Solution Manual for
Operations & Supply Chain Management 8th Canadian Edition By William J Stevenson, Hydeh Mottaghi,
Behrouz Bakhtiari
Chapter 1-18
CHAPTER 2
COMPETITIVENESS, STRATEGY, AND PRODUCTIVITY
Teaching Notes
Most of the students already know some of the concepts in this chapter (from other courses or general
business knowledge): (a) the competitive attributes of goods and services such as price, quality, and
timeliness, (b) plans and strategies, and (c) productivity.
The three apparently disjointed topics can be related through the following argument: companies must be
productive in order to be competitive, and to be competitive they must have goals and some well-thoughtout plans or strategies to achieve them.
Concepts new to students will be (a) value or best buy, order qualifies and order winners (b) operations
strategy and (c) measuring productivity.
Answers to Discussion and Review Questions
1. The IKEA sustainability strategy is a circular supply chain, as IKEA describes it, ―It‘s about
designing all of our products from the very beginning to be repurposed, repaired, reused, resold and
recycled, generating as little waste as possible. A circular supply chain "is one where every product is
designed and produced with its next use in mind". Therefore, IKEA treats the "waste" as a valuable
resource for its production. IKEA's long-term objective is to eliminate waste across value chain, through
prevention, reduction, reuse and recycling. Thus, they can reduce costs and negative impacts and secure
resources for the future.
2. The four key purchasing criteria are price, quality, variety, and timeliness. Every purchase is
different. For example, one may buy a very inexpensive Durabrand electric bread knife, but more
expensive and better quality (according to consumer ratings) Hamilton Beach mixer. Some consumers
look for special colours and models and are willing to pay more for them. Everyone prefers to have the
items they need available without delay, but some will wait a little in order to get a better price. For
example, many items are cheaper if purchased directly from Amazon.ca, but delivery times range from
one day to many weeks, depending on availability.
3. Organizations compete with cost, quality, flexibility, and delivery. WestJet competes based on
cost. Cadillac competes based on quality. Dell competes based on flexibility (customization). Domino‘s
Pizza competes based on fast delivery.
4. Characteristics such as price, quality, and timeliness can be order qualifiers or order winners.
Order qualifiers are the minimum level of characteristics required to be considered as a qualified
supplier. Order winners are those purchasing criteria that cause the selling organization to be
perceived as better than the competition. For example, for auto manufacturers operating just-intime, on-time delivery and quality of parts of a supplier are order qualifies and cost is order
winner.
5 A competitive advantage can be developed over time by focusing on a limited range of goods or
services, and/or on a technology. Using teamwork and rewards, an organization can develop its
capabilities (also called core competencies). Companies should use past experience and expertise
2-2
in design, operations/manufacturing, or marketing, and leverage them to introduce new goods and
services.