Om 2 2020 Mba Aru

CHAPTER 2
COMPETITIVENESS ,STRATEGY, AND PRODUCTIVITY
Chapter outline:
Competitiveness
Strategy Development process
Manufacturing strategies
Service strategies
Global strategies and role of operations strategy
Productivity and its Measures
Operations Management Dr. Yehualashet

1 Demeke 05/25/2020
Learning Objectives
After successful completion of this chapter, students will be
able to :
List several ways that business organizations compete.
Discuss and compare organization strategy and operations
strategy and explain why it is important to link the two.
Define the term productivity and explain why it is
important to organizations and to countries.
Describe several factors that affect productivity.
2 OM- Dr. Yehualashet D. 05/25/2020

Overview
Three separate, but related concepts that are vitally
important to business organizations:
Competitiveness
Strategy
Productivity
???????Brainstorming and Reflection????

Competitiveness
 How effectively an organization meets the needs of customers
relative to others that offer similar goods or services.
 Answer:
• What do customers want?
• How can these customer needs best be satisfied?
Organizations compete over:
Price (Cost): WAL-MART
Quality: BMW
Response-time: UPS
Variety (Flexibility): DELL

Cont----
Competitiveness is an important factor in determining
whether a company prospers, barely gets by, or fails.
Organizations compete through some combination of their
marketing and operations functions.
Marketing influences competitiveness in several ways:
Identifying consumer wants and/or needs
Price and quality are key factors in consumer buying decisions
Advertising and promotion

Ctd..
Operations has a major influence on competitiveness through :
Product and service design
innovation and the time-to-market for new products and
services.
Cost of an organization’s output is a key variable that affects
pricing decisions and profits.
Productivity
(discussed later in the chapter) is an important determinant of cost.
Location can be important in terms of cost and convenience for
customers.
Quality refers to materials, workmanship, design, and service.

Ctd..
Quick
 response can be a competitive advantage. One way is quickly bringing
new or improved products or services to the market. Quickly deliver existing
product/ Respond to customer complaints.
Flexibility
 is the ability to respond to changes.
Example: Alteration of design or features/ changes in volume
Inventory management –match supply and demand

Supply chain management involves coordinating internal and external

operations
Service might involve after-sale activities customers perceive as value-added,

such as delivery, setup, warranty work, and technical support.
Service quality can be a key differentiator; and it is often sustainable
Managers and workers are the people at the heart and soul of an organization.


Operations’ Influence on Competitiveness
Product and service design
Cost
Location
Quality
Quick response
Flexibility
Competitiveness
Inventory management
Supply chain management
Service
Managers and workers

Why Some Organizations Fail
Neglecting operations strategy.

Failing to take advantage of strengths and opportunities,
and/or failing to recognize competitive threats.
Putting too much emphasis on short-term financial
performance at the expense of research and development.
Placing too much emphasis on product and service design
and not enough on process design and improvement.
Neglecting investments in capital and human resources.
Failing to establish good internal communications and
cooperation among different functional areas.
Failing to consider customer needs.

Distinctive/core competencies
 Core competencies is the special attributes that give an
organization a competitive edge.
 Differentiation
 Cost: Make the Product or Deliver the Service Cheap
 Quality: Make a Great Product or Deliver a Great
Service
 Delivery Speed: Make the Product or Deliver the
Service Quickly
 Delivery Reliability: Deliver It When Promised
 Coping with Changes in Demand: Change Its
Volume
 Flexibility and New Product Introduction Speed:
Change It

Core Competencies
Core competencies include…
A well-trained and flexible Workforce
Having well-located & flexible Facilities
Having Market and Financial Know-How.
Expertise in Systems and Technology.
The core competencies should determine the firm’s
core processes.
These can include customer relations, new service/product
development, order fulfillment, and supplier relationships.
A firm may have all of these or focus on a subset of them,
as determined by its core competencies.
11/27 OM- Dr. Yehualashet D. 05/25/2020

Operations Priorities (Competitive Dimensions)
 Cost
 Make the Product or Deliver the Service Cheap
 Quality
 Make a Great Product or Deliver a Great Service
 Delivery Speed
 Make the Product or Deliver the Service Quickly
 Delivery Reliability
 Deliver It When Promised
 Coping with Changes in Demand

 Change Its Volume
 Flexibility and New Product Introduction Speed

 Change It
 Other Product-Specific Criteria

 Support It

Competitive Capabilities
The Competitive Capabilities are the cost, quality,
time and flexibility dimensions of competitive
priorities that a process or value chain actually
possesses and is able to deliver.
Low Cost means delivering a service or product at
the lowest possible cost to the satisfaction of the
customer.

Dealing with Trade-offs
For
Forexample,
example, ifif we
we reduce
reduce costs
costs by
by reducing
reducing product
product
quality
quality inspections,
inspections, we
we might
might reduce
reduce product
product quality.
quality.
For
Forexample,
example, ifif we
we
improve Cost
improve customer
customerservice
service
problem
problem solving
solving byby cross-
cross-
training
training personnel
personnel toto deal
deal Flexibility Delivery
with
with aa wider-range
wider-range of of
problems,
problems, they
they may
may Quality
become
becomeless
less efficient
efficient at
at
dealing
dealing with
with commonly
commonly
occurring
occurring problems.
problems.
Competing on Response
 Flexibility is matching market changes in design

innovation and volumes
 Institutionalization at Hewlett-Packard
 Reliability is meeting schedules
 German machine industry
 Timeliness is quickness
in design, production,
and delivery
 Johnson Electric,
Bennigan’s, Motorola
• Requires institutionalization within the firm of
ability to respond
Quality as a Competitive Capability
Top Quality: Delivering an outstanding service or

product.
Considerable interaction with the customers may be
required to determine what that means.
Consistent Quality: Producing services or products
that meet design specifications on a consistent basis.

Time as a Competitive Capability
Delivery Speed is quickly filling a customer’s order.
Lead Time is the time between receipt of an order
and filling the order.
On-Time Delivery means meeting the delivery time
promises.
Development Speed is quickly introducing a new
service or product.
Time-Based Competition is a strategy that focuses on
development speed and delivery speed.

Flexibility as a Competitive Capability
Customization means satisfying the unique needs of
each customer by changing the service or product
designs.
Variety involves handling a wide assortment of
services or products efficiently.
Volume Flexibility requires accelerating or
decelerating the rate of production quickly to handle
large fluctuations in demand.

Order Winners and Order Qualifiers
These are criteria used by customers in service or
product selection.
Order Winners are criteria for differentiating services or
products of one firm from those of another.
 Price, quality, time, flexibility, after sales support, reputation,
etc.
Order Qualifiers are demonstrated levels of performance
required to do business in a particular market segment.
The key to successfully competing is to determine what
customers want and then directing efforts toward meeting
(or even exceeding) customer expectations.

Ctd..
First: What do the customers want? (Which items on

the preceding list of the ways business organizations
compete are important to customers?)
Second: What is the best way to satisfy those wants?
Operations must work with marketing to obtain
information on the relative importance of the various
items to each major customer or target market.
Understanding competitive issues can help managers
develop successful strategies.

EXERCISE
• Name 10 ways that banks, city admin, education
institutions, manufacturing firm compete for customers.
• Hint: consider operations’ influence on competitiveness
• Product and service design
• Cost
• Location
• Quality
• Quick response
• Flexibility
• Inventory management
• Supply chain management
• Service
• Managers and workers
Mission- The reason for the existence of an organization.
MISSION AND STRATEGIES
Goals- Provide detail and scope of the mission.

Goals can be viewed as organizational destinations
Strategies- Plans for achieving organizational goals.
Serves as a roadmap for reaching the organizational destinations
Mission statement- States the purpose of an organization.
◦A clear statement of purpose that serves as a guide for
strategy and decision making
◦ Answers the question “What business are we in?”
 Example. As a service company, our mission is to: Satisfy
our customers’ immediate needs and wants by providing
them with a wide variety of goods and services at multiple
locations.
Ctd..
Organizations have:
Organizational strategies
Overall strategies that relate to the entire organization
Support the achievement of organizational goals and
mission
Business Level Strategies
How strategic business units compete
Functional level strategies
Strategies that relate to each of the functional areas
and that support achievement of the organizational
strategy

Tactics and Operations
Tactics
Themethods and actions taken to accomplish
strategies
They are more specific in nature than strategies
and they provide guidance and direction for
carrying out actual operations, which need the most
specific and detailed plans and decision making in
an organization.
“How to” part of process
Operations
The actual “doing” part of the process

Organizational Strategy
Low Price
Outsource operations to countries with low labor cost
Use capital-intensive methods to achieve high output volume and low unit cost
Specialization
Focus on narrow product lines or limited services to achieve higher quality
Responsiveness (time-based strategies)
Strategies that focus on the reduction of time needed to accomplish tasks
Differentiation: Variety
Focus on customization
Differentiation: Newness
Focus on innovation to create new products or services
Differentiation: Service
Focus on various aspects of service (e.g., helpful, reliable, etc)
Differentiation: Quality
focus on quality in all phases of an organization in order to achieve higher
quality than competitors

which comes first?
Mission Strategy Tactics
How does mission, strategies and tactics relate to

decision making and distinctive competencies?

Hierarchical Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance Marketing Operations

Strategies Strategies Strategies
Tactics Tactics Tactics
Operating Operating Operating

procedures procedures procedures
Operations Strategy
Operations strategy is the means by which operations
implements the firm’s corporate strategy and helps to
build a customer-driven firm.
It links long-term and short-term operations
decisions to corporate strategy.
It is the core of managing processes and value chains.
Operations strategy – The approach, consistent with
organization strategy, that is used to guide the
operations function.

How Operations Strategy fits the Operations Management
Philosophy
Operations As a Competitive
Weapon
Operations Strategy
Project Management Process Strategy
Process Analysis
Process Performance and Quality
Constraint Management Supply Chain Strategy
Location
Process Layout
Inventory Management
Lean Systems Forecasting
Sales and Operations Planning
Resource Planning
Scheduling

Ctd..
Corporate strategy views the organization as a system of
interconnected parts, each working with the others to achieve
desired goals.
Operations Strategy supports the corporate strategy and
requires continuous cross-functional interaction.
It is narrower in scope
The operations strategy should be customer driven.
Thought: Mention a company you are familiar with in terms of

its operations strategy and spot some key areas that comes to
your mind???

Customer-Driven Operations Strategy–
Example: Starbucks
If someone says, “Lets go out for coffee,” Starbucks
often comes to mind.
Entrepreneur Howard Schultz had an operations
strategy in mind in 1990 when he bought the 17-store
Seattle chain and turned it into a global success.
Service strategy was key.
Offering a variety of specialized products and
services, such as Internet access, phone ahead
ordering, and CD burning, all in a socially
interactive atmosphere.

Examples of Strategies
Organizational Examples of Companies
Strategy Operations Strategy or Services
Low Price Low Cost Wal-Mart
Southwest Airlines
Responsiveness Short processing times McDonald’s restaurants

On-time delivery FedEx
Differentiation: High performance design and/or BMW

High Quality high quality processing
Consistent Quality Coca-Cola
Differentiation: Innovation 3M
Newness Apple
Differentiation: Flexibility Burger King (“Have it your

Variety Volume way”)
McDonald’s (“Buses
Welcome”)
Differentiation: Superior customer service Disneyland
Service IBM
Differentiation: Convenience Supermarkets

Location Banks, ATMs

EXERCISE
• Name three companies you are familiar with in Ethiopia,
and describe their core organizational strategies in terms
of the following options:
• Low Price
• Specialization
• Responsiveness
• Differentiation: Quality
• Differentiation: Newness
• Differentiation: Variety
• Differentiation: Service
• Go online and find the mission statements of the three companies.

Are their strategies aligned with their mission statements?

Strategy Process
Environmental Company
Analysis Mission
Corporate SWOT
Strategy Analysis
FunctionalArea
Functional Area
Strategies
Marketing Operations Finance

Strategy Strategy Strategy

SWOT Analysis to Strategy Formulation
Mission
Internal External
S strengths Oopportunities
Strategy
Internal External
W weaknesses Tthreats
Competitive
Advantage
SWOT: Key Internal Factors
1. Human Resources
 Skills of workforce, expertise, experience, loyalty to the organization
2. Facilities and equipment

 Capacities, locations, age, maintenance costs
3. Financial resources
 Cash flow, access to additional funding, debt, cost of capital
4. Customers
 Loyalty, wants and needs
5. Products and services

 Existing, potential for new ones
6. Technology
 Existing, ability to integrate new and its impact on current and future operations
7. Suppliers
 Relationships, dependency, quality, flexibility, service
8. Other
 Labor relations, company image, distribution channels etc.

SWOT: Key External Factors
1. Economic conditions
 Health and directions of the economy, inflation, deflation, interest rates, taxes,
tariffs.
2. Political conditions
 Attitude towards business, political stability, wars
3. Legal environment
 Antitrust laws, regulations, trade restrictions, minimum wages laws, liability
laws, labor laws, patents
4. Technology
 Innovations rate, future process technology, design technology
5. Competition
 Number and strength of competitors, basis of competitions (price, quality etc.)
6. Markets
 Size, location, brand loyalty, ease of entry, growth potential, long term
stability, demographics.

Factors Affecting Mission
Philosophy and
Values
Profitability
Environment
and Growth
Mission
Customers Public Image

Benefit to
Society
Operations Strategy
Strategy Process Example
Customer Needs More Product
Corporate Strategy Increase Org. Size
Operations Strategy Increase Production Capacity
Decisions on Processes
Build New Factory
and Infrastructure
Service or Product Development Strategies
Product Variety: Offering a wide assortment.
Design: Ease of use and desirable features.
Innovation: Translate new technology into new
products.
Service: Products with services added.
Leader: Being first to introduce new services and/or
products.
Middle of the Road: Wait for the leaders to introduce
new services and/or products.
Laggard: Wait to see if the leader’s new services and/or
products catch on in the market.
Service Package
 A Service Package is a collection of goods and services
provided by a service process to its customers. It
consists of four features:
1. Supporting Facility: The physical resources that
must be in place before a service can be offered.
2. Facilitating Goods: The materials purchased or
consumed by the customer or the items provided by
the customer to receive a service.
3. Explicit Services: The readily observable benefits.
4. Implicit Services: Psychological benefits.

Quality Function Deployment (QDF)
Quality Function Deployment (QDF) is a means of translating
customer requirements into the appropriate technical
requirements for service or product development. Questions it
seeks to answer are…
1. What do our customers want?
2. How well are we doing relative to our competition?
3. What technical measures relate to our customers’ needs?
4. What are the relationships between what our customers
want and the technical measures?
5. How does our service or product performance compare
to the competition?
6. What are the potential technical trade-offs?

Concurrent Engineering
 Concurrent Engineering brings product engineers,
process engineers, marketers, buyers, information
specialists, quality specialists, and suppliers together
to design a product and the processes that will meet
customer expectations.
This is an essential cross-functional effort during
the service and/or product development phase to
insure a timely and well-coordinated process that
brings value to the customer.

Corporate Strategy and Key Operations
Management Decisions
Corporate
Corporate strategy
strategy
Market analysis
Competitive priorities
New
New Service/
Service/
Product
Product Development
Development No
Performance
Gap?
Yes
Operations strategy
Decisions
• Managing Processes Capabilities
• Managing Value Chains
Global Strategies
Reasons to Globalize
Tangible
1. Reduce costs (labor, taxes, tariffs, etc.)
Reasons 2. Improve supply chain
3. Provide better goods and services
4. Understand markets
Intangible 5. Learn to improve operations
Reasons
6. Attract and retain global talent

Cultural and Ethical Issues in Global
Operations
 Cultures can be quite different
 Attitudes can be quite different towards
 Punctuality  Thievery
 Lunch breaks  Bribery
 Environment  Child labor
 Intellectual
property

You May Wish To Consider
 National literacy rate  Work ethic
 Rate of innovation  Tax rates
 Rate of technology  Inflation
change  Availability of raw
 Number of skilled materials
workers  Interest rates
 Political stability
 Population
 Product liability laws
 Number of miles of
 Export restrictions highway
 Variations in language
 Phone system
OM’s Contribution to Strategy
Operations Specific Competitive
Decisions Examples Strategy Used Advantage
Product FLEXIBILITY:
Sony’s constant innovation
Quality of new products………………………………....Design
HP’s ability to lead
Process the printer market………………………………Volume
Location Southwest Airlines No-frills service……..…..LOW COST
DELIVERY:
Layout Pizza Hut’s 5-minute guarantee Differentiation
at lunchtime…………………..…..………………….Speed (Better)
Human Federal Express’s “absolutely,
resource positively on time”………………………..….Dependability
QUALITY: Response
Supply chain (Faster)
Motorola’s HDTV converters….……........Conformance
Motorola’s pagers………………………..….Performance Cost
Inventory leadership
Caterpillar’s after-sale service (Cheaper)
Scheduling on heavy equipment……………....AFTER-SALE SERVICE
Maintenance Fidelity Security’s broad

line of mutual funds………….BROAD PRODUCT LINE

Strategic Options to Gain a Competitive
Advantage
28% - Operations Management
18% - Marketing/distribution
17% - Momentum/name recognition
16% - Quality/service
14% - Good management
4% - Financial resources
3% - Other

Elements of Operations Management
Strategy
 Low-cost product
 Product-line breadth
 Technical superiority
 Product characteristics/differentiation
 Continuing product innovation
 Low-price/high-value offerings
 Efficient, flexible operations adaptable to
consumers
 Engineering research development
 Location
 Scheduling

Preconditions
One must understand:
 Strengths and weaknesses of competitors and possible new
entrants into the market
 Current and prospective environmental, technological, legal,
and economic issues
 The product life cycle
 Resources available within the firm and within the OM
function
 Integration of OM strategy with company’s strategy and
with other functional areas

Dynamics of Strategic Change
 Changes within the organization
 Personnel
 Finance
 Technology
 Product life
 Changes in the environment

Product Life Cycle
Introduction Growth Maturity Decline
Best period to Practical to change Poor time to change Cost control

increase market price or quality image, price, or critical
Company Strategy/Issues
image quality
share
Strengthen niche Competitive costs
R&D engineering become critical
is critical Defend market
position
CD-ROMs
Internet search engines
Analog TVs
Drive-through
LCD & plasma TVs restaurants
Sales iPods
3 1/2”
Xbox 360 Floppy
disks

Product Life Cycle
Introduction Growth Maturity
Decline
Product design and Forecasting critical Standardization Little product
development critical Product and process Less rapid product differentiation
OM Strategy/Issues
Frequent product reliability changes – more Cost

and process design Competitive product minor changes minimization
changes improvements and Optimum capacity Overcapacity in
Short production options Increasing stability of the industry
runs Increase capacity process Prune line to
High production Shift toward product Long production runs eliminate items
costs focus not returning
Product improvement good margin
Limited models Enhance distribution and cost cutting
Attention to quality Reduce capacity

Four International Operations
Strategies
High
Global Strategy
 Standardized product
 Economies of scale Transnational
 Cross-cultural learning Strategy
Cost Reduction Considerations
 Move material, people,

Examples ideas across national boundaries
Texas Instruments
Caterpillar  Economies of scale
Otis Elevator  Cross-cultural learning
International Strategy Multidomestic Strategy

 Use existing
 Import/export or license existing domestic model globally
product  Franchise, joint ventures,
subsidiaries
Examples
U.S. Steel Examples
Heinz The Body Shop
Harley Davidson McDonald’s Hard Rock Cafe
Low
Low High
55 OM- Dr. Yehualashet D. Local Responsiveness Considerations 05/25/2020
(Quick Response and/or Differentiation)
Productivity
A. Productivity
 One of the primary responsibility of operation management is
to achieve productive use of organizations resources.
 Productivity is an index that measure output (goods and
services) relative the input (labor, materials, energy and other
resources) used to produce them.
 Productivity
A measure of the effective use of resources, usually expressed
as the ratio of output to input
Productivity =output
input

Productivity cont’d…..
 The choice of productivity measure depends primarily on the

purpose of the measurement.
 If the purpose is to track improvements in labor productivity then
labor becomes the obvious input measure.
 The units of output used in productivity measures depends on the
type of job performed Number of office cleaned
Number of shifts
Number of machine installed

Labor hours
It can be described as number of offices cleaned per number of shifts

Or it can be described as the number of machines installed per labor

Productivity measures
Output
Productivity =
Input
Output Ouput Output
PartialMeasures ; ;
SingleInput Labor Capital
Output Ouput Output

Multifacto 
r Measures ; ;
Multiple
Inputs Labor+Machine Labor+Capital
+Energy
Goods or services produced

Total Measure
All inputs used to produce them
Examples of Partial Productivity Measures
Labor Units of output per labor hour
Productivity Units of output per shift
Value-added per labor hour
Machine Units of output per machine hour

Productivity machine hour
Capital Units of output per dollar input

Productivity Dollar value of output per dollar input
Energy Units of output per kilowatt-hour

Productivity Dollar value of output per kilowatt-hour

Productivity measures
Productivity Index = Value of output
Cost of Inputs
 For example, suppose the value of services generated by
a group of computers operations in a day is $2000 and
their total operational costs are $1,200.
The ratio of value produced to costs incurred is
$2,000/$1,200, or 1.67.
A firm’s overall ratio must be greater than 1, or it is
losing money.

ctd…..
Example :
a. Four workers installed 720 square yard of carpeting in
eight hours
b. A machine produced 68 usable pieces in two hours
 Calculation of multifactor productivity measure inputs
and outputs using a common units of measurement such as
cost/value
 For example the measurement might use cost of inputs and
price of the output
Multi factor productivity = quantity of production at standard price
Labor cost + material cost + overhead cost

Example . Determine the multifactor productivity for a combined input
of labor and machine time using the following data
 Total out put 16000 units
 Inputs
 Labor – 65 hours
 Machine – 15 hours
Multi factor productivity = total output

Labor + material
Multi factor productivity = 16000 units = 200 units per

hour
65 hrs + 15hrs

Example
7040 Units Produced

What is the
Sold for $1.10/unit multifactor
productivity?
Cost of labor of $1,000
Cost of materials: $520
Cost of overhead: $2000

MFP = Output
Labor + Materials + Overhead
MFP = (7040 units)*($1.10)
$1000 + $520 + $2000
MFP = 2.20
Current Period Productivity – Previous

Period Productivity
Productivity Growth = Previous Period Productivity

Productivity ratios are used for
Planning workforce requirements
Scheduling equipment
Financial analysis
Productivity measures are useful for

Tracking an operating unit’s performance over
time
Judging the performance and to decide where
improvements are needed

Factors Affecting Productivity
 Capital/Labor ratio: is a measure of whether enough
investment is being made in plant, machinery, and tools to
make effective use of labor hours.
 Scarcity of some resources, such as energy, water and a
number of metals, etc.
 Work-force changes: include a steady shift away from blue-
collar occupations.
 Innovation and technology
 Safety
 Shortage of IT workers
 Layoffs
 Labor turnover
 Design of the workspace
 Incentive plans that reward productivity
Ctd..
Managerial factors: are the ways an organization
benefits from the unique planning and managerial

skills, or business intelligence, of its managers
Quality of work life: is a term that describes the
organizational culture, and the extent to which it

motivates and satisfies employees.

Factors Affecting Productivity
Capital Quality
Technology Management

Improving Productivity
1st Develop productivity measures:- measurement is the
first step in managing and controlling an operation.
2nd Determine critical (bottleneck) operations:-
 look at the system as a whole in deciding which operations
are the most critical.
 it is overall productivity that is important.
3rd Develop methods for achieving productivity
improvements: such as soliciting ideas from workers
( organizing teams of workers, engineers and mangers
studying how other firms have increased productivity, and
reexamining the way work is done

Cntd.…
4th Establish reasonable goals
5th Make it clear that management supports/encourage productivity

improvement. Consider incentive to reward workers for contributions
6th Measure and publicize improvements
7th Don’t confuse productivity with efficiency:
 Efficiency is narrower concept that pertains to getting the most out of
a given set of resources
 Productivity is a broader concept that pertains to effective use of over
all resources

Reflection…..????
1) If one worker at a pizza shop produces 17 pizzas in 2
hours, the productivity of that worker is 8.5 pizzas per
hour. This number by itself does not tell us very much
about productivity. Why?? Comment?
2)Consider the alignment of competitive priorities and
productivity measures for company A and B:
Company (A) which competes on speed
Company (B) which competes on cost
Issue: How these two firms manage their Productivity
measures??
3) Consider two firms, A and B having the same level of
output. Firm A needs less input due to higher productivity.
What will happen in such circumstances??

Om 2 2020 Mba Aru

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CHAPTER 2

COMPETITIVENESS ,STRATEGY, AND PRODUCTIVITY

Operations Management Dr. Yehualashet

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???????Brainstorming and Reflection????

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Neglecting operations strategy.

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 Coping with Changes in Demand

 Flexibility and New Product Introduction Speed

 Other Product-Specific Criteria

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 Flexibility is matching market changes in design

Top Quality: Delivering an outstanding service or

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First: What do the customers want? (Which items on

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Goals- Provide detail and scope of the mission.

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Mission Strategy Tactics

How does mission, strategies and tactics relate to

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Finance Marketing Operations

Tactics Tactics Tactics

Operating Operating Operating

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Thought: Mention a company you are familiar with in terms of

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Responsiveness Short processing times McDonald’s restaurants

Differentiation: High performance design and/or BMW

Differentiation: Flexibility Burger King (“Have it your

Differentiation: Convenience Supermarkets

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• Go online and find the mission statements of the three companies.

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Marketing Operations Finance

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2. Facilities and equipment

5. Products and services

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Customers Public Image

Customer Needs More Product

Corporate Strategy Increase Org. Size

Operations Strategy Increase Production Capacity

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