Chapter 2: Competitiveness, strategic planning and productivity Flashcards
why go global?
- favourable cost
- access to international markets
- response to changes in demand
- reliable sources of supply
- latest trends and technologies
why has globalisation increased?
from the internet and falling trade barriers
competitiveness
how effectively an organization meets the needs of customers relative to others that offer similar goods or services
the most common measure of competitiveness is
productivity
marketing influences competitiveness in several ways:
- identifying customer wants and needs
- competing on price
- advertising and promotion
- product and service design
operations has a major influences on competitiveness through:
- product and service design
- cost of output
- location
- competing on quality
- flexibility
- competing on time
- competing on variety
- service
- managers and workers
product and service design:
should reflect joint effort of many areas of the firm to achieve a match between financial resources, operations capabilities, supply chains capabilities, and consumers buying decision
cost of output
is a key variable that effects pricing decision and profits. Cost reduction efforts are generally ongoing in business organization
location
can be important in terms of cost and convenience for customers. Location near inputs can result in lower input cost
competing on quality
It relates to how well the product or services will serve its intended purpose (ways to please customer not only to avoid problems)
flexiblity
is the ability to respond to changes. changes might relate to alterations in design features or service, or to the volume demanded
competing on time
refers to how quickly a products or service is delivered to the customers. such as fedex, mcDonalds’s have have always competed on speed
competing on variety
is the ability to produce a wide variety of products, to introduce new products and modify the existing one quickly and respond to customer needs
inventory management
can be competitive advantage by effectively matching supplies of goods with demand
service
might involve after sale activities customer perceive as added value, such as setup, warranty, courtesy, keeping the customer informed, and attention to details
managers and workers
people are the heat and soul of the organization, and if they are competent and motivated, they can provide a distinct competitive advantage by their skills and the ideas they create
business organizations compete with one another in a variety of ways
price quality customer service variety timeliness location differentiation
prices
the amount a customer must pay for a product or service
timeliness
it relates to how swell the product or service will serve its intended purpose
customer service
might involve after sales activities that perceived by customers as value added
the key to successfully competing:
is to determine what customers want and then direct efforts toward meeting (or exceeding) customer expectations
in formulating a successful strategy, organizations must take into account:
both order qualifiers and order winners
for example, when purchasing a smartphone, customer may determine a prices range (order qualifier) and then choose the products with most features (order winner) within that price range. looking at the iphone-6 or 7. Screen Camera upgrades- resolution, and brightness
order qualifiers
are the characteristics that customer perceive as minimum standard of acceptability to be considered as a potential for purchase (what qualifies an item to be considered for purchase)
order winners
are the characteristics of an organization’s goods or services that cause it to be perceived as better than competition (what wins the order). (UHDTV< HDTV, SUHDTV)
mission/vision
the reason for organization existence
mission
is where the organization is going now, its product, and its market (defines an organization’s purpose or reason for existence)
vision
is where the organization desires to be in the future
mission/vision statement:
a clear statement of purpose
- should serve to guide strategy
- statement provides general direction for an organization and should lead to organizational goals or objectives
strategy
a plan for achieving organization mission/goals
-a strategy is a set of coordinated broad long term policies, objectives and action programs to achieve goals
-organizations have overall strategies called organization or business strategies, which are related to the entire organization, and they have functional strategies or tactical, which related to the functional areas of the organization. then operations strategy
organizational strategy
a plan for achieving organization mission/vision/goals
tactics
medium-term plans, methods, and actions taken to accomplish strategies
operation strategy
short-term plans, methods, and actions taken to accomplish tactical and organizational strategy
quality based strategies
- maintain or improve quality
- may use initiatives such as 6-sigma or process re-engineering
time based strategies
focuses on reduction of time needed to accomplish tasks
productivity
a measure of the effective use of resources, usually expressed as the ratio of output to input
productivity = outputs/inputs
productivity ratios can be computed for:
a worker
a department
an organization
a country
measures of productivity
- partial measures (single input)
- multi-factor measures (multiple inputs)
- total measure (total inputs)
partial productivity measures
- labour productivity
- machine productivity
- capital productivity
- energy productivity
labour productivity
- units of output per labour hour
- units of output per shift
- value-added per labour hour
machine productivity
units of output per machine hour
capital productivity
- units of output per dollar input
- dollar value of output per dollar input
energy productivity
- units of output per kilowatt-hour
- dollar value of output per kilowatt-hour
productivity does not equal efficiency. It is used to
- track performance over time
- determine areas for improvement
- compare competitiveness
service productivity is more difficult to measure than manufacturing productivity for two main reasons:
- difficult to find a measure of output (activities with a high degree of variability in both output and input for example: medical diagnosis, legal services, arts, painting)
- sometimes the measures of output result in misleading conclusions (measure the productivity of a hospital by the number of patient-days of care provided).
factors affecting productivity
- methods
- management
- technology
- labour
improving productivity
- develop productivity measures
- determine critical (bottleneck) operations
- develop methods for productivity improvements
- establish reasonable goals
- get management support
- measure and publicize improvements
- don’t confuse productivity with efficiency
