Chapter 02
Competitiveness, Strategy
and Productivity
Competitiveness:
Competitiveness
relates to the Strategy:
effectiveness of an Strategy relates
organization in the to the plan that Productivity:
marketplace relative to determine how Productivity relates
other organization that an organization to the effective use
offers similar products pursues its goals. of resources, and it
or services. has a direct impact
on competitiveness.
Competitiveness
Competitiveness:
How effectively an organization meets the wants
and needs of customers relative to others that
offer similar goods or services.
Businesses Compete Using Operations
▪ Cost: Amari, Le Meridien vs Lake shore hotel; Walmart.
▪ Quality: BMW, Mercedes; “Pureit”- water purifier.
▪ Location: Blockbuster Cinemas vs Star Cineplex.
▪ Flexibility: Meena Bazar, Agora. Burger king- “Have it in your own way.”
▪ Quick response: Amazon Prime, Pathao Food, DHL.
▪ Service and service quality: Royal Tulip, Gala Makeover.
▪ Managers and workers: Customer care Services.
▪ Product and Service design: Iphone, MAC book pro; Watches.
What is Strategy?
Strategy is a thinking or plan of action designed to find out
the way that the organization is going to follow so that
they can make a successful product.
⮚Stressing long-term rather than short-term objectives.
⮚Setting broad objectives that direct an enterprise towards
its overall goal.
⮚Planning the path that will achieve these goals.
❖A strategy is not a wish list.
Mission Strategy Tactics
Hierarchy of Planning & Decision Making
Hierarchy of Planning & Decision Making
▪ Mission
– The reason for existence for an organization.
▪ Mission Statement
– Answers the question “What business are we in?”
▪ Goals
– Provide detail and scope of mission.
▪ Strategies
– Plans for achieving organizational goals.
▪ Tactics
– The methods and actions taken to accomplish strategies.
Example
Yesna is a student. She would like to have a career in
business, have a good job, and earn enough income to
live comfortably.
▪Mission: Live a good life.
▪ Goal: Successful career, good income.
▪Strategy: Obtain an university education.
▪Tactics: Select an university and a major.
▪Operations: Register, buy books, take
courses, study, graduate, get job.
Examples of Operations Strategies
Price Low Cost Walmart, Tata Nano.
Responsive Short processing time McDonalds; Express mail.
On-time delivery Domino’s Pizza; FedEx.
ness
High-performance
design or high quality Apple iPhone, MacBook
Quality BMW, Mercedes.
processing
Rapid delivery DHL, Amazon Prime,
Time On-time delivery Pizza Hut Delivery.
Newness Innovation Apple; Google.
Burger King (“Have it your
Variety Flexibility
way”).
Superior customer Disneyland; Gala
Service service makeover; Amazon.
Location Convenience ATM booths; Supermarkets.
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.
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.
Quality and Time Based Strategies
▪ Quality-based strategies
▪ Focuses on maintaining or improving the quality of an
organization’s products or services.
▪ Quality at the source.
▪ Time-based Strategies
Time-based Strategies focuses on reduction of time needed to
accomplish tasks.
JAN FEB MAR APR MAY JUN
Planning
Designing
Processing
Changeover On time!
Delivery
Productivity:
A measure of the effective use of resources,
usually expressed as the ratio of output to
input.
ity Output
Productiv =
sInput
s
Productivity
▪ Partial measures:
▪ output/(single input)
▪ Multi-factor measures:
▪ output/(multiple inputs)
▪ Total measure:
▪ output/(total inputs)
Measures of Productivity
Partial Output Output Output Output
measures Labor Machine Capital Energy
Multifactor Output Output
measures Labor + Machine Labor + Capital + Energy
Total Goods or Services Produced
measure All inputs used to produce them
Examples of Productivity Measures
Labor Labor Hour × Shifts × Wage × No.
Productivity of workers
Machine Machine Hours × Cost × No. of
Productivity machines
Material
Productivity Material Used × Cost
Energy
Productivity Kilowatt-hour × Cost
Example 3
7040 Units Produced
Cost of labor of Tk. 1,000
Cost of materials: Tk. 520
Cost of overhead: Tk. 2,000
What is the multifactor productivity?
Ans. 2.0 units per Taka of input
Example 3
Solution
MFP = Output
Labor + Materials + Overhead
MFP = (7040 units)
1000 + 520 + 2000
MFP = 2.0 units per Taka of input
Process Yield
▪ Process yield is the ratio of output of good
product to input.
▪ Defective product is not included in the output.
▪ Service example:
Ratio of number of students admitted to the
number of students applied.
Productivity Growth
Productivity Growth =
Current Period Productivity – Previous Period
Productivity
Previous Period Productivity
Factors Affecting Productivity
Capit Qualit
al y
Technolog Management
y
Other Factors Affecting Productivity
▪ Safety.
▪ Layoffs.
▪ New workers.
▪ Labor turnover.
▪ Use of Internet.
▪ Standardization.
▪ Computer viruses.
▪ Shortage of IT workers.
▪ Design of the workspace.
▪ Incentive plans that reward productivity.
▪ Searching for lost or misplaced items.
Lecture Takeaways
▪ Basics of “Competitiveness”, “Strategy” and “Productivity”.
▪ Primary ways that a business use to compete.
▪ Why some organizations fail.
▪ “Mission” vs “Goal” vs “Strategy” vs “Tactics”.
▪ Order Qualifiers vs Order Winners.
▪ Quality-based vs Time-based strategies.
▪ Productivity Growth & Process Yield.
▪ Try these at Home:
▪ Examples: 2 & 3 (Page 58-59)
▪ Solved Problems: 1 to 4 (page 63-64)
▪ Practice Problems: 1,2,3,7 (page 65-66)
