De Leon, Jouise Aniana A.

BSTM 3-1D

EXPLAINING CONCEPT
Instruction: Explain the following concept briefly

1. Generic Competitive Strategies

a. Differentiation
b. Overall Cost Leadership
c. Focus

The strategy of an organization is crucial because it determines how the company will be led
and how it will perform in a market that is competitive. According to Michael Porter, there are
three generic competitive strategies and these are the Overall Cost Leadership, Differentiation,
and Focus. The first strategy is the Overall Cost Leadership, that were frequently adopted in the
late 1970s. The reduction of costs through a series of functional policies that were directed at
the primary goal—Simply, it focuses on the decreasing production and purchasing costs in order
to make the organization improve its market share, and broaden their consumer base. The
second strategy is the Differentiation, it comprises the strategy of differentiating the goods and
services provided by the company, or generating something that is regarded as being distinctive
within the industry. It focuses on making the organization and its products and services unique,
different, and distinct in the marketplace. Lastly, the third strategy is the Focus, it comprises
concentrating on the growth of a specific market, product line, buyer group, or segment. Simply,
it focuses on providing a products and services that cater to the specific needs of a consumer
group.

2. Strategy and Tactics

A strategy is a thorough plan that serves as a road map or a point of reference for achieving
your objectives. Strategies aid in defining your long-term objectives and the path to achieving
them. On the other hand, Tactics are the specific and little stages and activities which help in
building a strategy.

3. Implication of Different Strategies to Operations Management

Organization Strategy Implications to Operations Management

Low price Entails low variations on products and services and a high-
volume of goods which results in maximizing the resources
through organizations’ system.
High quality Involves higher initial cost for product and service design, and
ensuring high quality from suppliers.
Quick Response Involves high flexibility, higher level of inventories, and extra
capacity.
Newness/ Innovation Requires large investment in research and development of the
product and services in order to produced new or innovative
one. It also requires new processes in operations as well as in
supply chain in order to produce such innovative product and
services.
Product or Service Variety Requires high variation of product and services through its
design. Higher cost which is also difficult to estimate, higher
 workers skills need, higher complexity in terms of inventory
monitoring, more quality assurance involvement, and complex in
matching the demand and supply.
Sustainability It affects location planning, design for product and services as
well as processes, outsourcing decisions, waste management
and return policies.

4. Balanced Scorecard

The Balanced scoreboard is considered as a strategic management performance indicator that

used to identify and enhance various internal business activities and the results they have on
the outside world. Originally it was proposed on 1992, the concept was modified to incorporate
both financial and non-financial data. Moreover, the balanced scorecard is isolated into four
areas, and these are the Financial, Customer Categories, Internal Business Processes, and the
Learning and Growth.

BakerHoltz. CPAs and Advisors

https://bakerholtz.com/why-is-a-balanced-scorecard-important/
5. Partial Measurement of Productivity
Labor Productivity Units of Output per labor hour, Value-added per labor hour,
Units of Output per shift, Peso value of output per labor hour.
Machine Productivity Peso value of output per machine hour, Units of output per
machine hour.
Capital Productivity Peso value of output per peso input, Unit of output per peso
input.
Energy Productivity Peso value of output per kilowatt-hour, Unit of output per
kilowatt-hour.