Strategizing in global production networks, Rachel Parker

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Strategizing in global production networks:Connections with CCI research themesData set on global VFX industryFindingsConnection with CCI streams for extended life

VFX dataInterviews54 including 24 with firms (11 in Australia, 7 in London, 6 in Canada), 16 with employees in Australia, 14 with other Australian industry experts, 1 VFX producer in LA)Questions: opportunities created by technological change, globalisation strategies for addressing environmental constraints and market uncertainty in GVCVFX credit database2504 VFX credits from IMDB.comExchange partners (local and global), industry segments, variations across region and time

Critical strategic and operational problems for VFX firms in GVC

Position in value chainLimited exchange partnersIntense competition with and across regionsBottom of food chainUncertainty arising from intangible nature of service delivery (relational value chain Gereffi et. al. 2005).Codification of product specifications difficultTransactions complex

Critical strategic and operational problems for VFX firms in GVC

Producers know how to play the game and triumph. They go X, Y, Z, get all the bids, go back again X, Y, Z and then just play and play and play until players just pull out and say you know what, its just not worth it. Its just not worth competing (Canadian VFX firm)

The VFX companies are at the bottom of the food chain (London VFX firm)

Its as per the story board. The story board is a very general kind of thing, huge amount of room for interpretation (London VFX firm)

Contract variation management has globally I think been a challenge for a lot of people. How you manage the client, especially clients who can leverage the intangible nature of service delivery. What classifies as completed delivery? (Australian VFX firm)

Critical strategic and operational problems for VFX firms in GVC

CCI theme connectionsHow do firms manage these strategic and operational problems? Interdisciplinary analysis drawing on global production network theory (economic geography) and resource dependency theory (strategic management) Strategies for responding to pressures of GPN and operational responses to contract variation provide insights into:CCI theme B(ii) Mapping the creative economy by providing toolsets for practitioners to improve their performance at the business of being creativeCCI theme A (iii) Actually existing innovation, particularly service industry componentCCI theme C (ii) Business process managementPatterns of global network relations in VFXCCI theme B (iii) Spatial network analysis of the games industry

Strategic responses to position in GVCAdapt by controlling key inputs labour and technology by choosing market segmentsSmall core workforce, limited workstations, low-engineered solutions, 2D, low budget filmsLarger core workforce, upscaling capacity, large technology infrastructure, R&D intensive 3D VFX projectsAvoid pressures by manoeuvring within and across value chainsDiversificationCapturing IP, moving into productionCCI theme connections: moving within and across GVC is an important component of business of being creative

Operational responses to intangible nature of service deliveryStage 1: dialogue, careful costing, concept phase, preview VFX workI think once they went through that they were confident and they felt that they could comment or they had an input on the final production. I think thats what they want (Canadian VFX firmStage 2: work monitoring and early intervention Stage 3: communication with clientCCI theme connection: organisational process innovations which manage exchange relations are critical within service industries and are an extension of business process modelling

Geography of VFX industryIncreasing globalisation butDistance is a barrierHollywood decides on global distribution of workFirms are not embedded in local creative clusters involving collaboration and knowledge sharing (highly political and competitive relations within and across regions)Knowledge flows as much global as localIntense competition between regionsCCI theme: cross-sectoral comparison of spatial network mapping