Waste Disposal Competitiveness, Strategy and Productivity

Presented by: Nathaniel Kier Angelo G. Mercado and Michellarea Shansai Mae B. Santos

Topics:
● Introduction
● Competitiveness
● Mission and Strategies
● Implication of organization strategy for operation management
● Transforming Strategy into Action: Balance Scorecard
● Productivity

Learning Outcomes:
● Describe the characteristics and value of a strong Management team
● Explain the common legal forms of organization
● Understand the nature of strategic alliances

INTRODUCTION
In this chapter you will learn about the different ways companies compete and why some firms do a very good
job of competing. You will learn how effective strategies can lead to competitive organizations, and you will
learn what productivity is, why it is important, and what organizations can do to improve it.

COMPETITIVENESS
Companies must be competitive to sell their goods and services in the marketplace. Competitiveness is an
important factor in determining whether a company prospers, barely gets by, or fails. Business organizations
compete through some combination of their marketing and operations functions. Marketing influences
competitiveness in several ways, including identifying consumer wants and needs, pricing, and advertising and
promotion.

1. Identifying consumer wants and/or needs is a basic input in an organization’s decision making process,
and central to competitiveness. The ideal is to achieve a perfect match between those wants and needs and
the organization’s goods and/or services.

2. Price and quality are key factors in consumer buying decisions. It is important to understand the trade-off
decision consumers make between price and quality.

3. Advertising and promotion are ways organizations can inform potential customers about features of their
products or services, and attract buyers.

Operations have a major influence on competitiveness through product and service design, cost, location,
quality, response time, flexibility, inventory and supply chain management, and service. Many of these are
interrelated.

1. Product and service design should reflect joint efforts of many areas of the firm to achieve a match
between financial resources, operations capabilities, supply chain capabilities, and consumer wants and
needs. Special characteristics or features of a product or service can be a key factor in consumer buying
decisions. Other key factors include innovation and the time-to-market for new products and services.
2. Cost of an organization’s output is a key variable that affects pricing decisions and profits. Cost-reduction
efforts are generally ongoing in business organizations. Productivity (discussed later in the chapter) is an
important determinant of cost. Organizations with higher productivity rates than their competitors have a
competitive cost advantage. A company may outsource a portion of its operation to achieve lower costs, higher
productivity, or better quality.

3. Location can be important in terms of cost and convenience for customers. Location near inputs can result
in lower input costs. Location near markets can result in lower transportation costs and quicker delivery times.
Convenient location is particularly important in the retail sector.

4. Quality refers to materials, workmanship, design, and service. Consumers judge quality in terms of how well
they think a product or service will satisfy its intended purpose. Customers are generally willing to pay more for
a product or service if they perceive the product or service has a higher quality than that of a competitor.

5. Quick response can be a competitive advantage. One way is quickly bringing new or improved products or
services to the market. Another is being able to quickly deliver existing products and services to a customer
after they are ordered, and still another is quickly handling customer complaints.

6. Flexibility is the ability to respond to changes. Changes might relate to alterations in design features of a
product or service, or to the volume demanded by customers, or the mix of products or services offered by an
organization. High flexibility can be a competitive advantage in a changeable environment.

7. Inventory management can be a competitive advantage by effectively matching supplies of goods with
demand.

8. Supply chain management involves coordinating internal and external operations (buyers and suppliers) to
achieve timely and cost-effective delivery of goods throughout the system.

9. Service might involve after-sale activities customers perceive as value-added, such as delivery, setup,
warranty work, and technical support. Or it might involve extra attention while work is in progress, such as
courtesy, keeping the customer informed, and attention to details. Service quality can be a key differentiator;
and it is one that is often sustainable. Moreover, businesses rated highly by their customers for service quality
tend to be more profitable, and grow faster, than businesses that are not rated highly.

10. Managers and workers are the people at the heart and soul of an organization, and if they are competent
and motivated, they can provide a distinct competitive edge by their skills and the ideas they create. One often
overlooked skill is answering the telephone. How complaint calls or requests for information are handled can
be a positive or a negative. If a person answering is rude or not helpful, that can produce a negative image.
Conversely, if calls are handled promptly and cheerfully, that can produce a positive image and, potentially, a
competitive advantage.

MISSION AND STRATEGIES

Mission Statement - states the purpose of an organization

Goals - provide detail and scope of the mission
Mission - the reason for the existence of an organization
Strategies - plans for achieving organizational goals
An organization’s mission is the reason for its existence. It is expressed in its mission statement.
For a business organization, the mission statement should answer the question “What business are we in?”
Missions vary from organization to organization, depending on the nature of their business. Below provides
several examples of mission statements.

Microsoft - To help people and businesses throughout the world to realize their full potential.
Nike - To bring inspiration and innovation to every athlete in the world.
Verizon - To help people and businesses communicate with each other.
Walt Disney - To be one of the world’s leading producers and providers of entertainment and information.

A mission statement serves as the basis for organizational goals, which provide more detail and describe the
scope of the mission. The mission and goals often relate to how an organization wants to be perceived by the
general public, and by its employees, suppliers, and customers. Goals serve as a foundation for the
development of organizational strategies. These, in turn, provide the basis for strategies and tactics of the
functional units of the organization.

Organizational strategy is important because it guides the organization by providing direction for, and
alignment of, the goals and strategies of the functional units. Moreover, strategies can be the main reason for
the success or failure of an organization.
There are
● Low cost
● Responsiveness
● Differentiation from competitors

IMPLICATIONS OF ORGANIZATION STRATEGY FOR OPERATIONS MANAGEMENT

Organization strategy has a major impact on operations and supply chain management strategies. For
example, organizations that use a low-cost, high-volume strategy limit the amount of variety offered to
customers. As a result, variations for operations and the supply chain are minimal, so they are easier to deal
with. Conversely, a strategy to offer a wide variety of products or services, or to perform customized work,
creates substantial operational and supply chain variations and, hence, more challenges in achieving a smooth
flow of goods and services throughout the supply chain, thus making the matching of supply to demand more
difficult. Similarly, increasing service reduces the ability to compete on price.

TRANSFORMING STRATEGY INTO ACTION: THE BALANCED SCORECARD

The Balanced Scorecard (BSC) is a top-down management system that organizations can use to clarify
their vision and strategy and transform them into action. It was introduced in the early 1990s by Robert
Kaplan and David Norton, and it has been revised and improved since then.

The idea was to move away from a purely financial perspective of the organization and integrate other
perspectives such as customers, internal business processes, and learning and growth. Using this approach,
managers develop objectives, metrics, and targets for each objective and initiatives to achieve objectives, and
they identify links among the various perspectives.

Although the Balanced Scorecard helps focus managers’ attention on strategic issues and the
implementation of strategy, it is important to note that it has no role in strategy formulation. Moreover, this
approach pays little attention to suppliers and government regulations, and community, environmental,
and sustainability issues are missing. These are closely linked and business organizations need to be aware of
the impact they are having in these areas and respond accordingly. Otherwise, organizations may be subject
to attack by pressure groups and risk damage to their reputation.
PRODUCTIVITY
One of the primary responsibilities of a manager is to achieve productive use of an organization’s resources.
The term productivity is used to describe this. Productivity is an index that measures output (goods and
services) relative to the input (labor, materials, energy, and other resources) used to produce it. It is usually
expressed as the ratio of output to input:

Output
=Productivity
Input

Although productivity is important for all business organizations, it is particularly important for organizations
that use a strategy of low cost, because the higher the productivity, the lower the cost of the output.

A productivity ratio can be computed for a single operation, a department, an organization, or an entire country.
In business organizations, productivity ratios are used for planning workforce requirements, scheduling
equipment, financial analysis, and other important tasks.

Productivity has important implications for business organizations and for entire nations. For nonprofit
organizations, higher productivity means lower costs; for profit-based organizations, productivity is an
important factor in determining how competitive a company is. For a nation, the rate of productivity growth is of
great importance. Productivity growth is the increase in productivity from one period to the next relative to
the productivity in the preceding period. Thus,

Current ∏ .−Previous ∏ .
x 100=∏ . Growth
Previous Productivity

Productivity growth is a key factor in a country’s rate of inflation and the standard of living of its people.
Productivity increases add value to the economy while keeping inflation in check. Productivity growth was a
major factor in the long period of sustained economic growth in the United States in the 1990s.

Reference: Stevenson, William J. (2015) Operations Management (twelfth Edition)