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Chapter 2

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Ryerson University
Global Management Studies
GMS 401
Sam Lampropoulos

CHAPTER 2: COMPETITIVENESS , TRATEGIC PLANNING AND PRODUCTIVITY Competitiveness is an organizations ability and performance in the marketplace compared to other organizations that offer similar goods and services Strategy is the long-term plans that determine the direction organizations to become / remain competitive Strategic Planning is the managerial process that determines a strategy for the organization while productivity is a measure of how efficiently the resources are being used  Impressive foreign competition causing North American companies to rethink their strategies to increase emphasis on operations Competitiveness Competitiveness depends on the capabilities / performance of the company in its marketplace. Can be developed overtime by focusing on limited range of goods and services or technology Performance depends on expectations of its customers for purchase goods/services, mainly on the Key Purchasing Criteria:  Price is the amount a customer must pay for a good/service. Customers choose good/service with the lowest price when all other factors are equal  Quality characteristics of good/service determined by its design, material, workmanship, performance and consistency.  Variety the choices of models and options available to the customer, more variety the winder range of potential customers Value = quality, timeless, etc. / price Order Qualifiers are those purchasing criteria that customers perceive as minimum standards of acceptability for purchase. Order Winners are those purchasing criteria that cause the organization to be perceived as better than the competition  Over time characteristics that once was an order winner may become an order qualifier and vice versa From an organization’s point of view these are competitive priorities:  Cost the unit production of a good/ performance to the organization. Organizations that compete on based on cost emphasize lowering their operating costs  Quality Determining customers’ quality requirements, translating these into specifications for goods or services, and consistently producing good/services to these specifications  Flexibility being able to produce a variety of goods/services in the same facility. Includes customization – modifying goods/services to meet individual customers. C HAPTER 2: COMPETITIVENESS , STRATEGIC P LANNING AND P RODUCTIVITY Easily increase/decrease the production quantity of goods or services (quantity flexibility) usually achieved by having general-purpose equipment, excess capacity, and multi-skilled workers, easy changeover between production  Delivery being able to consistently meet promised due dates by. Achieved by using communication networks, planning/control systems, reliable equipment and just-in-time production Strategic Planning pg. 30 Some companies perform strategic planning only when they face crisis. More progressive organizations perform strategic planning on a regular basis (annually) Starts with top management, soliciting performance of current strategy from department managers and setting up market research study of the where the industry will be in the next five years. Management team forms/adjusts organization’s mission and vision. Lastly, chosen strategy is implemented by determine a set of action plans at the operating department level  Mission where the organization is going now, its products and its market  Vision is where the organization desires to be in the future  Values are the organization’s beliefs that should be driving everything else such as culture, mission/vision and strategy. Goals and Objectives Mission/vision provides general direction for organizations and should lead to the goals. Objective is a specific goal containing numerical values Strategies the long-term plan that determines the direction an organization will take to become/remain competitive. Long-term function plans are sometimes called functional strategies Tactics medium-term plans sometimes used as components of a strategy more specific and may provide guidance and direction in carry out an action plan Action Plan usually medium or short-term project accomplished, assigned to an individual with deadline Mission/Vision: Live a good life Goal: Successful career, good income Strategy: Obtain a college/university education Tactics: Select a college/university and major; decide how to finance education Action plans: Register, buy books, take courses, study Operational Strategy Operation function performs its own strategic planning to answer organizational goals Operations Strategy deals with guiding the operations function of the organization, but should answer organizational goals C HAPTER 2: COMPETITIVENESS , STRATEGIC P LANNING AND P RODUCTIVITY  Set of well-coordinated policies, objectives, and action plans, directly affecting the
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