Ch2 Pomg PDF - Competitiveness, Strategy, and Productivity

Here is a detailed summary of **Chapter 2: Competitiveness, Strategy, and Productivity** :based on your uploaded presentation --- **Competitiveness.1** ### Definition**: Competitiveness is the ability of a company to maintain its position in the** - market relative to its competitors by meeting cu...

Here is a detailed summary of **Chapter 2: Competitiveness, Strategy, and Productivity** :based on your uploaded presentation --- **Competitiveness.1** ### Definition**: Competitiveness is the ability of a company to maintain its position in the** - market relative to its competitors by meeting customer needs effectively. It reflects how a.business performs compared to others offering similar products or services :**Marketing Perspective** - Identifying Customer Wants/Needs**: A company must understand changing customer** -.preferences and design products that match these preferences Pricing & Quality**: Businesses must balance offering affordable products and** - maintaining quality. Some customers are willing to pay more if they perceive higher value in.the product Advertising and Promotion**: Companies use creative advertising to increase visibility** -.and attract customers, which improves their competitive position :**Operations Perspective** - Product and Service Design**: Special characteristics or features that distinguish a** -.product from competitors are key. Innovation and time-to-market are also critical Cost**: Operational efficiency impacts pricing. Companies with lower operational costs** -.can either lower prices or maintain higher profit margins Location**: Proximity to customers or suppliers can reduce transportation costs and** -.delivery times, adding convenience Quality**: Customers are often willing to pay more for superior materials, workmanship,** -.and design Quick Response**: Fast delivery or quick responses to customer needs can be a** -.significant competitive advantage Flexibility**: The ability to adapt to changes in demand or product specifications** -.provides an edge, particularly in fast-changing industries Inventory Management**: Matching supply with demand effectively is critical for avoiding** -.excess inventory costs and ensuring product availability Supply Chain Management**: Coordination between internal and external partners** -.ensures timely and cost-effective product delivery Service**: For manufacturing companies, after-sales services like setup, delivery, and** - warranties add value. For service-based businesses, the quality of interaction with the.customer is crucial --- **Why Organizations Fail.2** ### :Some companies fail to compete effectively due to Neglecting Operations Strategy**: Focusing only on other areas like marketing or finance** -.and ignoring the operational side Missing Opportunities or Overlooking Threats**: Failure to recognize shifts in the market** -.or new competitors Short-Term Financial Focus**: Overemphasis on immediate financial performance at the** -.(expense of long-term investment in research and development (R&D Neglecting Process Design**: Focusing too much on product design without ensuring** -.efficient production processes Inadequate Capital and Human Resource Investments**: Not investing enough in modern** -.technology or skilled labor can hurt competitiveness Poor Internal Communication**: Lack of cooperation between departments hampers** -.efficiency.Ignoring Customer Wants**: Failing to stay aligned with changing customer preferences** - --- **Strategy.3** ### Definition**: A strategy is a detailed plan to achieve specific long-term objectives. It** -.defines how a business competes and meets customer demands Operations Strategy**: This refers to the specific strategies that guide how a business** - produces goods or delivers services. Effective operations strategies align with the overall.organizational strategy to ensure all functions work towards common goals :**Types of Operations Strategies** - Low-Cost Strategy**: Reducing costs to offer lower-priced products while maintaining** -.profitability Quality-Based Strategy**: Focusing on delivering superior products or services to attract** - :and retain customers. Companies adopt this strategy to.Overcome poor quality reputations -.Maintain or build a quality image -.Keep up with or surpass competitors -.Reduce costs by improving overall efficiency through quality control - Time-Based Strategy**: Reducing the time required to complete processes (e.g.,** - product development, order fulfillment) to improve customer service and increase :competitiveness. This strategy impacts.Planning Time**: Speed of responding to risks or opportunities** - Product/Service Design Time**: Time to develop and market new or redesigned** -.products.Processing Time**: Time taken to produce goods or services** - Changeover Time**: Time needed to switch from producing one type of product to** -.another.Delivery Time**: The time between receiving an order and delivering it to the customer** - Response Time for Complaints**: The speed at which customer complaints are** -.addressed --- **Agile Operations.4** ### Definition**: Agile operations refer to the ability of a company to adapt quickly to changes** -.in the market, production schedules, or customer preferences Focus**: The main goal is to increase competitiveness through flexibility. Agile operations** - require careful planning and coordination in areas like scheduling, innovation, and changeover times. Companies that can swiftly adjust to new market conditions or.technological advancements gain a competitive advantage --- **Productivity.5** ### Definition**: Productivity is a measure of how efficiently a business converts inputs (labor,** - materials, energy) into outputs (goods or services). It is often expressed as the ratio of.output to input :**Importance** - For companies using a low-cost strategy, higher productivity means lower costs and -.greater profitability Productivity improvements are essential for tracking performance over time and -.benchmarking against competitors or industry standards :**Why Productivity Matters** - Higher productivity is linked to a higher standard of living. In economies where - low-productivity service jobs replace high-productivity manufacturing jobs, maintaining high.living standards becomes more challenging Higher productivity gives businesses a competitive advantage by reducing costs and -.enabling lower pricing or higher profit margins :**Productivity Formulas** -.(Total Production = Output + Scrap (defective products -.Productivity = Output ÷ Input - Example from the book: If four workers install 720 square yards of carpet in 8 hours, the -.productivity is 22.5 yards per hour :**Measuring Productivity** -.(Partial Productivity**: Measures output relative to a single input (e.g., labor, materials** - Multifactor Productivity**: Measures output relative to multiple inputs (e.g., labor,** -.(materials, energy --- **Examples of Productivity Problems and Solutions.6** ### A catering company prepared 300 meals with 8 workers versus 240 meals with 6 workers -.in a prior event. The question is which event had higher labor productivity In a chocolate company scenario, weekly productivity was measured across multiple - weeks, taking into account different outputs, workers, and materials used. Calculating.multifactor productivity helps identify which week's operation was most efficient :Productivity Improvement**: Examples include** -.Reducing overhead costs -.Efficient material usage -.Optimizing labor input by tracking work hours and output -.Addressing scrap rates by improving production quality - --- **Conclusion** ### This chapter provides a detailed understanding of how businesses can gain and sustain a competitive advantage through effective strategy, agile operations, and continuous productivity improvements. Focusing on aligning operations strategies with broader organizational goals ensures that all departments work together to meet customer needs.and remain competitive in the global marketplace This comprehensive summary should give you a solid foundation for understanding the key concepts in **competitiveness, strategy, and productivity** for your upcoming class Here is a detailed explanation of the full content from your **Chapter 2 presentation** :("Competitiveness, Strategy, and Productivity") based on the document you provided --- **Part 1: Competitiveness** ### :**Definition of Competitiveness**.1 Competitiveness refers to how effectively an organization meets customer needs - compared to its competitors. It is crucial for businesses to outperform others in their industry.to survive and thrive :**Factors Influencing Competitiveness**.2 :**Marketing Perspective** - Identifying Consumer Wants/Needs**: Businesses need to understand and cater to** -.changing customer preferences Pricing & Quality**: It's important to strike the right balance between affordable pricing** -.and high-quality products, as some customers are willing to pay more for perceived value Advertising & Promotion**: Marketing strategies that increase visibility and customer** -.awareness can strengthen a company's competitive position :**Operations Perspective** - Product & Service Design**: Unique product features, innovation, and a short** -.time-to-market can distinguish a business from its competitors.Cost**: Lowering production costs improves pricing flexibility and profitability** - Location**: Proximity to suppliers and customers reduces transportation costs and** -.delivery time Quality**: Superior quality materials and service increase the product’s value in the** -.eyes of consumers Quick Response**: Fast delivery of products and services can provide a competitive** -.advantage Flexibility**: Being able to adapt to changes in the environment and customer demand** -.is critical Inventory & Supply Chain Management**: Managing supply chains efficiently and** -.matching supply to demand improves operational performance and reduces costs --- **Part 2: Strategy** ### :**Definition of Strategy**.1 A strategy is a long-term plan that sets a company’s direction and actions for achieving - its goals. For example, an operations strategy is focused on the processes that ensure.efficient production and delivery of goods/services :**Linking Organization & Operations Strategy**.2 Organization Strategy**: This broad strategy involves the entire business and focuses** -.on overall growth, market share, and profitability Operations Strategy**: This focuses on specific areas like product design, process** - improvements, and resource allocation to achieve organizational goals. For a company to be.successful, its operations strategy must align with the overall business strategy :**Types of Strategies**.3 Low-Cost Strategy**: Reducing costs to offer competitive pricing without sacrificing** -.profitability Quality-Based Strategy**: Emphasizing high-quality products or services to build** - customer trust and attract a loyal customer base. This is useful for overcoming poor-quality.reputations or maintaining high-quality standards Time-Based Strategy**: Reducing the time required for various operations, such as** -.product development, delivery, and customer service, to stay competitive --- **Part 3: Productivity** ### :**Definition of Productivity**.1 Productivity measures how efficiently resources (labor, materials, energy) are used to - produce goods or services. It is typically expressed as the ratio of output (goods or services).(to input (resources used :**Service Sector Productivity**.2 Productivity in the service sector is difficult to measure because it involves intellectual - activities and a high degree of variability in outcomes. Process yield can be a useful.(measure, defined as the ratio of good output to input (e.g., cars rented vs. cars available :**Productivity Example**.3 A company offering identity theft protection pays three employees $25/hour to process - leads from a bank. Each employee works 40 hours per week, processing 3,000 leads from a list of 5,000. An average of 4% of leads sign up for the service, paying a one-time fee of $70..This example shows how productivity can be tracked through lead processing and sign-ups :**Factors Affecting Productivity**.4.Capital**: Investment in modern technology and infrastructure can boost productivity** -.Methods**: Efficient work methods reduce waste and improve output** - Technology**: Automation and innovation help to speed up processes and reduce** -.human error Management**: Effective management ensures that resources are allocated efficiently** -.and employees are motivated Quality**: High-quality inputs reduce rework, defects, and scrap, leading to higher** -.productivity :**Improving Productivity**.5 Steps to improve productivity include developing accurate productivity measures, - identifying bottlenecks in processes, setting realistic goals, and ensuring management support. Publicizing improvements can motivate employees to continue improving their work.processes :**Difference Between Productivity and Efficiency**.6 Productivity** refers to the effective use of resources to produce goods/services, while** - **efficiency** focuses on maximizing output from a fixed set of resources. Both are important.but productivity provides a broader perspective on overall performance --- **Key Concepts** ### Competitiveness**: A company’s ability to outperform competitors through marketing and** -.operational excellence Strategy**: Long-term plans that align operations with business goals to achieve** -.competitive advantages Productivity**: Efficient use of resources to produce goods/services, crucial for reducing** -.costs and improving profitability This detailed summary outlines the core principles of **competitiveness, strategy, and productivity**, explaining how businesses can leverage them to gain a competitive advantage in the market. The strategies discussed, from low-cost approaches to quality-based and time-based strategies, help ensure long-term success when properly..implemented