Boeing 787 Dreamliner Strategy and Operations Quiz

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Questions and Answers

What is Boeing's strategy for its 787 Dreamliner?

Boeing's strategy for the 787 Dreamliner involves a technologically advanced product design and vast global supply chain.

Which advanced materials are used in the design of the Boeing 787 Dreamliner? (Select all that apply)

Titanium-graphite laminate (correct)

Steel

Aluminum

Carbon-fiber composites (correct)

What percentage of the 787 structure comes from Japanese companies?

35%

What is the primary benefit of Boeing's global supply chain strategy?

Higher fuel efficiency Signup and view all the answers

Boeing's collaboration with General Electric and Rolls-Royce resulted in a reduction of _______.

20% Signup and view all the answers

What role does digital design play in Boeing's operations?

Reduces design time and errors Signup and view all the answers

What defines the organization's mission?

The organization's mission is defined as its purpose—what it will contribute to society. Signup and view all the answers

Which of the following is not one of the three strategic approaches to competitive advantage?

Price Reduction Signup and view all the answers

Mission statements provide boundaries and focus for organizations.

True Signup and view all the answers

What is strategy in the context of operations management?

Strategy is an organization's action plan to achieve its mission. Signup and view all the answers

What is an example of differentiation in operations management?

Creating unique products or services Signup and view all the answers

What does competitive advantage imply?

Competitive advantage implies the creation of a system that has a unique advantage over competitors. Signup and view all the answers

Experience differentiation only applies to physical products.

False Signup and view all the answers

What is low-cost leadership?

Low-cost leadership entails achieving maximum value as defined by the customer while minimizing costs. Signup and view all the answers

What is a low-cost strategy's implication?

Does not imply low value or low quality Signup and view all the answers

What does response strategy include?

Timely product development and delivery, reliable scheduling, and flexible performance. Signup and view all the answers

Which company is noted for its flexibility in response to market changes?

Hewlett-Packard Signup and view all the answers

A low-cost strategy guarantees high product quality.

False Signup and view all the answers

The three aspects of response are flexibility, reliability, and __________.

quickness Signup and view all the answers

Which company is known for its 'absolutely, positively on time' promise?

FedEx Signup and view all the answers

What does SWOT analysis help determine?

Internal strengths and weaknesses, and external opportunities and threats. Signup and view all the answers

What does the Five Forces Model analyze?

Market competitiveness Signup and view all the answers

The response strategy at Super Fast Pizza focuses on __________.

speed Signup and view all the answers

What does globalization impact?

All of the above Signup and view all the answers

What are the six reasons domestic business operations decide to change to international operations?

<ol> <li>Improve the supply chain. 2. Reduce costs and exchange rate risk. 3. Improve operations. 4. Understand markets. 5. Improve products. 6. Attract and retain global talent.</li> </ol> Signup and view all the answers

Reduced costs and exchange rate risks are not among the reasons for changing to international operations.

False Signup and view all the answers

What is a maquiladora?

A maquiladora is a free trade zone created between the U.S. and Mexico that allows manufacturers to cut costs by paying only for the value added by workers. Signup and view all the answers

Which organization promotes world trade by lowering barriers?

World Trade Organization Signup and view all the answers

The North American Free Trade Agreement (NAFTA) includes Canada, Mexico, and the United States.

True Signup and view all the answers

What is the purpose of the European Union (EU)?

To reduce trade barriers among participating European nations through standardization. Signup and view all the answers

The __________ allows manufacturers to cut costs by paying only for the value added by workers.

maquiladora Signup and view all the answers

What is a benefit of global organizations attracting talent?

Greater employment opportunities Signup and view all the answers

Global firms cannot relocate personnel during economic downturns.

False Signup and view all the answers

What major challenges remain as firms move towards globalization?

Reconciling differences in social and cultural behavior. Signup and view all the answers

What are the two strategies mentioned for gaining competitive advantage in drug companies?

Cost Leadership Signup and view all the answers

Outsourcing has traditionally been considered a new concept.

False Signup and view all the answers

What is the primary focus of Generic Drug Corp. in terms of product selection?

Development of generic drugs Signup and view all the answers

Brand Name Drugs, Inc. employs a heavy investment in _____ for product selection.

R&D Signup and view all the answers

Match the following drug companies with their strategies:

Brand Name Drugs, Inc. = Product Differentiation Strategy Generic Drug Corp. = Low-Cost Strategy Signup and view all the answers

What is one risk of outsourcing?

Complexity in the supply chain Signup and view all the answers

What are key success factors (KSFs)?

Activities or factors that are key to achieving competitive advantage. Signup and view all the answers

What is meant by core competencies?

A set of unique skills, talents, and capabilities in which a firm is particularly strong. Signup and view all the answers

Which of the following is an example of a key success factor for McDonald's?

Layout Signup and view all the answers

Core competencies are often sufficient for competitive advantage.

False Signup and view all the answers

What must be identified to achieve sustainable competitive advantage?

Key success factors and core competencies. Signup and view all the answers

Which of the following is a component of the strategic operations management decisions?

Product quality Signup and view all the answers

Honda's core competence is the design and manufacture of _____ powered engines.

gas Signup and view all the answers

What should organizations focus on enhancing to build successful strategies?

Core competencies and KSFs with supporting activities. Signup and view all the answers

Match the following companies with their core competencies:

McDonald's = Layout efficiency Honda Motors = Gas-powered engines Southwest Airlines = Operations management Apple = Innovative product design Signup and view all the answers

What is the primary goal of location decisions in facility management?

To create high value for the company and its stakeholders Signup and view all the answers

What is the intended outcome of effective scheduling?

High levels of throughput and timely customer delivery Signup and view all the answers

Which of the following best describes the focus of human resources in an organization?

To ensure job safety, rewards, and equitable pay Signup and view all the answers

What is a key characteristic of a firm's core competencies?

They are vital for establishing a competitive advantage. Signup and view all the answers

Which practice is essential for effective maintenance of facilities and equipment?

Conducting regular inspections and implementing quick fixes Signup and view all the answers

What is the purpose of supply-chain management in an organization?

To develop innovative products by collaborating with suppliers Signup and view all the answers

Which of the following describes a key success factor (KSF) for McDonald's?

Efficient drive-through structure. Signup and view all the answers

What is inventory management primarily focused on achieving?

Low investment in inventory aligned with high customer service Signup and view all the answers

What aspect is NOT considered a KSF for a company?

Employee satisfaction initiatives. Signup and view all the answers

What is a key advantage of layout design in production?

It enhances production effectiveness and work quality Signup and view all the answers

How do core competencies relate to KSFs?

Core competencies allow firms to perform KSFs effectively. Signup and view all the answers

What underlying principle drives the concept of human resources management?

To create a safe and rewarding work environment Signup and view all the answers

What must a firm identify to develop a successful strategy?

Both KSFs and core competencies. Signup and view all the answers

What is typically included in a firm's competitive advantage?

Building a unique brand name. Signup and view all the answers

Which of the following best illustrates the concept of a corporate mission?

Defining the reason for the firm's existence. Signup and view all the answers

Which of the following is not a component of a strategy development process?

Eliminating all risks in operations. Signup and view all the answers

What is a primary responsibility of an operations manager?

To implement an OM strategy and increase productivity Signup and view all the answers

Outsourcing primarily involves which of the following?

Transferring internal activities to external suppliers Signup and view all the answers

Which of the following factors influences the implementation of strategic OM decisions?

Core competencies and competitive environment Signup and view all the answers

Which of the following activities are good candidates for outsourcing?

Non-core activities that do not provide competitive advantage Signup and view all the answers

The competitive advantage of a drug company pursuing differentiation will likely emphasize which element?

Unique product features and benefits Signup and view all the answers

What is an important consideration when implementing the 10 strategic OM decisions?

Product life cycle and product mix Signup and view all the answers

What is one potential downside of outsourcing?

Higher risks and complexities in the supply chain Signup and view all the answers

Core competencies allow an organization to do which of the following?

Perform certain activities better than competitors Signup and view all the answers

What is the primary purpose of an operations management mission?

To produce products consistent with the company’s overall mission Signup and view all the answers

What is a key responsibility of the product design department in operations management?

To design and produce products with outstanding quality Signup and view all the answers

Which of the following best describes the goal of a quality management mission?

To achieve exceptional value consistent with company objectives Signup and view all the answers

How does process design contribute to an organization’s operations strategy?

By determining the production process compatible with low-cost products Signup and view all the answers

What aspect does a company mission focused on microwave communications emphasize?

Exceeding customer expectations Signup and view all the answers

Which term describes products or services that provide inherent customer value?

Quality-focused designs Signup and view all the answers

What role does attention to field service play in quality management?

It ensures that post-sale services meet customer expectations Signup and view all the answers

What is a component of operations management that contributes to overall efficiency?

Effective supply chain management Signup and view all the answers

Which strategy is exemplified by Walmart's sophisticated distribution system?

Cost Leadership Signup and view all the answers

What aspect of operations management does FedEx's commitment to on-time delivery embody?

Reliability Signup and view all the answers

How does Hewlett-Packard demonstrate its response strategy in volatile markets?

Through flexibility in operations Signup and view all the answers

What factor primarily differentiates the dining experience at Hard Rock Cafe?

Experience Differentiation Signup and view all the answers

Which of the following describes the strategy employed by Southwest Airlines for high aircraft utilization?

Capacity Utilization Signup and view all the answers

What does Super Fast Pizza utilize to expedite their pizza delivery process?

Wireless order transmission Signup and view all the answers

In what way does Pizza Hut demonstrate a competitive advantage with its lunchtime service?

Through a five-minute guarantee Signup and view all the answers

What principle does Caterpillar’s service process emphasize in its heavy equipment operations?

Low overhead costs Signup and view all the answers

What is considered a core competency of a firm?

A set of world-class skills that distinguishes the firm from its competitors Signup and view all the answers

Which of the following best describes the relationship between KSFs and core competencies?

Core competencies facilitate the achievement of KSFs Signup and view all the answers

Which of the following statements is true regarding McDonald's competitive strategy?

Consistency and quality serve as their core competencies Signup and view all the answers

What is a necessary yet insufficient component for gaining competitive advantage?

Key success factors (KSFs) Signup and view all the answers

Which of the following is a crucial element in forming a strategy for competitive advantage?

Building capabilities in design or quality Signup and view all the answers

What key advantage does the Dreamliner project offer in relation to global business dynamics?

Enhanced operational efficiency through an international supply chain. Signup and view all the answers

What percentage of the Dreamliner is produced by companies in Japan?

35% Signup and view all the answers

Which factor was NOT mentioned as a challenge for the supply chain of the Dreamliner?

Legal regulations within domestic markets. Signup and view all the answers

What is a characteristic of Boeing's collaboration with its suppliers for the Dreamliner?

It involves tight integration with over 300 suppliers globally. Signup and view all the answers

Which company is identified as a major competitor to Boeing in the aircraft market?

Airbus Signup and view all the answers

What aspect of the Dreamliner has contributed to making it the fastest-selling commercial jet?

Global reach and state-of-the-art technology. Signup and view all the answers

The expectation for countries invested in the Dreamliner project includes favorable purchasing decisions from which company?

Boeing Signup and view all the answers

What is a critical aspect of the Dreamliner project that poses significant supply chain risk?

The multinational aircraft certifications required. Signup and view all the answers

What is one of the key components of competitive advantage mentioned in relation to scheduling?

Effective communication with customers Signup and view all the answers

Which aspect of response relates specifically to the speed of operations?

Quickness in product development and delivery Signup and view all the answers

How has HP built a sustainable competitive advantage?

By changing products and volume in response to market conditions Signup and view all the answers

What defines Johnson Electric Holdings' major competitive advantage?

Speed in product development and delivery Signup and view all the answers

Which of the following companies emphasizes reliability in their operational strategy?

German machine firms Signup and view all the answers

What is a major competitive advantage achieved through proper implementation of operational decisions?

Sustainable competitive advantage Signup and view all the answers

Which operational strategy is NOT mentioned as a focus for competitive advantage?

Automation Signup and view all the answers

What type of service aspect does Fidelity Security provide that can contribute to operational competitive advantage?

Comprehensive after-sales service Signup and view all the answers

What outcome is associated with the implementation of the operational decisions by managers?

Improved productivity and competitive advantage Signup and view all the answers

Why do operations managers focus on response strategies?

To secure competitive advantage through agility Signup and view all the answers

Which of the following is a method through which firms achieve their missions?

Differentiation Signup and view all the answers

What role do operations managers primarily play in relation to strategic concepts?

Translating strategies into tangible tasks Signup and view all the answers

Which strategy focuses on offering products that are perceived as better or different from the competition?

Differentiation Signup and view all the answers

What are the three strategic approaches to competitive advantage described?

Differentiation, cost leadership, and response Signup and view all the answers

What is the main purpose of an organization’s mission?

To provide boundaries and focus Signup and view all the answers

Which strategic aspect involves responding quickly to changes in market demands?

Response strategy Signup and view all the answers

How does a cost leadership strategy typically influence an organization's operations?

It prioritizes minimizing operational expenses. Signup and view all the answers

Which of the following components is essential for achieving competitive advantage through operations?

Exploiting opportunities and strengths Signup and view all the answers

What is a significant outcome of effective strategy implementation within an organization?

Achieving the overall mission Signup and view all the answers

Which of the following is NOT a supporting mission for the overall organizational mission?

Personal mission Signup and view all the answers

What is the primary objective of supply-chain management?

To develop innovative products from stable and effective sources. Signup and view all the answers

Which aspect is NOT a goal of scheduling?

To ensure effective resource allocation. Signup and view all the answers

What is a key focus of layout design in operations management?

To support production effectiveness and a quality work-life. Signup and view all the answers

What is the aim of maintenance in facility management?

To maintain high utilization of facilities and equipment. Signup and view all the answers

In human resources management, what is expected in exchange for individual contributions?

Equitable pay and job designs. Signup and view all the answers

Which of the following is NOT a critical aspect of inventory management?

Coordinating with suppliers regularly. Signup and view all the answers

What does effective layout design primarily enhance within a company?

Production effectiveness and efficiency. Signup and view all the answers

Which strategy is emphasized for achieving competitive advantage?

Achieving a differentiation focus with low cost. Signup and view all the answers

What is a crucial consideration in location decisions for facility management?

Enhancing the value provided to the company and community. Signup and view all the answers

What does effective supply-chain management seek to avoid?

Dependence on a single source of supply. Signup and view all the answers

Study Notes

A Global View of Operations and Supply Chains

The global economy is experiencing significant change.
Technological advancements, communication, and transportation advancements are driving this change.
Firms increasingly find customers and suppliers located worldwide.
Companies are extending their distribution channels and supply chains globally.
This includes firms competing with the talent in their global supply chain.
International trade, global capital markets, and the movement of people are increasing.

Reasons for International Operations

Companies are engaging in international operations to enhance supply chains.
This includes sourcing unique resources like expertise, low-cost labor, and raw materials.
Globalization is transforming the landscape of business operations.
The global market demands companies to adjust to a shrinking world.
Companies are seeking to reduce costs and minimize exchange rate vulnerabilities.
Improved operations, deeper market understanding, and product enhancements are key reasons for internationalization.
Attracting and retaining skilled global talent is a driving force behind international operations.

International Operations

Perfume manufacturers seek a presence in Grasse, France, known for its production of perfume essences from Mediterranean flowers.
International operations strive to reduce risks associated with fluctuating currency values (exchange rates) and lower direct costs.

Reducing Costs and Exchange Rate Risk

The text highlights the example of U.S. cartoon production shifting to Manila, Philippines, illustrating how outsourcing low-skilled jobs can reduce costs and free up skilled workers for more valuable tasks.
This relocation allows for savings to be invested in product and facility improvements, as well as worker retraining, in the home location.
Having facilities in countries with different currencies provides companies the opportunity to manage currency risk and costs.
The example illustrates the cost comparison of cartoon production in the United States, Korea, and the Philippines, showcasing the significant cost savings achieved by outsourcing to the Philippines.

Maquiladoras

The text mentions Maquiladoras, free trade zones along the U.S.-Mexico border, which enable manufacturers to minimize costs by only paying for the value added by Mexican workers.
In this setup, tariffs are levied only on the value added in Mexico, reducing the overall cost of manufacturing.

World Trade Organization (WTO)

The WTO has played a crucial role in reducing tariffs globally, from 40% in 1940 to less than 3% today.

Free Trade Agreements

The North American Free Trade Agreement (NAFTA) aims to eliminate trade and tariff barriers between Canada, Mexico, and the United States.
Other agreements, such as APEC (Pacific Rim countries), SEATO (Australia, New Zealand, Japan, Hong Kong, South Korea, New Guinea, and Chile), MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay), and CAFTA (Central America, Dominican Republic, and United States), are accelerating global trade.

European Union (EU)

The EU has reduced trade barriers among member nations through standardization and a unified currency, the euro.
Despite these efforts, the EU imposes stringent conditions on products sold within its borders, encompassing aspects like recycling standards, automotive components, and hormone-free farm products.

Improving Operations

Companies learn from international management practices, such as improved inventory management from Japan, the use of robots in Germany, and ergonomic improvements from Scandinavia.
International operations reduce response time to meet dynamic customer product and service requirements.
Establishing facilities in a customer's home country facilitates faster and better service.

Understanding Markets

International operations foster engagement with foreign customers, suppliers, and competitors, providing insights into new product and service opportunities.
Firms gain a deeper understanding of market trends and can diversify their customer base, enhancing production flexibility and smoothing out the business cycle.
International operations allow companies to extend the product lifecycle of established products in new markets.

Improving Products

Collaboration and knowledge sharing between international firms drive innovation and product improvement.
The text highlights partnerships between Toyota and BMW, and Samsung and Robert Bosch, emphasizing how these collaborations benefit both companies in terms of shared research and development, cost reductions, and access to cutting-edge technologies.

Attracting and Retaining Global Talent

Global organizations have the advantage of offering more employment opportunities, fostering greater growth prospects for employees.
Their worldwide presence allows them to recruit and retain skilled talent while providing a buffer against economic downturns.

Cultural and Ethical Issues

Navigating cultural and ethical differences presents a significant challenge for companies operating internationally.
The text emphasizes the importance of understanding and respecting cultural norms, giving the example of management styles varying across countries.
The WTO encourages ethical conduct by establishing guidelines and safeguards for both governments and industries to protect themselves from unethical practices by foreign companies.

Developing Missions and Strategies

An organization's mission defines its purpose and establishes a framework for its activities.
Each functional area within a company, such as marketing, finance, and production, should develop specific missions that align with the overall mission and strategy of the company.
Strategies are action plans designed to achieve the organization's mission.

Strategic Approaches to Competitive Advantage

Organizations strive to achieve competitive advantage by differentiating themselves from competitors, offering cost leadership, or being more responsive to customer needs.
Operations management translates these strategic objectives into actionable tasks and processes to deliver goods and services that are either superior, cheaper, or more responsive.
The text emphasizes that companies can opt for a singular or a combined approach to achieve a unique competitive advantage and differentiate themselves in the market.

Company Missions

PepsiCo's mission is to be the world's premier consumer products company focused on convenient foods and beverages
PepsiCo aims to provide opportunities for growth and enrichment to its employees, business partners, and communities it operates in. They also aim to be honest and fair.
Arnold Palmer Hospital for Children aims to provide state-of-the-art family-centered healthcare, focusing on restoring the joy of childhood.

Competitive Advantages

Firms can achieve a competitive advantage by differentiating their products, offering a low cost, or providing a superior response, like speed or flexibility
Differentiation involves offering products that are unique and valued by customers, often including aspects like convenience, product features, or accompanying services.
Experience differentiation focuses on engaging the customer's senses to create an immersive experience for them.
Low-cost strategies focus on minimizing expenses while maintaining customer satisfaction and value.
Low-cost leadership involves optimizing each of the Ten Operations Decisions to minimize costs without reducing the product's value to the customer.
Response strategies aim to satisfy customer expectations with timely product development and delivery, reliable scheduling, and flexible performance.
Companies can achieve a competitive advantage through a combination of differentiation, low-cost, and response by effectively implementing the Ten Operations Decisions, which include Product Design, Quality Management, Process Design, Location, Layout Design, Human Resources, Supply-Chain Management, Inventory Management, Scheduling, and Maintenance.

Successful Examples

Safeskin Corporation differentiates itself by producing innovative latex gloves that fulfill customer needs, such as hypoallergenic gloves or gloves with increased texture.
Hard Rock Cafe provides an immersive "dining experience" by using music, memorabilia, and staff who can tell stories related to the rock and roll theme.
Southwest Airlines implements a low-cost strategy by using smaller airports, prioritizing efficiency, and maintaining a single type of airplane for the entire fleet to reduce maintenance and operational costs.
Walmart uses its superstores to achieve low overhead and inventory costs, while Franz Colruyt, a Belgian discount food retailer, minimizes overhead by operating in affordable locations and forgoing unnecessary expenses like background music or shopping bags.
Hewlett-Packard has successfully adapted to the volatile personal computer market by consistently adapting to changing product designs and market demands.
German machine manufacturers prioritize reliable response with carefully planned schedules communicated to customers to ensure timely delivery of products.
Johnson Electric Holdings Ltd., a motor manufacturing company, thrives on speed in product development, production, and delivery.
Super Fast Pizza utilizes a responsive system with preheated pizzas, wireless ordering, and efficient delivery to provide fast pizza delivery.

Operations Strategy

Resource View: A strategy that takes into account the available financial, physical, human, and technological resources and ensures they align with the chosen strategy.
Value-Chain Analysis: A method to identify activities that add unique value, such as product research, design, human resources, supply-chain management, process innovation, or quality management.
Porter's Five Forces Model: Analyzes competitive forces, including:
- Immediate Rivals: Direct competitors in the same market
- Potential Entrants: New companies that could enter the market
- Customers: The buying power of customers
- Suppliers: The influence of suppliers on the cost of resources
- Substitute Products: Alternatives that can replace the company's offerings
External Factors: External factors, such as economic, legal, and cultural influences, impact strategy development and execution.
Internal Changes: Factors within a company undergoing change, such as resources, technology, and product life cycles.
Product Life Cycle: Products go through stages of introduction, growth, maturity, and decline, requiring adjustments in strategy.

Strategy Development and Implementation

SWOT Analysis: A formal analysis of the firm's internal strengths and weaknesses, and external opportunities and threats. The goal is to capitalize on opportunities and minimize threats while maximizing strengths and minimizing weaknesses.

Key Success Factors and Core Competencies

Key Success Factors (KSFs): Activities critical to a firm's survival. For example, McDonald's drive-through and efficient kitchen are KSFs.
Core Competencies: Unique skills, talents, and capabilities that a firm excels at. Core competencies differentiate a firm and create a competitive advantage. An example is Honda's expertise in designing and manufacturing gas-powered engines.
Identifying Key Success Factors (KSFs) and Core Competencies:
- Determine tasks critical to a strategy's success.
- Identify activities that provide a competitive advantage.
- Determine areas with a high likelihood of failure and areas requiring additional resources.
Sustainable Competitive Advantage: Achieved by identifying and strengthening KSFs and core competencies.

Operations Strategy in a Global Environment

Operations strategy aligns with an organization's overall business strategy to achieve competitive advantage.
Key Success Factors (KSFs) are elements essential for achieving competitive advantage in a specific industry.
Core competencies are the strengths that differentiate an organization from its competitors.
The 10 Strategic Operations Management (OM) decisions are:
- Product
- Quality
- Process
- Location
- Layout
- Human Resources
- Supply Chain
- Inventory
- Scheduling
- Maintenance
An activity map illustrates the connection between competitive advantage, KSFs, and supporting activities.
Southwest Airlines' competitive advantage is low cost, achieved through factors like:
- High aircraft utilization
- Standardized Boeing 737 fleet
- Frequent and reliable schedules
- Automated ticketing machines
- "Bags fly free" policy
- No seat assignments
- Limited passenger service
- Short-haul, point-to-point routes
- High employee compensation
- Employee ownership
- Empowered employees
Outsourcing involves transferring internal activities to external suppliers.
The expansion of outsourcing is driven by factors like:
- Cost reduction
- Increased flexibility
- Access to specialized skills
- Focus on core competencies
Brand Name Drugs, Inc. uses a product differentiation strategy, emphasizing R&D, high-quality standards, and specialized production processes.
Generic Drug Corp. employs a low-cost strategy, prioritizing cost efficiency through lower R&D investment, meeting regulatory requirements, and using general production processes.

Operations Strategy in a Global Environment

Operations strategy is a plan for the use of resources to achieve company goals, focused on improving efficiency, quality, and responsiveness.
Operations management decisions are influenced by the company's mission, goals, and competitive advantage.
Competitive advantage can be achieved through differentiation, low cost, or responsiveness.
Differentiation involves providing unique products or services, for example, Hard Rock Cafe's immersive dining experience.
Low cost strategies focus on minimizing production expenses, which are often important for a company's profitability, for example, Franz-Colruyt's warehouse-type stores.
Response strategies focus on delivering products or services quickly and reliably, for example, FedEx's "absolutely, positively on time" delivery service.
Key Success Factors (KSFs) are essential requirements for success in a specific industry, for example, layout is a KSF for fast food restaurants like McDonald's.
Core competencies are unique skills, abilities, or talents that allow a firm to differentiate itself from its competitors.
Strategic OM Decisions are operational activities that are based on corporate strategy and can be used to achieve a competitive advantage.
Outsourcing can be an effective strategy for non-core activities, which are activities that are not part of a company's core competencies.

The Global Nature of Business

Boeing partnered with over 300 suppliers in over a dozen countries to build the Dreamliner.
The Dreamliner's global range and worldwide supply chain are setting new levels of operational efficiency.
Japanese companies manufacture over 35% of the Dreamliner, and Italy's Alenia Aeronautica produces an additional 10%.
The Dreamliner is the fastest-selling commercial jet in history with over 1,100 planes sold.
Globalization and a global supply chain are key components of successful businesses in the 21st century.

Strategic Approaches to Competitive Advantage

Operations managers deliver goods and services that are better, cheaper, or more responsive.
Differentiation delivers better products or services.
Cost Leadership delivers cheaper products or services.
Response delivers more responsive products or services.

Competitive Advantage via Operations

Companies can use ten operations decisions to achieve competitive advantage.
The ten decisions: product, quality, process, location, layout, human resources, supply-chain management, inventory, scheduling, and maintenance.
Companies use the ten decisions to implement a combination of differentiation, cost leadership, and response.

Strategy Development Process

Analyze the Environment: Identify strengths, weaknesses, opportunities, and threats. Companies must understand their environment, customers, industry, and competitors.
Determine the Corporate Mission: State the reason for the firm's existence and identify the value it wishes to create.
Form a Strategy: Build a competitive advantage through low price, design or volume flexibility, quality, quick delivery, dependability, after-sale services, or broad product lines.
Identify Key Success Factors (KSFs) and Core Competencies:
- KSFs: Necessary, but not sufficient for competitive advantage. (e.g., layout for McDonald's)
- Core Competencies: Unique skills, talents, and capabilities that set a firm apart. (e.g., consistency and quality for McDonald's).

Competitive Advantage Examples

HP: institutionalized the ability to change products and volume, responding to dramatic changes in product design and costs.
German Machine Industry: Maintains competitiveness despite high labor costs through reliable response and scheduling.
Johnson Electric Holdings, Ltd.: Achieves a competitive advantage through speed: speed in product development, production, and delivery.

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Description

Test your knowledge of Boeing's strategy for the 787 Dreamliner, including its global supply chain, advanced materials, and competitive advantages. This quiz covers key concepts in operations management and the role of digital design in enhancing aerospace innovation.