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Assignment 2

Section A.
Ans a.
Dimensions of business and its relevance in business scenario:
Competitive dimensions of business are as follows
. Speciali:ation. The degree to which the Iirm Iocuses its eIIorts in terms oI the width oI its line, the target
customer segments, and the geographic markets served
2. Brand identification. The degree to which the Iirm seeks brand identiIication rather than competition
based mainly on price or other variables. Brand identiIication can be achieved via advertising, sales
Iorce, or a variety oI other means
3. Push versus Pull. The degree to which the Iirm seeks to develop brand identiIication with the ultimate
consumer directly versus the support oI distribution channels in selling its product
4. Channel selection. The choice oI distribution channels, ranging Irom company-owned channels to
specialty outlets to broad-line outlets
5. Product quality. The level oI product quality, in terms oI raw materials, speciIications, adherence to
tolerances, Ieatures, and so on
6. Technological leadership. the degree to which the Iirm seeks technological leadership versus Iollowing
or imitation.
7. Jertical integration. The extent oI value added as reIlected in the level oI Iorward and backward
integration, including whether the Iirm has captive distribution, exclusive or owned retail outlets, an in-
house service network, and so on
8. Cost Position. The extent to which the Iirm seeks the low-cost position in manuIacturing and distribution
through investments in cost-minimizing Iacilities and equipment
9. Service. The degree to which the Iirm provides ancillary services with its product line, such as
engineering assistance, an in-house service network, credit, and so Iorth. This aspect oI strategy could
be viewed as part oI vertical integration but is useIully separated Ior analytical purposes
.Price policy. The Iirm`s relative price position in the market. Price position will usually be related to
such other variables as cost position and product quality, but price is a distinct strategic variable that
must be treated separately
.Leverage. The amount oI Iinancial leverage and operating leverage the Iirm possesses

2.Relationship to home and host government. In international industries, the relationship the Iirm has
developed or is subject to with its home government as well as host governments in Ioreign countries
where it is operating. Home governments can provide resources or other assistance to the Iirm, or
conversely can regulate the Iirm or otherwise inIluence its goals. Host governments oIten play similar

Relevance in todays business scenario.
. Provides competitive edge, in terms oI cost leadership, product diIIerentiation etc.
2. Helps in maintaining total control over the management, sudden changes in political environment etc.
3. Helps in maintaining better customer relationship
4. All these dimensions are used globally, so does helps in maintaining trade relations in diIIerent countries
5. Helps in building brand image and creates separate brand identity.

Ans b


Productivity means an economic measure oI output per unit oI input. Here, input include labor and capital,
whereas output is typically measured in revenues and other GDP components like business output, export
and import etc.
Productivity is and objective concept, which can be measured against any universal standards. It can also be
used Ior tactical reasons such as project control and controlling perIormance to budget.
Productivity is usually expressed in one oI three Iorms: Partial Iactor productivity, multiIactor productivity.
Each one is now discussed.

1. Partial-factor productivity

The standard deIinition oI productivity is actually what is known as a partial Iactor measure oI productivity,
in the sense that it only considers a single input in ratio. The Iormula then Ior partial-Iactor productivity
would be the ratio oI total output to a single input.
Managers generally utilize partial productivity measure because the data is readily available. Also, since the
total oI multiIactor measure provides an aggregate perspective, partial Iactor productivity are easier to relate
to speciIic processes. Labor-based hours (generally, readily available inIormation) is a Irequently used input
variable in the equation. When this substitution machinery Ior labor. However, that may not necessarily be a
wise decision.

. ultifactor Productivity

A multiIactor productivity measure utilizes more than a single Iactor, Ior example, both labor and capital.
Hence, multiIactor productivity is the ratio oI total output to a subset oI input. A subset oI input might
consist oI only labor and material or it could include capital

Ans c

Location Decision (Part of Organi:ational Strategies)
. Existing location, operational Iacility
2. Managerial control operating multiple Iacilities
3. Region speciIic
a) Environmental (social, governmental, legal)
b) Licensing policy
c) Economy & Business Environment (supplier, competitor, market)
4. Transportation & Logistics
5. Natural Resources (water, weather, wind, heat)
6. Labor and Skill availability
7. Finance Related (Availability, Tax Rebate, holiday, investment subsidy, duty structure import, custom,

Section B

Ans a.

Short notes on:

. Lean ManuIacturing
Lean manuIacturing process is a comprehensive way to reduce waste oI all types. It could be a waste oI time
or material, it is still waste. Lean manuIacturing concepts were developed over the last Iive to six decades,
primarily in Japan, particularly Ior the Toyota production system. These concepts met various tests Ior many
many years and passed the test oI time very easily.Lean manuIacturing revolutionaries the manuIacturing
process. It was not a Iine tuning oI the existing manuIacturing processes. These manuIacturing techniques
are conceptually diIIerent Irom the traditional process. For an example, traditional manuIacturing works
based on inventory. But lean manuIacturing questions the role oI inventory and deIines as a waste itselI and
also as the reIlector oI the imperIections a system has. This example, itselI shows the conceptual deIerence
between the traditional manuIacturing system and lean manuIacturing system. Sometimes it is very hard to
believe that a system like lean manuIacturing was born with a simple set oI concepts. But it is true. Principle
on which lean manuIacturing operates is very simple. For an example it identiIies the Iact that 'customer
will not pay Ior the mistakes, but only Ior the value oI the product or the service they receive. The impact
on this thinking is huge on the manuIacturing process. It changed the way people looked at the
manuIacturing process. It made people to deIine value oI the product Irom the customer`s point oI view, not
Irom the internal manuIacturing point oI view. To successIully implement lean manuIacturing, it is
necessary to understand the diIIerences between the lean manuIacturing concepts to the conventional
manuIacturing. Failing to do this, will eventually kill your success.
Six Steps to implement lean manuIacturing.
Determine which aspects oI lean manuIacturing apply to you, prioritize according to your needs and
ategorize your people into groups according to similar training needs
IdentiIy your programs and make a matrix, or chart
Decide whether you will hire an consultant or do it in-house
Develop a time Irame or schedule according to work area or personnel
Prepare an immediate schedule and begin.

2. BOM (Bills oI Material)

DMAI is a basic component oI the Six Sigma methodology- a way to improve work processes by
eliminating deIects. The Six Sigma methodology is widely used in many top corporations in the United
States and around the world. It is normally deIined as a set oI practices that improve eIIiciency and eliminate
The Six Sigma system strives to reduce these variations in both business and manuIacturing and in order to
do so; these processes must be measured, analyzed, controlled and improved upon. In order to improve upon
these processes, the Six Sigma system requires sustained commitment Irom an entire organization
especially Irom the top echelons to help guide lower rung workers and policies. For those that use the Six
Sigma system there are two major methodologies. They include DMAI and DMADV.
DMAI was developed by Edwards Deming and is useIul in improving an existing business process to
reduce deIects. The DMAI methodology includes Iive steps including; DeIine, Measure, Analyze, Improve
and ontrol.
a. DeIine: DeIine is the Iirst step in the process. In this step, it is important to deIine speciIic goals
in achieving outcomes that are consistent with both your customer`s demands and your own
business`s strategy. In essence, you are laying down a road map Ior accomplishment.
b. Measure: In order to determine whether or not deIects have been reduced, you need a base
measurement. In this step, accurate measurements must be made and relevant data must be
collected so that Iuture comparisons can be measured to determine whether or not deIects have
been reduced.
c. Analyze: Analysis is extremely important to determine relationships and the Iactors oI causality.
II you are trying to understand how to Iix a problem, cause and eIIect is extremely necessary and
must be considered.
d. Improve: Making improvements or optimizing your processes based on measurements and
analysis can ensure that deIects are lowered and processes are streamlined.
e. ontrol: This is the last step in the DMAI methodology. ontrol ensures that any variances
stand out and are corrected beIore they can inIluence a process negatively causing deIects.
ontrols can be in the Iorm oI pilot runs to determine iI the processes are capable and then once
data is collected, a process can transition into standard production. However, continued
measurement and analysis must ensue to keep processes on track and Iree oI deIects below the
Six Sigma limit.
4. Delphi Method
5. Forecasting Error