NUR1 421 Lecture Notes - Lecture 5: Operations Management, Profit Margin
11 Jun 2018
School
Department
Course
Professor
MGCR 472 – Operations Management
Operations Strategy
*Please note that these are complement notes to the slides.
By creating a value for our customers, we can sell our products and services.
Value
• Customer side (value = worth/price)
• Company side (value = price/cost)
Whenever you add value/create value, you have to either increase the worth of the product or
service or decrease the cost.
Ex: Amazon focuses on the worth of the product/service (fast delivery, which increases the
worth and the value of their product). Walmart focuses on the cost of the product/service
(reducing the cost, which increases the value of their product)
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At the corporate level
Business Strategy
There are some group of customers who are really price sensitive. There are, in the same
market, other groups of customers who are more quality sensitive. They are willing to pay more
and refuses to pay the product with low quality. There are other customers who are willing to
pay more but would like to see different options.
You have to make a decision about which type of customer you would like to focus.
To be able to be competitive in the market place, you need to be at least one of the dimensions.
Operations Strategy
You need to design all the operations (and marketing, finance strategy) according to the
business strategy.
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find more resources at oneclass.com
If the marketing strategy focuses on promoting in order to increase the demand (investing a lot
on advertisement, promotions, price discount) but you don't have enough capacity to satisfy this
demand, it would be a huge error in the company.
In a successful company, all the strategies must match and the departments must communicate
with each other.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
*please note that these are complement notes to the slides. By creating a value for our customers, we can sell our products and services. Value: customer side (value = worth/price, company side (value = price/cost) Whenever you add value/create value, you have to either increase the worth of the product or service or decrease the cost. Ex: amazon focuses on the worth of the product/service (fast delivery, which increases the worth and the value of their product). Walmart focuses on the cost of the product/service (reducing the cost, which increases the value of their product) There are some group of customers who are really price sensitive. There are, in the same market, other groups of customers who are more quality sensitive. They are willing to pay more and refuses to pay the product with low quality. There are other customers who are willing to pay more but would like to see different options.
