Chapter 2: Strategy and Sustainability

Question 1

List the 3 factors of the Triple Bottom Line

Answer 1

• Social responsibility — pertains to fair and beneficial business practices toward labor, the community, and the region in which a firm conducts its business
• Economic prosperity — the firm is obligated to compensate shareholders who provide capital through stock purchases and other financial instruments via a competitive return on investment
• Environmental stewardship — The company should protect the environment as much as possible—or at least cause no harm

Question 2

Define Operations & supply chain strategy and Operations Effectiveness

Answer 2

Operations and supply chain strategy: The setting of broad policies and plans that will guide the use of the resources needed by the firm to implement its corporate strategy.

Operations effectiveness: Performing activities in a manner that best implements strategic priorities at minimum cost.

Question 3

Describe the three components of the Strategic Planning Process

Answer 3

• Strategic analysis — involves looking out and forecasting how business conditions that impact the firm’s strategy are going to change in the future (ex. Consumer preferences, impact of new technologies, changes in demographics, etc.)
• Initiatives are the major steps that need to be taken to drive success in the firm (ex. Updating existing product designs)
• Projects are used to implement change — The planning of these projects requires the identification of the resources needed, such as the expertise of the project members, special equipment, and other resources

Question 4

Define the six Competitive Dimensions

Answer 4

Cost or Price: “Make the Product or Deliver the Service Cheap”
* Firm being a low cost producer, to keep product costs low
* Large economies of scale
* Hard to distinguish products
* Competition is high

Quality: “Make a Great Product or Deliver a Great Service”
Two characteristics of quality:
* Design quality - features of the product
* Process quality - reliability of product, no defects

Delivery Speed: “Make the Product or Deliver the Service Quickly”
* Firm’s ability to deliver fast

Delivery Reliability: “Deliver It When Promised”
* Delivering the product on time without further delay

Coping with Changes in Demand: “Change Its Volume”
* Agility: a company’s ability to respond to increases and decreases in demand

Flexibility and New-Product Introduction Speed: “Change It”
* Ability for the company to provide a wide variety of products
* To develop a new product to meet the demand

Question 5

What is it meant by the notion of trade off? In concern to the competitive dimensions

Answer 5

• Firm cannot excel in all competitive dimensions, so they will have to decide which parameters of performance are critical to the success of the firm
  ○ Ex. If a company wants to focus on speed, it cannot be * * very flexible in offer a wide range of products
• **Higher quality is a trade off for low cost **

Question 6

Define Straddling

Answer 6

Straddling: When a firm seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates problems if certain trade-offs need to be made.

Question 7

Define Order winners and Order qualifiers

Answer 7

Order winners: One or more specific marketing-oriented dimensions that clearly differentiate a product from competing products.
* Ex. the order-winning criterion may be the cost of the product (price), product quality and reliability

Order qualifiers: Dimensions used to screen a product or service as a candidate for purchase.
* Ex. consider your purchase of a notebook computer. You might think that such features as screen size, weight, operating system version, and cost are important qualifying dimensions

Question 8

Define Activity-system Maps

Answer 8

Activity-system Maps: Diagrams that show how a company’s strategy is delivered through a set of supporting activities.

Question 9

Define Supply chain risk and explain the two catergories of them

Answer 9

Supply chain risk: The likelihood of a disruption that would impact the ability of a company to continuously supply products or services.

Categorize risk by
(1) risks that are associated with the day-to-day management of the supply chain, which are normally dealt with using safety stock, safety lead time, overtime, and so on;
(2) disruption risks, which are caused by natural or human-made disasters, such as earthquakes, hurricanes, terrorism, and even pandemics

Question 10

Define Productivity, give formula, and explain the difference between partial productivity measure, multifactor productivity measure, and total factor measure

Answer 10

Productivity: A measure of how well resources are used.
Producitivity = Outputs/Inputs

Partial productivity measure: concerned with the ratio of some output to a single input

• Ex. Finished Units/Energy

Multifactor productivity measure: the ratio of some output to a group of inputs (but not all inputs)

• Ex. Finished Units / Labour + Material

Total factor measure: expresses the ratio of all outputs to all inputs, — describes the productivity of an entire organization

• Ex. Total Outputs/ Total Inputs