You are on page 1of 16

MGMT 314 Tutorial 2

MGMT 314 Tutorial 2 Lincy Varghese Victoria Management School

Lincy Varghese Victoria Management School

Sustainable Strategy  Adding a sustainability requirement means meeting value goals without compromising the ability of

Sustainable Strategy

 Adding a sustainability requirement means meeting value goals without compromising the ability of future generations
 Adding a sustainability requirement means
meeting value goals without compromising the
ability of future generations to meet their own
needs

The firm’s strategy describes how it will create an sustain value for its current shareholders

Shareholders – individuals or companies that legally own one or more shares of stock in the company

Stakeholders – individuals or organizations who are directly or indirectly influenced by the actions of the fir

Triple bottom line – evaluating the firm against social, economic, and environmental criteria

Operations and Supply Chain Strategy  Operations effectiveness – performing activities in a manner that best

Operations and Supply Chain Strategy

Operations and Supply Chain Strategy  Operations effectiveness – performing activities in a manner that best

Operations effectiveness – performing activities in a manner that best implements strategic priorities at a minimum cost

Setting broad policies and plans for using the resources of a firm – must be integrated with corporate strategy

Corporate strategy provides overall direction and coordinates operational goals with those of the larger organization

Different competitive factors imply different performance objectives Competitive factors If the customers value these … Performance

Different competitive factors imply different performance objectives

Competitive factors If the customers value these … Performance objectives Then, the operations will need to
Competitive factors
If the customers value these …
Performance objectives
Then, the operations will need to
excel at these …
Low price
Cost
High quality
Quality
Fast delivery
Speed
Reliable delivery
Dependability
Innovative products and
services
Flexibility (products/services)
Wide range of products and
services
Flexibility (mix)
The ability to change the timing
or quantity of products and
services
Flexibility (volume and/or
delivery)
Trade-Offs  Management must decide which parameters of performance are critical and concentrate resources on those

Trade-Offs

 Management must decide which parameters of performance are critical and concentrate resources on those characteristics
 Management must decide which
parameters of performance are critical
and concentrate resources on those
characteristics
 For example, a firm that is focused on
low-cost production may not be capable
of quickly introducing new products

Straddling – seeking to match a successful competitor by adding features, services, or technology to existing activities

Often a risky strategy

Order Winners and Order Qualifiers  Features customers will not forego  Order qualifiers are those

Order Winners and Order Qualifiers

 Features customers will not forego
 Features customers will not forego

Order qualifiers are those dimensions that are necessary for a firm’s products to be considered for purchase by customers

Order winners are criteria used by customers to differentiate the products and services of one firm from those of other firms

Features that customers use to determine which product to ultimately purchase

What Drives Clockspeeds? Technology/innovation push, customer pull, system complexity, and regulation INDUSTRY CLOCKSPEED IS A COMPOSITE:

What Drives Clockspeeds?

Technology/innovation push, customer pull, system complexity, and regulation INDUSTRY CLOCKSPEED IS A COMPOSITE: OF PRODUCT, PROCESS,
Technology/innovation push, customer pull,
system complexity, and regulation
INDUSTRY CLOCKSPEED IS A COMPOSITE:
OF PRODUCT, PROCESS, AND ORGANIZATIONAL
CLOCKSPEEDS
38 Mobile Phone System CLOCKSPEED is a mix of Transmission Standards, Software and Handsets Mobile Phone
38
Mobile Phone System CLOCKSPEED is a mix of
Transmission Standards, Software and Handsets
Mobile Phone System
SOFTWARE
APPLICATIONS
fast clockspeed
SERVICES
TRANSMISSION
STANDARD
slow clockspeed
HAND SET
medium clockspeed
OPERATING
SYSTEM
fast clockspeed
slow clockspeed

ISSUE: THE FIRMS THAT ARE FORCED

Responding to industry structure dynamics From vertical /integral to Horizontal/modular
Responding to industry
structure dynamics
From
vertical /integral
to
Horizontal/modular
Operations strategy must reflect four perspectives – top-down, bottom-up, market requirements, and operations resources Corporate strategy

Operations strategy must reflect four perspectives – top-down, bottom-up, market requirements, and operations resources

Corporate strategy Business strategy Top-down Capacity Supply networks Process technology Development and organisation Quality Speed Operations
Corporate strategy
Business strategy
Top-down
Capacity
Supply networks
Process technology
Development and
organisation
Quality
Speed
Operations
Market
Dependability
requirements
resources
Flexibility
Cost
Bottom-up
Emergent sense of
what the strategy
should be
Operational
experience
Operations Market resources requirements What you HAVE What you DO What you WANT What you NEED
Operations
Market
resources
requirements
What you
HAVE
What you
DO
What you
WANT
What you
NEED
to maintain
in terms of
operations
capabilities
your
capabilities
and satisfy
from your
operations to
help you
‘compete’
to ‘compete’
in the market
markets
Strategic
reconciliation
Operations strategy is the strategic reconciliation of market requirements with operations resources Tangible and Customer intangible
Operations strategy is the strategic
reconciliation of market requirements with
operations resources
Tangible and
Customer
intangible
needs
resources
Operations
capabilities
Operations
strategy
decision areas
Performance
Market
objectives
positioning
Operations
Competitors’
processes
actions
Understanding
resources
and processes
Strategic decisions
Capacity
Supply networks
Process
technology
Required performance
Quality
Understanding
markets
Speed
Dependability
Flexibility
Development and
organisation
Cost

Market competitiveness

Market competitiveness The operations strategy matrix Quality Speed Dependability Flexibility Cost Development Supply Process and Capacity

The operations strategy matrix

Quality Speed Dependability Flexibility Cost Development Supply Process and Capacity network technology organisation Decision areas Performance
Quality
Speed
Dependability
Flexibility
Cost
Development
Supply
Process
and
Capacity
network
technology
organisation
Decision areas
Performance objectives
Assessing Risk  Supply chain coordination risks are associated with the day-to-day management of the supply

Assessing Risk

 Supply chain coordination risks are associated with the day-to-day management of the supply chain
 Supply chain coordination risks are associated
with the day-to-day management of the supply
chain

Disruption risks are caused by natural or manmade disasters

All strategies have an inherent level of risk

Uncertainty in the environment causes supply chain planners to evaluate the relative riskiness of their strategies

Supply chain risk is the likelihood of a disruption that would impact the ability of a company to continuously supply products or services

Risk Management Framework and Risk Mitigation Strategies 1. Identify the sources of potential disruptions. 2. Assess
Risk Management Framework and
Risk Mitigation Strategies
1.
Identify the sources of potential
disruptions.
2.
Assess the potential impact of the risk.
3.
Develop plans to mitigate the risk
Risk
Risk Mitigation Strategy
Natural disaster
Contingency planning (alternate
sites, etc.), insurance
Country risks
Hedge currency, produce/source
locally
Supplier failures
Logistics failure
Multiple suppliers
Safety stock, detailed tracking,
and alternate suppliers
Tutorial Exercise Are RIM’s Days Numbered ?

Tutorial Exercise

Are RIM’s Days Numbered ?
Are RIM’s Days Numbered ?