OPERATION AND COMPETITIVENESS.

Objectives

Introduction:

* Cos must be competitive in order to sell their goods and services in the
market place.
* Competitiveness refers to how effectively an org meets the needs and
wants of customers relative to others that offer similar goods and or
services. ( Stevenson 2007)

*Business orgs compete through some combination of their marketing

and operations function.
Marketing influences competitiveness through;
1. Identifying consumer needs and wants.
2. Pricing.
3. Advertising and promotion.

* Operations influences competitiveness through;

1. Product and service design.
Once the marketing dept identifies thenneeds and wants and passes info,
it should ensure the design of the product

2. Cost
Cost is a key variable that affects pricing productivity and profit

3. Location
4. Quality
It refers to materials workmanship and design.
5. Quick response.
In bringing new or improved products delivering on existing products
and responding to customers complaints.

6. Flexibility.
Is the ability to respond to changes? Alterations in design features or
volume or mix of products offered by the org.

7. Inventory management
gives a firm competitive advantage by effectively matching suppliers of
goods with demand.

8. Supply chain management.

SCM involves coordinating internal and external operations (buyers and
suppliers) to achieve a timely and cost effective delivery of goods
throughout the system.Ensures tehres a flowm of info from suppliers to
customers
9. Service.
Involves after sale activities that are perceived by customers as value
added
- delivery, set up, warranty work, technical support.
10. Managers and workers

*The key to successfully competing is to determine what customers

want and then directing efforts towards meeting (or exceeding)
customers’ expectations.
*Two basic issues must be addressed;
1. What do customers want?
2. What is the best way to satisfy those wants?
*Understanding competitive issues can help managers develop
successful strategies.

Strategy
*A strategy is a plan for achieving organizational goals.
*It may be long, intermediate or short term.
*It should be designed in such a way that it supports organizations
mission and goals.
Mission – the reason for an organizations existence
Mission statement – states the purpose of an organization.
Goals – provide detail and describe the scope of the mission.

*the mission and goals often relates to how an org wants to be perceived
by the general public, its employees, suppliers and customers.
Strategy – roadmap for reaching the goal.
Tactics – Methods and actions used to accomplish strategies and are
more specific in nature

*A high school student would like to have a career in business, have a

good job and earn enough money to live comfortably.
- mission – live a good life
-goal- successful career, good income.
-strategy- obtain university education
- tactics- select a college and a major; decide how to finance college
-operations- register, buy books, take courses today
Strategy formulation takes into account the way orgs compete and a
particular orgs assessment of its own strength and weaknesses in order to
take advantage of its distinctive competencies.
- distinctive competencies are those attributes or abilities that give an
organization a competitive edge
The most effective organizations use an approach that develop
distinctive competencies based on customer needs as well as what the
competition is doing.
Some examples of different strategies and org may choose from ; low
cost, flexible operations, high quality, service etc.

Mission

Organizations goals

Organizations strategies

Functional goals

Finance strategies Marketing strategies Operations strategies

Tactics tactics tactics

operating procedures operating procedures operating procedures

OPERATIONS STRATEGY
 Setting broad policies and plans to utilize the firms resources
optimally to support its longer term competitive strategy (chase,
Jacobs, and aquilano 2010)
 The approach, consistent with the organization strategy, that is
used to guide the operations function. (Stevenson 2008)
 The organizations strategy provides the overall direction of the
organization. It is broad, covering the entire organization.
Operation strategy is narrower in scope. Dealing primarily with the
operations aspect of the organization. It relates to product
processes, methods, operating resources, quality, costs, lead time
and scheduling. Operations strategy should be linked to the org’s
strategy.
 Organization strategy should take into account the realities of
operations, strengths and weaknesses capitalizing on the strengths
and dealing with the weaknesses.
 The operation strategy must be consistent with other functional
unit of the organization.
 Synergetic effects are likely to be experienced from working
together rather than competing internally.
 Operation strategy can have a major influence on the
competitiveness of the org if it is well designed and executed, there
is a chance that the or will be successful.
 Strategy process Example

CUSTOMER NEEDS MORE PRODUCT

CORPORATE STRATEGY INCREASE ORG. SIZE

INCREASE PRODUCTION
OPERATIONS STRATEGY CAPACITY

DECISIONS ON PROCESSES AND

INFRASTRUCTURE BUILD NEW FACTORY

COMPETITIVE DIMENSIONS.
- Decisions that can determine whether an org will be competitive or
not.
- Different customers are attracted by different attributes.;

1. Cost or price
Within every industry there is usually a segment of the market that
buys only on the basis of low cost. For it to be successful, a firm
must be a low cost producer but even this does not guarantee
profitability and success. This segment of the mancat is frequently
very large. As a consequence, competition is fierce as so is the
failure rate.
 2. Quality
make a great product or deliver a great service.
3. Delivery speed
Make the product or deliver the service quickly.
4.Delivery reliability
Deliver it when promised,
5. Coping with changes in demand.
Change its volume.
6.