Business Strategy Quiz

Competitiveness, Strategy, and Productivity

• Competitiveness equates to higher productivity and better product/service quality.
• Stronger competitiveness leads to improved market position and stable market growth.
• Consumers benefit from lower prices and a wider range of goods/services.

Operations Influence

• Operations directly impact competitiveness through aspects like:
  • Product and service design
  • Cost of organization output
  • Location
  • Quality
  • Quick response
  • Flexibility
  • Inventory management
  • Supply chain management
  • Service quality
  • Manager and worker performance

Organizational Failure Reasons

• Excessive focus on short-term financial performance (over research and development)
• Failing to capitalize on strengths and potential, as well as to recognize competitive threats
• Neglecting operational strategy
• Overemphasis on product/service design, with insufficient focus on process improvement.
• Inadequate investment in capital and human resources
• Lack of strong internal communication and cooperation among different functional areas
• Disregard for customer needs and wants.

What is Strategy?

• A strategy provides a clear path for an organization to meet its objectives.
• A well-defined strategy offers a detailed action plan for achieving a desired position in the future.
• The strategy provides direction for achieving organizational goals.

Mission and Goals

• The mission statement defines the organization's reason for existence.
• The mission statement acts as the foundation for establishing organizational goals.
• Goals provide detail and scope for the organization's mission.

Strategies and Tactics

• Strategies act as roadmaps to reach destinations.
• Strategies provide direction for decision-making.
• Tactics are the methods and actions used to implement strategies.
• Tactics are more specific and detail-oriented than strategies.

Hierarchy of Strategies & Tactics

• The presentation demonstrates a hierarchical relationship between mission, organizational goals, organizational strategies, functional strategies, tactics, and operating procedures.
• The hierarchy depicts how tactics are part of implementing a functional strategy and how operating procedures support tactics.

Examples of Organizational Strategies

• Low Cost: Outsourcing to low-cost labor areas
• Scale-based: Using capital-intensive methods for high output at low unit costs.
• Specialization: Focusing on specific product lines/service offerings to maintain high quality
• Flexible Operations: Focusing on quick response and customization
• High Quality: Outperforming competitors by focusing on high-quality products/services
• Service: Highlighting quality service attributes

Organization and Operations Strategy Examples

• The table in the presentation connects organization strategies (e.g., low price, responsiveness) with corresponding operations strategies (e.g., low cost, short processing time) and examples of businesses applying those strategies.

Strategy Formulation

• Strategy formulation requires understanding organizational competencies and scanning the environment.
• It involves carefully analyzing competitors' actions and potential impacts (positive and negative)
• The presentation advocates utilizing the SWOT approach (Strengths, Weaknesses, Opportunities, and Threats).

External Factors

• Economic Conditions: General economic health, inflation, interest rates, and tariffs.
• Political Conditions: Favorable or unfavorable business attitudes, political stability, and war.
• Legal Environment: Antitrust laws, government regulations, restrictions, labor laws, and patent issues.
• Technology: Pace of product innovation, future process technology, and impact of current/future technology on operations.
• Competition: Number and strength of competitors, ease of entry into the market, and competitive basis (price, quality, features).
• Market: Size, location, brand loyalty, ease of entry, growth potential, long-term stability, and demographic characteristics.

Internal Factors

• Human Resources: Skills, expertise, worker dedication/loyalty and overall team experience.
• Facilities and Equipment: Location, condition, age/cost, operational feasibility
• Financial Resources: Capability to operate/sustain operations.
• Customers: Customer loyalty, existing relationships, and understanding of customer needs/wants.
• Products and Services: Existing offerings and potential innovations.
• Technology: Existing technological capacity to integrate/evolve.
• Suppliers: Reliability, quality, and flexible relationships with suppliers, and access to resources.

Global Strategy

• Globalization necessitating strategic adaptations.
• Regional variations, political/social changes, and coordinating international efforts are considered.
• Adapting to international competition is crucial for success in global operations.

Organization Strategy

• Organization strategy provides overarching direction to all aspects of the organization.
• It covers a broad range of factors, such as products, processes, methods, resources, quality, costs, lead times, and scheduling.
• Operations strategy addresses the implementation of the company's organizational goals and strategies.

Strategic Operations Management Decision Areas

• Decision areas concern:
  • Product/service design
  • Capacity planning
  • Process selection/layout
  • Work design
  • Facility location
  • Quality control
  • Inventory management
  • Maintenance planning
  • Scheduling tasks
  • Supply chains
  • Project management

Quality and Time Strategy

• Quality-based strategies highlight enhancement to products/services to attract customers.
• Time-based strategies aim to speed up various processes to improve the customer experience, product delivery, and overall business competitiveness.

Time Reduction Achieved in Organizations

• Planning time: Reaction to competitive threats, adapting to changes, and new technology/facility implementation
• Product/service design time: Development and marketing of new or adjusted offerings.
• Processing time: Time required for tasks and production
• Changeover time: Adjustments to production for different products/services
• Delivery time: Order fulfillment lead times.
• Response time for complaints: Handling customer issues efficiently These factors are critical elements in maximizing productivity improvements.

Productivity

• Productivity is an indicator of output/input.
• Output (products/services), relative to input (resources).
• A higher productivity ratio often translates to reduced operational costs.
• The ratio of output created per unit of input, can be computed at various levels (single operations, departments, organizations, or even national economies).

Computing Productivity

• Productivity can be based on a single input, multiple inputs, or all inputs.
• Choosing the right measure depends on the purpose of the measurement.
• Labor productivity is a frequently used measure.

Factors Affecting Productivity

• Standards, procedures, and variability in processes/procedures enhance productivity/quality
• Quality differences can distort productivity measurements over time.
• Internet usage often lowers transaction costs, which increase productivity.
• Virus damage negatively impacts productivity.
• Worker/employee attrition time negatively affects productivity/output

Improving Productivity

• Developing productivity measures for all parts of the business (operations) is the first step to manage it effectively
• Consider the entire operational system, focusing on critical operations
• Seek input from workers, engineers, and managers for improvement strategies.
• Establish realistic goals, show support, and encourage improvements
• Measure and share improvements