BUS331 Operations Management

OM Worksheet#1 (4%)
Chapter 1 Introduction to Operations Management
Remark: You may extend the space for writing the answer as you want in each question.

1. What is ‘Operations Management’? and how do various operations in an

organization function? Please explain and give examples of real businesses.
ANS: Operations Management includes the critical management of resources that
need to be converted into goods and services by an organization. The role of OM of
any company is to design, plan, direct and improve all the activities involved in the
production of goods or services. It is the process of formulating high level strategic
and tactical decisions for converting company input to an output of greater value.
Finances, inventory management, product design, quality control, material planning,
and maintenance are all the operations handled by the OM of an organization.
Finance in operations management aids in the creation of a budget that allows the
company to accomplish its production targets and can assist in the evaluation of
various investment options in order to make the best selection. The proper use and
distribution of funds allows a product to be manufactured at an efficient cost while
also meeting the needs of the entire consumer. Another most important
responsibilities of operations management are to guarantee that a product is
appropriately designed, that it follows market trends, and that it meets the
expectations of customers. The OM of a company also needs to strive to deliver the
highest quality product possible in addition to the product design function.
Consumers today are more concerned with quality than quantity, which is why
developing a long-lasting and high-quality product is necessary. Operations also
engages with suppliers outside the company to place orders for goods or services,
discuss production and delivery requirements, certify quality, negotiate contracts,
and complete design specifications.

 Example can be taken of Herbal Essence, an herbal hair care company, by

analyzing their suppliers and distributors- a part of their OM. Herbal Essences
uses a push strategy through indirect distribution where its products are easily
accessible to all consumers with intensive distribution at major retailers, grocery
stores, and drug stores. In addition to these bricks and mortar retailers, Herbal
Essences provides its target segment who are accustomed to using technology
and purchasing its products online by connecting these users with third-party
online retailers. The company's objective is to make their users and clients

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 experience a feeling of belonging, wellness, and growth while they have been
given the support it needs to quickly take on new challenges in the business of
women's hair care products. 
 Herbal Essences' key mission is to reestablish their brand in the hair care
business, with their new campaign that intended to differentiate their product
from competitors, raise public awareness among their potential customers, and
provide benefits for buyers to pick their brand of items in order to achieve this
goal.

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2. Please explain ‘Productivity’ and ‘Competitiveness’, and give examples:

ANS: Competitiveness refers to how well a company serves the demands and
needs of customers in comparison to other companies that provide similar goods
or services. It is an important determinant of a company’s success and an
encouraging factor for overall growth. Product and service design, cost, location,
quality, response time, flexibility, inventory and supply chain management, and
service all have a significant impact on competitiveness. The key to competing
successfully is to figure out what customers want and then delivering their
expectations. Operation managers can design successful strategies by
understanding competitive issues and strengthening competitive advantages to
create a positive image among other competitors. Herbal Essences is a well-
established brand worldwide, in 160 countries. The strong ethos of this brand
gives it a competitive advantage. Even with plenty of hair care product
competitors, this brand has not lost much of its competitive edge. Moreover,
their products are high-quality with an affordable range of prices, while their
customer services are excellently accessible on different platforms, which all
these are their competitive advantages.
Productivity is a measure of how efficiently resources are used, usually stated as a
ratio of output to input. Although productivity is crucial for all businesses, it is
especially important for those who pursue a low-cost approach, because the higher
the productivity, the lower the output cost. For a single activity, a department, an
organization, or an entire country, a productivity ratio can be calculated. Productivity
ratios are used in business to manage staff requirements, schedule equipment,
perform financial analysis, and other vital functions. Measures of productivity might

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be based on a single input (partial productivity), many inputs (multifactor
productivity), or all inputs (total productivity). An example of productivity in terms of
efficiently resources and material usage of Herbal Essences is through their
specialization of their products different from other brands in meaningful ways,
including organic ingredients, safe and appealing packaging for its customers and
the environment, natural materials that can be reused and recycled for its input and
formulations into great products that does great sales for its output, which they
measured out to be productive.
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3. Please explain ‘Strategy Formulation’ process in great details.

ANS: Strategy Formulation is the process of selecting the most suitable course of
action for achieving organizational goals and objectives and also achieving the
organizational vision. Strategy Formulation contains 5 basic steps:
1. Define Primary Task = Define what is the firm doing in the business and define the
mission and vision of the company. When define the task shouldn’t define it too
narrowly define it as wide as possible to make the goal better visualize.
2. Assessing core competencies = is the assessment of the business, firm, and
people capabilities against other competitors as well as its distinctive competencies.
3. Determining order winners and order qualifiers =
- Order winners are a feature that will win a bid or a customer purchase in order to
enter or remain in a market, companies must furnish the qualifications. They merely
have to be as good as their counterparts in order to provide qualifiers.
- Order qualifiers are characteristics that a product must have in order to be
considered for a competition by a customer.
4. Positioning the firm = The positioning strategy of a company is concerned with
how it will compete in the market. An efficient positioning strategy takes into account
the organization’s strengths and shortcomings, as well as the needs of consumers
and the market, as well as the position of competitors. It can be competing with:
cost, speed, quality, and flexibility.

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 5. Deploying the strategy = Deploying a strategy convert a firm’s positioning strategy
and resultant order winners and order qualifiers into specific performance
requirement also formulating a strategy can be easier than implementing a strategy
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4. What are core competencies of business enterprises e.g. Tesco Lotus and
Kerry? Explain both businesses core competencies and their strategic
positioning.

ANS: A company's core competency, or distinguishing competence, is what a

company does better than anybody else, resulting in long-term (sustainable)
competitive advantages. A company's core competencies are the resources and
capabilities that make up a company's strategic advantages in terms of providing
sustenance and stability, they might come in the forms of being greater service,
higher quality, faster delivery, or cheaper prices and costs. 

The ways to find the company's real strength is to identify the real specific core
competency, where the company does better than others, with three
requirements:
1. provide access to a wide variety of marketing
2. contribute to the benefit of the product as perceived by the customers
3. hard for competitors to imitate

Example (Tesco Lotus):

As for Tesco Lotus enterprise, they have been operating in Thailand as one of
the largest supply chains, assisting their suppliers' ranging from Thai farmers and
consumer brands' products to Thai customers through partnerships with major
consumer goods firms such as Unilever and P&G, and so on. With the
company's supply chain being their key component and a unique value of their
business, it provides them a competitive advantage by allowing Tesco Lotus to deliver
their items to customers with greater speed, excellent product qualities that has been
screened for qualifications and their prices are lower than their competitors,
hence why they are satisfying all ranges of customers. Tesco Lotus is very
flexible with their operations, as shown by the COVID-19 pandemic impacts, where
their services turned into online applications and home deliveries, making them able to
adapt and change according to the situations and changes. In this case, Tesco

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Lotus' core competencies is their supply chain which they able to invest into their
systems, methods, and people.