Implications Of Onshore And Offshore Business Process For Avery Dennison

Organization Background

Discuss about the Implications of Onshore and Offshore Business Process.

The report focuses on the SA manufacturer of Australia “Avery Dennison”. The organization moves its business due to numerous competitive advantage in Australia (Corporate - Global Packaging Trends In Consumer Goods Packaging | Avery Dennison 2017).The moving of the business to offshore leads to loss of 40 local jobs. The organization moved its northern operations to various countries like India, Thailand and Malaysia.

The report discusses various external and internal issues that affect SA manufacturer. The report also illustrates the impact of shifting the offshore activities on the various identified stakeholders and analysis of the reason that affect the number of jobs continuation in Australia.

The organization “Avery Dennison” is a manufacturer as well as distributor of sensitive adhesive material, branding tags, levels and especially medical products. The organization wants to shift some of its operation to offshore which resulted in loss of 40 jobs (SA Manufacturer To Move Offshore 2017). The organization informed its staff that the Edinburgh North operation will be transferred to various countries including India, Thailand and Malaysia. The executive of the organization mentioned that the affected staff will be provided with some opportunities in different areas of business.

The organization “Avery Dennison” takes the step of moving the business to offshore in order to address various challenges of the market condition with which the organization got affected (Corporate - Global Packaging Trends In Consumer Goods Packaging | Avery Dennison 2017). The organization is supporting its employees so that the can cope up with the changing environment but the step of the organization have resulted in numerous jobs. The organization works closely with various union as well as government agencies for helping the employees. The steps of moving some of the specific operations of the business are mainly for gaining competitive advantage in the market of Australia.

 The organization decided to shift some of its operations due to some reasons which resulted in loss of 40 jobs. The decision of shifting the organization is due to some of the external issues (SA Manufacturer To Move Offshore 2017). The external issue that is faced Avery Dennison is analyzed with the help of Porter Diamond model. The model helps in reflecting the competitive position of the organization.  The model is illustrated below:

 The factor conditions: The organization faces problems as there is unavailability of proper research on the materials that are used by the company (Riasi 2015).The employees are not trained as a result they do not have proper and effective knowledge.

External issues that affect SA manufacturer and driven it to employ a strategy that has resulted in moving jobs offshore

Related and supporting industries: The organization does not get enough support from its competitors but they generate number of challenges for Avery Dennison in the market place by selling the products at lower prices.

Home Demand Conditions: The organization is not achieving proper financial benefits while operating in Australia as because of its competitors (Jarungkitkul and Sukcharoensin 2016).The market of the company diminishes as its competitor’s sales products at low prices.

Strategy, structure and Rivalry: The strategy of the organization is organized properly for aging the goals as well as objectives of the organization. The cultural aspect of Australia plays an important role in the development of Avery Dennison but the organization faces huge competition from its rivalry (Lu, Wu and Meng 2015). The organization is facing huge challenges for the market of Australia.

Government: The government of Australia encourages the organization in the development procedure of Avery Dennison (Liu and Mao 2014).The government finance system helps in providing a major support to the organization but some of the regulations made by the government have a negative impact on the growth of the organization.

Chance Events: The organization does not any new opportunities in the market of Australia to starting a new operation.

After analyzing the Porters Diamond model, it is identified that the organization faces numerous challenges due to its competitors and therefore it decided to move some of its jobs offshore. The Porter’s Diamond model helps in all the reflecting all the external issues that is the cause of shifting jobs offshore.

The organization “Avery Dennison” is moving some of its operations to offshore. This is for gaining competitive advantage in the market of Australia as the organizations have faced numerous challenges in the market of Australia (SA Manufacturer To Move Offshore 2017). The decisions of shifting the operations of the organization have both advantages as well as disadvantages. In order to analyze all the advantages as well as disadvantage of moving jobs offshore, SWOT analysis is selected.  The analysis will reflect some of the strategy which is considered by the organization for moving the jobs offshore. The SWOT analysis is considered as one of the useful technique for illustrating comprehensive strengths, weaknesses, potential opportunities as well as threats (von Kodolitsch et al. 2015).

Strengths: The operation of the organization includes more than 200 facilities of manufacturing globally with 40, 000 employees approximately. The organizations have strong market presence in Australia including sales as well as various distribution networks. It is analyzed that the annual collection of revenue from the Southern Australian zone is too high and therefore the organization have strong financial position in the parts of Australia (Chen, Kim and Yamaguchi 2014). In Australia the organization does not have spent money in training employees as the staffs of the organization are quite experiences. The labor cost is also too low as compared to other countries. Therefore the revenue collected from the Australian zone is high. The presence of monetary assistance plays a major role in strengthening the position of Avery Dennison in Australia. All this points helps in reflecting the strengths as well as advantages of having business in Australia.

Internal issues that are making SA manufacturer to consider moving jobs offshore as a part of its strategy

Weaknesses:  The organization faces problems due to prediction of future probability as well as future market size. The products of the organization have high prices as compared to the products that are sold by its competitors (Uhrenfeldt et al. 2014). This is one of the major drawback or weakness of the company. The organization faces number of challenges due to the current market condition of Australia. The operation clash flows of the organizations are also weak which is mainly due to weak return on equity over the industrial sector.

Opportunities: There are number of opportunities for Avery Dennison due to the rising demand of the products. The various emerging market in different countries is quite advantageous for the products as well as services of the organization. The new markets are considered as an opportunity for Avery Dennison where they can expand their various operations (Bull et al. 2016). They can introduce new product as well as services in different countries due to the emergence of new markets. It is analyzed that the Strategic acquisitions of Paxar Corporation have exposed the fact that the organization is wider customer based in the economic zone of Australia.

Threats: There are number of threats that are faced by the organization. The threats included enhanced cost of raw material as well as labor (von Kodolitsch et al. 2015).With the changes in the market the organization have to face this type of challenges. The competitors of the organization are coming with better quality of product at low price and the labor cost is increasing constantly. The regulations of the government generated number of risks in the growth of the company in Australia.

It is analyzed that shifting of various operations to offshore is done by the organization is due to the threats that are present in the market of Australia. The organization faces number of opportunities that leads “Avery Dennison” to shift its business.

The different stakeholders of the organization include the employees of the organization, the customers, chief executive officer, human resource manager, supplier, and government.

Chief Executive officer: The chief executive officer of the organization faces many challenges due to the shift (Riasi 2015). They have a responsibility to provide some opportunities to the employees whose jobs were lost due to the decision of shifting. The organization needs to implement several procedures for managing the change within the organization effectively.

Government: The regulations which have been created by the government got affected and as a result it creates a negative result in the growth of the organization and this is due to shifting of the jobs to offshore (Cummings and Worley 2014).

Human resource manager: The HR manager also gets affected and as a result they have to implement change management properly within the organization as well as they have to sack the employees of the organization which is one of the difficult jobs (Trussell and Chevis 2014). Due to the decision of the organization, around 40 people got affected.

Supplier: The suppliers got affected significantly. The raw materials that are provided to the organization will be stopped due to the decision of moving the business operations to offshore (Baskaran 2016) The suppliers will face huge loss due to this shifting.

Employees: The organization’s decisions have affected around 40 jobs of the Australians. The have to search new job and as a result their source of income got affected a lot.

Customers: The customers will get products of Avery Dennison at higher price than the process they usually get (Thompson et al. 2013) The shift of the organization to offshore result into additional taxes as well as transportation cost which increases the entire cost of the products.

 There are number of reasons of keeping the various jobs as well as operations onshore by the organization Avery Dennison. This is because in the Australian market the organizations have number of opportunities including lower cost of the labor, experienced employees within the organization and presence of monitory assistance (SA Manufacturer To Move Offshore 2017). These factors are quite advantageous for the organization in achieving benefit in the market of Australia. The lower cost of the labor helps in saving a huge amount of financial expense of the organization. The presence of monetary assistance plays a major role in strengthening the position of Avery Dennison in Australia (Onshore Implications - Seafish 2017). The organization have strong market position in Australia therefore keeping numerous jobs onshore helps in grabbing the entire market of Australia by providing string competition to the various competitors. The sale of the organization does not also get affected.

There are number of implications of keeping various jobs onshore which includes:

 Sales of the organization do not get affected: Due to the presence of several jobs in offshore the organization has a grab on Australian market (Whitaker 2017). Therefore sales of Avery Dennison do not get affected.

Reduced overheads: it helps in reducing overheads as the labor cost is too low which is advantageous for Avery Dennison (Onshore Implications - Seafish 2017). 

Availability: The staff or employees are easily available and they do not require training. The employees are quite experienced which is advantageous in saving the financial expense of Avery Dennison.

Conclusions

It is concluded that the organization Avery Dennison shifted some of its operation to offshore as it faces huge completion in the Australian market and shifting of operations provides numerous opportunities to the organization. The opportunities that the organization gets after achieving its business includes rising demand, new markets and opportunities to implement new services as well as products. The organization faces numerous external as well as internal issues in Australia therefore decided to shift its business offshore which leads to loss of 40 jobs. It is analyzed that different stakeholders of the organization gets affected due to the decision of shifting.

References

"Corporate - Global Packaging Trends In Consumer Goods Packaging | Avery Dennison". 2017. Averydennison.Com. https://www.averydennison.com/en/home.html.

"Onshore Implications - Seafish". 2017. Seafish.Org. https://www.seafish.org/responsible-sourcing/conserving-fish-stocks/discards/landing-obligation/onshore-implications.

"SA Manufacturer To Move Offshore". 2017. Adelaidenow.Com.Au. https://www.adelaidenow.com.au/business/sa-manufacturer-to-move-offshore-affecting-40-employees/news-story/2abe06850f17da5bd5d25c3256c7bdb1.

Baskaran, R.V., 2016. A critical study into discerning challenges posed by visible US based BPOs an open-source onshore model which is a hybrid between outsourcing and captive. Indian Journal of Applied Research, 6(3).

Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, 17, pp.99-111.

Chen, W.M., Kim, H. and Yamaguchi, H., 2014. Renewable energy in eastern Asia: Renewable energy policy review and comparative SWOT analysis for promoting renewable energy in Japan, South Korea, and Taiwan. Energy Policy, 74, pp.319-329.

Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage learning.

Jarungkitkul, W. and Sukcharoensin, S., 2016. Benchmarking the competitiveness of the ASEAN 5 equity markets: an application of Porter’s diamond model. Benchmarking: An International Journal, 23(5).

Liu, X. and Mao, H.Y., 2014. Analysis on Problems of Liaoning Tourism Industry Based on DIAMOND MODEL. In Applied Mechanics and Materials (Vol. 651, pp. 1527-1530). Trans Tech Publications.

Lu, M., Wu, Z. and Meng, Q., 2015. Comprehensive Development Evaluation System of Asian Infrastructure Investment Bank Based on Double Diamond Model. American Journal of Industrial and Business Management, 5(07), p.518.

Riasi, A., 2015. Competitive advantages of shadow banking industry: An analysis using Porter diamond model. Business Management and Strategy, 6(2), pp.15-27.

Trussell, J. and Chevis, M., 2014, May. Olympus TLP Operations Team–Enabling a community of excellence. In Offshore Technology Conference. Offshore Technology Conference.

Uhrenfeldt, L., Lakanmaa, R.L., Flinkman, M., Basto, M.L. and Attree, M., 2014. Collaboration: A SWOT analysis of the process of conducting a review of nursing workforce policies in five European countries. Journal of nursing management, 22(4), pp.485-498.

von Kodolitsch, Y., Bernhardt, A.M., Robinson, P.N., Kölbel, T., Reichenspurner, H., Debus, S. and Detter, C., 2015. Analysis of strengths, weaknesses, opportunities, and threats as a tool for translating evidence into Individualized medical strategies (I-SWOT). AORTA Journal, 3(3), p.98.

Whitaker, Jonathan William. 2017. "Implications Of Onshore And Offshore Business Process Outsourcing For Firms And Customers.". Deepblue.Lib.Umich.Edu. https://deepblue.lib.umich.edu/handle/2027.42/126853.