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1. Define a primary task 2. Assess core competencies 3. Determine order winners & order qualifiers 4. Positioning the firm
Primary Task • What business the firm sees itself in • How the firm adds value to its customer – THE FIRM’S VALUE PROPOSITION .
Core Competencies • What a firm does better than anyone else • Based on experience and knowledge – NOT products and services. equipment and technologies or customers and markets • Core competencies need to align with the firm’s value proposition .
Order Winners and Core Competencies • Ideally. the marketplace order winner should align ewith an firm’s core Va lu Pro p o sitio competency C o re C o m p e ten c ie s O rd e r W in n e r .
strengths/weaknesses of the organization.Positioning • Making strategic choices • No firm can be all things to all people • Choosing one or two important dimensions and doing them extremely well • An effective positioning strategy considers the needs of the marketplace. . and position of competitors.
Dimensions of Competition • • • • Cost Quality Flexibility Speed .
Competing on Cost Eliminate all waste Invest in Updated facilities & equipment Streamlining operations Training & development .
Competing on Quality Please the customer Understand customer attitudes toward and expectations of quality .
Competing on Flexibility Produce wide variety of products Introduce new products Modify existing products quickly Respond to customer needs .
Competing on Speed Fast moves Fast adaptations Tight linkages .
Operations Role in Corporate Strategy Provide support for overall strategy of a firm Serve as firm’s distinctive competence Must be consistent with overall strategy .
Strategic Decisions in Operations Products Services Human Resource s Sourcing Processes and Technology Quality Capacity Facilities Operatin g Systems .
Products & Services Make-to-order Made to customer specifications after order received Make-to-stock Made in anticipation of demand Assemble-to-order Add options according to customer specification .
Processes & Technology Project One-time production of product to customer order Batch production Process many jobs at same time in batch Mass production Produce large volumes of standard product for mass market Continuous production Very high volume commodity product .
Product-Process Matrix High Continuous Production Mass Production Batch Production Projects Low Low Standardization High Volume .
Service-Process Matrix Labor Intensity Low Service Factory Mass Service Service Shop Professional Service High High Customization Low .
Capacity & Facilities How much capacity to provide Size of capacity changes Handling excess demand Hiring/firing workers Need for new facilities .
Facilities Best size for facility? Large or small facilities Facility focus Facility location Global facility .
Human Resources Skill levels required Degree of autonomy Policies Profit sharing Individual or team work Supervision methods Levels of management Training .
Quality Target level Measurement Employee involvement Training Systems needed to ensure quality Maintaining quality awareness Evaluating quality efforts Determining customer perceptions .
Sourcing Degree of vertical integration Supplier selection Supplier relationship Supplier quality Supplier cooperation .
& reward systems . scheduling priorities.Operating Systems Execute strategy daily Information technology support Effective planning & control systems Alignment of inventory levels.
Strategic Planning Mission and Vision Voice of the Business Corporate Strategy Voice of the Customer Marketing Strategy Operations Strategy Financial Strategy .
Policy Deployment Focuses employees on common goals & priorities Translates strategy into measurable objectives Aligns day-to-day decisions with strategic plan .
Balanced Scorecard Finance — How should we look to our shareholders? customers? Customer — How should we look to our Processes — At which business processes must we excel? Learning and Growing — How will we sustain our ability to change and improve? .