Krajewski IN Chapter 2 - Chapter 2 Operations Strategy...

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Chapter 2 Operations Strategy TEACHING TIP Students sometimes have difficulty envisioning the linking of operations to competitive priorities. This chapter focuses on how operations implements corporate strategy and helps build a customer-driven firm. Moreover, operations strategy links the firm’s internal processes together to form “value chains” that extend beyond the firm and encompass suppliers and customers. A. Operations Strategy Across the Organization TEACHING TIP Mention Starbuck’s customer-driven operations (service) strategy. (1) a variety of exotic coffees, (2) speed of service, (3) use of technology, and (4) cluster of stores 1. Corporate strategy views the organization as a system of interconnected functional areas all working together to achieve a desired goal. 2. Operations strategy supports corporate strategy through continuous cross- functional interaction, and is vital for success 3. Management information systems help to link the various functional areas. B. Developing a Customer-Driven Operations Strategy Developing a customer-driven operations strategy begins with the corporate strategy , which coordinates the organization’s overall goals with its core processes. Based on the corporate strategy, a market analysis is conducted. The analysis is then used to develop competitive priorities , which is the link between corporate strategy and operations strategy. 1. Corporate strategy provides a framework of goals for the organization a. Strategic considerations Monitor and adjust to changes in the business environment . Identify and develop firm’s core competencies . Develop firm’s core processes . b. Environmental scanning: monitor socioeconomic trends for potential opportunities or threats. competition is broadening product lines, improving quality, or lowering costs economic trends technological changes political conditions social changes 2-1
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2- 2 Chapter 2: Operations Strategy availability of vital resources collective power of customers or suppliers c. Core competencies (examples) Work force, well-trained and flexible Facilities, well-located and flexible Marketing and financial skill Systems and technology, achieve competitive advantage through innovation d. Core processes (as discussed in chapter 1) Customer relationship New service or product development Order fulfillment Supplier relationship 2. Global strategies is required in today’s global environment a. Strategic alliances Collaborative effort Joint venture b. Licensing of technology c. Locating abroad some differences to consider Political environment Customer needs Customs TEACHING TIP Mention McDonald’s restaurants are known for the consistency of its products
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Krajewski IN Chapter 2 - Chapter 2 Operations Strategy...

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