Chapter 2 Flashcards
What is meant by the term competitive advantage? Provide an example.
Unique service of operations The example of McDonald’s Limited menu of standardized food Fast production and service Convenient, clean and low price
What does operations strategy mean? What are its elements?
Operations strategy – linked to business strategy, leading to a consistent pattern of decision-making and competitive advantage for the firm.
Consists of mission, objectives, strategic decisions and distinctive competence.
4 Elements of Operating strategy
Operations mission
Operations objectives – cost, quality, delivery, flexibility
Operations policies – how will the objectives be achieved
Distinctive competence.
How does operations strategy relate to organizational (corporate) strategy?
Corporate & business strategy – overall goal of the organization
An example is Walmart’s Corporate Strategy is Everyday Low Prices but their Operations Strategy is Operations Mission(Cut down cost is store operations and in supply chain) operations objectives (Cost, Quality, Delivery, Flexibility) Strategic Decesions (Control inventory, centralized location) and Distinctive Competence (RFID, Vendor Management, Cross Docking)
Describe how the market might not drive an organization’s strategy.
Organization doesn’t always reflect the market because the company would need to reflect their distinctive competency. Whether it stems from patents or other competencies it must reflect the potential new market.
What is the ultimate goal of having well-understood functional strategies?
are guided by the business and corporate strategies. The outcomes of the process are a consistent pattern of operations decisions that are well connected with other functions in the business
How many common objectives of operations? What are they?
4 of them.
Cost- Unit cost per production or cost of goods sold
Quality- Conformance of product or service to customer requirements.
Delivery- Provide service quickly & on time.
Flexibility - Ability to rapidly change operations.
What are examples of measurements related to common objectives of operations?
Cost- Unit cost per production or cost of goods sold
Quality- Conformance of product or service to customer requirements.
Delivery- Provide service quickly & on time.
Flexibility - Ability to rapidly change operations.
What competitive choices relate to these common objectives?
The objectives should be suited to the particular business, which will not necessarily exceed the competition in every category.
What does the product imitator strategy entail?
low cost(Price Sensitive), mature Market, High Volume of Standardization,
What does the product innovator strategy entail?
Product- Features- Sensitive
Emerging Market
low volume
customized products
What are some examples of operations distinctive competencies?
Building distinctive competence – capabilities that are difficult to imitate.
i. e.
- Patents
- Proprietary processes
- Location of facilities – first mover advantage
- Employee skills
- Organizational knowledge
What are typical characteristics of a global organization?
Facilities and plants are located on a worldwide basis. the best worldwide source of supply is found regardless of its national origin.
What is meant by supply chain strategy?
Supply chain in other chapters focuses on network of manufacturing and service operations that supply one another. from raw materials through manufacturing to the ultimate customer. Supply chain strategy thus takes into account not only the operations strategy of the firm but also the strategies and capabilities of the suppliers and customers in the firms supply chain.
