Transcript Operations
Competitive Strategy Page 1 Business-level [Competitive] Strategy • Since we’re in the XYZ industry, how do we compete? Profit = (Price – Cost) x Qty. • Cost or size advantage • Differentiation or uniqueness advantage • Marketing advantage • Innovation advantage • Bridge converging industries Page 2 Generic Business Level Strategies Source of Competitive Advantage Cost Breadth of Competitive Scope Broad Target Market Uniqueness Low Cost Narrow Target Market Page 3 Low-Cost Strategy - Operational Advantage “Dell finds it hilarious that HP and Sony fund researchers to come up with new ideas.” “Steamrollered by Dell” Newsweek, February 21, 2005 Page 4 Value Chain and Low Cost Strategy Firm Infrastructure Human Resource Management Technological Development Service Marketing & Sales Outbound Logistics Operations Inbound Logistics Procurement Page 5 Inbound Logistics Inbound Logistics Highly Efficient Systems to Link Suppliers’ Products with the Firm’s Production Processes Located in Close Proximity with Suppliers Page 6 Operations Firm Efficient Plant Scale to Minimize Mfg. Infrastructure Costs Relatively Few Management Layers to Reduce Overhead Effective Training Programs to Improve Worker Efficiency and Effectiveness Human Resource Management Timing of Asset Purchases Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes Technological Development Policy Choice of Plant Technology Frequent Evaluation Processes to Monitor Procurement Organizational Small, Highly Trained Sales Force Learning Products Priced to Generate Sales Volume Service Outbound Logistics Efficient Plant Delivery Schedule Scale to Minimize that Reduces Manufacturing Costs Costs Selection of Low Timing of Asset Cost Transport Purchases Carriers Operations Inbound Logistics Suppliers’ Performances Policy Choice of Efficient Order Plant Technology Sizes Organizational Learning Page 7 Outbound Logistics Firm Infrastructure Delivery Schedule that Reduces Costs Human Resource ManagementSelection of Low Technological Development Cost Transport Carriers Efficient Frequent Evaluation Processes to Monitor Suppliers’ Performances Sizes Procurement Effective Product Interrelationships Installations to with Sister Units Reduce Frequency Marketing & Sales Service Outbound Outbound Logistics Logistics Delivery Schedule Small, Highly that Reduces Trained Sales Costs Force Order Selection of Low Cost Transport Carriers and Severity Products Priced to of Recalls Generate Sales Volume Efficient Order Sizes National Scale Advertising Interrelationships with Sister Units Page 8 Marketing & Sales Firm Infrastructure Human Resource Management Technological Development Products Priced to Generate Sales Volume Global Scale Advertising Marketing & Sales Marketing & Sales Service Outbound Logistics Operations Inbound Logistics Procurement Small, Highly Trained Sales Force Page 9 Coca-Cola Marketing & Sales Firm Infrastructure Human Resource Management Technological Development Products Priced to Generate Sales Volume Global Scale Advertising Marketing & Sales Marketing & Sales Service Outbound Logistics Operations Inbound Logistics Procurement Small, Highly Trained Sales Force Page 10 Firm Infrastructure Human Resource Service Effective Product Installations to Management Reduce Recalls Technological Development Marketing Service & Sales Service Outbound Logistics Inbound Logistics Operations Procurement Page 11 Firm Infrastructure Human Resource Management Technological Development Procurement Systems and Procedures to Find the Lowest Cost Products to Purchase Raw Materials Marketing & Sales Service Outbound Logistics Inbound Logistics Operations Procurement Procurement Frequent Evaluation Processes to Monitor Suppliers’ Performances Page 12 Firm Infrastructure Human Resource Management Technological Development Marketing & Sales Easy-to-Use Manufacturing Technologies Outbound Logistics Operations Inbound Logistics Technological Development Service Procurement Investments in Technology in order to Reduce Costs Associated with Manufacturing Processes Page 13 Firm Infrastructure Human Resource Management Technological Development HumanProcurement Resource Management Service Marketing & Sales Effective Training Programs to Improve Worker Efficiency and Effectiveness Outbound Logistics Operations Inbound Logistics Consistent Policies to Reduce Turnover Costs Page 14 Human Resource Management Firm Infrastructure Technological Development Service Relatively Few Management Layers to Reduce Overhead Marketing & Sales Simplified Planning Procurement Practices to Reduce Planning Costs Outbound Logistics Inbound Logistics Cost Effective MIS Systems Operations Support Activities Firm Infrastructure Page 15 Generic Business Level Strategies Source of Competitive Advantage Breadth of Competitive Scope Broad Target Market Cost Uniqueness Cost Leadership Differentiation Narrow Target Market Page 16 Differentiation Strategy – Uniqueness Advantage SOUTHWEST Page 17 Value Chain and Differentiation Strategy Firm Infrastructure Human Resource Management Technological Development Service Marketing & Sales Outbound Logistics Operations Inbound Logistics Procurement Page 18 Inbound Logistics Firm Infrastructure Superior handling of incoming raw materials to Human Resource Management minimize damage and improve the Technological Development quality of the final product Service Outbound Logistics Inbound Logistics Inbound Logistics Operations Procurement Page 19 Operations Firm Consistent manufacturing of Infrastructure attractive products Human Resource Management Technological Rapid responses to customers unique Development manufacturing specifications Service Outbound Logistics Inbound Logistics Operations Operations Procurement Page 20 Outbound Logistics Firm Infrastructure Technological Development Outbound Outbound Logistics Logistics Inbound Logistics Operations Procurement Rapid and timely product deliveries to customers Marketing & Sales Service Human Resource Accurate and responsive order Managementprocessing procedures Page 21 Marketing & Sales Firm Infrastructure Human Resource Management Outbound Logistics Inbound Logistics Operations Procurement Extensive personal relationships with buyers Premium Pricing Marketing & Sales Marketing & Sales Service Technological Development Strong Coordination among functions in R&D, Marketing and Product Development Page 22 Firm Infrastructure Human Resource Service Complete field stocking of Management replacement parts Technological Development Marketing Service & Sales Service Outbound Logistics Inbound Logistics Operations Procurement Page 23 Caterpillar vs. Komatsu Firm Infrastructure Human Resource Service Complete field stocking of Management replacement parts Technological Development Marketing Service & Sales Service Outbound Logistics Inbound Logistics Operations Procurement Page 24 Firm Infrastructure Human Resource Management Technological Development Coordination among R&D, marketing and product development Outbound Logistics Inbound Logistics Operations Technological Development Marketing & Sales Service Procurement Investments in technol-ogies Strong to produce highly capability in differentiated products basic research Page 25 Support Activities Firm Infrastructure Human Resource Management Technological Development HumanProcurement Resource Management Marketing & Sales Service Outbound Logistics Inbound Logistics Operations Compensation programs which Extensive use of encourage worker creativity subjective performance and productivity measures Superior personnel training Page 26 Human Resource Management Firm Infrastructure Technological Development Outbound Logistics Inbound Logistics Operations Highly developed Information Systems to better understand Procurement customers’ purchasing preferences A companywide culture emphasizing quality and innovation Marketing & Sales Service Support Activities Firm Infrastructure Page 27 Marketing Advantage Page 28 Innovation Advantage Page 29 Innovation Cycle Time Growth Rate Slow is good, unless you’re the one driving innovation t1 t2 t3 Time Page 30 Differentiated Beef Bluegrass Meadows Beef Page 31 Generic Business Level Strategies Source of Competitive Advantage Breadth of Competitive Scope Broad Target Market Narrow Target Market Cost Uniqueness Cost Leadership Differentiation Cost Leadership Focused Differentiation Page 32 Page 33 Page 34 Page 35 Page 36 Converging Industry Advantage Entertainment Palmtop Computing Wireless Telephony Page 37 Razor Trials • Overall impressions • Design features and shaving performance –Do they make a difference? –Do they create [real or perceived] value? • What are relevant “strategic dimensions” of razor industry? –What needs [real or perceived] do these dimensions fulfill? Strategic Dimension 2 Strategic Map: Wet Razor Industry Strategic Dimension 1 The Future… How Many is Enough? Is this our shaving destiny? Gillette More is Better… 12 Blades Jellette’s MP3 8-Track Razor • Eight blades and Built-in 8-Track MP3 Player http://www.antonsledgehammer.com/jellette.htm Strategic Dimension 2 Strategic Map: Wet Razor Industry Strategic Dimension 1