Building Competitive Advantage Through Functional-Level Strategy - PowerPoint PPT Presentation

Loading...

PPT – Building Competitive Advantage Through Functional-Level Strategy PowerPoint presentation | free to download - id: 64b628-YjIzN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Building Competitive Advantage Through Functional-Level Strategy

Description:

4 Building Competitive Advantage Through Functional-Level Strategy Functional-Level Strategies Strategies aimed at improving the effectiveness of a company s ... – PowerPoint PPT presentation

Number of Views:8
Avg rating:3.0/5.0
Slides: 34
Provided by: Windo197
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Building Competitive Advantage Through Functional-Level Strategy


1
4
  • Building Competitive Advantage Through
    Functional-Level Strategy

2
Functional-Level Strategies
  • Strategies aimed at improving the effectiveness
    of a companys operations
  • Improving a companys ability to attain superior
    efficiency, quality, innovation, and customer
    responsiveness

3
The Roots of Competitive Advantage
4
Achieving Superior Efficiency
  • Economies of scale
  • Unit cost reductions associated with a large
    scale of output
  • Ability to spread fixed costs over a large
    production volume
  • Ability of companies producing in large volumes
    to achieve a greater division of labor and
    specialization
  • Diseconomies of scale
  • Unit cost increases associated with a large scale
    of output

5
Economies and Diseconomies of Scale
6
Achieving Superior Efficiency (contd)
  • Learning effects
  • Cost savings that come from learning by doing
  • Labor productivity
  • Management efficiency
  • When changes occur in a companys production
    system, learning has to begin again

7
The Impact of Learning and Scale Economies on
Unit Costs
8
Achieving Superior Efficiency (contd)
  • The experience curve
  • The systematic lowering of the cost structure and
    consequent unit cost reductions that occur over
    the life of a product
  • Economies of scale and learning effects underlie
    the experience curve

9
The Experience Curve
10
Achieving Superior Efficiency (contd)
  • Dangers of complacency with the experience curve
  • It will bottom out
  • New technologies can make experience effects
    obsolete
  • Some technologies may not produce lower costs
    with higher volumes of output
  • Flexible manufacturing technologies may allow
    small manufacturers to product at low unit costs

11
Unit Production Costs in an Integrated Mill and
Mini-Mill
12
Achieving Superior Efficiency (contd)
  • Flexible manufacturing (lean production)
  • Technology that reduces setup times for complex
    equipment, improves scheduling to increase use of
    individual machines, and improves quality control
  • Increases efficiency and lowers unit costs
  • Mass customization reconciles two goals low cost
    and differentiation through product customization

13
Tradeoff Between Costs and Product Variety
14
Achieving Superior Efficiency (contd)
  • Marketing
  • Marketing strategy pricing, promotion,
    advertising, product design, distribution
  • Reducing customer defection rates and building
    customer loyalty

15
The Relationship Between Customer Loyalty and
Profit per Customer
16
Achieving Superior Efficiency (contd)
  • Materials management
  • Getting inputs and components to a production
    facility, through the production process, and out
    through a distribution system to the end user
  • Just-in-time (JIT) inventory system
  • Supply chain management

17
Achieving Superior Efficiency (contd)
  • RD strategy
  • Designing products that are easy to manufacture
  • Process innovations

18
Achieving Superior Efficiency (contd)
  • Human resource strategy employee productivity
  • Hiring
  • Training
  • Self-Managing Teams
  • Pay for Performance

19
Achieving Superior Efficiency (contd)
  • Information systems and the Internet
  • Automating interactions between
  • Company and customers
  • Company and suppliers
  • Infrastructure
  • Company structure, culture, style of strategic
    leadership, and control system determine context
    of all value creation activities

20
Primary Roles of Value Creation Functions in
Achieving Superior Efficiency
21
Achieving Superior Quality
  • Attaining superior reliability
  • Total quality management (TQM)
  • Improved quality means that costs decrease
  • As a result, productivity improves
  • Better quality leads to higher market share and
    allows increased prices
  • This increases profitability
  • More jobs are created

22
Implementing Reliability Improvement Methodologies
  • Build organizational commitment to quality
  • Focus on the customer
  • Find ways to measure quality
  • Set goals and create incentives
  • Solicit input from employees
  • Identify defects and trace them to source
  • Work with suppliers
  • Design for ease of manufacture
  • Break down barriers among functions

23
Attributes Associated with a Product Offering
24
Achieving Superior Quality (contd)
  • Developing Superior Attributes
  • Learn which attributes are most important to
    customers
  • Design products and associate services to embody
    the important attributes
  • Decide which attributes to promote and how best
    to position them in consumers minds
  • Monitor competition for improvement in attributes
    and development of new attributes

25
Achieving Superior Innovation
  • Innovation can
  • Result in new products that better satisfy
    customer needs
  • Improve the quality of existing products
  • Reduce costs
  • Innovation can be imitated so it must be
    continuous
  • Successful new product launches are major drivers
    of superior profitability

26
The High Failure Rate of Innovation
  • Uncertainty
  • Quantum innovation vs. incremental innovation
  • Poor commercialization
  • Poor positioning strategy
  • Technological Myopia
  • Slow to Market

27
Achieving Superior Innovation (contd)
  • Building Competencies in Innovation
  • Building skills in basic and applied research
  • Project selection and management

28
The Development Funnel
29
Achieving Superior Innovation (contd)
  • Building Competencies in Innovation (contd)
  • Cross-functional integration
  • Product development teams
  • Partly parallel development processes

30
Sequential and Partly Parallel Development
Processes
31
Function Roles for Achieving Superior Innovation
32
Achieving Superior Responsiveness to Customers
  • Customer focus
  • Leadership
  • Employee attitudes
  • Bringing customers into the company
  • Satisfying customer needs
  • Customization
  • Response time

33
The Primary Role of Different Functions in
Achieving Superior Responsiveness to Customers
About PowerShow.com