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GMS 401 (200)
Chapter 2

Chapter 2

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Ryerson University
Global Management Studies
GMS 401
Kirk Bailey

CHAPTER 2 – COMPETITIVENESS , STRATEGIC PLANNING , AND P RODUCTIVITY - Competitiveness: ability and performance of an organization in the marketplace compared to other organizations that offer similar goods or services - Strategy: the long-term plans that determine the direction an organization takes to become (or remain) competitive - Strategic planning: is the managerial process that determine a strategy for the organization; and productivity is a measure of how efficiently the resources are being used. C OMPETITIVENESS - Competitiveness depends on the capabilities and performance of the company in its marketplace - An organization’s performance in the marketplace depends on the expectation of its customers for purchase of goods or services, mainly price, quality, variety, and timeliness. These are key purchasing criteria - Key purchasing criteria: the major elements influencing a purchase: price, quality, variety, timeliness o Price: the amount a customer must pay for the good or services. If all other factors are equal, customers will choose the cheaper price o Quality: refers to characteristics of a good or service determined by its design, material, workmanship, performance, and consistency o Variety: refers to the choices of models and options available to customers. The more variety the wider the range of potential customers o Timeliness: refers to the availability of goods or services when they are needed by the customer  Other factors include customer service and convenient location - Value = Quality, timeliness, etc. / price - Customers may use two categories of purchasing criteria: order qualifiers and order winners - Order qualifiers: are those purchasing criteria that customers perceive as minimum standards of acceptability for purchase. This may not be enough to get a customer to purchase from the organization - Order winners: are those purchasing criteria that cause the organization to be perceived as better than the competition - Competitive priorities: the importance given to operations characteristics: cost, quality, flexibility, and delivery S TRATEGICP LANNING - Strategic planning is the process of determining a strategy, long-term plans that will set a new direction for an organisation, and implementing it through allocation of resources and action plans - Look through the questions to see a strategic planning process for a business – PAGE 30 ⋅ Mission, Vision, and Values - Some organizations determine and use missions, vision, and values statement during their strategic planning process. - Mission: where the organization is going now - Vision: where the organization desires to be in the future - Values: shared beliefs of the organization’s stakeholders ⋅ Goals and Objectives - Mission/vision provides a general direction for an organization and should lead to organisational goals which provide substance to the overall mission/vision ⋅ Strategies, Tactics, and Action Plans - An organization usually has an overall organizational strategy - Long-term functional plans are sometimes called functional strategies - Tactics: medium-term plans used as components of a strategy - Action plans: a medium- or short-term project to accomplish a specific objective, assigned to an individual with a deadline and the resources needed - The overall relationship that exists from the mission/vision down to actual policies and action planes is hierarchical in nature, Figure 2-1, pg. 33 ⋅ Operations Strategy - The operations function performs its own strategic planning to answer organizational goals. The determined strategy is called operations strategy - Operations strategy: deals with guiding the operations function of the organization, but should answer organizational goals - The creation of operations strategy occurs both at the company level and at the functional level - Usually the operation policies, objectives, and action plans are classified into nine strategic decision categories 1. Facility – a major decision of multifacility organizations is how to specialize or focus each facility: by market, product group, or production process type 2. Capacity – decision is related to facility decision. Long-term capacity decisions relate to
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