04 - technological strategy i

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Technology Strategy Supplement

Learning Objectives

List and briefly discuss the primary waysthat business organizations compete.

List five reasons for the poor

competitiveness of some companies. Define the term strategy and explain why

strategy is important for competitiveness.

Contrast strategy and tactics.


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Learning Objectives

Discuss and compare organization strategyand operations strategy, and explain why it is

important to link the two.

Describe and give examples of time-basedstrategies.

Define the term productivity and explain why

it is important to organizations and tocountries.

List some of the reasons for poor productivity

and some ways of improving it.


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Competitiveness:

How effectively an organization meets the

wants and needs of customers relative to

others that offer similar goods or services


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Businesses Compete UsingMarketing

Identifying consumer wants and needs

Pricing

Advertising and promotion


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Businesses Compete UsingOperations

Product and service design

Cost

Location

Quality

Quick response


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Businesses Compete UsingOperations

Flexibility

Inventory management

Supply chain management

Service and service quality

Managers and workers


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Why Some Organizations Fail

Too much emphasis on short-term

financial performance

Failing to take advantage of strengths

and opportunities

Neglecting operations strategy

Failing to recognize competitive threats


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Why Some Organizations Fail

Too much emphasis in product andservice design and not enough on

improvement

Neglecting investments in capital andhuman resources

Failing to establish good internal

communications Failing to consider customer wants and

needs


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Mission/Strategy/Tactics

How does mission, strategies and tactics relate to

decision making and distinctive competencies?

Strategy TacticsMission


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Strategy

Mission The reason for existence for an organization

Mission Statement

States the purpose of an organization

Goals

Provide detail and scope of mission

Strategies

Plans for achieving organizational goals

Tactics

The methods and actions taken to accomplish strategies


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Planning and Decision Making

Mission

Goals

OrganizationalStrategies

Functional Goals

Finance

Strategies

Marketing

Strategies

Operations

Strategies

Tactics Tactics Tactics

Operating

procedures

Operating

procedures

Operating

procedures

Figure 2.1


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Strategy Example

Rita is a high school student. She would like to havea career in business, have a good job, and earnenough income to live comfortably

Mission: Live a good lifeGoal: Successful career, good income

Strategy: Obtain a college education

Tactics: Select a college and a major

Operations: Register, buy books, takecourses, study, graduate, get

job

Example 1


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Examples of Strategies

Low cost

Scale-based strategies

Specialization

Flexible operations High quality

Service


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Strategy and Tactics

Distinctive CompetenciesThe special attributes or abilities that give an

organization a competitive edge.

Strategy Factors

Price

Quality

Time

Flexibility Service

Location


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Banks, ATMsConvenienceLocation

Disneyland

Nordstroms

Superior customer

serviceService

Burger King

Supermarkets

Variety

VolumeFlexibility

Express Mail, Fedex,

One-hour photo, UPSRapid delivery

On-time deliveryTime

Sony TV

Lexus, Cadillac

Pepsi, Kodak, Motorola

High-performance design

or high quality Consistent

quality

Quality

U.S. first-class postageMotel-6, Red Roof Inns

Low CostPrice

Examples of Operations StrategiesTable 2.2


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Global Strategy

Strategic decisions must be made withrespect to globalization

What works in one country may not work in

another Strategies must be changed to account for

these differences

Other issues Political, social, cultural, and economic

differences


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Strategy Formulation

Distinctive competencies Environmental scanning

SWOT

Order qualifiers Order winners


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Strategy Formulation

Order qualifiers Characteristics that customers perceive as

minimum standards of acceptability to be

considered as a potential purchase Order winners

Characteristics of an organizations goods or

services that cause it to be perceived as

better than the competition


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Economic conditions

Political conditions

Legal environment

Technology

Competition

Markets

Key External Factors


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Human Resources

Facilities and equipment

Financial resources

Customers

Products and services

Technology Suppliers

Key Internal Factors


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Operations Strategy

Operations strategy The approach,consistent with organization strategy,

that is used to guide the operations

function.


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Strategic OM Decisions

Decision Area AffectsProduct and service design Costs, quality liability and environmental

Capacity Cost structure, flexibility

Process selection and layout Costs, flexibility, skill level, capacity

Work design Quality of work life, employee safety, productivity

Location Costs, visibility

Quality Ability to meet or exceed customer expectations

Inventory Costs, shortages

Maintenance Costs, equipment reliability, productivity

Scheduling Flexibility, efficiency

Supply chains Costs, quality, agility, shortages, vendor relations

Projects Costs, new products, services, or operating systems

Table 2.4


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Quality and Time Strategies

Quality-basedstrategies Focuses on maintaining or

improving the quality of anorganizations products or

services

Quality at the source

Time-based strategies Focuses on reduction of

time needed to accomplish

tasks


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Time-based Strategies

JAN FEB MAR APR MAY JUN

Planning

Processing

ChangeoverOn time!

Designing

Delivery


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Improving Productivity

Develop productivity measures

Determine critical (bottleneck)operations

Develop methods for productivityimprovements

Establish reasonable goals

Get management support Measure and publicize improvements

Dont confuse productivity with

efficiency


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Video: Process Strategy


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Video: Compet. Analysis

04 - technological strategy i

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