SundarTechnologies: Business Management : Strategy and Operations IBMI Certification

International Business Management Institute

Business Management : Strategy and Operations

Strategy and Operations

(4.7 user rating)

An introduction to the most important tools of strategic decision making and optimization of

operational business processes.

Skills you will learn

* Manage strategic projects proactively

* Prepare a long-term business strategy services

* Optimize business processes and increase productivity

About this course

Strategic management is one of the most important “hard skills” in business management.

In Strategic Management, you will learn how you can manage businesses and projects

proactively with a focus on long-term strategy, rather than reacting to day-to-day

விக்கல் hiccups.

In order to do so, you will get familiar with the most important management tools, like

the Vision Statement,

the Mission Statement,

PESTEL Analysis,

Porter’s Five Forces,

SWOT Analysis,

Balanced Scorecard (BSC), and many more.

Operations management is chiefly concerned with planning, organizing and supervising in the

contexts of production, manufacturing or the provision of services. In this course, you’ll

learn to analyze and improve business processes by learning how to increase productivity and

deliver higher quality standards.

You will also receive a short case study of Samsung Electronics that summarizes the key

takeaways of this course.

Strategy and Operations

10 chapters | 3 hours

Course Content

1. Introduction

2. Strategic Management

3 Topics

3. Environment Analysis

5 Topics

4. Strategic Planning & Internal Analysis

6 Topics

5. Operations Management

2 Topics

6. Value Chain Management

4 Topics

7. Inventory Management

4 Topics

8. Business Decision Management

4 Topics

9. Case Study: Samsung

10. Conclusion

Strategy and Operations - Exam

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https://www.ibm-institute.com/courses/strategy-operations/

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Strategy and Operations - Exam :

$14/-

International Business Management Institute

Berlin Germany

Business Management :

Strategy and Operations

Certificate ID 355085-xxx-xxx-xxxx

Issue Date: xxxx-xx-xx

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* 1. Introduction :

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Welcome to Strategy and Operations!

-----------------------------------

In today’s competitive business world, effective managers need to understand the differences

and similarities between the operational side and the strategic side of business. They need to

understand and bring together both disciplines.

Expanded knowledge of how strategy and operations can work in parallel with one another will

drive better performance and competitiveness for the organization.

Understanding the tension that exists between these two business functions will help managers

recognize ways to reconcile those differences. When that happens, managers will begin to identify

strategic opportunities.

Strategy and Operations :

( Operational Effectiveness ) <==> ( Strategic Positioning )

----------------------------- --------------------------------

| "Doing things better and | | "Doing things differently to |

| better" | | delivers value compared to |

| | | rivals |

----------------------------- --------------------------------

rivals-போட்டியாளர்கள்

Note : For the "Strategy and Operations" refer to the exact image from the local folder of IBMI.

To provide greater clarity, think of operations and strategy as two separate, but related,

engines on a boat. Both engines propel உந்து the boat forward. While forward movement can

occur with only one engine, the boat moves faster and is more responsive if both engines

are running efficiently.

Each engine is important, and each engine requires fuel, maintenance, and skillful attention

so the boat’s ability to deliver results is optimized.

Think of your organization as a big boat. If we focus all of our attention, effort, and resources

solely on the operations side of the business, we put the whole organization at risk. This risk

comes from the operational engine running harder.

Being so focused on operations may seem like the smart thing to do at the moment, but over the

long run, your efficiency may suffer. Running one engine hard could quickly move you in a

direction that will backfire, taking your future competitive advantage with it. The idea of

focusing solely on the strategic engine is equally bad.

Without the operational capacity to implement or take advantage of our insights about future

innovations, processes, or market needs, all efforts towards our strategy and planning will be

for nothing. We must understand and balance both sides of the business, and to do that well,

a greater depth of understanding is necessary.

In the first part of this course (chapters 2-4), you are going to learn the basics of Strategic

Management. In the second part of this course (chapters 5-8), we will discuss the most essentials

tools and models of Operations Management.

* 2. Strategic Management : PMA

---------------------------

Strategic management is the continuous Planning, Monitoring, Analysis and assessment of all

that is necessary for an organization to meet its goals and objectives. In the first chapters

of this course, we will discuss the most important strategic management tools every manager

needs to understand.

3 Topics :

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Lesson Content

Defining "Strategy"

Strategic Management

Competitive Advantage

*i. Defining "Strategy" மூலோபாயம் :

Quote!!!!!!! :

The word “strategy” is derived from the Greek word “stratçgos”

– a combination of stratus (meaning army) and “ago” (meaning leading/moving).

A strategy is an action that managers take to attain one or more of the organization’s

goals. Strategy can also be defined as a general direction set for the company and its

various components to achieve a desired state in the future. Strategy results from the

detailed strategic planning process.

A strategy is all about integrating organizational activities and utilizing and allocating

the scarce பற்றாக்குறை resources within the organizational environment so as to meet the

present objectives. While planning a strategy it is essential to consider that decisions

are not taken in a vacuum and that any action taken by a firm is likely to be met by a

reaction from those affected: competitors, customers, employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events and the need

to take into consideration the likely or actual behavior of others. Strategy is the blueprint of

decisions in an organization that shows its objectives and goals, reduces the key policies, and

plans for achieving these goals, and defines the business the company is to carry on, the type

of economic and human organization it wants to be, and the contribution it plans to make to its

shareholders, customers, and society at large.

But why is a strategy so important?

* A strategy is significant because it is not possible to foresee முன்கூட்டியே the future. Without

perfect foresight, firms must be ready to deal with the uncertain events which constitute உண்டாக்கு the

business environment.

* A strategy deals with long term developments rather than routine operations, i.e. it deals with the

probability of innovations or new products, new methods of productions, or new markets to be developed

in the future.

* A strategy is created to take into account the probable behavior of customers and competitors.

Strategies dealing with employees will predict employee behavior.

A strategy is a well-defined road map of an organization. It defines the overall mission, vision

and direction of an organization. The objective of a strategy is to maximize an organization’s

strengths and to minimize the strengths of the competitors. Strategy, in short, is the link between

“where we are” and “where we want to be”.

Info.!!!!!!! :

A strategy is a road map of an organization and defines its overall mission, vision, and direction.

*ii. Strategic Management

The strategic management process means defining the organization’s strategy. It is also defined

as the process by which managers make a choice of a set of strategies for the organization that

will enable it to achieve better performance. Strategic management is a continuous process that

appraises the business and industries in which the organization is involved; appraises it’s

competitors; and fixes goals to meet all the present and future competitor’s and then reassesses

each strategy.

The strategic management process has the following four steps:

------------------------------------

| 1. Environmental Scanning |

----------------------------|--------

------------------------------------

| 2. Strategy Formulation |

-----------------------------|--------

-----------------------------------

| 3. Strategy Implementation |

------------------------------|-----

-----------------------------------

| 4. Strategy Evaluation |

-----------------------------------

Strive to imporve- மேம்படுத்த முயற்சி

accomplishing organizational objectives-நிறுவன நோக்கங்களை நிறைவேற்றுதல்

1. Environmental Scanning :

Environmental scanning refers to a process of collecting, scrutinizing ஆராய்வது and

providing information for strategic purposes. It helps in analyzing the internal and

external factors influencing an organization. After executing the environmental analysis

process, management should evaluate it on a continuous basis and strive to improve it.

2. Strategy Formulation :

Strategy formulation மூலோபாய உருவாக்கம் is the process of deciding best course of action

for accomplishing organizational objectives and hence achieving organizational purpose.

After conducting environment scanning, managers formulate corporate, business and functional

strategies.

3. Strategy Implementation :

Strategy implementation implies making the strategy work as intended நோக்கம் or putting the

organization’s chosen strategy into action. Strategy implementation includes designing the

organization’s structure, distributing resources, developing decision making process, and

managing human resources.

4. Strategy Evaluation :

Strategy evaluation is the final step of strategy management process. The key strategy

evaluation activities are: appraising internal and external factors that are the root

of present strategies, measuring performance, and taking தீர்வு remedial / corrective actions.

Evaluation makes sure that the organizational strategy as well as it’s implementation meets

the organizational objectives.

These components are steps that are carried, in காலவரிசை chronological order, when creating a new

strategic management plan. Present businesses that have already created a strategic management plan

will revert to these steps as per the situation’s requirement, so as to make essential changes.

However, strategic management is an ongoing process. Therefore, it must be realized that each

component interacts with the other components and that this interaction often happens in

கூட்டாக பாடுதல் chorus.

Info.!!!!!!! :

Remember: strategic management is an ongoing process.

Competitive Advantage-ஒப்பீட்டு (போட்டி) அனுகூலம்

*iii. Competitive Advantage :

An organization is said to have a competitive advantage if its profitability is higher than

the average profitability for all companies in its industry. But there is not only one correct

way to measure it, and for the right reason. Nearly everything can be considered as competitive

edge, e.g. higher profit margin, greater return on assets, valuable resources such as brand

reputation or unique competence in producing jet engines.

Every company must have at least one advantage to successfully compete in the market. If a company can’t

identify one or just doesn’t possess it, competitors soon outperform சிறப்பாக it and force the business to

leave the market.

An organization can achieve an edge over its competitors in the following two ways:

* Through external changes :

When external factors change, many opportunities can appear that, if seized upon, could provide many

benefits for an organization. A company can also gain an upper hand over its competitors when it is capable

to respond to external changes faster than other organizations.

* By developing them inside the company :

A firm can achieve cost or differentiation advantage when it develops rare resources, unique competencies திறன்கள்

or through innovative processes and products.

Although there are many ways to achieve an advantage, American economist Michael Porter has identified two basic

types of competitive advantage: cost and differentiation வேறுபாடு நன்மை advantage.

-----------------------

| Competitive Advantage |

-----------------------

----------------------- | ------------------------

| {Price Premium from |-------| Lower price) |

| unique product | | |

----------------------- ------------------------

* Cost advantage :

A company can achieve superior performance by producing similar quality products or services

but at lower costs. The company that tries to achieve cost advantage is pursuing cost

leadership strategy. Higher profit margins lead to further price reductions, more investments

in process innovation and ultimately greater value for customers.

* Differentiation advantage :

Differentiation advantage is achieved by offering unique products and services and charging

a premium price for that. Differentiation strategy is used in this situation and company

positions itself more on branding, advertising, design, quality and new product development

rather மாறாக than efficiency, outsourcing or process innovation. Customers are only willing

to pay higher prices for unique features and the best quality.

An organization that is capable of outperforming சிறப்பாக செயல்படுகிறது its competitors over a long

period of time has a sustainable competitive advantage.

*3. Environment Analysis :

--------------------------

Environmental analysis is the process of identifying external elements that affect an organization’s

performance. It is an essential foundation for every business strategy. In this chapter, we will

discuss the two most popular techniques: the PESTLE analysis as well as Porter’s Five Forces.

5 Topics :

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Lesson Content

i. PEST Analysis

ii. Extended to PESTLE

iii. PESTLE Example

iv. Porter's Five Forces

v. Porter's Five Example

i. PEST Analysis :

PEST-Analysis is a framework used to scan the organization’s external environment.

The letters PEST stand for Political, Economic, Social, and Technological. Some

approaches will add in extra factors, such as Legal and Environmental (PESTLE-Analysis). However, all approaches are all merely variations on a theme. The important principle is identifying the key factors from the wider, uncontrollable external environment that might affect the organization.

The basic PEST analysis includes four factors:

Political

/ \

Technological PEST Economic

\ /

Social

Note : For the "The basic PEST analysis includes four factors" refer to the exact image from the local folder of IBMI.

* Political – Here government regulations are assessed in terms of their ability to affect the

business environment and trade markets. The main issues addressed in this section include political

stability, tax guidelines, trade regulations, safety regulations, and employment laws.

* Economic – Through this factor, businesses examine the economic issues that are bound to have an

impact on the company. This would include factors like வீக்கம் inflation, interest rates, economic

growth, the unemployment rate, policies கொள்கைகள் , and the business cycle followed in the country.

* Social – With the social factor, a business can analyze the socio-economic environment of its

market via elements like customer demographics, cultural limitations, lifestyle attitude, and

education. With these, a business can understand how consumer needs are shaped.

* Technological – How technology can either positively or negatively impact the introduction of a

product or service into a marketplace is assessed here. These factors include technological

advancements, the lifecycle of technologies, and the role of the Internet.

ii. Extended to PESTLE

Expanding the PEST analysis to PESTLE adds two more factors:

Political

/ \

Environmental Economic

\ PEST /

Legal Social

\ /

Technological

Note : For the "Expanding the PEST analysis to PESTLE" refer to the exact image from the local folder of IBMI.

* Legal – These factors include பாகுபாடு discrimination law, consumer law, antitrust law, employment

law, and health and safety law. These factors can affect how a company operates, its costs, and the

demand for its products.

* Environmental – Those factors include ecological and environmental aspects such as weather, climate,

and climate change, which may especially affect industries such as tourism, farming, and insurance.

Furthermore, a growing awareness of the potential impacts of climate change is affecting how companies

operate.

When using PESTLE as a tool for analysis it is possible to get overlap between an issue which can be

put into two sections. For example, legal factors are often connected to political factors.

As with all techniques, there are advantages and disadvantages to using it to help plan an organizational

strategy. On the one hand, it provides a simple and easy-to-use framework for your analysis. It helps to

reduce the impact and effects of potential threats to your organization and provides a mechanism that

enables your organization to identify and பயன்படுத்தி exploit new opportunities. On the other hand, users

can oversimplify the information that is used for making decisions. Also, the process has to be conducted

regularly to be effective and often organizations do not make this investment.

To maximize the benefit of the PESTLE analysis, it should be used on a regular basis within an organization.

The impact of a certain external factor may have more severe consequences for a particular division or

department and the PESTLE technique can help to clarify why change is needed. Furthermore, this analysis

technique should be used in conjunction with other tools (such as SWOT) to produce the best results.

iii. PESTLE Example :

In this part, we will take a look at the American coffee company Starbucks. The macroeconomic

environment that Starbucks operates in is characterized by the last global economic recession.

However, consumers have not cut down on their coffee consumption and instead, are shifting to

lower-priced options. This means that Starbucks can still leverage the buying power of consumers

by offering cheaper alternatives.

We can use the PESTLE tool to screen the environment of the company and analyze the consequences for

Starbucks:

1. Political Factors:

The sourcing process of Starbuck’s raw materials has attracted the attention of the politicians in the

West and in the countries from where it sources its raw materials. This is the reason why Starbucks is

keen on adhering to social and environmental norms and to follow sourcing strategies that are appropriate

and in conformance to the “Fair Trade” practices that have been agreed upon by global corporations and

the governments.

2. Economic Factors:

The foremost external economic driver for Starbucks is the last global economic recession, which has

dented the profitability of many companies. However, studies have shown that consumers instead of

cutting down on their coffee consumption are shifting to lower-priced alternatives which is an

opportunity for Starbucks.

3. Social Factors:

Though Starbucks can offer cheaper alternatives as mentioned previously, it has to do so without

sacrificing the quality and this is the key socio-cultural challenge that the company faces as it

expands its consumer base to include the consumers from the lower and the middle tiers of the

income pyramid.

4. Technological Factors:

The company has already introduced WiFi capabilities in its outlets so that consumers can surf

the web and do their work while sipping coffee. Furthermore, it has introduced app-based discount

coupons and mobile payments.

afoul-ஒன்றில் இடக்கு முடக்காகச் சிக்கி

5. Legal Factors:

Starbucks has to ensure that it does not run afoul of the laws and regulations in the countries

from which it sources its raw materials as well as the home markets in the United States.

6. Environmental Factors:

There have been several concerns about the business practices of Starbucks from the activists

and from the consumers themselves. Therefore, Starbucks has to take into account these concerns

if it has to continue holding on to the trust it enjoys with its consumers.

Conclusion

The analysis proves the point that Starbucks is operating in a relatively stable external environment.

The main reason for this is the fact that it operates in the Food and Beverages space which means that

despite the recession, consumers cut down on the consumption to a certain extent and not completely.

Therefore, the task before Starbucks is to lower costs and increase the value so that it retains its c

onsumer base and attracts consumer loyalty.

iv. Porter's Five Forces

Porter’s Five Forces model, named after Michael Porter, identifies five forces that shape every

market and industry in the world. The five forces are frequently used to measure competition

intensityத ீவிரம், attractiveness, and profitability of an industry or market. These five forces are:

New Entrants-புதிய நுழைபவர்கள்

Threat of New Entrants

Bargaining power ----> Rivalry போட்டி among ----> Bargaining power

of suppliers exisiting Competitors of buyers

Threat of Substitute

products or services

Note : For the "Porter’s Five Forces model" refer to the exact image from the local folder of IBMI.

* Threat of New Entry:

A company’s power is affected by the force of new entrants into its market. The less time and money

it costs for a competitor to enter a company’s market and be an effective competitor, the more a

company’s position may be significantly weakened. An industry with strong barriers to entry is an

attractive feature for companies that allows them to charge higher prices and negotiate better terms.

* Buyer Power:

This specifically deals with the ability that customers have to drive prices down. It is affected by

how many buyers or customers a company has, how significant each customer is, and how much it would

cost a company to find new customers or markets for its output. A smaller and more powerful client

base means that each customer has more power to negotiate for lower prices and better deals. A company

that has many, smaller, independent customers will have an easier time charging higher prices to

increase profitability.

* Threat of Substitution:

Substitute goods or services that can be used in place of a company’s products or services pose a threat.

Companies that produce goods or services for which there are no close substitutes will have more power to

increase prices and lock in favorable terms. When close substitutes are available, customers will have the

option to forgo buying வாங்குவதை கைவிடுங்கள் a company’s product, and a company’s power can be weakened.

* Competitive Rivalry: போட்டி போட்டி

This force refers to the number of competitors and their ability to undercut a company. The larger the number

of competitors, along with the number of equivalent products and services they offer, the lesser the power of

a company. Suppliers and buyers seek out a company’s competition if they are able to offer a better deal or

lower prices. Conversely, when competitive rivalry is low, a company has greater power to charge higher prices

and set the terms of deals to achieve higher sales and profits.

Intro.!!!!!!!! :

Frequently used to identify an industry’s structure to determine corporate strategy, Porter’s model can be applied to

any segment of the economy to search for profitability and attractiveness.

Understanding Porter’s Five Forces and how they apply to an industry, can enable a company to adjust its business

strategy to better use its resources to generate higher earnings for its investors.

v. Porter's Five Example :

In this short example, we will look at how Under Armour fits கவசம் பொருந்துகிறது into the athletic footwear

and apparel industry. Under Armour is an American company headquartered in Baltimore, US that manufactures

footwear, sports, and casual apparel சாதாரண ஆடை.

* Competitive rivalry:

Under Armour faces intense தீவிரமானது competition from Nike, Adidas, and newer players. Nike and Adidas,

which have considerably larger resources at their disposal, are making a play within the performance

apparel market to gain market share in this up-and-coming product category. Under Armour does not hold

any fabric or process patents, hence its product portfolio could be copied in the future.

* Bargaining power of suppliers:

A diverse supplier base limits their bargaining power. Under Armour’s products are produced by dozens

of manufacturers based in multiple countries.

* Bargaining power of customers:

Under Armour’s customers include both wholesale customers as well as end customers. Wholesale customers,

like Dick’s Sporting Goods and the Sports Authority, hold a certain degree of bargaining leverage, as they

could substitute Under Armour’s products with those of UA’s competitors to gain higher margins.

The bargaining power of end customers is lower as UA enjoys strong brand recognition.

* Threat of new entrants:

Large capital costs are required for branding, advertising and creating product demand, and hence limits

the entry of newer players in the sports apparel market. However, existing companies in the sports apparel

industry could enter the performance apparel market in the future.

* Threat of substitute products:

The demand for performance apparel, sports footwear and accessories is expected to continue, and hence this

force does not threaten Under Armour in the foreseeable future.

Win.!!!!!!! :

Conclusion:

By thinking about how each force affects you, and by identifying the strength and direction of each force, you can

quickly assess the strength of your position and your ability to make a sustained profit in the industry. You

can then look at how you can affect each of the forces to move the balance of power in your favor.

* 4. Strategic Planning & Internal Analysis :

---------------------------------------------

* 4. Strategic Planning & Internal Analysis

After having analyzed the environment, it is now time to take an organization’s internal

strengths and weaknesses into account. This is essential for crafting a powerful strategy

that distinguishes வேறுபடுத்தி காட்டுவதாக your business from your competitors and leads to

long-term success.

6 Topics :

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Lesson Content

i. SWOT Analysis

ii. SWOT Example

iii. BCG Matrix

iv. BCG Matrix Example

v. Ansoff-Matrix

vi. Balanced Scorecard

vii. Previous Lesson

i. SWOT Analysis :

SWOT analysis is a relatively quick way to look at organizational Strengths, Weaknesses,

Opportunities, and Threats. The overall purpose of a SWOT analysis is to examine the

internal and external factors that help or hinder தடை you in achieving each of your

objectives. Strengths (S) and Weaknesses (W) are considered to be internal factors over

which you have some measure of control. However, Opportunities (O) and Threats (T) are

considered to be external factors over which you have essentially no control. In other

words, the framework views all positive and negative factors inside and outside the firm

that affect success.

----------------- --------------

Internal | Strengths | | Weaknesses |

Factors ----------------- --------------

----------------- --------------

External | Opportunities | | Threats |

Factors ----------------- --------------

Note : For the "SWOT Analysis" refer to the exact image from the local folder of IBMI.

1. Strengths

Strengths are the qualities that enable us to accomplish the organization’s mission. These are

the basis on which continued success can be made and continued/sustained. Strengths are the

beneficial aspects of the organization or the capabilities of an organization, which includes

human competencies, process capabilities, financial resources, products and services, customer

goodwill and brand loyalty. Examples of organizational strengths are huge financial resources,

broad product line, no debt, committed employees, etc.

2. Weaknesses

Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our

full potential. Weaknesses in an organization may be depreciating machinery, insufficient research

and development facilities, narrow product range, poor decision-making, etc. Examples of organizational

weaknesses are huge debts, high employee turnover, complex decision making process, narrow product range,

large wastage of raw materials, etc. Weaknesses are controllable. They must be minimized

and eliminated.

3. Opportunities

Opportunities are presented by the environment within which our organization operates. These arise

when an organization can take benefit of conditions in its environment to plan and execute strategies

that enable it to become more profitable. Organizations can gain a competitive advantage by making use

of opportunities. Opportunities may arise from market, competition, industry/government and technology.

Increasing demand for telecommunications accompanied by deregulation is a great opportunity for new

firms to enter the telecom sector.

4. Threats

Threats arise when conditions in the external environment jeopardize ஆபத்து the reliability and profitability

of the organization’s business. Threats are uncontrollable. When a threat comes, stability and survival can

be at stake. Examples of threats are ever-changing technology; increasing competition leading to excess capacity,

and massive price wars reducing industry profits.

Info.!!!!!!!! :

SWOT analysis (or SWOT matrix) is a strategic planning technique used to evaluate the strengths, weaknesses,

opportunities, and threats of an organization.

The popularity of SWOT analysis is down to its simplicity and flexibility. It is easy for everyone to understand

and its implementation does not require any technical knowledge or specialist training. However, the SWOT

methodology does encourage a tendency to oversimplify the situation. Another problem with SWOT is that there

are no obvious வெளிப்படையானது limits as to what is and is not relevant. During SWOT discussions, you need to

keep everyone focused on what is important in achieving the objectives, rather than just creating lists of issues.

ii. SWOT Example :

This chapter analyzes the strategy of the world’s leading furniture retailer, IKEA using the SWOT methodology.

The Swedish company is known for its simple yet effective approach to retailing with the Do It Yourself (DIY)

concept: The products sold by IKEA are mostly ready to use and flat packed meaning that they can be assembled

by the customers themselves.

1. Strengths

The biggest strength that IKEA has is its clear vision, which is to add value to its customers irrespective of

the market conditions. This has translated into an articulate தெளிவாக உச்சரி and well-defined business strategy

and an approach to retailing, which is pioneering in its simplicity and deadly in its targeting of competitors

and effective in its positioning. Another key strength of the company is its clear concept which translates into

an array of products that can be assembled by the customers themselves leading to மிகப்பெரிய humongous cost

reductions which are then passed on to the customers.

2. Weaknesses

Given the fact that IKEA operates in multiple countries around the world, it is difficult to control standards across

locations. Though the company tries its best to implement uniform quality across its product range and throughout its

locations, replicable and scalable control of quality is a key weakness. Furthermore, with its வெறித்தனமான obsessive

focus on cost leadership, quality sometimes goes for a toss. The point to be noted here is that it is sometimes difficult

to maintain quality in the context of increasing costs and the need to replicate standards across its locations worldwide.

3. Opportunities

Perhaps the biggest opportunity that the company has is its cost leadership, which means a single-minded focus on cost

at the expense of everything else. While this has raised concerns about quality, the customers do not seem to mind as

they are getting their money’s worth. The other opportunity lies in the company’s expansion into the emerging markets

and the developing world where it has an untapped customer base that can be leveraged for effective profitability.

4. Threats

IKEA’s low-cost business model has been imitated and copied by its rivals, which means that the company needs to

constantly innovate if it has to stay ahead of the competition. For instance, several regional and local companies

have caught on to the DIY bandwagon அலைக்கற்றை and are also focusing on costs which means that to stay

nimble வேகமான and agile சுறுசுறுப்பான, IKEA has to come up with newer strategies. With the advent வருகை of the

internet and online shopping, DIY as a key driver of strategic success is no longer the sole USP (Unique Selling

Proposition) of IKEA.

Win.!!!!!!!! :

Conclusion

Through its innovative business model and its focus on products, processes, and systems, IKEA has managed to stay

ahead of the competition in the furniture retailing business.

The company can diversify into other products and product lines as it can replicate its business model in other

realms பகுதிகள் as well. This requires fresh thinking and a new approach to its strategy that would combine low-cost

leadership with additional drivers of success like scalability and focus on quality.

Finally, the company can enter the emerging markets where its products and its business model are likely to be met

with success and the untapped திறக்கப்படவில்லை customer base can be leveraged.

iii. BCG Matrix :

******* The BCG Matrix, named after its inventors from Boston Consulting Group, assess products on two dimensions.

The first dimension looks at the products general level of growth within its market.

The second dimension then measures the product’s market share relative to the largest

competitor in the industry. Analyzing products this way provides a useful insight into

the likely opportunities and problems with a particular product.

Products are classified into four distinct groups: Stars, Cash Cows, Question marks, and Dogs.

Four distinct groups :

------------------------------

M | | |

a | * Stars | ? Question |

r | | marks |

k ------------------------------

e`| | |

t`| Cash Cows | Dogs |

Growth | | |

------------------------------

Market Share

Note : For the "Four distinct groups" refer to the exact image from the local folder of IBMI.

Let’s have a look at what each of these four outcomes means for the product and the

decision making process:

* Stars:

Star products all have rapid growth and dominant market share. This means that star

products can be seen as market-leading products. These products will need a lot of

investment to retain their position, to support further growth as well as to maintain

its lead over competing products. Star products will also be generating a lot of income.

* Cash Cows:

Cash cows don’t need the same level of support as stars. This is due to less competitive

pressures within a low growth market where they usually enjoy a dominant position. Cash

cows are still generating a significant level of income but are not costing the organization

much to maintain. These products can be “milked” to fund Star products.

* Dogs:

Products classified as dogs always have a weak market share in a low growth market. These

products are very likely making a loss or a very low profit at best. The question for

managers is whether the investment currently being spent on keeping these products alive

could be spent on making something that would be more profitable.

* Question Marks (also called Problem Children):

These products are in a high growth market but do not seem to have a high share of the market.

One reason for this might be that a very new product was recently added to the market. If this

is not the case, then some questions need to be answered. What is the organization doing wrong?

What are competitors doing right?

The BCG Matrix is easy to perform, it helps to understand the strategic positions of the business portfolio,

and it’s a good starting point for further analysis. Nevertheless, this growth-share analysis has been heavily

criticized for its oversimplification. Market growth is one of many factors that determine industry attractiveness

and relative market share is only one of the factors that determine competitive advantage. This matrix does not

take into account any other factors that may have a bearing on both industry attractiveness and competitive

advantage.

iv. BCG Matrix Example :

The BCG matrix analysis for Nestlé reveals some interesting perspectives. As a global multinational in

the food and beverage industry, the Swiss company is one of the biggest corporations in the world. Over

8000 brands fall within its umbrella and are as widespread as bottled water and pet food.

Question Marks:

There are products that formulate a part of the industry that is still in the phase of development, yet the

organization has not been able to create a significant position in that industry. The small market share obtained

by the organization makes the future outlook for the product uncertain, therefore investing in such domains is

seen as a high-risk decision. Nestlé’s Chocolates and confectioneries can be placed in the Question Mark quadrant

of the BCG Matrix due to high competition and small market share in the industry.

Stars:

The products that have a high market share in a high growth industry are the stars of the organization. In the case

of Nestlé, it’s Mineral Water and its Nescafe Coffee fall in the Star quadrant. Growing healthier lifestyle trends

and emerging markets have prompted the brand to invest large amounts of investments in order to differentiate the

bottled water brands from competitors in mature markets and grow brand awareness in emerging markets.

Dogs:

Dogs were perceived உணரப்பட்டது to have the potential to grow but failed to create magic due to the slow market

growth. Failure to deliver the expected results makes the product a source of loss for the organization,

propelling செலுத்துதல் the management to withdraw future investments. The capital could be invested in a Question

mark or Star category instead. Nestlé’s Milo was launched as chocolate and malt powder for Milk and water, however,

the product failed to create any significant impact on the business in many countries.

Cash Cows:

Cash cows are the products that have a high market share in a market that has low growth. For Nestlé,

one Cash Cow is Maggi Noddles. With a market share of 80-85 %, Maggi Noddles holds a very stronghold

கோட்டை in the market and has high customer loyalty. The product requires very less investment to

maintain its market share and fight off any competition.

Win.!!!!!!! :

The BCG matrix helps organizations determine which areas of their business deserve more resources and

investment. This is especially helpful for corporations like Nestlé that offer a broad range of products

in many different markets.

v. Ansoff-Matrix :

The Ansoff Matrix is a strategic planning tool that provides a framework to help executives,

senior managers, and marketers devise strategies for future growth.

According to this tool, there are four possible combinations for growth. Each company needs to decide which

strategy to use based on the strengths and weaknesses of the organization and its competitors. Each strategy

has a different level of risk, with market penetration having the lowest risk and diversification having the

highest risk.

E Products

x Existing New

i ----------------------------------

M s| | |

a t| Market | Product |

r i| Penetration | Development |

k n| | |

e g-----------------------------------

t `| | |

N| Market | Diversification |

e| Development | |

w| | |

----------------------------------

Market Share

Note : For the "Ansoff-Matrix" refer to the exact image from the local folder of IBMI.

Market Penetration ஊடுருவல்

This occurs when a company infiltrates ஊடுருவுகிறது a market in which current products already

exist. The best way to achieve this is by gaining the customers of competitors. Other ways

include attracting non-users of your product or convincing உறுதியானது current clients to

use more of your product.

While market penetration may come with the lowest risk, at some point the company will

reach market saturation with the current product and will have to switch to a new strategy.

Market Development

Market development targets non-buying customers in currently targeted segments. It also

targets new customers in new segments in order to expand the potential market. New users

can be defined as new geographic, demographic, institutional, or psychographic segments.

If a company believes that its strength lies with its products and they believe their

products would be enticing கவர்ந்திழுக்கும் to new customers, then a company may want to

use a market development strategy.

New Product Development

New product development is a process that has two parallel paths: one involves the

idea generation, product design, and detail engineering; the other involves market

research and marketing analysis. Companies typically see new product development as

the first stage in the overall strategic process of product life cycle management

used to maintain or grow market share.

If a company believes that its strength lies with the customers, then they should

consider a product development strategy.

Diversification

Diversification seeks to increase profitability through greater sales volume obtained

from new products and new markets. At the business unit level, diversification is most

likely to expand into a new segment of an industry that the business is already in. At

the corporate level, it is generally via investing in a promising business outside of

the scope of the existing business unit.

Because of the high risk involved with diversification, many marketing experts believe

a company shouldn’t attempt diversification unless there is a high return on investment.

Info.!!!!!!! :

The Ansoff Matrix is a useful tool for organizations wanting to identify and explore

their growth options. It is one of the most commonly used tools for this type of

analysis due to its simplicity and ease of use.

vi. Balanced Scorecard :

The Balanced Scorecard, invented by Kaplan and Norton, is a strategic management system used by businesses

from all over the globe to align their business activities to the overall strategy and vision of their

organizations. We all know that business success, whether public or private, is ultimately down to

performance. Hence, managing and measuring that performance is vital for any organization that wants to

thrive in its niche or industry.

This management system enables your business to set, trace and ultimately achieve your objectives and strategies.

After you develop your business strategies and goals, they can be set and tracked using the Four Legs of the

Balanced Scorecard. Each leg deals with a distinct business perspective. These legs are the Financial one, the

Internal Business Process Leg, the Customer Leg and the Learning & Growth Leg.

Note : For the "Vision and Strategy" refer to the exact image from the local folder of IBMI.

1. Financial

Norton and Kaplan have not disregarded the need for financial data. Accurate and timely data is always a priority,

being paramount மிக முக்கியமானது for managers who want to get the complete picture. With the implementation of a

large corporate database, the financial leg aims to automate processes. The financial leg tracks your business

financial performance and requirements, including return on investment (ROI), cash flow, financial results

(quarterly and annually) and return on capital employed.

2. Customer

More and more, managers and researchers are coming to realize the huge importance of customer focus and customer

satisfaction. If customers are not happy with your company, they will eventually migrate to the competition.

Hence, poor performance from the customer perspective is an indicator of decline. Some of the areas assessed

by this indicator include customer retention rate, delivery performance to the customer, customer percentage

of market, customer satisfaction rate and quality performance for the customer.

3. Internal Business Processes

This perspective allows you to measure customer process needs, requirements and procedures. Metrics based on

this leg allow you to know how well your business is running and whether your services and products conform

to your company’s mission. Some of the areas that relate to internal business processes are process automation,

process bottlenecks, duplicate activities across functions, number of activities per function and process

alignment.

4. Learning and Growth

This perspective முன்னோக்கு focuses on teaching you to educate your employees, how you gain knowledge and how

you can use this knowledge to maintain an edge in your niche. This leg deals with subjects like

job satisfaction, training & learning opportunities for your employees, employee turnover and level

of expertise for the job. According to Norton and Kaplan, learning is considered a much more important

criterion than training. Additionally, they emphasize the importance of using high-performance work systems

(or technological tools) in order to create a better work environment.

Conclusion

Each of these unique perspectives or legs is inter-dependent. In other words, you need to improve all of them in

order to reap the benefits of Balanced Scorecard. Hence, these four legs have to be analyzed and improved together,

on a regular basis, in order for your company to thrive. Ignoring one of these legs is like sitting on a four-legged

stool with one broken leg – an impossibility. You will eventually lose your balance and fall to the ground, flat on

your face.

The main benefit of this system is that it reflects all the elements that define a company’s functions. This powerful

management system also helps you study those areas where performance measurements are not normally present. However,

there are a few downsides to using balanced scorecards. Scorecards tend to evolve into complex management instruments.

Moreover, maintaining these scorecards is a daunting அச்சுறுத்தும் task which can take large amounts of time.

Info.!!!!!!! :

In a nutshell, the Balanced Scorecard is a very good management assessing tool that allows managers

to make positive changes in their organizations and complement smart strategies with

smarter implementations.

* 5. Operations Management :

----------------------------

2 Topics :

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Operations management is the administration of business practices to create the highest level of

efficiency possible within an organization. It is concerned with converting materials and labor

into goods and services as efficiently as possible to maximize the profit of an organization.

Lesson Content

i. Definition

ii. Basic Principles

i. Definition

Operations Management is an area of management concerned with overseeing, designing, and

controlling the process of production and redesigning business operations in the production

of goods or services. It involves the responsibility of ensuring that business operations

are efficient in terms of using as few resources as needed and effective in terms of

meeting customer requirements.

Operations Management is concerned with managing the process that converts inputs (in the

forms of raw materials, machines, labor, management, capital, energy, etc.) into outputs

(in the form of goods and/or services):

Input ====> ( Transofrmation Process ) ===> Output

(Meaterial, Machines, ( goods, Services)

Labour, Mangement, Capital, etc.)

Note : For the "Transformation Process" refer to the exact image from the local folder of IBMI.

In this second part of the course, we will take a look at management methods and analytical

techniques to perform more efficient and more effective operations and production processes. For example, you will learn…

* the essentials of value and supply chain management by carrying out a Value Chain

Analysis as well as a VIRO Analysis of Resources

* the basics of business decision management by carrying out Break-Even Analysis

and drawing Decision Trees

* the fundamentals of inventory management by carrying out an ABC-Analysis as well

as using the Reorder Point Model

ii. Basic Principles

Before discussing the first practical tools, it makes sense to get familiar with some of the fundamental rules of successful operations management. Below you can find a list of essential principles that are important to understand the driving forces behind decisions about planning, designing and organizing processes.

These basic rules are embracing the idea of focusing on the delivery: supporting the organization to deliver better results and optimizing the input of materials, equipment, technology, and human resources.

Dr. Richard J. Schonberger, a renowned researcher of American manufacturing, has become widely known in operations management for his set of customer-focused principles:

--------------- -------------- ----------- ----------------- -------------

--------------- --------------- ----------- ----------------- -------------

--------------- -------------- ----------- ----------------- -------------

| Cut | | Cut | | Pull | | Total Quality | | Fix |

--------------- -------------- ----------- ----------------- -------------

* Continual, rapid improvement:

Aim for non-stop improvement to always deliver the best quality, aim for a

quicker response to customer demand, and always offer maximum flexibility

* Team up with customers:

Know what they buy and use, and organize product families accordingly

* Focus:

Allow no variations that the customers don’t buy or demand

* Organize resources:

Set priorities in organizing resources in a way the operations are close to

the customer rate of use or demand

* Maintain equipment:

Always think of improvement of current assets first; keep the equipment as

simple and flexible as possible.

* Cut times:

Shorten product path to the customer by making processes and delivery faster

* Cut setup:

Be prepared to support different processes and get all information and tools

ready for on-demand production

* Pull system:

Improve the workflow and cut the waste by producing on demand

* Total quality control:

Use only the best materials, processes, and partners

* Fix causes:

Focus on controlling the root causes that really affect cost and performance

* 6. Value Chain Management :

-----------------------------

4 Topics :

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With ever-increasing competition for unbeatable prices, exceptional products, and customer

loyalty, businesses must continually evaluate the value they create. In this chapter,

you will learn how successful value chain management can give businesses an advantage

over their competition.

Lesson Content

i. Value Chain Analysis

ii. Value Chain Example

iii. VRIO Framework

iv. VRIO Example: Google's HR

i. Value Chain Analysis

The Value Chain Analysis (VCA) is a process where a firm identifies its primary

and support activities that add value to its final product and then analyzes

these activities to reduce costs or increase differentiation.

The goal is to recognize which activities are the most valuable to the firm and which

ones could be improved to provide a competitive advantage. In other words, by looking

into internal activities, the analysis reveals where a firm’s competitive advantages

or disadvantages are.

As pointed out earlier in this course, a firm that competes through differentiation

advantage will try to perform its activities better than competitors would do. If it

competes through cost advantage, it will try to perform internal activities at lower

costs than competitors would do. When a company is capable of producing goods at lower

costs than the market price or to provide superior products, it earns profits.

---------------

| Competitive |

| Advantage |

---------------

---------------------------- | ----------------------------

|(Price premium from uniue |-------| (Similar Product at |

| Product) | | lower price ) |

---------------------------- ----------------------------

Michael Porter introduced the generic value chain model in 1985. The value chain represents

all the internal activities a firm engages in to produce goods and services. Below you can

see Porter’s value chain model:

Note : For the "Primary Activities and Support activities " refer to the exact image from the local folder of IBMI.

The value chain is formed of primary activities that add value to the final product directly

and support activities that add value indirectly.

Although primary activities add value directly to the production process, they are not

necessarily more important than support activities. Nowadays, competitive advantage mainly

derives from technological improvements or innovations in business models or processes.

Therefore, support activities are often the most important source of differentiation

advantage. On the other hand, primary activities are usually the source of cost advantage,

where costs can be easily identified for each activity and properly managed.

ii. Value Chain Example

There are two different approaches on how to perform the value chain analysis. The approach

depends on what type of competitive advantage a company wants to create (differentiation or

cost advantage). The table below lists all the steps that are necessary.

Differentiation advantage:

* Step 1: Identify the customers’ value-creating activities. These may be related to

marketing or design.

* Step 2: Evaluate the differentiation strategies for improving customer value, i.e. by

adding more features.

* Step 3: Identify the best sustainable differentiation by linking activities.

Cost advantage:

* Step 1: Identify the firm’s primary and support activities. This requires adequate knowledge of

the company’s operations.

* Step 2: Establish the relative importance of each activity in the total cost of the product.

* Step 3: Identify cost drivers for each activity, i.e. by benchmarking against competitors.

* Step 4: Identify links between activities. Does cost reduction in one activity lead to

further cost reductions or higher costs in other activities?

* Step 5: Identify opportunities for reducing costs. How will you improve the activities precisely?

The following example illustrates all five steps of the basic Value Chain Analysis

for an automobile manufacturing company that competes on cost advantage.

Note : For the "Five steps of the basic Value Chain Analysis" refer to the exact image from the local folder of IBMI.

In step 1, the company’s primary activities were identified (i.e. design, assembly, distribution.

For simplicity reasons, this table does not include the support activities). In step 2, the importance of each activity was established (from not important to very important). In step 3, the cost drivers for each activity were identified (i.e. order size, frequency of defects, advertising budget). In step 4, links between activities were identified and finally, in step 5, opportunities for reducing costs were identified.

iii. VRIO Framework

The VRIO framework is a tool that is used to analyze a company’s internal resources. It

tries to find out if they can be a source of sustained competitive advantage.

In order to become a source of sustained competitive advantage, resources must have three attributes:

they need to be valuable, rare, and costly to imitate. Additionally, a firm must be organized to capture

the value of the resources. A resource that meets all four requirements can bring sustained competitive

advantage for the company.

* Value:

Does the resource add value by enabling a firm to exploit opportunities or defend against threats?

If the answer is yes, then a resource is considered valuable. Resources are also valuable if they

help organizations to increase the perceived customer value. This is done by increasing differentiation

or/and decreasing the price of the product. The resources that cannot meet this condition will lead to

competitive disadvantage.

* Rareness:

How rare or limited is the resource? Resources that can only be acquired by one or very few companies

are considered rare. Rare and valuable resources grant temporary competitive advantage. However, a

firm should not neglect resources that are valuable but common. Losing valuable resources and capabilities

would hurt an organization because they are essential for staying in the market.

* Imitability:

How difficult is it to imitate the resource? A resource is costly to imitate if other organizations are

unable to imitate, buy or substitute it at a reasonable price. Imitation can occur in two ways: by directly

imitating (duplicating) the resource or providing a comparable product/service (substituting).

* Organization:

Is the organization able to use the resources properly? The resources themselves do not confer any advantage

for a company if it’s not organized to capture the value from them. A firm must organize its management systems,

processes, operations, and organizational structure to be able to fully realize the potential of its valuable,

rare and costly to imitate resources. Only if this is the case, sustained competitive advantage can be achieved.

----------------------------------------------------------------------------------------------------

Is it valuable? | Is it rare? | Is it hard to | Is the firm | What is the

| | imitate? | organized | result?

| | | arount it? |

----------------------------------------------------------------------------------------------------

X Competitive disadvantage

/ X Competitive Equality

/ / X Short - Term Competitive Advantage

/ / / X Unused Competitive Advantage

----------------------------------------------------------------------------------------------------

/ / / / Long - Term Competitive Advantage

----------------------------------------------------------------------------------------------------

* / ~ Right Marks

iv. VRIO Example: Google's HR

There’s no doubt that Google/Alphabet is one of the most powerful companies in the world, and its

success arguably stems from a sustained competitive advantage in human capital management. If we

were to break down Google’s VRIO framework from the HR perspective, it might look something

like this:

* Value: Use human capital management data to hire and retain innovative, productive employees. These employees

consistently create some of the most popular consumer products and services in the world.

* Rarity: No other companies are using data-based employee management so extensively.

* Imitability: Data-based human capital management is both costly and difficult to imitate, at least for the

near future. Companies have to build the software and invest in training their HR staff on the new technology

and strategy.

* Organization: Google is organized to capture value from this capability. The IT department has the skills to

collect and maintain the data, while HR and team leaders are trained on how to use the data to hire, promote,

manage, and improve performance of employees.

Having a VRIO framework in place allowed Google to take a completely different approach to human capital management

and make decisions using massive amounts of objective data.

For example, Google’s People Operations team set out to identify which characteristics make a great manager. The data

used to determine this included surveys, performance evaluations, and great-manager nominations. Google also conducted

double-blind interviews with the company’s highest- and lowest-rated managers. By determining what qualifies as a great

manager, Google strengthens its internal team and the foundation of its sustained competitive advantage.

Info.!!!!!!! :

The VRIO framework complements other strategic analysis methods to provide your organization with clear-cut

competitive advantages. A VRIO analysis can be applied company-wide or to individual departments for a well-rounded

view of how each aspect of your business should position itself in the marketplace. It’s important to continually

review your framework—capabilities change over time and competitors adapt.

* 7. Inventory Management :

---------------------------

Inventory management refers to the process of ordering, storing, and using a company’s inventory.

These include the management and supervision of raw materials, components, and finished products,

as well as warehousing and processing such items.

4 Topics :

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Lesson Content

ABC Analysis

ABC Example

Reorder Point Model

Reorder Example

i. ABC Analysis

Typically, a company has thousands of items held in its inventory. However, only a small percentage of these

items deserve management’s closest attention and tightest control. An ABC analysis is the process of dividing

the inventory units into three classes according to their dollar usage so that managers can focus on the items

with the highest importance.

* Class A items:

These items typically represent 20% of the items in the inventory but account for 80% of the dollar usage.

* Class B items:

These items represent 30% of the items in the inventory but only account for 15% of the dollar usage.

* Class C items:

These items represent 50% of the items in the inventory but only account for 5% of the dollar usage.

Note : For the "Annual Sales Volume Vs % of Total Number of Items" refer to the exact image from the local folder of IBMI.

The ABC-classification gives recognition to the varying importance of different types of inventory.

Consequently, classifying items into A, B, and C allows management to better identify and control

items of greater importance. Loss of control over a few Class A items is considerably more serious

than the loss of control over a large number of Class B or C items.

ii. ABC Example

The following table of a company’s item usage is given:

Items Quantity/year Valye/Items Dollar Usage % of Total Class

Screws 100,000 $0.05 $5,000 19% B

Special Glue 100 $200 $20,000 76% A

Bowes 300 $2.5 $750 3% C

Paper 3,000 $0.1 $300 1% C

Cardboard 1,500 $0.2 $300 1% C

Total $26350 100%

In this example, the item “special glue” is only used 100 times but accounts for 76% of the total dollar usage.

It is, therefore, a class A item. Management should focus on finding cheaper glue, alternatives for glue or

reduce the amount of glue used.

Only after this, management should spend time and effort on trying to reduce the costs of Class B items (screws),

and then Class C items (boxes, paper, cardboard).

Info.!!!!!!! :

A items are goods where annual consumption value is the highest. Applying the Pareto principle (also referred to

as the 80/20 rule where 80 percent of the output is determined by 20 percent of the input), they comprise a

relatively small number of items but have a relatively high consumption value. So it’s logical that analysis

and control of this class is relatively intense since there is the greatest potential to reduce costs.

iii. Reorder Point Model

The Reorder Point Model identifies the time to order when a stock level drops to a predetermined amount.

This amount usually includes a certain quantity of stock to cover for the delay between order and delivery,

the lead time, and stock to reduce the risk of running out of stock, the safety stock.

The Reorder Point Model permits you to calculate when you need to make a new order to…

* not run out of stock, and

* minimize inventory and stocking costs.

The two main elements of the reorder point model are:

* Lead Time:

The interval between placing an order and having it ready for விநியோகித்தல் dispensing. When calculating

lead times in a supermarket, for example, you must also consider the amount of time to stock the shelves.

* Safety Stock:

The extra units of inventory carried as a protection against possible stock-outs. The safety stock must be

carried when the manager is not sure about either the demand for the product or the lead time.

The thing to know about a reorder point is that it’s not a static number. It’s based on your own purchase and sales

cycles, and it varies on a per-product basis. However, once you have a handle on patterns in your purchase and sales

orders for a particular product, you’re ready to start putting the variables together.

The reorder point is the inventory level at which it is appropriate to நிரப்பவும் replenish stock. The calculation for

this is as follows:

Reorder Point = Average demand during lead time + Safety stock

The reorder point can also be displayed graphically. You can see that the reorder point depends heavily on the

lead time. The longer it is, the earlier the new purchasing order should be placed. So the order cycle can be

pictured as follows:

Note : For the "Inventory level Vs Time" refer to the exact image from the local folder of IBMI.

iv. Reorder Example

You have a great new product on the அலமாரிகள் shelves, and it’s selling fast. Every customer purchase

means more revenue but also reduces your inventory levels. Of course, you will reorder before it goes

out of stock, but if you order too early, you’ll need to spend more on storing these excess items. If

you order too late, you’ll be facing disappointed customers who’ll look to your competitors.

So when is the best time to place your order? Let’s take a look at an example to find out. Let’s assume that the

வழக்கமான typical demand for the product you are selling is 50 units per day. The lead time is 25 days. Your safety stock

is 300 units. We can calculate the best moment to place the reorder with the following formula:

Reorder Point = Average demand during lead time + Safety Stock

Reorder Point = (50 * 25) + 300

Reorder Point = 1,250 + 300

Reorder Point = 1,550

This means that you should place a reorder as soon as you have 1,550 units left for sale.

Info.!!!!!!! :

Planning reorder points is a crucial முக்கியமான part of inventory management. Setting your reorder point to the optimum amount

lets you cut down on excess spending while ensuring you’ll have enough stock for your customers even when things take an

unexpected turn.

* 8. Business Decision Management :

-----------------------------------

4 Topics :

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entails all aspects-அனைத்து அம்சங்களையும் உள்ளடக்கியது

8. Business Decision Management

Business decision management entails all aspects of designing, building and managing

the decision-making systems that an organization uses to manage its interactions with

customers, employees, and suppliers. In this chapter, you will learn to use two of the

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Saturday, January 23, 2021

Business Management : Strategy and Operations IBMI Certification

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