Chapter 2:

COMPETITIVENESS,
STRATEGY, AND
PRODUCTIVITY
Part 2

Jomar B. Torres, LPT, MBA, MPA,

CMP, CSSWB
 LEARNING OBJECTIVES
At the end of the session, students are expected to:
1. Define the term competitiveness.
2. Identify several ways that business organizations
compete.
3. Explore several reasons why business organizations
fail.
4. Define and explain the importance of the terms
mission, goal, and strategy.
COMPETITIVENESS
is an important factor in
determining whether a
company prospers, barely
gets by, or fails.
*price, delivery time, and product or
service differentiation.
Continued...
Marketing and Operations influences competitiveness!
MARKETING OPERATIONS
1. Identifying customer and/or 1. product or service design
consumer needs and/wants 2. cost
2. Price and Quality 3. location
3. Advertising and Promotion 4. quality
5. response time
6. flexibility
7. inventory
8. supply chain management.
 KEY ISSUES TO ADDRESS TO
SUCCESSFUL COMPETITION
What do Customers
want?
(What is really important to
customers)
What is the BEST way to
satisfy those wants?
(Efforts to meet or even exceed customer
expectations)

NOTE: Operations must work with marketing to obtain information on the

relative importance of the various items to each major customer or target
market.
 ORGANIZATIONAL
MISSION GOALS
STRATEGY
- destination of business - guides the business
- reason for existence of a
organization. organization by providing
business organization.
- foundation for direction for, and alignment
- "What business are we in"
development of of, the goals and strategies
- basis for organizational
organizational strategies. of the functional units.
goals, which provide more
- basis for startegies and - main reason for the
detail and describe the scope
tactics of functional units of success or failure of an
of the mission.
the organization. organization.

NOTE: If you think that GOALS are DESTINATIONS, then

STRATEGIES are the ROADMAPS for reaching the destinations.
 ORGANIZATIONAL STRATEGIES

OPERATIONAL QUALITY-BASED TIME-BASED

STRATEGY STRATEGY STRATEGY
- focused on maintaining or - focused on reducing the
- narrower in scope, dealing
improving the quality of an time required to accomplish
primarily with the operations
organization's product. various activities.
aspect of the organization.
- relates to product, processes,
Note: Planning, product
methods, operating resources,
design, processing,
quality, costs, lead times, and
changeover time, delivery
scheduling.
time, and response time for
complaints.
 HOW TO FORMULATE
EFFECTIVE STRATEGY?

1 2
SWOT ANALYSIS
INTERNAL FOCUS:
STRENGTH AND WEAKNESS
EXTERNAL FOCUS:
OPPORTUNITIES AND THREATS
MICHAEL PORTER'S MODEL
1. THREAT OF NEW COMPETITION
2. THREAT OF SUBSTITUTE PRODUCT/SERVICE
3. BARGAINING POWER OF CUSTOMERS
4. BARGAINING POWER OF SUPPLIERS
5. INTENSITY OF COMPETITION

3 ENVIRONMENTAL SCANNING
EXTERNAL FACTORS:
ECONOMIC CONDITIONS, POLITICAL CONDITIONS, LEGAL
ENVIRONMENT, TECHNOLOGY, COMPETITION, AND MARKETS
INTERNAL FOCUS:
HUMAN RESOURCES, FACILITIES AND EQUIPMENT, FINANCIAL
RESOURCES, CUSTOMERS, PRODUCT AND SERVICE, TECHNOLOGY,
SUPPLER, AND OTHER
WHY SOME ORGANIZATIONS FAIL?
1. Neglecting operations strategy.
2. Failing to take advantage of strengths and opportunities
and/or failure to identify competitive threats.
3. Emphasizing short-term financial performance at the
expense of research and development.
4. Emphasizing product and service design and not on
process design and improvement.
5. Neglecting investments in human resources.
6. Poor internal communications and cooperation amongst
functional areas.
7. Failing to consider customer and/or consumer wants and
or needs.
 IMPORTANT
IN FORMULATING A SUCCESSFUL STRATEGY, ORGANIZATIONS MUST
TAKE INTO ACCOUNT BOTH ORDER QUALIFIERS AND ORDER WINNERS.
ORDER QUALIFIERS ARE CHARACTERISTICS THAT POTENTIAL
CUSTOMERS PERCEIVE AS THE MINIMUM STANDARDS OF
ACCEPTABILITY FOR APRODUCT TO BE CONSIDERED FOR PURCHASE.

ORDER WINNERS ARE CHARACTERISTICS OF AN ORGANIZATION'S

GOODS OR SERVICES THAT CAUSE THEM TO BE PERCEIVED AS BETTER
THAT THE COMPETITION.
 IMPORTANT
BUSINESS STRATEGIES MUST POSSESS THE FOLLOWING:
1. LOW COST
2. RESPONSIVENESS
3. DIFFERENT FROM COMPETITORS
THANK YOU!!!