Smoke Gets In Your Eyes

Apparently, it took 10 years for Reynolds American to realize that smoking is truly bad for you. Being the second-largest tobacco producer in America; this is a bit ironic. The new corporate policy, that is effective in the start of 2015, bans workers from smoking in the corporate offices located in Winston-Salem, North Carolina.

The workers will be given a “designated indoor smoking area” to smoke their cigarettes. However, electronic cigarettes will be allowed outside those areas.  The company is deciding to come in to terms with the safety of its products and states, “We’re well aware that there will be folks who see this as an irony, but we believe it’s the right thing to do and the right time to do it.”

So, what kind of effect does this have on the market place and operations of the company? Basically, the company is entailing that traditional cigarettes are harmful. They are sending out a mass message to their consumers saying that, the company is providing them with cancer sticks. So, who in their right mind would go buy a product from a company that bans their own workers from using it?

Imagine meeting a McDonalds employee and finding out that they can’t consume a Big Mac at work because the obesity rate has been skyrocketing. This would make a lot of people concerned about ever buying McDonalds again.

A business will only succeed, if they create and keep their customers. The company has sent out a marketing message that just might confuse their consumers. This decision might drop sales, having a massive effect on the operations of the company. The finances of the firm might get injured and the overall direction of the business might also get hurt. This message is not only concerned with marketing, but it affects the decision-making about production and operations as well.

The company might need to re-evaluate their strategic plan so it does not go in the wrong direction. The point of a strategic plan is to set the direction of a business, so the products and services meet the overall business objective. But, then what happens in this case when the company is setting a corporate environment that goes against the product they are mass-producing?

How will employees that smoke deal with situation? I’m certain that as a smoker; a person working for a tobacco company is very proud and happy with what they do. So, will this make them unhappy and reduce their work ethic?

Personally, I think that this decision might have a negative effect on the sales, work ethic, company morale, and overall operations. People have known for decades that smoking cigarettes is bad for their health. Regardless, of the warnings they have continued to smoke.

What kind of effect do you think that will have on the company? Is this a good decision or bad?




The 5 Billion Dollar Strategic Decision

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Tesla motors is headed to Carson City, Nevada to plant their massive gigafactory. The California based electric car company made a 5 billion dollar decision and chose Nevada over California, Texas, New Mexico, and Arizona to build a advance battery factory.

This was one of the toughest decisions that the rapid growing company has faced. The company put so much emphasis on the location of the factory that made me wonder, why? Why should they care so much about a simple location? I then recalled the ten strategic decisions in operations management and how important and strategically planned a location should be. The five states were battling it out with one another as to who would get the opportunity to have a factory that would implicate “a move that Gov. Brian Sandovol estimates would have a $100 billion economic impact over the next 20 years” (WSJ).

The innovative company chose a state that offered them  $750 million and $1 billion in tax abatements and $195 million in tax credits. Not only focusing on costs; the company truly thought out the infrastructure and logistics. “Nevada is close to Tesla’s Fremont, California assembly plant and has ready access to lithium, a raw key material for batteries that power electric cars” (WSJ).

Tesla played their cards really well in selecting Nevada. By picking a spot in the sunny, desert state they will be able to fully support a massive plant that would be energy self sufficient, using geothermal, wind and sun to provide electricity.

Personally, I think this was one of the smartest decisions that the company could have made in operations. By picking a place like Nevada they will bloom the job market in the state while boosting their finances. Currently, the unemployment rate of Nevada has been drastically high due of the economic downfall. That being said the civilians of the state will work for relatively low wages compared to the workers in California or Texas. This will not only help employ the jobless people of Nevada, but will save Tesla millions of dollars.

This transaction will not only benefit Tesla, but will also have a positive impact on Nevada as a whole. Currently, the state is known for Las Vegas and its nightlife, but what about the rest of the state? According to Forbes, the state will benefit in more jobs, a population boost, and overall a stabilized infrastructure that will drive in more companies; which will result in  a positive effect on the state’s economy.

My question to everyone else is. What role do you think the location strategy plays in the success of the company? By being near customers, suppliers, and putting that much emphasis on the infrastructure; will it truly help the position of the company?