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List and briefly discuss the primary ways that business organizations compete. List five reasons for the poor competitiveness of some companies. Define the term strategy and explain why strategy is important for competitiveness. Contrast strategy and tactics.
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Learning Objectives
Discuss and compare organization strategy and operations strategy, and explain why it is important to link the two. Describe and give examples of time-based strategies. Define the term productivity and explain why it is important to organizations and to countries. List some of the reasons for poor productivity and some ways of improving it.
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Competitiveness:
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
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Mission/Strategy/Tactics
Mission Strategy Tactics
How does mission, strategies and tactics relate to decision making and distinctive competencies?
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Strategy
Mission
Mission Statement
Goals
Strategies
Plans for achieving organizational goals
Tactics
Organizational Strategies
Functional Goals Finance Strategies Marketing Strategies Operations Strategies
Strategy Example
Example 1
Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably
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Examples of Strategies
Low cost Scale-based strategies Specialization Flexible operations High quality Service
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Strategy Factors
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Low Cost
High-performance design Sony TV or high quality Consistent Lexus, Cadillac quality Pepsi, Kodak, Motorola Rapid delivery On-time delivery Variety Volume Superior customer service Convenience Express Mail, Fedex, One-hour photo, UPS Burger King Supermarkets Disneyland Nordstroms Banks, ATMs
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Global Strategy
Strategic decisions must be made with respect to globalization What works in one country may not work in another Strategies must be changed to account for these differences Other issues
Political, social, cultural, and economic differences
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Strategy Formulation
Distinctive competencies Environmental scanning SWOT Order qualifiers Order winners
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Strategy Formulation
Order qualifiers
Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase
Order winners
Characteristics of an organizations goods or services that cause it to be perceived as better than the competition
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Operations Strategy
Operations strategy The approach, consistent with organization strategy, that is used to guide the operations function.
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Strategic OM Decisions
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Decision Area
Product and service design Capacity Process selection and layout
Affects
Costs, quality liability and environmental Cost structure, flexibility Costs, flexibility, skill level, capacity
Work design
Location Quality Inventory Maintenance Scheduling Supply chains
Projects
Focuses on maintaining or improving the quality of an organizations products or services Quality at the source Focuses on reduction of time needed to accomplish tasks
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Time-based strategies
Time-based Strategies
JAN
Planning Designing Processing Changeover Delivery On time!
FEB
MAR
APR
MAY
JUN
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Outsourcing
Higher productivity in another company is a key reason organizations outsource work Improving productivity may reduce the need for outsourcing
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Improving Productivity
Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Dont confuse productivity with efficiency
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