Professional Documents
Culture Documents
Business strategy
Organizational strategy
Business plan
Value proposition
Cost structure
Revenue model
Business strategy
Low cost
Best cost
Broad differentiation
Focused differentiation
Focused low cost
Reduce cost in all areas. Low cost and large market can have great leverage on suppliers, cutting
facility costs, relocate and adopt leand manufacturing. Has high operational efficiency, standarized
products, tight supplier inventory control. High supplier quality and cut on reworks.
Supply chain agility: the hability of sourcing and manufacturing to rampup or own in production
volume quickly without underdue cost or hardship
Mass marketing: strategy of sending the same message to all potential customers
Organizational strategy
Goal to satisfy customer growth, compete, organize and make money.
Focus on what is good for the customer, not for the company or the supply chain. Balance of quality,
price, availability that is right for the customer
Based on push system: 1. production requried times based on schedule in advance, 2. Issuing
material at its start time, 3. In distribution, a system for replenishment field warehouse inventories,
usually manufacturing site
Based on Pull systems: 1. Production based on demand, 2. Material as demand, not issue until sign
comes from user, 3. In distribution, system for replenishment are made at the field warehouse, not
at a central warehouse
Most organizations purse push-pull and the point where pull moves to pull is the key strategy
decision
Key changes:
Functional products: mature, low profit margin and predictable demand, long life cycles, easy to
forecast
Innovative products: unpredictable demand, short lie cycles, high contribution margin. Average
stockout is 10-40%, sale 10-25%
Products:
Business Plan
Long term strategy, revenue, cost, profit, objectives, budgets, balanc sheet, PL, cash flow. Displayed
in USD, grouped by product family
Customer service
Sales channels
Value system
Operating model
Asset footprint
Value proposition
Core capabilities
Economy of scale
Geographical expertise
Technology advantages
Resource advantage
Cost structure
Make to stock: low production cost, high inventory carring cost. Standarized, high-volume
products
Assemble to order: modules are made to stock but final customer order is asembled only after
being ordered. Moderate production cost and low inventory carrying and planning. High
demand items with many options as computers
Make to order: high production cost but low inventory carryng cost and low planning cost.
Sporadic demand patterns and wide configuration options
Configure to order: mass production items that can be configured after being ordered. Like an
extension of make-to-order has moderate production and inventory carrying cost. It is used
when customer is willing to wait
Engineer to order: production and inventory cost after payment
Revenue model
Plan on how to earn more revenue to earn profits. A revenue model considers sales channels that
the organizationwill employ to sell good or service.