Lom5 Chapter 6

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LOM 5

AQuestion 2: What are Amazon.com’s competitive priorities and what should its operation strategy focus on?

Competitive priorities:

- Keep the position of market leader.
- Maintain the fast delivery.
- Low price focus
- User friendly website.

Operational strategy:

Promote the website, especially in this time of the year, during the holidays. People will be reminded of the website, and maybe visit the website because of the promotion. When the visitors are on amazon.com, they must experience a nice shopping-environment. This can be done by constantly improving the website’s user friendliness, this can be done by improving the search engine for example. Or something as easy as changing some colors to match the season.

Question 4: FedEx built its business on quick, dependable delivery of items being shipped by air from one business to another. Its early advantages included global tracking of shipments using Web technology. The advancement of Internet technology enabled competitors to become much more sophisticated in order tracking. In addition, the advent of Web-based businesses put pressure on increased ground transportation deliveries. Explain how this change in the environment has affected FedEx’s operations strategy, especially relative to UPS, which has a strong hold on the business-to-consumer ground delivery business.

Because FedEx lost their initial competitive advantage (UPS became a threat as they were able to deliver large volume of shipments because of the advanced Internet technology as well), they had to come up with new operations strategies to remain competitive: - FedEx Ground

- FedEx Home

FedEx now focuses on low-cost operations and dependable delivery, to gain a new competitive advantage.

Question 6: Although all nine of the competitive priorities discussed in this chapter are relevant to a company’s success in the marketplace, explain why a company should not necessarily try to excel in all of them. What determines the choice of the competitive priorities that a company should emphasize for its key processes?

It really depends on the specific market you are operating in as a company. The company should focus on the most marketable assets by implementing demographics and forecasting future opportunities. Top quality may influence the development speed and low cost operations could conflict with your volume flexibility.

BChad’s Creative Concepts started as a small company producing custom made wooden furniture. Business was good, and Chad Thomas decided to expand his business. Now, Chad added a standard line of furniture to his business. The priority is still on the custom made furniture, therefore the standard line is put on the second place, leading to unfinished products and a big inventory.

Question 1: What types of decisions must Chad Thomas make daily for his company’s operations to run effectively? Over the long run?

Chad has to make operational decisions. In the long run, these decisions are Strategic decisions.

Question 2: How did sales and marketing affect operations when they began to sell standard pieces to retail outlet?

By changing to selling standard pieces in retail outlets next to the custom pieces, Chad has start promoting his business, because now there are serious competitors, which are easily reached by the customer. The whole production process changed, because now standard pieces are produced in the factory as well.

Question 3: How has the move to producing standard furniture affected the company’s financial structure?

The sales of the standard line are increasing steadily, but still the most dollars of the sales come from the custom made pieces. However, the financial situation is not optimal, because lots of dollars are spend on inventory.

Question 4: What might Chad Thomas have done differently to avoid some of the problems he now faces?

Thomas could make a second factory, focused on...
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