PLANT STRATEGY

Running Head: PLANT STRATEGY

Plant Strategy

Name

Institution

Plant Strategies

Introduction

When making decisions to open, expand or close plants, firms must come up with strategies in order shape their present decisions and the strategies they will use in future.

Firm Strategies in Future

For a firm to open a new plant, they have to do an analysis and determine the plant performance for over ten years. Thus, if they open or expand plant they must come up with strategies that will focus on improving the new plant performance before coming up with other plants (Tomiura, 2003).

In future, the strategies must be developed based on the successes and weaknesses of the new plant that the firm comes up with. If a firm decides to close a plant, this decision will affect the future strategies of the plant. The firm may decide to close a plant in order to open a new plant in another area that has a greater possibility for the plant’s business to flourish. Thus, in future the firm’s strategies must include opening new plants or expanding the existing ones.

Flexibility of Plant Capacities

In comparison to other decision variables that the simulation allows, a firm can be remarkably flexible with plant capacity. Elevated the plant competences lower the suppleness of a plant. Thus, Firms with plants that have low production capacities are highly flexible. Consequently for a firm to be flexible, other variables are not significant determinants compared to the capacity of a firm (Tomiura, 2003).

The decisions on plant flexibility based on a plant capacity, has a significant impact on the firm’s strategy choice in the future. The decision largely influences the firms’ ability to open, expand, or close down a plant.

If a firm decides to have a plant with an exceptionally high production capacity, this decision is likely to impact of the decisions in future strategies. For instance, the firm will not be able to close or expand the plant easily. If a firm decides to have a plant with low production capacity, in the future they can easily expand or close the plant depending on the firm’s demands.

Acquisition of celebrities in Branded Market

Decisions made by a firm determine whether they successfully or unsuccessfully bid on celebrities. If a firm decides to acquire celebrities, this decision limits the firm’s strategic choices in the branded market in the future (Private Label in the U.S. –, 2011).

The firm’s performance will largely depend on the popularity of the celebrities. Thus in their future strategies the firm must put in plans to make sure that celebrities remain popular. On the other hand, they must also come up with a strategy to keep their brands successful even if the celebrities have poor performances and lose their popularity. If a firm does not acquire celebrities, its performance will be stable, minimizing the apparent turbulence caused by the wavering popularity that many celebrities face and its backlash on the endorsing firm.

It is possible for a firm to have few or many celebrities. This will depend on the number of branded products that they have. Many celebrities can be acquired by a firm that wants to create a brand or new collection for each one of them. However, a firm can decide to have a few celebrities if they want to have a few brands with many items instead of having many brands.

References

Tomiura, E. (2003). Capacity Constraint and Seasonal Productivity Variations at Plant Level. Applied Economics Letters, 10 (3), 197-200. Retrieved < HYPERLINK “https://ehis.ebscohost.com/eds/”https://ehis.ebscohost.com/eds/>

Private Label in the U.S. — Growth? Yes, Though Not to the Market Share Levels Seen in the U.K. (2011). Black Book – U.S. Food’s Growing Pains: Challenges in the United States & Overseas, 111-127. Retrieved < https://ehis.ebscohost.com/eds/result>