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88 Cards in this Set
- Front
- Back
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Define Competitive Advantage |
A firm's ability to achieve market superiority over its competitors |
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7 Characteristics of Competitive Advantage? |
1) Driven by customer wants and needs 2) Makes a significant contribution to the success of the business 3) Matches the organization's unique resources with opportunities in the environment 4) Durable, lasting, and difficult for competitors to copy 5) Provides a basis for further improvement 6) Provides direction to the entire organization 7) Leads to market superiority over competitors |
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What is competitive advantage driven by? |
customer wants and needs |
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Three sources of competitive advantage? |
1) Low Cost Leadership 2) Differentiation 3) People |
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Define strategy |
The pattern of decisions that determines and reveals a company's goals, policies, and plans. meets the needs of its stakeholders |
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Define strategic planning |
the process by which the members of the organization envisions its future and develops the necessary procedures/operations to carry out that vision |
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What does it mean to be a low cost leader? |
-produce high volumes of mature products -achieve competitive advantage through low prices |
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What can low cost result from? |
High productivity and high capacity utilization |
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What type of competitive advantage do the Japanese use most? |
Low Cost Leadership |
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How does Six Sigma help Low Cost Leadership? |
Helps identify sources of problems and opportunities for process and design improvements that have clear financial justifications and impact on the bottom line. |
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What does it mean to have Differentiation as your competitive advantage? |
The company must be unique in its industry along some dimensions that are widely values by customers. Select attributes customers perceive as important and positions itself uniquely to meet those needs. MUST MAKE THEIR PRODUCTS OR SYSTEMS DIFFICULT TO COPY |
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What can a differentiation firm command? |
Command premium prices and achieve higher profits. |
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5 Competitive Advantage Strategies? |
1) Superior Product and Service Design 2) Outstanding Service 3) Rapid Response 4) Continuous Innovation (R&D) 5) High Quality |
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What does it mean to have a product that is superior in design? |
Appealing Reliable Easy to Operate Economical |
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The role of quality in product design? |
Firm must focus on key product dimensions that reflect specific customer needs. |
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How does the Baldric Award effect quality and differentiation strategies? |
It emphasizes the importance of systematic processes to design and improve products and the processes that create them. |
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4 techniques of quality engineering? |
1) Concurrent engineering 2) Value analysis 3) Design Reviews 4) Experimental Design |
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Define Concurrent Engineering |
Engineering and production personnel jointly develop product designs that are both functional and easy to manufacture. Reduces opportunities for poor quality |
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Define Value Analysis |
Function of every component of a product is analyzed to determine how ti might be accomplished in the most economical fashion |
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Define Design Reviews |
Managers asses how well the design relates to customer requirements and how it might be improves prior to releasing it to production |
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Define Experimental Design |
Formal statistical experiments are applies to determine the best combinations of product and process parameters for high quality and low cost. |
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When was the importance of service recognized, and by who? How? |
1980s Tom Peters and Bob Waterman Book called "In Search of Excellence" |
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What are two key components of the service system? |
1) Employees 2) Information Technology |
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Why is information technology essential in modern service organizations? |
-high volumes of information they must process - demand service at ever-increasing speeds. |
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5 Factors of Outstanding Service |
Reliability Assurance Tangibles Empathy Responsiveness |
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An important aspect of agility |
Ability to produce a wide range of products and options |
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Three types of products |
1) Custom Products 2) Option-Oriented Products 3) Standard Products |
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Define Custom Products |
Designed to meet customers' specifications precisely |
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Define Option-Oriented Products |
Unique configurations of subassemblies that are designed to fit together. Customer chooses options to be assembled. Ex: Personal computer system. |
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Define Standard Product |
Customer has no options to choose from, and quality is easiest to achieve because the product is made the same way every time. |
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How is flexibility achieved? |
Offering several model variations |
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How is an organization agile? |
-effective processes -ability to modify those processes as business conditions change |
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Companies that focus on innovation focus on...? |
-Product research -design and development -high product quality -ability to modify production facilities to produce new products frequently |
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What is one of the Core Values and Concepts in the Baldric Criteria? |
Managing for Innovation |
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Baldric Award Criteria encourages innovation through several means. What are they? |
- Encourage creativity - Customer-driven quality emphasizes the positive side of quality - Human resource focus stresses employee involvement, development, and recognition. - Continuous improvement and learning are integral parts of all work groups - Focus on future requirements of customers encourages companies to seek innovative and creative ways to serve their patrons |
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Define cycle time |
The time it takes to accomplish one cycle of a process |
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Two purposes of reducing cycle time |
1) Speed up work processes: Customer response is improved. 2) Streamlines and simplify processes to eliminate non-value added steps such as rework. Reduces potential for mistakes and errors. |
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Define Product Lead Time |
total time required by a company to deliver a finished product that satisfies customers' needs |
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3/4 Reasons organizations need performance measures |
1) Lead the organization in a particular direction (drive strategies and organizational change) 2) Manage the resources needed to travel to a particular direction 3) Operate processes to make the organization work and improve Bonus: 4) Balance Scorecard |
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Who coined the term balanced scorecard |
Robert Kaplan and David Norton |
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Purpose of a balanced scorecard |
translate strategy into measures that uniquely communicate your vision to the organization |
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4 perspectives of the balanced scorecard |
1) Financial Perspective 2) Internal Perspective 3)Customer Perspective 4) Innovation and Learning Perspective |
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Define Financial Perspective |
Measures the ultimate results that the business provides to shareholders. Includes profitability, revenue growth, return on investment,economic value added (EVA), and shareholder value |
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Define Internal Perspective |
Focusses attention on the performance of the key internal processes that drive the business. This includes such measures as quality levels, productivity, cycle time, and cost |
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Define customer perspective |
Focuses on customer needs and satisfaction as well as a market share. This includes service levels, satisfaction ratings, and repeat business. |
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Define innovation and learning perspective |
Directs attention to the basis of a future success-- the organizations people and infrastructure. Key measures might include intellectual assets, employee satisfaction, market innovation, and skills development. |
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What does a good balanced scorecard contain? |
Leading and lagging measures, indicators |
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define lagging measures |
Outcomes tell what has happened Diagnostic |
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Define leading measures |
Performance Drivers Predict what will happen Predictive |
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Baldrige criteria Results category groups performance measures into six sets. What are the six sets? |
1) Product and process outcomes 2) Customer-focused outcomes 3) Workforce-focused outcomes 4) Leadership and governance outcomes 5) Financial and market outcomes |
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How does Strategic Planning help an organization? |
Helps leadership mold an organization's future and manage change by focusing on an ideal vision of what the organization should and could be in the future. |
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Role of strategic planning |
-create viable directions and specific objectives -align work processes with the company strategic directions. Ensures that improvement and learning reinforce company priorities. |
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Four steps in viewing strategic planning as a process |
1) Plan for the long term: understand key influences, risks, challenges, and other requirements that affect the future 2) Project the future competitive environment 3) Develop action plans and deploy resources to achieve alignment and consistency 4) Ensure deployment will be effective |
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Two principal activities of strategic planning |
1) Development 2) Implementation |
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Define strategy development |
defining the mission of the organization |
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Define strategic implementation |
focuses on executing the strategy effectively and efficiently |
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Define Mission |
Defines the reason for existence. Guides the development of strategies |
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Define Vision |
Describes where the organization is headed and what it intends to be. |
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Define Values/Guiding Principles |
Direct the journey to a vision by defining attitudes and policies for all employees that are reinforced through conscious and subconscious behaviors at all levels of the organization |
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What are the three cornerstones |
1) Mission 2) Vision 3) Values / Guiding Principles |
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What do the cornerstones lead to |
1) Assessment of Strategic Challenges 2) Identification of Strategic objectives |
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Define Strategic Challenges |
The pressures that exert a decisive influence on an organization's likelihood of future success |
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Define Strategic Objectives |
What an organization must change of improve to remain or become competitive |
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Define Strategies |
Broad statements that set the direction for the organization to take in realizing its mission and vision |
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Define action plans |
Clearly describe the things that need to be done |
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What does Strategy Implementation lead to? |
Hoshin Planning |
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Typical Strategic Planning Model |
Vision > Environmental Assessment > Strategy Development > Action Plans |
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Another term for Hoshin Planning? |
Policy Deployment |
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What is Hoshin Planning |
A systems approach to managing change in critical business processes. Emphasizes organization-wide planning and setting of priorities, providing resources to meet objectives, and measuring performance as a basis for improving performance |
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Goal of strategy implementation |
Ensure plans and strategies are successfully implemented and executed |
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General Hoshin Planning Process? |
1) Senior managers establish vision and core objectives 2) Middle Management negotiates with senior management regarding the goals that will achieve objectives |
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LOOK DIS UP AND DISCUSS IT |
Page 226 |
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7 Elements of a TQ Strategy |
1) Customer Focused Vision 2) Concept of the voice of the customer 3) A way of learning from outstanding companies 4) An expression of caring employees 5) A means of removing barriers to achieve quality 6) Measurement Plan 7) QUALITY |
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Core factor of TQ Strategy |
Quality |
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You can do it |
You can do it |
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Define core competencies |
organization's areas of greatest expertise that provide a sustainable competitive advantage in the marketplace or service environment |
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Define outsourcing |
The practice of transferring the operations of a business function to an outside supplier |
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Define vertical integration |
Certain business functions are acquired and consolidated within a firm |
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5 Ways TQ Improves the strategy formulation |
1) Forces organization to think in terms of its customers 2) Places expectations of leadership on senior management 3) Determines effectiveness of strategy and performance in meeting goals and objectives 4) Focus on teamwork 5) Supports inclusion of quality as fundamental part of strategy |
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Seven Management Tools? |
1) Affinity Diagram 2) Interrelationship Digraphs 3) Tree Diagram 4) Matrix Diagram 5) Matrix Data Analysis 6) Process Decision Program Chart 7) Arrow Diagrams |
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Purpose of Management/Planning Tools? |
Address problems to organize and develop strategy |
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Define Affinity Diagrams |
Tool for organizing large number of ideas, opinions, and facts relating to a broad problem or subject area. Once ideas are generated, they can be grouped according to their "affinity" or relationship to each other. |
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Define interrelationship digraph |
Identifies and explores casual relationships among related concepts or ideas. Shows every idea can be logically linked with more than one other idea at a time. Allows for "lateral thinking" rather than "linear thinking." Used after the affinity diagram has clarified issues and problems. |
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Define Tree Diagram |
Maps out paths and tasks necessary to complete a specific project or reach a specified goal. Planner uses this technique to seek answers to such questions as "what factors contribute to the existence of the problem?" Brings issues and problems revealed by affinity diagram and the interrelationship digraph down to the operational planning stage |
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Define Matrix Diagram |
Spreadsheets that graphically display relationships between ideas, activities, or other dimensions in such a way as to provide logical connecting points between them. Strong, medium, and weak relationships |
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Define Matrix Data Analysis |
Takes data and arranges them to display quantitative relationships among variables to make them more easily understood and analyzed. |
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Define Process Decision Program Chart |
Method for mapping out every conceivable event and contingency that can occur when moving from a problem statement to possible solutions. Takes each branch of tree diagram, anticipates possible problems, and provides countermeasures that will 1) Prevent deviation from occurring 2) Be in place if the deviation does occur |
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Define Arrow Diagrams |
Construction planners have used arrow diagrams to sequence and schedule project tasks. |
