It Companies’Operating Model And Operational Efficiency Analysis

The globalization of the world economy is putting unprecedented competitive pressureon enterprises, especially IT companies, which are facing increasingly severe competitionfrom foreign IT giants. Rapidly changing customer requirements, the increasing pace of newproduct development, and the decreasing product life cycles all put enterprises that rely solelyon low price strategies at a distinct competitive disadvantage. Advanced managementconcepts have been developed to address customers’ product quality, pricing requirements,and service needs. Enterprises need to adopt advanced management concepts to enhancetheir core competitiveness, win customers, and become market leaders in a globalized marketenvironment.Based on the Value Chain Management Theory, this paper briefly introduces andanalyzes several operating modes: self-assembly, Consign, Turn-key, warehousing andlogistics outsourcing, and just-in-time production. Following this introduction is acomparative analysis of the advantages and disadvantages of different operating modes withrespect to operational and production costs. Finally, a theoretical analysis of ‘HS Company’and its product costs in comparison to industry averages will confirm that the evolution andoptimization of HS Company’s operation mode will successfully yield greater efficiency forthe company.In this paper, the case study of the ‘HS Company’ and its operational efficiency isrepresentative of other IT companies’ operating modes and the current and developing trendsthat affect them. This case study outlines a successful and efficient evolutionary path fortoday’s IT companies and it can be used to draw some general guidelines for the selection anddevelopment of the optimal operating mode in the conditions faced today by many domesticIT enterprises.