Scribd
Upload
48 views33 pages

Prelim Topics, PPT 2

The document discusses competitiveness and operations strategy. It covers topics like gaining competitive advantage, understanding customer requirements, competitive priorities, product design, production processes, capacity, quality, and inventory management. It also discusses the relationship between operations strategy, business strategy, and a company's competitive priorities.

Uploaded by

Mark
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
48 views33 pages

Prelim Topics, PPT 2

The document discusses competitiveness and operations strategy. It covers topics like gaining competitive advantage, understanding customer requirements, competitive priorities, product design, production processes, capacity, quality, and inventory management. It also discusses the relationship between operations strategy, business strategy, and a company's competitive priorities.

Uploaded by

Mark
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 33

COMPETITIVENESS

Gaining Competitive Advantage

Understanding Customer Requirement

Customer Benefit Packages

Competitive Priorities
Can give reasons on business organizations
failure.
Can explain reasons for the poor
competitiveness of some companies.
Define the term strategy and can discuss the
importance on it.
Can internalize the importance of VMGO in
organization.
 Competitiveness:

 How effectively an organization meets the wants and


needs of customers relative to others that offer similar
goods or services
 Organizations compete through some combination of
their marketing and operations functions
• What do customers want?
• How can these customer needs be best satisfied?
Competitive Strategy is about being different. It means
deliberately choosing to perform activities differently or to
perform different activities than rivals to deliver a unique mix
of value.

- Michael Porter
1. Product and service design
2. Cost
3. Location
4. Quality
5. Quick response
6. Flexibility
7. Inventory management
8. Supply chain management
9. Service
10. Managers and workers
 Operations strategy
 The approach, consistent with organization strategy, that is used to
guide the operations function.

Decision Area What the Decisions Affect


Product and service design Costs, quality, liability, and environmental issues
Capacity Cost, structure, flexibility
Process selection and layout Costs, flexibility, skill level needed, capacity

Work design Quality of work life, employee safety, productivity


Location Costs, visibility
Quality Ability to meet or exceed customer expectations
Inventory Costs, shortages
Maintenance Costs, equipment reliability, productivity
Scheduling Flexibility, efficiency
Supply chains Costs, quality, agility, shortages, vendor relations
Projects Costs, new products, services, or operating systems
l Positioning the production system

l Product/service plans

l Outsourcing plans

l Process and technology plans

l Strategic allocation of resources

l Facility plans: capacity, location, and layout


l Select the type of product design
l Standard
l Custom
l Select the type of production processing system
l Product focused
l Process focused
l Select the type of finished-goods inventory policy
l Produce-to-stock
l Produce-to-order
As a product is designed, all the detailed
characteristics of the product are established.

Each product characteristic directly


affects how the product can be made.

How the product is made determines


the design of the production system.
 Introduction- Sales begin, production and marketing are
developing, profits are negative.
 Growth - sales grow dramatically, marketing efforts
intensify, capacity is expanded, profits begin.
 Maturity - production focuses on high-volume,
efficiency, low costs; marketing focuses on competitive
sales promotion; profits are at peak.
 Decline - declining sales and profit; product might be
dropped or replaced.
 Outsourcing refers to hiring out or subcontracting some
of the work that a company needs to do.

 This strategy is being used more and more as companies


strive to operate more efficiently.

 Outsourcing has many advantages and disadvantages.

 Companies try to determine the best level of out-


sourcing to achieve their operations & business goals.

 More outsourcing requires a company to have less


equipment, fewer employees, and a smaller facility.
 A company might outsource any of the
following manufacturing related functions:
 Designing the product

 Purchasing the basic raw materials

 Processing the subcomponents, subassemblies,


major assemblies, and finished product

 Distributing the product


 Many companies even outsource some service
functions such as:
 Payroll

 Billing

 Order processing

 Developing/maintaining a website

 Employee recruitment

 Facility maintenance
 An essential part of operations strategy is the
determination of how products/services will
be produced.

 The range of technologies available to


produce products/services is great and is
continually changing.
 For most companies, the vast majority of the
firm’s resources are used in
production/operations.
 Some or all of these resources are limited.
 The resources must be allocated to products,
services, projects, or profit opportunities in
ways that maximize the achievement of the
operations objectives.
 How to provide the long-range capacity to
produce the firm’s products/services is a critical
strategic decision.
 The location of a new facility may need to be
decided.
 The internal arrangement (layout) of workers,
equipment, and functional areas within a facility
affects the ability to provide the desired
volume, quality, and cost of products/services.
Corporate Mission
Assessment Distinctive
of Global Competencies
Business Business Strategy or
Conditions Weaknesses
Product/Service Plans

Competitive Priorities

Operations Strategy
 A corporate mission is a set of long-range
goals and including statements about:
 the kind of business the company wants to be in

 who its customers are

 its basic beliefs about business

 its goals of survival, growth, and profitability


 Business strategy is a long-range game plan of an
organization and provides a road map of how to
achieve the corporate mission.

 Inputs to the business strategy are


 Assessment of global business conditions - social,
economic, political, technological, competitive

 Distinctive competencies or weaknesses - workers,


sales force, R&D, technology, management
 Effective strategy formulation requires taking into
account(SWOT analysis):
 Core competencies
 Environmental scanning

SWOT Analysis
 Strengths
 Weaknesses
 Opportunities
 Threats
 Core Competencies
The special attributes or abilities that give an
organization a competitive edge
 To be effective, core competencies and strategies need to be
aligned
1. Cost

2. Quality

3. Response time

4. Customer service
 Low Production Costs
 Definition

Unit cost (labor, material, and overhead) of


each product/service
 Some Ways of Creating
 Redesign of product/service
 New technology
 Increase in production rates
 Reduction of scrap/waste
 Reduction of inventory
 Delivery Performance

 Definition
a) Fast delivery b) On-time delivery
 Some Ways of Creating
a) larger finished-goods inventory
a) faster production rates
a) quicker shipping methods
b) more-realistic promises
b) better control of production of orders
b) better information systems
 High-Quality Products/Services
 Definition
Customers’ perception of degree of excellence
exhibited by products/services
 Some Ways of Creating
Improve product/service’s
 Appearance
 Performance and function
 Wear, endurance ability
 After-sales service
 Customer Service and Flexibility
 Definition
Ability to quickly change production to other
products/services. Customer responsiveness.
 Some Ways of Creating
 Change in type of processes used
 Use of advanced technologies
 Reduction in WIP through lean manufacturing
 Increase in capacity
 The competitive priorities listed earlier for
manufacturers apply to service firms as well

 Low production costs


 Fast and on-time delivery
 High-quality products/services
 Customer service and flexibility

 Providing all the priorities simultaneously to


customers is seldom possible.
 Support the product plans and competitive
priorities defined in the business strategy.

 Adjust to the evolving positioning strategies.

 Link to the marketing strategies.

 Look at alternative operations strategies.


Life Early Late
Intro. Maturity
Stage Growth Growth
Slightly Highly
Product Custom Standard
Standard Standard
Very Very
Volume Low High
Low High
Prod mode Process Process Product Product
Inventory. To
To--Order To
To--Order To
To--Stock To
To--Stock
Batch Very Very
Small Large
Size Small Large
 Operations Strategy
 Product-focused
 Make-to-stock
 Standardized products
 High volume
 Marketing Strategy
 Low production cost
 Fast delivery of products
 Quality

 Example: TV sets
 Start-up and Small Manufacturers
Usually prefer positioning strategies with:

 Custom products

 Process-focused production

 Produce-to-order policies

These systems are more flexible and require less

capital.
In what ways are companies considered
advantageous to their rivalries?

1. People
2. Organizational Culture & Structure
3. Processes & Practices
4. Products and Intellectual Property
5. Capital & Natural Resources
6. Advanced Technology

You might also like