Technology Strategy Supplement Learning Objectives

List and briefly discuss the primary ways that 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 Objectives
Discuss and compare organization strategy and operations strategy, and explain why it is important to link the two. Describe and give examples of time-based strategies. Define the term productivity and explain why it is important to organizations and to countries. List some of the reasons for poor productivity and some ways of improving it.
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Competitiveness:
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services

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Businesses Compete Using Marketing

Identifying consumer wants and needs Pricing Advertising and promotion

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Businesses Compete Using Operations

Product and service design Cost Location Quality Quick response

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Businesses Compete Using Operations

Flexibility Inventory management Supply chain management Service and service quality Managers and workers

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Why Some Organizations Fail

Too much emphasis on short-term financial performance Failing to take advantage of strengths and opportunities Neglecting operations strategy Failing to recognize competitive threats

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Why Some Organizations Fail

Too much emphasis in product and service design and not enough on improvement Neglecting investments in capital and human resources Failing to establish good internal communications Failing to consider customer wants and needs
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Mission/Strategy/Tactics
Mission Strategy Tactics

How does mission, strategies and tactics relate to decision making and distinctive competencies?

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Strategy
Mission

The reason for existence for an organization

Mission Statement

States the purpose of an organization

Goals

Provide detail and scope of mission

Strategies
Plans for achieving organizational goals

Tactics

The methods and actions taken to accomplish strategies

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Planning and Decision Making

Figure 2.1
Mission Goals

Organizational Strategies
Functional Goals Finance Strategies Marketing Strategies Operations Strategies

Tactics Operating procedures

Tactics Operating procedures

Tactics Operating procedures

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Strategy Example
Example 1

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: Goal: Strategy: Tactics: Operations:

job

Live a good life

Successful career, good income
Obtain a college education Select a college and a major

Register, buy books, take courses, study, graduate, get

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Examples of Strategies
Low cost Scale-based strategies Specialization Flexible operations High quality Service

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Strategy and Tactics

Distinctive Competencies
The special attributes or abilities that give an organization a competitive edge.

Strategy Factors

Price Quality Time Flexibility Service Location

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Examples of Operations Strategies

Table 2.2

Price Quality Time Flexibility Service Location

Low Cost

U.S. first-class postage Motel-6, Red Roof Inns

High-performance design Sony TV or high quality Consistent Lexus, Cadillac quality Pepsi, Kodak, Motorola Rapid delivery On-time delivery Variety Volume Superior customer service Convenience Express Mail, Fedex, One-hour photo, UPS Burger King Supermarkets Disneyland Nordstroms Banks, ATMs
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Global Strategy
Strategic decisions must be made with respect to globalization What works in one country may not work in another Strategies must be changed to account for these differences Other issues
Political, social, cultural, and economic differences
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Strategy Formulation
Distinctive competencies Environmental scanning SWOT Order qualifiers Order winners

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Strategy Formulation
Order qualifiers
Characteristics that customers perceive as minimum standards of acceptability to be considered as a potential purchase

Order winners
Characteristics of an organizations goods or services that cause it to be perceived as better than the competition

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Key External Factors

Economic conditions Political conditions Legal environment Technology Competition Markets

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Key Internal Factors

Human Resources Facilities and equipment Financial resources Customers Products and services Technology Suppliers

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

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Strategic OM Decisions
Table 2.4

Decision Area
Product and service design Capacity Process selection and layout

Affects
Costs, quality liability and environmental Cost structure, flexibility Costs, flexibility, skill level, capacity

Work design
Location Quality Inventory Maintenance Scheduling Supply chains

Quality of work life, employee safety, productivity

Costs, visibility Ability to meet or exceed customer expectations Costs, shortages Costs, equipment reliability, productivity Flexibility, efficiency Costs, quality, agility, shortages, vendor relations

Projects

Costs, new products, services, or operating systems

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Quality and Time Strategies

Quality-based strategies

Focuses on maintaining or improving the quality of an organizations products or services Quality at the source Focuses on reduction of time needed to accomplish tasks
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Time-based strategies

Time-based Strategies
JAN
Planning Designing Processing Changeover Delivery On time!

FEB

MAR

APR

MAY

JUN

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Outsourcing
Higher productivity in another company is a key reason organizations outsource work Improving productivity may reduce the need for outsourcing

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Improving Productivity
Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Dont confuse productivity with efficiency

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Video: Process Strategy

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Video: Compet. Analysis

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