Instructions Competitive Advantage Imagine that you are the chief operations officer (COO) of Amazon.com. You are interested in c

Decision Making

As with any other managers in an organization, operations managers must make decisions on behalf of the

organization.  While there are many aspects to such decision making processes, it is often valuable to have

structured tools that can assist in framing the decision and comparing the alternatives.   Two such structured tools

are decision tables and decision tools.

A decision table is a tabular means of analyzing decision alternatives and the factors that impact the decision.  For

example, the location decision analyzed in an earlier supplemental media resource utilized a weighting scheme in

order to rank different locations for a restaurant.  The weights included factors such as the cotenants in the same

location, the traf�c in the area, etc.  Thus, such a tabular form of analysis allows decision alternatives, which are

often treated as columns in the table, to be compared systematically.

A decision tree is a graphical means of presenting the decision alternatives, including probabilities that certain outcomes will occur and monetary values associated with those outcomes.  Decision makers will make decisions

that are believed to generate the greatest value for the organization.  Due to the fact that the outcomes are often

probabilistic (meaning that none of them are certain to occur), the decision maker is faced with uncertainty in

what the outcome will be.  However, if the probabilities are accepted as the “most likely” distribution of outcomes,

then the decision tree can be used to identify the decision that provides the organization with the highest

expected value. 

Not all decisions can be made by using decision tables and decision trees exclusively.  For many organizations, the knowledge and intuition of those working in the industry may be valuable and may not be easily factored into

such structured approaches.  However, when analysis can be conducted, these structured tools can assist in the

creation of a more objective analysis of the decision under consideration.

Competitive Advantage

After an organization has a good understanding of its position in the marketplace and available opportunities, the

organization can develop the overall organization strategy.

An organization can choose to create a competitive advantage through differentiation, cost, or response. Think

of an organization that uses each of these strategies and you will probably come up with some of the leaders in that industry. For example, Nordstrom has utilized a differentiation strategy in department stores. Nordstrom is

known for a high level of customer service, and customers expect more when shopping there. Walmart is known

for its everyday low prices and cost advantages. McDonald's is known for competing on cost. Amazon has built a

reputation on its response to changes in the marketplace. Through its innovative technology, Amazon can update

its website and information offered to each customer based on previous purchases.

Depending on the overall strategy, there are six speci�c strategies that an operations manager can utilize.  These are: 

Flexibility in design and volume

Low cost

Delivery

Quality

After-sales service

Broad product line

An operations manager must consider all aspects of OM when determining the strategy appropriate for meeting

the overall organization goals. Each aspect will have an impact on the costs of the operations functions. However,

in some cases, customers are willing to pay extra for the products based on a strategy. For example, a high-quality

product with after-sale support may be more worthwhile to a customer to have the peace of mind such a

purchase ensures.

Part of achieving a competitive advantage is designing a process that will deliver a product or service in which people are interested.  When considering process design, it is useful to think of your product or service has being

largely standardized (little variety, as with adhesive bandages) or more easily customizable (lots of variety, as with

how you order a Subway sandwich).  Similarly, it is also helpful to think of the product as being one that is

produced in large numbers (like a Snickers candy bar) or in small batches (as with the production of wedding

cakes).  The Supplemental Media entitled “Process Design Dimensions” goes into greater depth with these two

dimensions of process design. 

Additional Materials

Process Design Dimensions

(media/week1/SUO_MGT3059%20W1%20L3%20Process%20Design%20Dimensions.pdf?

_&d2lSessionVal=SWzqLkE3HvLXZkZ375Dqp03nU&ou=86458)

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Process Design Dimensions Standard vs. Customized, High Volume vs. Low Volume

When considering process design, the following graphic is very useful. Based on the variety of products offered and the expected volume, this graphic can assist an operations manager in determining an appropriate strategy.

For example, McDonald’s has a repetitive focus strategy for preparing foods in each restaurant. Typically, a customer does not ask for special requests at McDonald’s. Burger King, on the other hand, has tried to differentiate itself from McDonald’s with the slogan “Have it your way.” Burger King encourages customers to request what toppings they want on their hamburger. This has led to a repetitive focus that leans more toward mass customization.

Think about where a barber shop would fall in this graphic. Can you determine which operations strategy is being pursued by your local hair stylist? Think about where toilet paper would fall in this graphic. Can you determine which operations strategy is being pursued in the production of Charmin, Northern, etc.? © 2017 South University

Operations Strategy

An operations strategy should describe how an organization plans to reach its goal, which always involves

creating value for its customers.  An operations strategy needs to focus on how to use the resources available to

the organization to meet the overall objectives of the organization.

Many organizations state their purpose or overall goal in their mission statements.  For example, the mission statement of Starbucks is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at

a time.”  Thus, the operations strategy will ensure that all resources are used in order to help achieve this goal. 

Whether pouring a cup of coffee or participating in community engagement, every action of the company is

targeted toward this objective. 

When developing an operations strategy, an organization needs to determine its position in the marketplace. This

is done through strengths, weaknesses, opportunities, and threats (SWOT) analysis.

A SWOT analysis helps a manager determine the organization’s position within the current business environment.

The strengths and weaknesses focus on the organization itself (meaning that they are internal to the

organization), while the opportunities and threats evaluate the environment (meaning that they are external to

the organization).

SWOT analysis is not only useful for OM, but is useful for the business in its entirety.  However, decisions that are

made in the OM area should be consistent with decisions that are being made for the organization as a whole. 

Thus, operations strategy should dovetail with the organization’s strategy. 

Since SWOT analysis is such a large part of developing an operations strategy, it should be noted that strengths

and opportunities are helpful in achieving the organization’s goals.  Similarly, weaknesses and threats make

achievement of those goals more dif�cult. 

MGT3059 Week 1 Project Rubric Course: MGT3059-Operations Management SU01

Criteria No Submission 0 points

Emerging (F through D Range) (18-21) 21 points

Satisfactory (C Range) (21- 24) 24 points

Proficient (B Range) (24- 27) 27 points

Exemplary (A Range) (27- 30) 30 points

Criterion Score

Identified a possible

solution to speed up

the delivery of

products to customers.

/ 30Did not propose any solutions to speed up the

delivery of products.

Identified a solution that

would not change the

speed of the delivery of

products or would slow it

down.

Made a suggestion that

might or might not be

successful in speeding up

delivery of products.

Identified a possible

solution to speed up the

delivery of products.

Suggested creative,

compelling and insightful

solutions to speed up the

delivery of products.

Criteria No Submission 0 points

Emerging (F through D Range) (6-7) 7 points

Satisfactory (C Range) (7- 8) 8 points

Proficient (B Range) (8-9) 9 points

Exemplary (A Range) (9- 10) 10 points

Criterion Score

Discussed negative

consequences or

disadvantages of the

proposed solution.

/ 10Did not identify consequences or

disadvantages of the

proposed solution.

Identified consequences

for the organization.

Described consequences

but was unclear as to

whether or not they would

be disadvantages.

Discussed negative

consequences or

disadvantages of the

proposed solution.

Provided compelling

discussion of negative

consequences or

disadvantages of the

proposed solution.

Criteria No Submission 0 points

Emerging (F through D Range) (6-7) 7 points

Satisfactory (C Range) (7- 8) 8 points

Proficient (B Range) (8-9) 9 points

Exemplary (A Range) (9- 10) 10 points

Criterion Score

Wrote in a clear,

concise, and organized

manner; demonstrated

ethical scholarship in

accurate

representation and

attribution of sources

(i.e., APA); and

displayed accurate

spelling, grammar, and

punctuation.

Communication: Use

of tone, word choice,

audien

/ 10Submission contains no discernible overall intent in

author’s selection of ideas.

Errors in basic writing

conventions are

sufficiently numerous to

prevent reader

comprehension.

No attempt at

Academic/APA formatting

in presentation

Submission contains

random presentation of

ideas, which prevents

understanding the majority

of author’s overall intent.

Errors in basic writing

conventions are

sufficiently numerous to

prevent reader

comprehension of majority

of the work.

Academic/APA format is

attempted, but errors are

significant.

Ideas are presented in a

way that forces the reader

to make repeated

inferences in order to

identify and follow the

author’s overall intent.

Errors in basic writing

conventions interfere with,

but do not prevent, reader

comprehension.

Academic/APA format is

attempted but errors are

distracting.

The reader can follow the

author’s overall intent as

stated.

The reader noticed a few

errors in basic writing

conventions but these few

errors do not interfere with

reader comprehension.

Using Academic/APA

format, accurately. Errors

are noticeable but minor.

The writer’s overall

argument and language are

clear and tightly focused,

leaving the reader with no

room for confusion about

author’s intent.

Text is basically error free,

so that a reader would

have to purposely search

to find any errors that may

be present.

Using Academic/APA

format proficiently. Text is

basically error free.

Total / 50

Overall Score

No Submission 0 points minimum

Emerging (F through D Range) 35 points minimum

Satisfactory (C Range) 40 points minimum

Proficient (B Range) 45 points minimum

Exemplary (A Range) 50 points minimum