...CHAPTER 3: THE MICRO ENVIRONMENT MGMT 488 – STRATEGY AND POLICY OVERVIEW The micro environmental analysis is the second step in creating the Environmental Analysis. The micro environment examines the general business climate as it relates to the organization within its industry. The micro environment is also known as Porter’s Five Forces of Competition. The macro environment is primarily concerned with major issues and upcoming changes in the environment. The analysis looks at five areas of interest, which are 1) Power of the Buyers; 2) Power of the Suppliers; 3) Threat of Substitute Products; 4) Threat of New Entrants; and 5) Intensity of Rivalry. Notice in the following diagram, how these interact and influence each other. MGMT 488 Chapter 3 – Macro Environment POWER OF BUYERS STRONGER WHEN • • • • • • • • • • Buyers have low switching costs Buyers are large; large volume sales are important Large number of small buyers can band together Buyer demand is weak or declining Buyer demand dramatically slows (aka “a buyer’s market”) Buyer identity is important Quality and quantity of information to buyers is high Buyers can postpone purchase until a later date Product is a commodity Threat of substitute products is high WEAKER WHEN • • • • • • • Buyers purchase infrequently or in small quantities Many buyers Buyer switching costs are high Buyer demand surges (aka “a seller’s market”) Brand reputation is important Highly...
Words: 1494 - Pages: 6
...Tuesday, September 9, 2014 Nucor Corp A! Subject - Structure/Ops! • Decentralized ! - Distance between MGMT and ops! • Communication between top mgmt and supervisors?! - Autonomy for plant mgr - operated as an independent business! • Employees tell mgrs about their bad decisions — where is top mgmt? (no input/guidance)! • Too many risks?! - HR - People like working there! • Large labour supply! • Performance based pay, fairness! • Grievance reviews! - GM, then HQ! - Does HQ need to get involved?! • Annual dinners with GMs, monthly crew meetings, employee surveys! - Discuss any employee problems! • No layoffs! - Reduced workweek instead! - Compensation! • 1. Production Incentive plan! - Bonuses for workgroups (25-40 workers) based on anticipated vs. actual production! - 80-150% of base wage - BIG! 1 Tuesday, September 9, 2014 - Late - Lose bonus for the day, Sick - Lose bonus for the week! • 4 forgiveness days per yr! • Too harsh? Maybe not considering strong labour pool! - Supervisors and maintenance included! • No bonus paid of equipment not operating on that shift! • 2. Department Manager Plan! - Annual bonus based on ROA for the plant! • Target of 25%! • Average 82% bonus in recent years! - High?! • 3. Non-Production/Department Mgr Plan! - Accountants, engineers, clerks, etc! - Bonus based primarily on ROA for their plant! - Could be over 25% of base salary! • 4. Senior Officers Incentive Plan! - inc. Plant General Mgrs! - Based on return on shareholders’...
Words: 600 - Pages: 3
...FORD MOTOR COMPANY: SUPPLY CHAIN STRATEGY Teri Takai, the director of supply chain systems, had set aside this time on her calendar to contemplate recommendations to senior executives. The question they’d asked was widely agreed to be extremely important to Ford’s future: How should the company use emerging information technologies (i.e. Internet technologies) and ideas from new high-tech industries to change the way it interacted with suppliers? Members of her team had different views on the subject. Some argued that the new technology made it inevitable that entirely new business models would prevail and that Ford needed to radically redesign its supply chain and other activities or risk being left behind. This group favored “virtual integration,” modeling the Ford supply chain on that of companies, such as Dell, which had aggressively used technology to reduce working capital and exposure to inventory obsolescence. Proponents of this approach argued that although the auto business was very complex both for historical reasons and because of the inherent complexity of the automotive product, there was no reason such business models could not provide a conceptual blueprint for what Ford should attempt. Another group was more cautious, believing that the difference between the auto business and relatively newer businesses such as computer manufacturing were important and substantive. Some noted, for example, that relative to Dell the Ford supplier network had many...
Words: 2555 - Pages: 11
...inventory control, quality control, storage, logistics and evaluations. A great deal of focus is on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Ultimately, the nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization, for example, retail, manufacturing, wholesale, etc. Sections of This Topic Include: Purchasing Control and Coordinating Function of Management Product and Service Management Quality Management Inventory Management Logistics and Transportation Management Facilities Management Configuration Management Distribution Channels General Resources [pic] Procurement (Purchasing) Practices This topic reviews guidelines for buying various materials from suppliers and vendors -- materials, including computers, services from lawyers, insurance, etc. Procurement (Purchasing) Practices Management Control and Coordinating Function Management control and...
Words: 685 - Pages: 3
...| | | | | | | | | | | | | | | | | | | | Q #1 - I have too much work to do and too little time! How much time can POS Software really save me? | | This depends on your specific business and the type of POS system you buy. But if you choose the right system and use it properly -- POS software can give you a dramatic boost in efficiency. | | In fact, I've done several surveys with retail business owners and it's common for them to improve efficiency by 10% to 50% (Based on "Annual Sales Per Employee"). POS software can save time by automating inventory control, speeding up point of sale transactions, automatically tracking accounting information, quickly providing valuable financial reports and much more. | | Unfortunately POS software won't give you a big boost in efficiency unless you choose the right type of system and you use the software properly. That's why professional training is so important. | | It's also common for retailers to go through 2 or 3 POS systems before they reach a 10% to 50% boost in efficiency. So it depends whether you choose the right system the first time around. | | Q #2 - Most POS Software systems do pretty much the same thing... right? | | Absolutely NOT! This is a common misconception. Every POS system has different features, strengths, weaknesses, and intended uses. For example, some POS systems will work great for a retailer that sells large ticket...
Words: 1029 - Pages: 5
...Todd Diller Dr. Min MGMT 4420 February 23, 2015 Sandusky Winery Case Problem Analysis At Sandusky Winery, there seems to be several issues going on within the company’s operations, resulting in a huge inventory mess. The first issue I have noticed is the eagerness of Sandusky Winery’s marketing department. The marketing department wanted to expand product lines and aggressively promote its new products, without taking storage and warehousing into consideration. This high level of production has resulted into a massive surplus of product that has the storage room packed from the floor to the ceiling. The main issue is the poor inventory management. The stock room is filled from the floor to the ceiling with a variety of old wine products and promotional items, including ones from 1996 Summer Olympics. This problem is causing the production manager to take time out to locate the inventory manager, so they can find storage space for these leftover products from previous promotional runs. Some of these items had temperature requirements that were not met when they were left outside a facility in a boxcar, resulting in a loss of product. They often reduce their inventory and storage space by purging their less popular products, resulting in a loss. Sandusky managers their inventory with an “earn and turn” process that does not identify their most popular products or control the excessive supply of unpopular products. Sandusky Winery is limited on additional storage/warehousing...
Words: 741 - Pages: 3
...MGMT 3161 Purchasing & Supply Chain Assignment #5A: Case 7-1 Power Line Poles Write-Up Due: Sunday, September 27, 2015 @ midnight If you were in the position of Gordon Yarrow, how would you deal with the bid exceptions requested? In addition to answering the question above, select and answer one of the following six questions: 1. Do you agree with Mr. Yarrow’s procedure of sending only the four most acceptable bids to Moren’s engineering consultants for complete analysis? 2. Does Mr. Yarrow really have much choice as to whom he awards the pole manufacture contract? 3. Under the circumstances, is the manufacturer of the pole or the engineering consultant responsible for the final specifications? 4. If you were Mr. Yarrow, what additional information would you like beyond that supplied in the case, and how would it affect your final decision? 5. What decision would you make on the basis of the available information? 6. Do you think that all suppliers have been fairly treated? Guidelines & Requirements: * Use standard margins (i.e., 1”) and double spacing * Do not exceed two pages in total length * You will be evaluated on the following criteria (grading rubric): * Analysis: * apply relevant principles, concepts and frameworks to the questions * assess the issues faced by the enterprise * do not just repeat the information already in the case * Reasoning & Logic * Clear ideas, practical...
Words: 290 - Pages: 2
...implemented within the 554th ELSW. Fielded in Mar 2002, the AFWay system combines e-Business and e-Commerce processes that guide users through requirement approval, purchase, and asset tracking by combining these into one simplified process. On 13 Aug 2003, the AF CIO mandated the use of AFWay Air Force wide to purchase all laptop and desktop computers. Despite AFWay’s success, the Air Force is in need of a more robust application to better enforce government rules/workflow requirements, integrate financial management functions with the existing AFWay functions, perform spend analysis, help transform procurement, implement e-procurement initiatives, and to provide a scalable and flexible foundation to meet future strategic enterprise-wide purchasing needs for all commodities. The AFWay II modernization initiative is intended to meet these requirements. SAF/AQC initiated the Enterprise Architecture for Procurement (EAP) architecture initiative to design the end-to-end procurement processes and systems of the future. The Air Force Way II (AFWay II) operational architecture is a subset of the EAP which consists of structured DoD Architecture Framework (DoDAF) architecture artifacts that capture AF procurement business goals and processes. AFWay II will meet the goals and objectives articulated by Air Force senior leadership. The AFWay II application provides Air Force and DoD organizations at all levels with a web-based e-commerce solution to acquire information technology (IT) assets...
Words: 1266 - Pages: 6
...Future Solutions, Inc. Case Study Fact Future Solutions Inc., (FSI) is protesting the award by the Environmental Protection Agency (EPA) of a blanket purchase agreement (BPA) for office supplies to Corporate Express pursuant to request for quotations (RFQ) No. DC-03-00233. FSI, a small business concern, argues that the requirements should be set aside for small business concerns and that it was not given an equitable opportunity to compete for this requirement. FSI also contends that the consolidation of the agency’s office supply requirements into the BPA constitutes improper bundling. The RFQ contemplated award of a BPA for the procurement of office supplies, with an emphasis in environmentally preferable products (EPP) and products of organizations for the blind or other severely handicapped as authorized by the Javits-Wagner-O’Day Act, 41 U.S.C. 46-48c (2000). These products will be provided to approximately 70 EPA facilities, located in the contiguous United States. The vendor selected for award of the BPA was required to be a current holder of the contract under the GSA , FSS 75IIA, Office Supplies Products and Equipment. The items covered by the RFQ included all general office supplies offered under Special Item Number 75 200. The base term of the BPA was 1 year, with four 1 year options, and a maximum 15 months of award-term incentive options. In 2003, the EPA obtained and evaluated the quotations and oral presentations of four large business FSS 75 IIA contractors...
Words: 1065 - Pages: 5
...Chapter 2: The Integrated Buying Model Tennessee State University MGMT 6220 The integrated buying model is used by the buyer in making buying decisions. Factors that affect decisions made in the integrated buying model are the cost per unit, quality level, and lead time. As each company tries to achieve their competitive advantage, the goals of a purchasing decision may vary. For example, most purchasing decisions require buying the right material at an acceptable cost and quality level within a reasonable lead time. The decision maker must consider multiples goals. As a result, the buyer is faced with several constraints. Budgetary constraints and quality level constraints can cause issues with making the best buying decision. Companies may have limited resources, budgets may not be high enough to cover costs, or the storage size may limit the amount a product can be purchased. Nonetheless, the buyer must achieve the multiples goals within the constraints. The integrated buying model is shown in figure 1. Figure 1: Integrated Buying Model The cost per unit, quantity discount schedule, and price/cost analysis are considered when making buying decisions based on cost. The cost per unit is influenced by the volume or amount purchased, the quality level desired, and the desired lead time. A company’s strategy may to purchase in bulk to buy at a discount which can drive the material costs down. A buyer must also consider the quality...
Words: 1674 - Pages: 7
...Elizabeth Harris MGMT 430 Week 8 Assignment 2 Mattel designs, manufactures, and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers. Mattel’s business is dependant in great part on its ability each year to redesign restyle, and extend existing core products and product lines, to design and develop innovative new products and product lines, and successfully market those products and product lines. Mattel plans to continue to focus on its portfolio of traditional brands that have historically had worldwide appeal, to create new brands utilizing its knowledge of children’s play patterns and to target customers and consumer preferences around the world. The objective of Mattel is to continue to create long-term stockholder values by generating strong cash flow and deploying it in a disciplined and opportunistic manner which is outlined in Mattel’s capital a investment framework. To achieve this objective, management has established these three overarching goals. The first goal is to grow core brands by continuing to develop popular toys that are innovative and responsive to current play patterns and other trends. Additionally, Mattel plans to pursue additional licensing arrangements and strategic partnerships to extend its portfolio of brands into areas outside of traditional toys. The second goal is to improve execution in areas including manufacturing, distribution, and selling. Mattel continues to focus on improving...
Words: 597 - Pages: 3
...Miguel Gonzalez MGMT4430_900 Purchasing & Supply Mgmt. Article Review #2 After reading this article in the New York Times, immediately came to my mind the good topic we discuss on chapter 7 about “Process and Technological Capability” concept, which in the business world consist of the technological, design, methods, and equipment used to manufacture a product or deliver a service. This article describes how important process and technological capability had made Boeing a global aviation leader and the world’s second largest military contractor, but at the same time talks about a technological problem that is affecting Boeing losing millions of dollars as well as current and future contractors. Founded in 1916 by William E. Boeing, the company has grown through decades of innovative designs and the acquisition of venerable names in aviation like McDonnell Douglas and Rockwell International. In 2000, the company moved its headquarters from Seattle to Chicago. As we all know now days for most of businesses keep growing or at least maintain their economical business competition they should all introduce innovation and Boeing is not the exception. By doing this Boeing have created recognition on the aviation industry, but also by doing this and experimenting with new technology and new process some of their products have reveled many technical problems, which in this case had happened to Boeing’s much-anticipated “Dreamliner”. In December 2012, a United Airlines 787 flying...
Words: 455 - Pages: 2
...BEER FOR ALL: SABMiller in Mozambique MGMT 205: International Business Discuss the local conditions that make SAB Miller’s traditional model unsuitable for Mozambique. SABMiller’s traditional model was based on repeating well-known processes worldwide and was heavily reliant on global supply chains. This approach proved to be the most suitable option for entering and operating in rich countries, where SAB Miller could benefit from short and cost-efficient supply chains. Furthermore, the high demand of commercially brewed beer, which was globally based on malted barley and hops, allowed them to pursue a mass-production strategy. In Mozambique on the other hand, the demand for commercially brewed beer was, with an average per capita consumption of 8 liters per year, very slim. Yet, there was a huge market that wanted to drink beer but could not afford to because many people in Mozambique were living in poverty. That is why the price was their major decision criterion when it came to buying alcoholic beverages. As a result SABMiller´s potential low-income customers would rather satisfy their needs with considerably less costly homebrewed beer or even dangerous alcohol from the unregulated and untaxed illicit alcohol market, than with SABMiller´s relatively expensive commercial beer. In order to offer a legal alternative, the brewery had to cut costs even more. Therefore the brewery had to start using locally grown cassava as a new raw material, as it was very costly to...
Words: 943 - Pages: 4
...superior performance relative to rivals is the ultimate challenge -if a company’s strategies result in superior performance, it is said to have a competitive advantage -Ex: Dell’s strategies produced superior performance from mid-1990s until mid-2000s, as a result, Dell enjoyed competitive advantage over its rivals -How did they achieve competitive advantage? -due to successful pursuit of varying strategies: Direct selling, customization and efficient supply chain mgmt. -enabled company to lower cost structure, charge low prices, gain market share, and become more profitable than its rivals -Dell lost competitive advantage in later half of 2000s HP offered bundled products, needed to find ways to sell to intermediaries & Apple differentiation -first step toward achieving objective is to describe in more detail what superior performance/competitive adv mean and to explain pivotal role that managers play in leading strategy-making process Strategic Leadership: creating competitive adv through effective mgmt. of the strategy-making process -strat-making process is the process by which managers select/implement a set of strategies that ain to achieve a competitive adv Strategy Formulation: selecting strategies based on analysis of an org’s external/internal environment Strategy Implementation: putting strategies into action includes designing, delivering, and supporting products; improving efficiency of ops; designing company’s org structure/control systems...
Words: 4937 - Pages: 20
...MGMT 306 PRODUCTION AND OPERATIONS MANAGEMENT HOMEWORK 1 (Please submit the Scantron form) I. TRUE/FALSE (A for True; B for False) 1. All organizations, including service firms such as banks and hospitals, have a production function. True (What is operations management? moderate) 2. Operations management is the set of activities that create value in the form of goods and services by transforming inputs into outputs. True (What is operations management? easy) 3. The operations manager performs the management activities of planning, organizing, staffing, leading, and controlling of the OM function. True (What operations managers do, easy) 4. "How much inventory of this item should we have?" is within the critical decision area of managing quality. False (What operations managers do, easy) 5. Customer interaction is often high for manufacturing processes, but low for services. False (Operations in the service sector, moderate) 6. One reason for global operations is to gain improvements in the supply chain. True (A global view of operations, moderate) {AACSB: Multiculture and Diversity} 7. A product will always be in the same stage of its product life cycle regardless of the country. False (A global view of operations, moderate) {AACSB: Multiculture and Diversity} 8. Boeing’s development of the 787 Dreamliner is an example of a company obtaining a competitive advantage via product differentiation/innovation. True (Global company profile, easy) 9. An organization's strategy...
Words: 818 - Pages: 4
