Functional Level Strategy Flashcards
Discuss the aspects of functional level strategy
- strategies aimed at improving effectiveness of operations
- improves company’s ability to create superior
- efficiency
- quality
- innovation
- customer responsiveness
- improves customer experience:
- through differentiation
- lower cost structures
- creating better value than rivals
List the functional steps to achieving superior efficiency (4)
Economies of scale Learning effects experience curve Flexible manufacturing and mass customization Marketing Materials management and supply chain R&D strategy Human resource strategy Information systems Infrastructure
Describe the marketing strategy
Refers to position that company takes regarding
- pricing
- promotion
- advertising
- distribution
- product design
Define customer defection rates
Percentage of customers who defect every year
- defection rates determined by customer loyalty
- loyalty is a function of the ability to satisfy customers
Discuss the role of R&D
Purpose is to help company achieve higher efficiency and reduce cost structures
- boost efficiency by designing products that are easy to manufacture
- reduces assembly time and parts required
- close coordination with production
- lowering cost structure by pioneering process innovations
- reduce process setup times
- flexible manufacturing
- important source of competitive advantage
Discuss the role of the human resource department
- hiring strategy: hires people with attributes that match strategic objectives
- employee trainning: upgrade employee skills to be more efficient
- self managing teams: members coordinate own activities and make own hiring, trainning, work, and reward decisions
- pay for performance: linking pay to individual and group performance to improve productivity
Purpose of information system
- Web based info can automate many company activities
- can potentially affect all activities
- regulates interaction between
- company and customers
- company and suppliers
List the value creation functions (4)
Infrastructure (leadership) Production Marketing R&D Information system Human resources
Describe the two dimensions of quality
- Quality=Reliability
- do the jobs they were designed to do with exceptional results
- Quality=Excellence
- perceived by customers to have superior attributes
NB: strong reputation for quality allows company to differentiate its products
Discuss how to improve quality as reliability (5 step chain)
TQM based on the following 5 step chain reaction:
- Improved quality means reduced costs
- As a result productivity also improves
- Better quality=higher market share which allows for increased prices
- This increases profitability
- Thereafter company creates more jobs
Business model for quality improvement (4)
Philosophy Supervision Environment Standards Training Commitment
List Deming’s 7 steps in a quality improvement program
- Company must possess clear business model
- Management should enforce view that mistakes defects and poor quality are not acceptable
- Quality of supervision should be improved
- Managers should foster environment where employees can feel free to express opinion and concern
- Work standards should include motion of quality to promote defect-free output
- Employees should be trained in new skills
- Commitment of all is necessary for better quality
List methodologies needed to implement reliability improvement
Build org commitment to quality Create quality leaders Put focus on the customer Identification of processes and sources of defect Implement ways to measure quality Create goals and incentives Solicit input for employees Create long term relationships with suppliers Create model that improves manufacturing Break down barriers among functions
List steps in improving quality as excellence (4)
- Prioritise attributes that are most important to customers
- design products and associate services to embody the important attributes
- choose which attributes to promote and position them in customers’ minds
- constant improvements in attributes and development of new product attributes
Discuss the importance of superior innovation
Creating unique competencies that result in superior innovation is key to competitive advantage
- innovation can:
- result in the creation of new products in the market that meet customer needs better
- improve on existing products
- reduce costs
- innovation can be copied so it must be continuously improved
