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Competitiveness, strategy, productivity

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Title: Competitiveness, strategy, productivity


1
Competitiveness, strategy, productivity
2
What can be competitive?
  • Country?
  • Company?
  • Brand?
  • Product line?
  • Product?
  • Competence?

3
Competitiveness
  • How effectively an organization meets the wants
    and needs of customers relative to others that
    offer similar goods or services.

4
What functions can affect competitiveness?
  • Marketing
  • Identifying consumer wants/needs
  • Pricing
  • Advertising and promotions
  • Operations
  • Product and service design
  • Cost
  • Location
  • Quality
  • Quick response
  • Flexibility
  • Inventory management
  • Supply chain management
  • Service

5
Mission and strategies
  • Mission
  • The reason for existence for an organization
  • Mission Statement
  • Answers the question What business are we in?
  • Strategies
  • Plans for achieving organizational goals
  • Goals
  • Provide detail and scope of mission
  • Tactics
  • The methods and actions taken to accomplish
    strategies

6
Vision Mission
Goals
Organizational Strategies
Functional Goals
Finance Strategies
MarketingStrategies
OperationsStrategies
Tactics
Tactics
Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
7
Examples of Strategies (Stevenson 2009)
8
Porter's Generic Strategies
Target Scope Advantage Advantage
Target Scope Low Cost Product Uniqueness
Broad(Industry Wide) Cost LeadershipStrategy DifferentiationStrategy
Narrow(Market Segment) FocusStrategy(low cost) FocusStrategy(differentiation)
9
Strategy core competences
  • Core competences (strength) are the natural basis
    for choosing a strategy
  • Price
  • Quality
  • Time
  • Flexibility
  • Service
  • Location

10
Generic Strategies and Industry Forces
IndustryForce Generic Strategies Generic Strategies Generic Strategies
IndustryForce Cost Leadership Differentiation Focus
EntryBarriers Ability to cut price in retaliation deters potential entrants. Customer loyalty can discourage potential entrants. Focusing develops core competencies that can act as an entry barrier.
BuyerPower Ability to offer lower price to powerful buyers. Large buyers have less power to negotiate because of few close alternatives. Large buyers have less power to negotiate because of few alternatives.
SupplierPower Better insulated from powerful suppliers. Better able to pass on supplier price increases to customers. Suppliers have power because of low volumes, but a differentiation-focused firm is better able to pass on supplier price increases.
Threat ofSubstitutes Can use low price to defend against substitutes. Customer's become attached to differentiating attributes, reducing threat of substitutes. Specialized products core competency protect against substitutes.
Rivalry Better able to compete on price. Brand loyalty to keep customers from rivals. Rivals cannot meet differentiation-focused customer needs.
11
Order qualifiers and order winner
  • Order qualifiers
  • Characteristics of a companys product or service
    that customers percieve as minimum standards of
    acceptability to be considered as a standard
  • Order winners
  • Characteristics of a companys product or service
    that cause it to be perceived as better than the
    competition

12
Operations Strategy
  • Operations strategy The approach, consistent
    with organization strategy, that is used to guide
    the operations function.

13
Strategy Formulation
  • Distinctive competencies
  • Environmental scanning
  • SWOT
  • Order qualifiers
  • Order winners

Operations strategytactics andoperational plans
14
Key External Factors
  • Economic conditions
  • Political conditions
  • Legal environment
  • Technology
  • Competition
  • Markets

15
Key External Factors
  • Economic conditions
  • Political conditions
  • Legal environment
  • Technology
  • Competition
  • Markets

16
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17
Comparison of organizational goals
18
Quality and Time Strategies
  • Quality-based strategies
  • Focuses on maintaining or improving the quality
    of an organizations products or services
  • Quality at the source
  • Time-based strategies
  • Focuses on reduction of time needed to accomplish
    tasks

19
Productivity
  • Productivity
  • A measure of the effective use of resources,
    usually expressed as the ratio of output to input
  • Productivity ratios are used for
  • Planning workforce requirements
  • Scheduling equipment
  • Financial analysis

20
Productivity 2.
  • Partial measures
  • output/(single input)
  • Multi-factor measures
  • output/(multiple inputs)
  • Total measure
  • output/(total inputs)

21
Levels of measuring productivity
  • Single operation
  • Organizational unit
  • The entire organization
  • Country

22
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23
Productivity Growth
Productivity Growth
Current Period Productivity Previous Period
Productivity Previous Period Productivity
24
Measures of Productivity
Partial Output Output Output
Outputmeasures Labor Machine
Capital Energy Multifactor
Output
Output measures Labor Machine
Labor Capital Energy Total
Goods or Services Produced measure
All inputs used to produce them
25
Examples of Partial Productivity Measures
26
Example
  • What is the
  • multifactorproductivity?
  • labour productivity?
  • machine productivity

7040 Units Produced Sold for
1.10/unit Cost of labor 1,000 total (labor
hrs used 10) Cost of machines 520
total (machine hrs used 8) Overhead expenses
2000 total
Solutions 2.20 704 units/hr 7.74 880 units/hr
14.89
27
Solution MFP
MFP Output Labor Materials
Overhead
MFP (7040 units) (1.10) 1000 520
2000
MFP 2.20
28
Factors Affecting Productivity
Capital / Labour
  • Quality
  • quality aim
  • quality of production
  • Technology
  • labor/capital
  • processes

Management
29
Other Factors Affecting Productivity
  • Standardization
  • Information technology
  • Design of the workspace searching for lost or
    misplaced items
  • Scrap rates
  • Labor turnover, new workers, shortage of workers
  • Safety
  • Incentives

30
Seminar exercises
31
Exercise 1.
  • A group of four workers installed 720 square
    yards of carpeting in 8 hours. What is the labour
    productivity ratio?

720 hrs / (4 workers8 hrs) 22.5 yards per hour
  • A new worker joins the group. The next job (900
    yards) is done in 9.5 hour. What is the new
    productivity, and what is the productivity
    change?

900 hrs / (5 workers9,5 hrs) 18.9 yards per
hour 18.9- 22.5 -3.6 yards/hr
32
Exercise 2.
  • What is the output in dollars?
  • Labour costs in dollars?
  • 8000
  • 1600
  • MFP 8000/(16001301000) 2.93
  • Labour productivity?
  • LP 5
  • How much should the leads possibility per name
    lists increase to reach LP6?
  • How does LP changes, if material costs are
    lowered with 20?
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