Importance of Competitive priorities for any organization

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1 Importance of Competitive priorities for any organization Saiyed Rizvi Sr. Project Manager Toronto Water, City of Toronto Candidate of MSc Information and Technology Management Sheffield Hallam University, Sheffield, United Kingdom Any Business strategy is a short or long term plan of action of an organization designed to achieve a particular goal or set of goals or objectives. It states how business should be conducted to achieve its goals, meet the expectations of its customers, and sustain a competitive advantage in the marketplace Porter (2008) argues that there are five competitive forces that shape business strategy of any business: Porter (1985, p. 35) further explains that there are three potentially successful generic strategic approaches to outperforming other firms in an industry: 1. Overall Cost leadership 2 Differentiation 3. Focus of Market Segmentation

2 There are three common business/competitive strategies: Type Overall Cost leadership Focus or Market Segmentation Product Differentiation Definition Producing the lowest cost products or services in the market Satisfying the need of a particular market niche Offering products that differ significantly from the competition Competitive Priorities are critical, operational dimensions a process, an organization or supply chain must possess to remain competitive in the market now and in future. (Krajewski, et al, 2013) A business chooses and decide on competitive priorities based on the short and long terms business strategies and goals in order to have a competitive edge over competitors. There are few challenges that every business faces to have competitive edge on the competition. These challenges are: Developing and Implementing Effective Strategies Maintaining an good clientele Meeting the challenges of increased competition in the business environment. Keeping up with technology advances. Learning to do more with less. Staying ahead of competitors. Keeping an eye on the future. An organization\business must carefully choose its competitive priorities based on the business competitive strategies. Stuck in the Middle "The three generic strategies are alternative, viable approaches to dealing with the competitive forces. The converse of the previous discussion is that the firm failing to develop its strategy in at least one of the three directions-a firm that is "stuck in the middle'-is in an extremely poor strategic situation. This firm lacks the market share, capital investment, and resolve to play the low-cost game, the industrywide differentiation necessary to obviate the need for a low cost position,or the focus to create differentiation or a low-cost position in a more limited sphere. The firm stuck in the middle is almost guaranteed low profitability. It either loses the high-volume customers who demand low prices or must bid away its profits to get this business away from low-cost firms. Yet it also loses high-margin businesses-the cream-to the firms who are focused on highmargin targets or have achieved differentiation overall. The firm stuck in the middle also probably suffers from a blurred corporate culture and a conflicting set of organizational arrangements and motivation system" (Porter, 1985 p.41) Here are 9 competitive priorities that are grouped into 4 competitive capabilities dimensions: A- Cost 1- Low-cost operation

3 B- Quality 2- Top Quality 3- Consistent Quality C- Time 4- Delivery Speed 5- On-Time Delivery 6- Development Speed D- Flexibility 7- Customization 8- Variety 9- Volume Flexibility (Krajewski, et al, 2013) The business strategies may change over period of time and hence corresponding competitive priorities. In Simple words: "Any organization's competitive priorities are driven by and depends upon business's competitive strategies" To prove the above statement, until 2005 Mercedeze Benz (MB) business strategy was Focused or Market Segregation i.e satisfying the need of a niche market. Until 2005 MB fleet contained only high end luxurious cars to cater a particular customer based who were interested in top quality and luxury. By introducing a new model B200 in 2005, MB announced that they have added another competitive priority in their business strategies which is to add Variety to cater relatively low-end starter vehicle while providing its customer a sense of luxury and above class vehicle. Comparing MB, Porche still cater only niche market by keeping their competitive priorities to Top quality. Process Considerations for each competitive priority We will further map three business and competitive strategies with competitive priorities and corresponding processes. We will use examples using existing business models Business or competitive strategy: Overall Cost Leadership Competitive capability: Cost Competitive priority: Low-cost operation This model will refer to an organization with an Overall Cost Leadership as a business and competitive strategy factoring Cost as competitive capability and a Low cost operation as the competitive priority. These organizations deliver services and products at the lowest price possible to satisfy internal and external customers. In order to reduce cost and have a competitive edge in the market, such organizations will need a rigorous process analysis to ensure efficiency in each process and methods (to reduce scape, rework and overheads etc) producing the products and services. Another important considerations for such organizations to invest in the automation and technology to keep the cost low to be competitive. An example of such organization is China s Huawei telecommunications producing networking equipments. Huwei has grown to China's largest and world's largest telecommunication organization competing directly with Cisco. They achieve low cost by keeping manufacturing in China and their R&D

4 in developing countries like India and Pakistan. They are able to keep the low cost competitive edge over their competitors by keeping the operation cost low. (Anon.b, 2015) Business strategy: Differentiation Competitive capability Time and Flexibility Competitive priority: Variety, customization, delivery speed and on time delivery Businesses use Product Differentiation to gain a competitive edge in industries where multiple competitors produce similar products or services. (Anon.a, 2015) This model will refer to an organization with a Product Differentiation as business strategy factoring Flexibility as competitive capability and Variety and Customization as the competitive priorities. These organizations deliver services and products allowing their customers and clients more flexibility to choose the products and services and be able customize as per their requirements. Such businesses must consider processes supporting large volumes and be able to work closely with the market demands in order to meet the market demands. An example of such business strategy is Dell. This organization has a competitive edge over other competitors as they provide their customers ability to customize the products (for example a server hardware) and choose from a variety of available options. Business strategy: Focus Market Segmentation Competitive capability: Quality Competitive priority: Top Quality and Consistent Quality This model will refer to an organization with a Market Segmentation as business strategy factoring Quality as competitive capability and a Top Quality as the competitive priority. These organizations deliver top quality product and services for satisfying the need of a particular market niche. These organization must emphasis on the processes focussing to generate top notch quality products and services. From manufacturing stand point, those top qualities may include, superior features, product durability and very controlled quality control. An example of such organization is Rolls Royce which is known for its superior quality control, feature and serving a special group of customers. Competitive priorities and the impact upon the company's enterprise computing platform As noted by Porter and Millar (1985) that Information technology is changing the way companies operate. It is affecting the entire process by which companies create their products. Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers. Adoption and use of information technology can play a significant role for any organization to meet their competitive priorities and allows companies to maintain a competitive advantage over their competitors. In the section below, we will discuss some of the competitive priorities and their impact on any organization's computing platform. We will further relate to some of the existing businesses. Businesses with Low-Cost-Operation as their competitive priority must engage an enterprise computing platform that is designed to reduce cost by increasing productivity, reduce waste and overheads. An

5 example of such businesses are Costco and Walmart which excel in providing low-cost products to their customer. Businesses with Delivery speed and On-time delivery as their competitive priorities must use an enterprise computing platform which is highly robust, reduce lead time, fully integrated with all business processes (for example, suppliers and customer modules). For example, Dell has designed his computing platform that is completely integrated with customer relations module, order fulfillment and supplier management module. This integrated computing platform allows Dell to reduce lead time making sure On-time delivery and also assist in cost reduction hence increasing the profitability of the business. Businesses with Top quality as their competitive priority must make sure that their computing environment must use computing platform that support to an enhanced customer relationship module, making sure that superior quality of the products and services is paramount on all used module and service. Businesses with Variety as the competitive priority must make use of the computing platform that allows handling of large volume, streamlined customer relationship, order fulfillment and supplier relationship module. A great example of such is Amazon.com. Conclusion We have discussed three different business strategies and the corresponding competitive capabilities and priorities. As we can see that an organization is unable to focus on all four competitive capabilities (cost, quality, delivery, and flexibility) and the nine competitive priorities as these are driven by the business strategy and objectives. Focusing performance on one priority limits/eliminates the ability to focus on another priority. Further, for any business to have a competitive advantage over rivals, business's computing platform\environment must support the business processes that are designed to meet the competitive priorities.

6 References Porter, M. (2008) The Five Competitive Forces That Shape Strategy: Harvard Business Review [Online] Available from: [Accessed:September 30 th, 2015] Porter, M. (1985) Competitive Strategy, Techniques for analyzing industries and competitors. New York:The Free Press Krajewski, L. J. Ritzman, L. P., & Malhotra, M. K. (2013). Operations management: processes and supply chains, 10th edition, Pearson, New Jersey Anon.a (no date) Product Differentiation in Marketing: Examples, Strategies & Definition [Online] Available from: Porter, M. and Millar, V. (2008) How information gives you competitive advantage:harvard Business Review [Online] Available from: [Accessed:September 3, 2015] ANON. (n.d) Successful strategies for convergence [Online] Available from: Osterwalder, A (no date) What is a Business Model? [Online] Available from: ANON. (n.d) About Snapfish [Online] Available from:

PRODUCTION PLANNING AND CONTROL ( ) Dr. Akram AlSukker

PRODUCTION PLANNING AND CONTROL (110403436) Dr. Akram AlSukker TEXT BOOKS Operations Management: Processes and supply chains. Krajewski, L., Ritzman, L. and Malhotra, M., Pearson Prentice Hall, 10th Edition,