Bài giảng môn Quản trị kinh doanh - Chapter 3: Strategy and value: competing through operations

Chapter 3Strategy and Value: Competing Through Operations1Learning ObjectivesDescribe the concepts of business-to-business (B2B) and business-to-consumer (B2C).Define the concept of a supply chain.Describe the value attributes common to B2B and B2C customers.Describe the role of the strategies that form the strategy hierarchy.Describe the role and importance of supply chain strategyDescribe Porter’s three strategiesDefine order winners, order losers, and order qualifiers and relate them to value.List and describe examples of strategic structural and infrastructural decisions.List and describe the competitive priorities of operations.Summarize the effects each strategic decision category has on operations’ competitive priorities.Distinguish between capabilities and processes.Compare the strengths and weaknesses of process-oriented, product-oriented, and cellular layouts.Describe the continuum of choices related to production volume and the alternatives available for linking to customer demand.Describe what is meant by a capability chain.2Supply ChainsA supply chain encompasses all activities associated with the flow and transformation of goods from the raw material stage (extraction), through the end user, as well as the associated information flows. 3Supply ChainsBasicProducerConvertersFabricatorsAssemblersSupport ServicesTransportStorageFinance, etc.Basic Producer – Mines, extracts or harvests natural resourcesConverter – Refines natural resourcesFabricator – Converts refined materials into usable componentsAssembler – Assembles components into finished products4Supply ChainsExhibit 3.1GenericSupply ChainModel5Value Attributes of Consumer CustomersCost – What does it cost for the total time of ownership?Quality – Does it meet my needs?Convenience – How easy is it to get?Timeliness – How quickly can I get it? Personalization – Will the business treat me as special? Do they know me?Ethical Issues – Is the business acting responsibly?Style/Fashion – Is the product the most current style?Technology – Do I need technical skills to use this product?6Value Attributes of Business CustomersWhen determining product or service value, a Business evaluates its potential to add value to the products or services it sells to its customers.Cost – What does it cost for the total time of ownership?Quality – Does it meet our specifications?Delivery Dependability – Does the firm meet delivery promises?Flexibility – Can they adapt to special needs?Response Time – How quickly can they get it to us?7The Value Transfer ModelThose producers sell it to consumers if it matches the value attributes they desire. Supplierscreate value. They sell it to product and service producers.8Operations Management FrameworkIn A Successful Strategy. . . The firm has made decisions that enable it to continue providing value profitably.Customers perceive value that is greater than the value offered by competitors. A strategy is a plan for creating value. A strategy is a pattern of decisions an organization adopts in order to link resource decisions to goals.  A strategy is not what you say it is-it is defined by what you do.9The Strategic HierarchyMission StatementCorporate StrategyBusiness StrategyOperations Strategy10The Strategic HierarchyMission StatementA short statement of what a business does, what its values are, who its market is, and why. Corporate StrategyBroad and general in large diversified companiesDefines the businesses the corporation will engage in and how resources will be expended in these businesses.Sets expectations for business performanceBusiness StrategyThe general basis on which the business will competeCost LeadershipDifferentiationFocusFunctional Strategy Sets priorities so that day-to-day decisions support business strategy11A Closer Look at Business StrategiesCost leadershipKeep costs lower than those of competitionMay lead to lower prices than competitorsDifferentiationCreate products or services that are different enough to be more attractive or better match customers view of valueFocusTarget a small segment of the market12CostQualityResponseTimeDependabilityConvenienceStyle/FashionEthicsTechnologyFlexibilityPersonalizationCostQualityResponseTimeDependabilityFlexibilityUnderstand what is “valued” in the marketChoose which attributes to emphasizePrioritize those attributesDesign operations to support those prioritiesREMINDER:Operations management is “The management of resources used to create saleable products and services”Business & Operations StrategyXXXXXX123413Functional strategies must support one another as well as the higher level strategies!!Operations StrategyHow to design the operationHow to allocate productive resourcesOperations Strategy14Environmental ScanningEnables the business to stay abreast of changes inTechnologyCustomer expectationsCompetitor’s offeringsGlobal politicsRegulationsCosts of inputs15Structural vs. Infrastructural DecisionsStructural - Related to tangible resources (buildings, equipment, process, supply-chain integration)ExamplesCapacityHigh vs. Low volume Equipment, Adding capacity, Flexibility of capacityFacilitiesLocation, size, design, numberProcess TechnologyLayout, AutomationVertical Integration/Supplier RelationshipsSupplier links, partnerships, integration vs. outsourcing16Structural vs. Infrastructural DecisionsInfrastructural - Related to systems used to enhance the utilization and control of structural resourcesExamplesHuman ResourcesSkill level, part vs. full time, salariesQualityPrevention vs detection, control, specifications, supplier involvementPlanning & ControlInventory management, vendor policies17Structural vs. Infrastructural DecisionsInfrastructural Examples (continued)New Product DevelopmentSequential vs. parallel activities, development team compositionPerformance measurementTeam vs. individual incentives, types of measures, types of rewardsOrganization structureOrganizational structure, line and staff relationships18Strategic Decision Categories and ValueStructural and infrastructuraldecisions affect value, and ultimately whether or not the customer’s needs are met.REMINDER:Operations management is “The management of resources used to create saleable products and services.” The structural and infrastructural decisions dictate how those resources are used.19Operations StrategyAlign the value being created (cost, quality, response time, dependability, convenience, etc.) with resource decisions (inventory, workforce, capacity, facilities) so that your investment in resources creates what customers expect and you get a financial return on that resource investment that is better than your alternatives. 20Value Attributes and Competitive PrioritiesThe value attributes customers want . . .must dictate how operations makes resource decisions21Summary of Competitive Effects of Structural DecisionsInsert Exhibit 3.1022Summary of Competitive Effects of Infrastructural DecisionsInsert Exhibit 3.1123Strategic Objectives, Capabilities, and Process RequirementsMary’s Speedy PizzaGuaranteed Pizza Delivery in 20 minutes24Order Qualifiers and Order WinnersMary looks at “Speedy” delivery as an order winnerShe organizes processes to create capabilities that support the strategic objectiveOther minimum expectations must also be met before customers consider alternatives. Taste & TemperatureMust develop process supported capabilities in these areas as well.25Order Losers, Order Qualifiers, Order WinnersOrder Qualifier: hamburgers and fries are available. Order Winner: a cool toy is given with the meal. Order Loser: bad tasting food, soggy fries, etc.Example: Taking a group of children to lunchExample: Selecting a bank after moving to a new cityOrder Qualifiers: ATM access, online bankingdrive-up windowOrder Winner: free checking, no ATM fees for other banks’ ATMSOrder Loser: No ATM access, no online access.26Customers pay for capabilities, not processes or resourcesHOWEVER . . .No capability delivers a competitive advantage (i.e., acts as an “order winner”) forever.No capability delivers competitive advantage alone.Because capabilities rely on processes, competitive advantage can be obtained by concurrent design of capabilities along with products and processes .27