Management Exam 1: Study Guide
Exam 1 Review
Porter Strategy Article
Productivity Frontier
444517843500
Operational Effectiveness
Any kind of practice which allows a business or other organization to maximize the use of their inputs by developing products at a faster pace than competitors or reducing defects
What is and isn’t operational effectiveness?
Operational Effectiveness Includes:
Productivity initiatives
Total Quality
Reengineering
Benchmarking
Outsourcing
Operational Effectiveness is NOT strategy
How and why does strategy rest on:
Unique Activities - deliberately choosing a different way to deliver a mix of values and activities. Ex. South West Airlines
Southwest Airlines found a position as provider for low-cost low-thrill, standardized provider of flights within US for a value-based but low-cost position where other airlines have difficulties to meet the same cost structure and activities and therefore can not compete on the chosen activity-value combination.
Strategy is about finding a unique position by combining a unique set of activities
Trade-offs—a company should know its limits and that it should know that certain sacrifices cannot be made without putting other activities behind.
Benchmarking—used as yardstick to see current conditions of the productivity frontier within an industry; it should be used as method to identify activities that can done differently.
Example: Continental Airlines creating “Continental Lite” to maintain a full-service image while challenging and imitating Southwest Airlines business concept
Strategy is about choices and about what not to do
Fit—drives both competitive advantage and sustainability
Strategy is about combining activities, creating synergy that come from combining the right activities and leave other activities aside
Porter distinguishes three types of fits:
Simple consistency fit (1st Order): Create consistency among functional activities throughout the company to serve the main strategic goals.
Porter Strategy Article
Productivity Frontier
444517843500
Operational Effectiveness
Any kind of practice which allows a business or other organization to maximize the use of their inputs by developing products at a faster pace than competitors or reducing defects
What is and isn’t operational effectiveness?
Operational Effectiveness Includes:
Productivity initiatives
Total Quality
Reengineering
Benchmarking
Outsourcing
Operational Effectiveness is NOT strategy
How and why does strategy rest on:
Unique Activities - deliberately choosing a different way to deliver a mix of values and activities. Ex. South West Airlines
Southwest Airlines found a position as provider for low-cost low-thrill, standardized provider of flights within US for a value-based but low-cost position where other airlines have difficulties to meet the same cost structure and activities and therefore can not compete on the chosen activity-value combination.
Strategy is about finding a unique position by combining a unique set of activities
Trade-offs—a company should know its limits and that it should know that certain sacrifices cannot be made without putting other activities behind.
Benchmarking—used as yardstick to see current conditions of the productivity frontier within an industry; it should be used as method to identify activities that can done differently.
Example: Continental Airlines creating “Continental Lite” to maintain a full-service image while challenging and imitating Southwest Airlines business concept
Strategy is about choices and about what not to do
Fit—drives both competitive advantage and sustainability
Strategy is about combining activities, creating synergy that come from combining the right activities and leave other activities aside
Porter distinguishes three types of fits:
Simple consistency fit (1st Order): Create consistency among functional activities throughout the company to serve the main strategic goals.