Competitiveness, Strategy, and Productivity

4. Businesses Compete Using Marketing Identifying consumer wants and needs Pricing Advertising and promotion

5. Businesses Compete Using Operations

6. Why Some Organizations Fail

8. Mission Mission The reason for an organization’s existence Mission statement States the purpose of the organization The mission statement should answer the question of “What business are we in?”

9. McDonald’s Mission Statement McDonald's brand mission is to "be our customers' favorite place and way to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience -- People, Products, Place, Price and Promotion. We are committed to improving our operations and enhancing our customers' experience. http://www.mcdonalds.com/corp/about/mcd_faq/student_research.html

10. Goals The mission statement serves as the basis for organizational goals Goals Provide detail and the scope of the mission Goals can be viewed as organizational destinations Goals serve as the basis for organizational strategies

11. Strategies Strategy A plan for achieving organizational goals Serves as a roadmap for reaching the organizational destinations Organizations have Organizational strategies Overall strategies that relate to the entire organization Support the achievement of organizational goals and mission Functional level strategies Strategies that relate to each of the functional areas and that support achievement of the organizational strategy

12. Tactics and Operations Tactics The methods and actions taken to accomplish strategies The “how to” part of the process Operations The actual “doing” part of the process

13. Planning and Decision Making

14. Strategy Example Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably Mission: Live a good life Goal: Successful career, good income Strategy: Obtain a college education Tactics: Select a college and a major Operations: Register, buy books, take courses, study, graduate, get job

15. Sample Strategies

16. Strategy Formulation

17. Strategy and Tactics Distinctive Competencies The special attributes or abilities that give an organization a competitive edge. Price Quality Time Flexibility Service Location

18. Environmental Scanning

19. Human Resources Facilities and equipment Financial resources Customers Products and services Technology Suppliers Key Internal Factors

20. Economic conditions Political conditions Legal environment Technology Competition Markets Key External Factors

21. 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 organization’s goods or services that cause it to be perceived as better than the competition

22. Operations Strategy

23. Quality and Time Strategies

24. Quality and Time Strategies

25. Time-Based Strategies

26. Time-based Competition

27. Time-based Competition Examples

28. A Tale of two Product Development: GM vs. Ford

29. Time-to-Market

30. Agile Operations

31. Productivity

32. Why Productivity Matters High productivity is linked to higher standards of living As an economy replaces manufacturing jobs with lower productivity service jobs, it is more difficult to maintain high standards of living Higher productivity relative to the competition leads to competitive advantage in the marketplace Pricing and profit effects For an industry, high relative productivity makes it less likely it will be supplanted by foreign industry

33. Productivity Partial measures output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs)

35. Productivity Example

36. Solution

37. U.S. Multifactor Productivity

38. Productivity Growth

39. MFP Growth---Non-Farm

40. MFP Growth--Manufacturing

41. Factors Affecting Productivity

42. Standardization Quality Use of Internet Computer viruses Searching for lost or misplaced items Scrap rates New workers Other Factors Affecting Productivity

43. Safety Shortage of IT workers Layoffs Labor turnover Design of the workspace Incentive plans that reward productivity Other Factors Affecting Productivity

44. Bottleneck Operation

45. Improving Productivity Develop productivity measures Determine critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Don’t confuse productivity with efficiency

46. Who’s more productive and the consequences?

47. Some Usual Explanations Government regulation New investment Composition of work force High initial base Wage rates

48. The Competitive Decline Rolls-Royce (1906) Rover Jaguar Chrysler Daimler Benz (1998) ?