Role of Operations Flashcards
What is cost leadership?
Cost leadership is a strategic role of operations management.
It means establishing a competitive advantage by having the lowest cost of operation in the industry.
What is product differentation?
Product differentiation is a strategic role of operations management.
It is used by businesses to distinguish their good/service from other similar ones, to create more appeal for potential customers.
What does the term ‘economies of scale’ mean, and why would businesses want to achieve it?
Economies of scale is a term referring to a competitive advantage businesses gain by mass producing products.
The most common advantage is the ability to lower their prices, which achieves cost leadership and creates product differentiation to appeal to customers.
What is the difference between standardised goods and customised goods?
Standardised goods are mass-produced, usually on an assembly line. They are identical in quality, and are produced with a production focus.
Customised goods are those that are varied according to the needs of each customers. They are produced with a market & customer focus.
What are the 4 key business functions, and why is important that they are interdependent?
The 4 key business functions are: Operations, Marketing, Finance, and Human Resources.
Interdependence means that all 4 functions are committed to the same goals, and that they work together in a collaborative manner to achieve these goals.
Name the main influences on operations.
Technology
Environmental Sustainability
Legal Regulation
Globalisation
Government Policies
Quality Expectations
Cost-Based Competition
Corporate Social Responsibility
Briefly explain globalisation and its influence on operations management.
Globalisation refers to the removal of barriers of trade between nations.
It provides opportunities, but can also lead to the undercutting of profit margins and cost leadership.
Its influence on operations management encourages and leads to global sourcing and then regional operations.
What is cost-based competition?
Cost-based competition is the act of determining the break even point and then applying strategies to create cost advantages over competitors.
