Session 1 - Flashcards
What are the major business functions?
1- Finance and Accounting
2- Marketing
3- Human Resource
4- Operations
What is Operations?
The transformation process that converts inputs into outputs
What is Operations Management (OM)?
Managing the transformation process
What are the two types of outputs / businesses?
1- Manufacturing
2- Services
Whare are characteristics of the Manufacturing Output?
1- Products are physical objects
2- Low degree of customer contact
3- Quality can be easily checked prior to consumption
What are characteristics of Service output?
1- Products are not tangible objects
2- High degree of customer contact
3- Quality cannot be easily assessed prior to delivery
4- Services cannot be stored
What is cross-functional collaboration?
The interaction and collaboration of the different business functions
What does Cross-Firm collaboration lead to?
Supply Chain management
What is a trait CEO’s from many companies have?
They have Operations Background
What is Strategy?
Strategy is a careful plan
- Alternatives
- Trade-offs
What does a firm’s strategic plan do?
Focuses on how a firm will deploy internal resources and capabilities within its external environment to achieve a competitive advantage
What is in the Strategic Planning Hierarchy?
Corporate Strategy —>
Business Strategy —>
Functional Strategy —>
(three level plan)
Consistent Patterns of Decisions —>
Results
What is Corporate Strategy?
It defines what business that the company is pursuing
What is Business Strategy?
- Follow the corporate strategy
- Defines how each business unit competes
How many and what are the different strategies in the Functional Strategy level?
3 types of strategy
- Finance Strategy
- Operations Strategy
- Marketing Strategy
What is Functional Strategy?
- Follow the business strategy
- Support the competitive advantage being pursued
What are the Three Generic Business Strategies? What defines them?
1) Differentiation - Is associated with a unique and frequently innovative product or service
2) Low Cost - Is pursued in commodity markets where the products or services are imitative
3) Focus - Refers to the geographical or product portfolio being narrow or broad in nature
What are the three functional strategies and what is their purpose?
1) Marketing Strategy - to increase sales and attract customers
2) Finance Strategy - to maximize business profit
3) Operations Strategy - to deliver products or services to customers
- to help the firm develop capabilities that sustain its competitive advantage
What is Operations Strategy?
A consistent pattern of business decisions for operations and the associated supply chains that are linked to the business strategy and other functional strategies, leading to a competitive advantage for the firm
What are the four elements in Operations Strategy?
1) Mission - Why?
2) Objectives - Where to compete?
3) Strategic Decisions - How to achieve?
4) Distinctive Competence - What have achieved?
What is the purpose of Mission in Operations Strategy?
Why does the firm pursue a line of business?
- A mission with a clear sense of purpose motivates employees
- Creating an organization of highly motivated people is hard to duplicate
What is the purpose of Objectives in operations management?
Where does the firm want to compete?
- Also called competitive priorities
- Has four common objectives = Cost, Quality, Flexibility, Delivery
- Most firms choose one or a few objectives to focus on - they cannot be everything to everyone
What is the purpose of Competing on Cost?
Fulfilling customers needs at a lower price relative to the competitors
What are the key focuses of Competing on Cost?
1) Continually reduce costs in
- Materials, Labor, Inventory, Transportation, etc.
2) Invest in long term productivity
- updated facilities & equipment, streamlining operations, training & development
3) Focusing on Economies of Scale & Learning Curve
