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Questions and Answers
What is the primary focus of a low-cost provider competitive strategy?
Which of the following is NOT a risk associated with a differentiation strategy?
What type of organizational structure defines how internal value chains and supply chains are organized?
Which of the following best describes the role of policies in operations strategy?
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What does the SCOR model identify as key supply chain processes?
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Which of the following activities is part of monitoring in operations strategy?
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What is a key focus of evaluating progress in operations strategy?
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What is one of the main goals when correcting course in operations strategy?
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What are considered minimum competitive characteristics necessary to be viable in the market?
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Which strategy primarily focuses on providing distinct features or capabilities?
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In which phase of the product life cycle is dependability primarily considered a key order qualifier?
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What is the Push/Pull Frontier related to in the supply chain?
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Which of the following is NOT one of the five generic strategies?
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What typically happens to order winners as competitors improve and market innovations occur?
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During which product life cycle phase would quality and flexibility be prioritized as order qualifiers?
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Why is it challenging for a single business unit to implement multiple strategies at once?
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Study Notes
Business Strategy Overview
- A business strategy is a plan to compete effectively and create demand by meeting customer expectations.
- Order qualifiers are the minimum characteristics needed to be viable in the market, such as quality in medical devices and dependability in food services.
- Order winners are features that differentiate a company's offerings, such as price and delivery speed.
- As market conditions change, order winners may shift to become order qualifiers, requiring strategic adaptation.
Supply Chain Concepts
- The push/pull frontier marks the transition from forecast-driven production to actual customer orders, impacting manufacturing strategies like Engineer-to-Order and Assemble-to-Order.
- Product profiling evaluates the alignment of manufacturing processes with market needs, identifying areas requiring adjustments.
Product Life Cycle Stages
- Introduction: Focus on quality and flexibility; order winners include product design and brand image.
- Growth: Cost and flexibility become qualifiers; reliable supply is a key order winner.
- Maturity: Quality and flexibility maintain importance; order winners can be cost, dependability, or after-service.
- Decline: Dependability is crucial; cost becomes a primary order winner, though loyal customers might pay more.
Strategy Development and Generic Strategies
- Strategies are shaped by insights from product profiling and life cycle analysis, enhancing strengths in qualifiers and winners.
- Five generic strategies:
- Cost Leadership: Competing on lower prices with equal value.
- Differentiation: Offering unique features or capabilities for added value.
- Focus: Targeting a specific market segment through low-cost or differentiated approaches.
- Best-Cost Provider: Balancing functionality with competitive pricing.
Strategy Implementation Challenges
- Different business units may adopt various strategies, but a single unit implementing multiple strategies can face confusion and identity issues.
Operations Strategy Influences
- Chosen strategies affect performance objectives in operations: speed, dependability, flexibility, quality, and cost.
- Low-Cost Provider: Prioritizes cost control but faces risks like price wars and changing customer preferences.
- Differentiation: Invests in flexibility and innovation, risking obsolescence and market misalignment.
- Quality and Customer Service: Focus on fast and high-quality processes, with risks from shrinking markets and intense competition.
Strategy Execution Components
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Structure:
- Horizontal structure organizes supply chain components.
- Vertical structure defines centralized vs. decentralized decision-making.
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Policies:
- Guide behavior and reinforce the organization's values and culture, including codes of conduct and sustainability approaches.
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Processes:
- Outline task completion aligned with structure and policies, guided by the SCOR model for supply chain processes.
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Managing Assets:
- Involves real-time tracking and development of both physical and human resources, emphasizing maintenance and skill enhancement.
Monitoring and Evaluation
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Monitoring:
- Tracks effectiveness of strategies and adapts to new conditions; addresses unexpected outcomes promptly.
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Evaluating:
- Progress measured at different levels: overall strategic objectives for longer terms, operational objectives quarterly, and tactical objectives continuously.
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Correcting Course:
- Involves making adjustments to address identified issues and ensure alignment with strategic goals.
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Description
Test your knowledge on business strategy concepts, focusing on order qualifiers, order winners, and evolving standards. Understand how these elements influence competitive advantage and customer expectations in the market.
