Technology Strategy Supplement
Learning Objectives
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List and briefly discuss the primary ways
that 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.
2-1
Learning Objectives
 Discuss and compare organization strategy
and operations strategy, and explain why it is
important to link the two.
 Describe and give examples of time-based
strategies.
 Define the term productivity and explain why
it is important to organizations and to
countries.
 List some of the reasons for poor productivity
and some ways of improving it.
2-2
Competitiveness:
How effectively an organization meets the
wants and needs of customers relative to
others that offer similar goods or services
2-3
Businesses Compete Using
Marketing
 Identifying consumer wants and needs
 Pricing
 Advertising and promotion
2-4
Businesses Compete Using
Operations
 Product and service design
 Cost
 Location
 Quality
 Quick response
2-5
Businesses Compete Using
Operations
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Flexibility
Inventory management
Supply chain management
Service and service quality
Managers and workers
2-6
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
2-7
Why Some Organizations Fail
 Too much emphasis in product and
service design and not enough on
improvement
 Neglecting investments in capital and
human resources
 Failing to establish good internal
communications
 Failing to consider customer wants and
needs
2-8
Mission/Strategy/Tactics
Mission
Strategy
Tactics
How does mission, strategies and tactics relate to
decision making and distinctive competencies?
2-9
Strategy
 Mission
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The reason for existence for an organization
 Mission Statement
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States the purpose of an organization
 Goals
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Provide detail and scope of mission
Strategies
 Plans for achieving organizational goals
 Tactics
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The methods and actions taken to accomplish strategies
2-10
Planning and Decision Making
Figure 2.1
Mission
Goals
Organizational Strategies
Functional Goals
Finance
Strategies
Tactics
Operating
procedures
Marketing
Strategies
Tactics
Operating
procedures
Operations
Strategies
Tactics
Operating
procedures
2-11
Strategy Example
Example 1
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:
 Goal:
 Strategy:
 Tactics:
 Operations:
Live a good life
Successful career, good income
Obtain a college education
Select a college and a major
Register, buy books, take
courses, study, graduate, get
job
2-12
Examples of Strategies
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Low cost
Scale-based strategies
Specialization
Flexible operations
High quality
Service
2-13
Strategy and Tactics
 Distinctive Competencies
The special attributes or abilities that give an
organization a competitive edge.
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Strategy Factors
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Price
Quality
Time
Flexibility
Service
Location
2-14
Examples of Operations Strategies
Table 2.2
Price
Low Cost
U.S. first-class postage
Motel-6, Red Roof Inns
Quality
High-performance design Sony TV
or high quality Consistent Lexus, Cadillac
quality
Pepsi, Kodak, Motorola
Time
Rapid delivery
On-time delivery
Express Mail, Fedex,
One-hour photo, UPS
Flexibility
Variety
Volume
Burger King
Supermarkets
Service
Superior customer
service
Disneyland
Nordstroms
Location
Convenience
Banks, ATMs
2-15
Global Strategy
 Strategic decisions must be made with
respect 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
2-16
Strategy Formulation
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Distinctive competencies
Environmental scanning
SWOT
Order qualifiers
Order winners
2-17
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
2-18
Key External Factors
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Economic conditions
Political conditions
Legal environment
Technology
Competition
Markets
2-19
Key Internal Factors
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Human Resources
Facilities and equipment
Financial resources
Customers
Products and services
Technology
Suppliers
2-20
Operations Strategy
 Operations strategy – The approach,
consistent with organization strategy,
that is used to guide the operations
function.
2-21
Strategic OM Decisions
Table 2.4
Decision Area
Affects
Product 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
2-22
Quality and Time Strategies
 Quality-based
strategies
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Focuses on maintaining or
improving the quality of an
organization’s products or
services
Quality at the source
 Time-based strategies
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Focuses on reduction of
time needed to accomplish
tasks
2-23
Time-based Strategies
JAN
FEB
MAR
APR
MAY
JUN
Planning
Designing
Processing
Changeover
On time!
Delivery
2-24
Outsourcing
 Higher productivity in another company is a
key reason organizations outsource work
 Improving productivity may reduce the need
for outsourcing
2-25
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
2-26
Video: Process Strategy
2-27
Video: Compet. Analysis
2-28