KR: Chapter 2 Operations Strategy
Chapter Outline Corporate strategy
Corporate strategy Three levels of strategies SWOT analysis Functional strategy Operations strategy Competitive priorities and core competencies
ORGANIZATIONAL LEVELS OF STRATEGIES TM 7-3 ORGANIZATIONAL LEVELS OF STRATEGIES CORPORATE STRATEGIES Type of business Competitive position Resource development BUSINESS STRATEGIES How to compete in a particular market How to achieve competitive advantage FUNCTIONAL STRATEGIES Action plans for each functional area Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 2 2 2 3
STRATEGY FORMULATION STRATEGY IMPLEMENTATION assess environmental TM 7-2 STRATEGY FORMULATION STRATEGY IMPLEMENTATION assess environmental factors Conduct Competitive Analysis: * Strengths * Weaknesses * Opportunities * Threats Identify Current Mission and Strategic Goals Develop Specific Strategies: * Corporate * Business * Functional Carry Out Strategic Plans Maintain Strategic Control assess organizational factors Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998
COMPETITIVE ADVANTAGE TM 7-4 SWOT ANALYSIS Strengths Opportunities Weaknesses Threats COMPETITIVE ADVANTAGE Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 3 3 3 4
Chapter Outline Corporate strategy Competitive priorities
Competitive Priorities Cost Quality High-performance design Consistent quality Flexibility Customization Volume flexibility Time Fast delivery On-time delivery Development speed
Speedster Innovators and Producers Product Development Time Old New Honda Cars 5 yrs 3 yrs AT&T Phones 2 yrs 1 yr Navistar Trucks 2.5 yrs Hewlett-Packard Computer printers 4.5 yrs 22 months Speedster Producers Order-to-finished goods GE Circuit breaker boxes 3 wks 3 days Motorola Pagers 2 hrs Electronic testing equipment 4 wks 5 days Brunswick Fishing reels 1 wk Matsushita Washing machines 360 hrs Harley-Davidson Motorcycles 360 days < 3 days
As Time is Compressed, Prices Can Be Increased Advantage Price Premium (%) Electrical Components 2:1 59 Locks 3:1 25 Writing papers 5:1 20 Commercial doors 9:1 100
Chapter Outline Competitive priorities Positioning strategies
Positioning Strategy Product-focused Line flow Flow shop Process-focused Flexible flow Job shop
Flow Strategies None Flow pattern Jumbled flows Flexible flows Intermediate flows Line flows None Jumbled flows Jumbled, but with some dominant flows Linear flows Low volumes Moderate High volumes or one-of-a-kind volumes products or services Volume Flow pattern This series of slides builds the classic Hayes and Wheelwright model of how basic strategies are related to volume and flexibility issues.
Flow Strategies None Flow pattern Jumbled flows Flexible flows Tool and die shop Health center General medical practice Intermediate flows Branch offices Print shop Health clinic Line flows Oil refinery Cafeteria Assembly plant None Jumbled flows Jumbled, but with some dominant flows Linear flows Low volumes Moderate High volumes or one-of-a-kind volumes products or services Volume Flow pattern Not shown in this Figure is the portion of the original model that shows how these strategies and issues play out over the life cycle of a product.
Chapter Outline Competitive priorities Positioning strategy Manufacturing strategies Service strategies
Manufacturing Strategies Make-to-stock made in anticipation of demand Assemble-to-order add options according to customer specification Make-to-order made to customer specifications after order received
Service Strategies Standardized-service strategy Assemble-to-order strategy Customized-service strategy
Chapter Outline Competitive priorities Positioning strategy Manufacturing strategies Service strategies Mass customization
Mass Customization What is it? Product/service implications Process implications Internet implications
Focusing on Mass Customization Dell Mattel Levi Straus Morpheus Tech. Cductive.com Artuframe.com Acumines.com NewEdge.com