COMPETITIVENESS, STRATEGY AND PRODUCTIVITY

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COMPETITIVENESS, STRATEGYAND PRODUCTIVITY
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Dimensions of Competitiveness
Price
Flexibility
Quality
Differentiation
Time
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Dimensions of Competitiveness

• Price/Cost
• Quality
• Product or Service Differentiation
• Flexibility
• Time
• Service
• Managers and Workers

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The Importance of a Good Strategy

• If you dont know where youre going, you will
  wind up somewhere else!!!
• --Yogi Berra, Philosopher and Ex-Yankee Catcher

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Mission/Strategy/Tactics
How does mission, strategies and tactics relate
to decision making and distinctive competencies?
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Planning and Decision Making
Mission
Goals
Organizational strategy
Functional strategies
Finance
Marketing
Operations
Tactics
Tactics
Tactics
Finance operations
Marketing operations
Operations operations
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Elements of Strategy

• Mission/Mission Statement (To become)
• The reason for existence for an organization
• A clear statement of purpose
• Goals (To accomplish)
• Specific, measurable

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Elements of Strategy (cont.)

• Strategy (To do)
• Plan for achieving organizational goals
• Long term focus (road map)
• Organizational vs. functional (Hierarchical)
• Tactics (How to)
• Actions to accomplish strategies
• Short term focus
• Operations (Doing)
• Day-to-day execution

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Strategy Example

• Rita is a high school student. She would like to
  have a career in business, have a good job, and
  earn enough income to live comfortably
• Mission Live good life/Be good person
• Goal VP by 40, 100k income by 30
• Strategy Obtain a college education
• Tactics Select a college and a major
• Operations Register, buy books, take
  courses, study, graduate, get job

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Operations Strategy

• Functional Focus
• Linkage and Alignment

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New Strategies

• Quality-based strategies
• Focuses on quality in all phases of an
  organization
• Quality at the source
• Time-based strategies
• Focuses on reduction of time needed to accomplish
  tasks

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Strategy Formulation

• Order Qualifiers/Order Winners
• Distinctive Competencies
• Special attributes or abilities give
  organization competitive edge.
• Environmental Scanning
• considering events and trends that present
  threats or opportunities

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OMs Contribution to Strategy
Operations Decisions
Specific Strategy Used
Competitive Advantage
Examples
Quality Product Process Location Layout Human
Resource Supply Chain Inventory Scheduling Mainten
ance
FLEXIBILITY
Sonys constant innovation of new products
Design
Compaq Computers ability to follow the PC market
Volume
Southwest Airlines No-frills service
LOW COST
DELIVERY
Pizza Huts five-minute guarantee at lunchtime
Speed
Differentiation (Better)
Federal Expresss absolutely, positively on time
Dependability
QUALITY
Response (Faster)
Conformance
Motorolas automotive products ignition systems
Cost leadership (Cheaper)
Motorolas pagers
Performance
IBMs after-sale service on mainframe computers
AFTER-SALE SERVICE
Fidelity Securitys broad line of mutual funds
BROAD PRODUCT LINE
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Productivity

• How can we improve?
• Labor, Technology, Management

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Factors Affecting Productivity
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Differences inCompetitive Dimension

• Low Cost
• U.S. Strategy - Economies of Scale
• Japanese Strategy - Economies of Scope
• High Flexibility
• U.S. Strategy - Excess Capacity
• Japan Strategy - Quick Changeover

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Differences inCompetitive Dimension

• High Quality
• U.S. Strategy - Rework of Mistakes
• Japanese Strategy - Prevention of Mistakes