a firm decides to make the resources it
needs to produce its end product, it may purchase a supplier
firm and take the resource production "in-house" (Backward
Vertical Integration).
If a firm decides it would be best to distribute their products
themselves, rather than lose the profit margins to a distributor,
they may desire to purchase a distributorship and move that
function "in-house" (Forward Vertical Integration).
Conversely, firms may decide that the best efficiencies for
production and pricing occur when they purchase their resources
for production. In this case, procurement operations are a
critical facet of ensuring that resources are purchased at the
most favorable terms possible. In the international marketplace,
this function relies on strong multinational communications
techniques and continual foreign currency analysis in order to
optimize pricing. These operational decisions are complex and
require astute business analysisLocation
When determining the location for an international firm's
various facilities, operations managers must consider:

2. Country-related issues
· Resource availability - abundance and quality of workforce,
raw materials, clean water, etc.
· Cost - prohibitive or supportive of locating a business in that
location
· Infrastructure - technology, transportation systems,
regulations
· Branding - various nations have brand images associated with
them that can either enhance or diminish brand reputation
Product-related issues
· Transportation costs relative to the weight of the product can
impact profitability such that a specific location is not suitable
for production.
· Appropriate and efficient facility size (relative to anticipated
product sales)
Government policies
· The decision to locate a facility in a foreign nation is greatly
impacted by the stability of the political system.
· Tariffs and taxes can force firms to locate a facility within the
borders of a nation.
· Location decisions can be influenced by economic incentives
offered by certain host nations.
Operational issues
· Firms that have a low-cost strategy may locate in low-cost
locations, but a firm that relies on product quality will need to
locate facilities where there is an ample skilled labor force and
managerial expertise.
· Inventory management policies are impacted by plant location
determinations.
· Corporations balance the costs of maintaining inventory
against the costs of running out of materials and/or finished
goods.

3. · Just-in-time (JIT) inventory management systems exert
particular pressure on the factory location, since they require
strong reliance on suppliers to deliver needed resources at
precisely the correct point in the production process.
Organizational Congruence
Global firms operating in multiple nations face mounting
challenges in ensuring that standardized policies are managed
effectively across borders. Variances in political landscapes
including the degree of governmental controls, laws,
regulations, taxes, tariffs, human rights issues, labor systems,
and rules, all have an impact on the specific abilities of a
corporation to ensure smooth adherence to internal policies.
In addition to working to achieve consistent policies across
borders, operations managers are tasked with determining how
to manage the growing bank of knowledge about multinational
operations across borders. Effective knowledge management
creates efficiencies in production and other operational areas,
but the lack of strong knowledge management systems can
result in devastating loss of profits through attrition, inefficient
processes, or labor-intensive investments that recreate systems
and processes already successfully implemented in other
nations.
Operations Management in a Multi-Product Environment
Firms that produce multiple product lines, such as General
Electric or Kraft Foods, must manage their operations functions,
such as Supply Chain Management, across various product
lines. When the global differences between nations are factored
into this management process, it is quite easy to see how
complex the global operations management process becomes.
Some of the complexities when managing multiple product lines
include:
· Management of an increasing number of suppliers and supplier
relationships.
· Production lines may have increasing numbers of components
and final products in inventory.
· Product planners have increased difficulty in scheduling and

4. allocating finished goods across multiple factories and sales
channels and any change in the supply chain can have a domino
effect on other areas of the organization or even the customer
base.
Strong operations management uses technical analysis to
measure the cost and benefit of product line complexities, and
determine the correct production proportions to maximize
profits. Consider the five-step process to operation management
of product complexities.
Step 1: The first step is to identify which cost areas are
impacted by product line complexity. To avoid overlooking
hidden costs, conduct a thorough review of material,
information, and financial flows along the value chain.
Step 2: The next step is to estimate the effects of complexity in
each cost area on a per-unit basis. This includes analyzing the
costs for each component's inputs, as well as the expected net
revenues, other costs including marketing, and inputs such as
factory capacities and retail order lead-time.
Step 3: This is basically a method for establishing a cutoff point
at which the business would not be profitable for a specific
product. Each product in the portfolio must meet business
objectives and contribute acceptable contribution margin (VCM)
to offset these complexities.
Step 4: Increased product line complexity can yield benefits as
well as costs. Benefits include greater consumer choice,
increased shelf space at retailers, increased consumer
mindshare, and reduced pricing transparency.
Step 5: The last step involves eliminating products under
consideration for which the projected margin contributions do
not exceed the thresholds assigned. At its most basic level, this
is simply a product-by-product comparison of projected margin
impacts against the measured cost thresholds.How are
operations management and operations strategy related?
International operations management refers to the
transformation-related activities of an international firm. The

5. overall objective of operations management is to create the
opportunity or potential to create superior value for the firm by
efficiently managing all operational components of the
business. Operations strategies are developed from the
competitive priorities of an organization, which include: low
cost, high quality, fast delivery, flexibility, and service.
If a firm is pursuing a differentiation strategy, then management
of the operations must result in products or services that are
clearly different from the firm's competitors. In a low-cost
strategy, operations management must effectively create
efficiencies throughout its operations, which allow the business
to price their product as a low-cost leader.
Both large and small firms, global or otherwise, engage in the
execution of their vision and mission through the development
and implementation of strategies designed to expand, or grow,
their profits in order to maximize their shareholder wealth. This
is the overall objective of a business. But, how do they
implement the business strategies once they have been
identified?
These strategies consist of objectives and actions that, when
successful, achieve the desired result. But, in order to be
successful, the strategic business actions must be translated into
operational strategies that not only synergistically align with
the business strategies, but have the capacity for success
through appropriate allocations of resources, facilities,
application of policies and compliance, adherence to
regulations, marketing objectives, logistical support, finance
and pricing, technological infrastructure, and a host of other
considerations. In other words, there must be strong
management of the operations components of the business that
are soundly integrated across functions (cross-functionality) in
order to increase the likelihood of successfully achieving the
business strategies. This requires the development of precise
operations strategies.
In the international environment, operations strategies are
increasingly complex, as firms must not only consider the

6. efficiencies and success of internal operations in relation to
firm strategy, but they must also analyze and develop operations
strategies that can successfully create efficiencies and success
in multiple regions and nations, whose laws, environment,
culture, politics, and technological and logistical considerations
are vastly different.
The differences that exist within a host nation and between
multinational environments are capable of reducing productivity
through inefficiencies and waste, and through the impact of
policies and regulations across borders. How firms identify,
analyze, and prepare or respond to these cross-border
differences can greatly impact their profitability or even their
ability to remain in business.
When products and services are produced using systematic
production techniques that are standardized across a company,
firms can and should use the same systems across borders in
order to create greater efficiencies. But when various foreign
markets require a firm to use unique operations, global
integration of systems is difficult, and often not possible.The
Finance Function in the International Environment
Financing
A CFO can reduce a group's tax bill by, for example, borrowing
in countries with high tax rates and lending to operations in
countries with lower rates. But the global CFO needs to be
aware of the downsides of strategic financing. Saddling the
managers of subsidiaries with debt, for instance, can cloud their
profit performance.
Risk Management
Instead of managing currency exposures through the financial
market, global firms can offset natural currency exposures
through their worldwide operations. Doing so, however, can
obscure the performance of local units, making it harder for
headquarters to assess local managers and easier for financial
managers to take purely speculative positions.
Capital Budgeting
CFOs can add value by getting smarter about valuing

7. investment opportunities. But adopting an overly formal
approach may tempt managers to game the system and can lead
to an outcome at odds with the company's objectives.
As corporations go global, capital markets open up within them,
giving companies a powerful mechanism for arbitrage across
national financial markets. But in managing their internal
markets to build an advantage, Chief Financial Officers (CFOs)
must balance the opportunities with the challenges of operating
in multiple environments. By exploiting their internal capital
markets, CFOs can create value in three functions:
1. Come to some kind of conclusion about the restaurant market.
What alternative methods of distribution of the product should
be considered? Is it most appropriate initially.
Running head: COUNTRY RESEARCH 1
CONTRACT – COUNTRY RESEARCH 2
Country Research
Areas of Influence
Current State in France
Political
France is a politically stable country that is led by an elected
President. The French government is democratic in nature and
this favors businesses in that country. When it comes to
security, the government has an able police force to protect
people and businesses from criminal activities. This makes that
country suitable for international business. If a company would
wish to expand its business to France then it would not be a bad
idea as the business would be assured of its security as the
country has good security agencies and is also politically stable.
Socio-Cultural
French people are still struggling to ensure that their culture
remains relevant in this ever-changing world. Although the U.S
boasts of having people of diverse cultures. France is mainly

8. made up of French speaking people. Therefore, it would be
crucial for people doing business to study French as most of the
people in that country speak that language.
Apart from that, French business people always observe
neatness and fashion as they engage with potential business
people. Therefore, one should be neatly dressed and well
groomed in order to win their first impression.
French people are not always in a hurry in order to save time.
Therefore, it would be wise for a business to allow its workers
to have a good time for social interaction during breaks. When
doing business with French clients, it is paramount for one to
win their trust in order for a long-term business relationship to
be developed.
Economic
France is highly developed just as its neighbors like Germany
and Britain. Its annual Gross Domestic Product is extremely
high and this shows that the country is economically stable.
Though some countries, such as the United States of America,
were hit by an economic meltdown, France was affected
minimally and has since recovered. A company expanding its
market to France would face stiff competition from other
domestic and international firms operating in that country.
Therefore, a company expanding its market to France should use
many of the marketing strategies to ensure that the company
does not incur losses. Apart from that, the country has many
educated people hence it would be easy to find well-trained
workers in that country. However, the French government
imposes high taxes on business when compared to other
countries and this can affect businesses that are not used to such
high taxes. Apart from that, France does not have a free market
economy, but one that is slightly regulated by the government.
This can affect businesses. However, the government is trying
to privatize some of its property.
Geographic
France is the largest country when compared to the other
countries within the European union. Therefore, it would be

9. suitable for a business, as it would enjoy a wide customer base
in that country. It also has many urban centers as well as rural
areas to suit the needs of various businesses. However, the
southern part of France is prone to earthquakes and these could
lead to destruction of property and loss of lives. Some areas,
which are covered by forests, are also prone to forest fires,
which could have negative impacts on international business.
Technology
France is a highly developed country since it has well-
developed infrastructure. Their advanced use of roads, railway
systems and airports ensure that people travel efficiently from
one point to another, have adequately networked the country.
Communication systems are also advanced as there are both
satellite and fiber optic systems throughout the country. These
systems ensure that both people and businesses get access to the
internet.
Legal/Regulatory
There are many laws in the Republic of France which guide how
businesses operate. Apart from that, those laws govern how:
taxation is to take place, auditing, employment, trading and
banking. These laws ensure that businesses are protected from
market failures such as monopoly. Apart from that, they ensure
that employees are treated well. Child labor and discrimination
is not allowed. However, taxes affect business operations, but
generally, France is a great country for conducting business.
References
Etiquette outreach. (2012). French-American Cultural
Differences in Business. Retrieved on April 11, 2014 from:
http://www.etiquetteoutreach.com/blog_new-york-etiquette-
guide/bid/83338/French-American-Cultural-Differences-in-
Business
About-France. (2014). The French economy: strengths and
weaknesses. Retrieved on April 11, 2014 from: http://about-
france.com/geo/french-economy.htm

10. Company Selection
Artemis hotel is considering expansion in France. The prospects
of growth in the next five years are some of the key factors that
management is interested in to help it make this key strategic
decision.
1. Industry and Company forecasted growth rates over the next
5-10 years
a. Positive
i. Expanding into the French market will help Artemis hotel add
French dishes that it does not offer traditionally.
ii. Additional branches opened in France will help in increasing
the revenue for Artemis hotel
b. Negative
i. The eating habits in France may limit the number of products
offered, since there is high preference for French meals
ii. Over the next 5-10 years growth in France could be limited
to major towns
2. Key Risk Factors in your industry and company
a. Overall growth of hotel industry was 4% for financial year
2012-2013(Hospitality net, 2014), this is a low growth rate
considering the high inflation rates.
b. Popular brands are always at risk of being counterfeited.
3. Current financials for your company
a. Artemis hotel currently operates in Greece and Amsterdam.
The company has acquired a loan of $500,000.00 USD to
facilitate initial expansion into the French Market.
4. Government Regulatory outlook
a. The France government is strict on the requirement for
facilities to be used by disabled clients and staff.
b. More regulations on sanitation and safety are expected to be
implemented next year, in 2015 (Edward, C. 2013).
5. Competitive Landscape In the U.S. and in your target country
a. The American market is more competitive, since the market
absorbs more competition compared to France
6. Quality of foreign staffers
a. How trained or educated are they - or will they need to be and

11. how quickly could their skill sets meet your needs?
i. Most of the workers that are available in France are
specifically trained for French cuisine and hospitality. This may
require importation of staff with knowledge on international
meals and hospitality guidelines that may not be found in
France.
References
Edward, C. (2013). France drowning in rules and regulations,
critics say. Washington: Washington Post
Hospitality Net, (2014). French Hotel Industry Performances.
France
Five Forces Analysis
Environmental Forces
Challenge
Generic Strategy
Justifications
Industry and Company forecasted growth rates over the next 5-
10 years
7. The eating habits in France may limit the number of products
offered, since there is high preference for French meals
8. Over the next 5-10 years, growth in France could be limited
to major towns
Develop Partnerships
Developing partnerships with major firms in France and other
countries. These alliances manifest a strategic determination to
adopt an overall approach of group to group that is beneficial
for both customers and partners (Peichl, Pestel and Siegloch,
2013). The company also focuses on their employees, training,
and social advancement.
Key Risk Factors in your industry and company
a. Overall growth of hotel industry was 4% for financial year
2012-2013 (Hospitality net, 2014); this is a low growth rate
considering high inflation rates.
b. Popular brands are always at risk of being counterfeited

12. Develop center of expertise
The hotel has to leverage itself for the experience to develop
skill platforms of high level; interconnected units will extend
throughout the business and create a unique system. Sharing of
the best practices and the pooling of costs will enhance
performance at the hotel’s brands, give support to the hotel
owners and guarantee the customers availability of the best
services.
Current financials for your company
a. Artemis hotel currently operates in Greece and Amsterdam.
The company has acquired a loan of $500,000.00 USD to
facilitate initial expansion into the French Market.
Divestments of non-strategic businesses
The hotel can carry out non-strategic assets’ disposal such as,
the sale of its subsidiary hotels into consortiums that are special
situations in several parts of the market.
Government Regulatory outlook
a. The French government is strict on the requirement for
facilities to be used by disabled clients and staff.
b. More regulations on sanitation and safety are expected to be
implemented in 2015.
Make improvements on political influence
Artemis hotel should be influenced by the political and
legislative conditions of France. In the hotel industry, Artemis
Hotel does not face a huge threat due to the good relations
within the country.
Competitive Landscape In the U.S. and in your target country
a. The American market is more competitive, since the market
absorbs more competition compared to France
Implementing their intended goals in France
All marketing plans must include a control component of the
actual performance comparable to planned performance.
Through collecting performance data, the gaps between the
objectives and performance will be evaluated regularly to

13. pursue required corrective action (Shilei and Yong, 2009).
Quality of foreign staffers
a. How trained or educated are they - or will they need to be and
how quickly could their skill sets meet your needs?
i. Most of the workers that are available in France are
specifically trained for French cuisine and hospitality. This may
require importation of staff with knowledge on international
meals and hospitality guidelines that may not be found in
France.
Enforce training and development
Human resource managing the demands of the employees, as
well as a reduction of undesired turnover. Other components
include: the development of a succession plan, layoff plan,
promotion policies, and ensuring compliance with local labor
laws; these policies focus on career advancement through
training (Yüksel, 2012).
References
Peichl, A., Pestel, N., & Siegloch, S. (2013). The politicians'
wage gap: Insights from german members of parliament. Public
Choice, 156(3-4), 653-676.
Shilei, L., & Yong, W. (2009). Target-oriented obstacle analysis
by PESTEL modeling of energy efficiency retrofit for existing
residential buildings in china's northern heating region. Energy
Policy, 37(6), 2098.
Yüksel, I. (2012). Developing a multi-criteria decision making
model for PESTEL analysis.
International Journal of Business and Management, 7(24), 52-
66.
SWOT Analysis
POSITIVE
NEGATIVE
Internal
STRENGTHS
· Political stability
· Security

14. · Economy
· Technology
WEAKNESSES
· Predictable culture
· Neatness and fashion
· Open to many visitors
External
OPPORTUNITIES
· Growth of tourism
· New potential Market
· Expanding economy
THREATS
· Emerging culture
· World insecurity
· Dynamic Market
Political stability is an important factor for a business or a
country to succeed, because politics influence the other areas of
the business’ environment, for instance, people cannot invest in
a war-torn or unpredictable country. The security position of a
country at the World Arena is also crucial for investment.
Economically, France is a relatively stable country since it has
not been hit by the wave of economic meltdown that was
experienced by other developed countries. This country has a
high number of educated people, which is contributory in the
motivation of business. Being a developed country, France has
an advanced level of technology that can assist in the growth
and expansion of business; its geographical location is also
significant in the attraction of many international visitors.
Though, this proximity to other countries is also an issue
because it encourages counterfeits, which can interfere with the
genuine market.
While culture has been an instrument for economic and business
growth, France is being faced by threats caused by the
infiltration of new cultures into its society; which has made the
French culture begin to lose its luster. Culture can also work

15. against this situation because the French are need and also love
fashion; this can discourage people from associating with them
as far as business is concerned. Running an international hotel
may be difficult because citizens tend to prefer French food and
may not be willing to try international cuisines. Another issue
may be that some citizens are not welcoming towards people of
other nationalities, so a hotel with diverse employees may not
be embraced. Also, it is important to keep in mind that many
customers may be tourists.
References
Etiquette outreach. (2012). French-American Cultural
Differences in Business. Retrieved on April 11, 2014 from:
http://www.etiquetteoutreach.com/blog_new-york-etiquette-
guide/bid/83338/French-American-Cultural-Differences-in-
Business
About-France. (2014). The French economy: strengths and
weaknesses. Retrieved on April 11, 2014 from: http://about-
france.com/geo/french-economy.htm