Chapter 3

Efficient customer response system

an efficient customer response system directly links consumer behavior to distribution and production and supply chains.

primary activities

are most directly related to the production and distribution of the firm's products and services, which create value for the customer.

best practices

are usually identified by consulting companies, research organizations, government agencies, and industry associations as the most successful solutions or problem-solving methods for consistently and effectively achieving a business objective.

computer-aided design system (CAD)

automates the creation and revision of designs, using computers and sophisticated graphic software.

network economics

business models based on a network may help firms strategically by taking advantage of network economics

quality

can be defined from both producer and customer perspectives

analyze existing processes

existing business processes should be modeled and documented, nothing inputs, outputs, resources, and the sequence of activities.

franchisers

have the product created, designed, financed, and initially produced in the home country but rely heavily on foreign personnel for further production, marketing, and human resources.

value chain model

highlights specific activities in the business where competitive strategies can best be applied

benchmarking

involves comparing the efficiency and effectiveness of your business processes against strict standards and then measuring performance against those standards

value web

is a collection of independent that use information technology to coordinate their value chains to produce a product or service for a market collectively

six sigma

is a specific measure of quality representing defects per million opportunities

core competency

is an activity for which a firm is a world class leader

business process management (BPM)

is an approach to business which aims to continuously improve business processes.

Support activties

make the delivery of the primary activities possible and consist of organization infrastructure

total quality management (TQM)

makes quality the responsibility of all people and functions within an organization.

Business process reengineering (BPR)

many business process improvements are incremental and ongoing but occasionally, more radical change is required.

transnational

nearly all the value adding activities are managed from a global perspective without reference to national borders, optimizing sources of supply and demand wherever they appear and taking advantage of any local competitive advantages.

continuous measurement

once a process has been implemented and optimized it needs to be continually measured.

design the new process

once the existing process is mapped and measured in terms of time and cost, the process design team will try to improve the process by designing a new one.

implement the new process

once the new process has been thoroughly modeled and analyzed it must be translated into a new set of procedures and work rules.

Identify processes for change

one of the most important strategic decisions that a firm can make is not deciding how to use computers to improve business processes, but rather understanding what business processes need improvement.

multinational

strategy concentrates financial management and control out of a central home base while decentralizing the production, sales, and marketing operations to units in other countries.

domestic exporter

strategy is characterized by heavy centralization of corporate activities in the home country of origin.

disruptive technologies

substitute products that performs as well or better than anything currently produced.

mass customization

the ability to offer individually tailored products or services using the same production resources as mass production

switching cost

the cost of switching from one product or service to competitor

Competitive forces model

this model proves a general view of the firms, its competitors, and the firms's environment

virtual company

uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations.