MBA IInd SEM POM Chapter 13 Competetiveness
Transcript of MBA IInd SEM POM Chapter 13 Competetiveness
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Competitiveness, Strategy,and Productivity
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Learning ObjectivesLearning Objectives
List and briefly discuss the primary waysthat business organizations compete.
List five reasons for the poor
competitiveness of some companies. Define the term strategy and explain why
strategy is important for competitiveness.
Contrast strategy and tactics.
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Learning ObjectivesLearning Objectives
Discuss and compare organization strategyand operations strategy, and explain why it isimportant to link the two.
Describe and give examples of time-basedstrategies.
Define the term productivity and explain why
it is important to organizations and tocountries.
List some of the reasons for poor productivity
and some ways of improving it.
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Competitiveness:Competitiveness:
How effectively an organization meets thewants and needs of customers relative toothers that offer similar goods or services
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Businesses Compete UsingBusinesses Compete UsingMarketingMarketing
Identifying consumer wants and needs Pricing
Advertising and promotion
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Businesses Compete UsingBusinesses Compete UsingOperationsOperations
Product and service design Cost
Location
Quality Quick response
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Businesses Compete UsingBusinesses Compete UsingOperationsOperations
Flexibility Inventory management
Supply chain management
Service and service quality Managers and workers
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Why Some Organizations FailWhy Some Organizations Fail
Too much emphasis on short-termfinancial performance
Failing to take advantage of strengths
and opportunities
Neglecting operations strategy
Failing to recognize competitive threats
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Mission/Strategy/TacticsMission/Strategy/Tactics
How does mission, strategies and tactics relate to
decision making and distinctive competencies?
StrategyStrategy TacticsTacticsMissionMission
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Planning and Decision MakingPlanning and Decision Making
Mission
Goals
OrganizationalStrategies
Functional Goals
FinanceStrategies
MarketingStrategies
OperationsStrategies
Tactics Tactics Tactics
Operatingprocedures
Operatingprocedures
Operatingprocedures
Figure 2.1
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Strategy ExampleStrategy Example
Rita is a high school student. She would like to havea career in business, have a good job, and earnenough income to live comfortably
Mission: Live a good lifeGoal: Successful career, good incomeStrategy: Obtain a college educationTactics: Select a college and a majorOperations: Register, buy books, take
courses, study, graduate, getjob
Example 1
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Strategy and TacticsStrategy and Tactics
Distinctive CompetenciesThe special attributes or abilities that give an
organization a competitive edge.
Strategy Factors Price Quality Time
Flexibility Service Location
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Strategy FormulationStrategy Formulation
Distinctive competencies Environmental scanning
SWOT
Order qualifiers Order winners
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Strategic OM DecisionsStrategic OM Decisions
Costs, new products, services, or operating systemsProjects
Costs, quality, agility, shortages, vendor relationsSupply chains
Flexibility, efficiencyScheduling
Costs, equipment reliability, productivityMaintenance
Costs, shortagesInventory
Ability to meet or exceed customer expectationsQuality
Costs, visibilityLocation
Quality of work life, employee safety, productivityWork design
Costs, flexibility, skill level, capacityProcess selection and layout
Cost structure, flexibilityCapacity
Costs, quality liability and environmentalProduct and service designAffectsDecision Area
Table 2.4
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ProductivityProductivity
Partial measures output/(single input)
Multi-factor measures output/(multiple inputs)
Total measure output/(total inputs)
Productivity =Outputs
Inputs
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Measures of ProductivityMeasures of ProductivityTable 2.4
Partial Output Output Output Output
measures 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
xamp es o ar a ro uc v yxamp es o ar a ro uc v y
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Units of output per kilowatt-hour
Dollar value of output per kilowatt-hourEnergy
Productivity
Units of output per dollar input
Dollar value of output per dollar inputCapital
Productivity
Units of output per machine hour
machine hourMachine
Productivity
Units of output per labor hour
Units of output per shift
Value-added per labor hour
Labor
Productivity
xamp es o ar a ro uc v yxamp es o ar a ro uc v yMeasuresMeasures
Table 2.5
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Example 3Example 3
7040 Units Produced
Cost of labor of $1,000
Cost of materials: $520
Cost of overhead: $2000
What is the multifactor productivity?
Ans. 2.0 units per dollar of input
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Example 3 SolutionExample 3 Solution
MFP = OutputLabor + Materials + Overhead
MFP = (7040 units)$1000 + $520 + $2000
MFP = 2.0 units per dollar of input
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Process YieldProcess Yield
Process yield is the ratio of output ofgoodproduct to input
Defective product is not included in the
output
Service example:
Ratio of cars rented to cars available to rent
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Factors Affecting ProductivityFactors Affecting Productivity
Capital Quality
Technology Management
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Standardization Quality
Use of Internet
Computer viruses
Searching for lost or misplaced items
Scrap rates New workers
Other Factors Affecting ProductivityOther Factors Affecting Productivity
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Improving ProductivityImproving Productivity
Develop productivity measures Determine critical (bottleneck)
operations
Develop methods for productivityimprovements
Establish reasonable goals
Get management support Measure and publicize improvements
Dont confuse productivity with
ffi i