1.
Unit
3
Business
Management
Outcome
3
The
Opera/ons
Management
Func/on
Revision
2014

2.
This
assessment
task
addresses
the
following
key
knowledge
as
outlined
in
Unit
3:
Area
of
Study
3:
(VCAA
Study
design)
•
the
opera/ons
func/on
and
its
rela/onship
to
business
objecIves
and
business
strategy;
•
characteris/cs
of
opera/ons
management
within
large-­‐scale
manufacturing
and
service
organisa/ons;
•
key
elements
of
an
opera/ons
system
(inputs,
processes
and
outputs)
in
different
types
of
large
scale
organisa/ons;
•
producIvity
and
business
compeIIveness,
their
importance
for
and
impact
on
the
opera/ons
system;
•
strategies
adopted
to
opImise
operaIons,
including:
• –
faciliIes
design
and
layout
• –
materials
management
• –
management
of
quality
• –
extent
of
the
use
of
technology;
•
ethical
and
socially
responsible
management
of
an
operaIons
system.
• 3

3. The key skills that this assessment task addresses include the ability to:
• accurately
use
relevant
management
terms;
• research
aspects
of
opera/ons
management
using
print
and
online
sources;
• analyse
business
informa/on
and
data;
• apply
opera/ons
management
knowledge
and
concepts
to
prac/cal
and/or
simulated
situa/ons;
• discuss
key
aspects
of
opera/ons
management;
• analyse
strategies
that
arise
through
prac/ces
within
opera/ons
management.

4. How
to
prepare??
• Know
each
dot
point
in
study
design.
• Use
Wiki
resources,
(including
past
sacs)
• Use
Edrolo
• Complete
past
VCAA
exam
ques/ons

5. The
opera/ons
func/on
and
its
rela/onship
to
business
objecIves
and
business
strategy;
• Opera/ons
func/on:
The
opera/ons
func/on
transforms
inputs
into
outputs
for
sale
through
a
range
of
processes.
It
is
the
core
func/on
or
purpose
of
an
organisa/on
because
it
is
what
generates
revenue
for
a
business.
• The
core
objec/ve
of
all
organisa/ons
is
to
efficiently
produce
a
good
or
service.
Opera/ons
management
is
the
strategy
used
to
achieve
this
objec/ve.
• Opera/ons
must
work
within
a
framework
of
what
the
organisa/on
aims
to
achieve.
ie.
Its
objec/ves.
• The
opera/ons
management
func/on
has
a
considerable
influence
on
the
quality,
cost
and
availability
of
an
organisa/on's
goods
or
services.
• These,
in
turn,
have
a
direct
bearing
on
whether
the
organisaIon
achieves
its
other
main
objecIves
—
specifically,
to
increase
profitability,
to
increase
market
share,
to
provide
a
reasonable
return
for
investors
or
to
contribute
to
the
wellbeing
of
the
community.

6. The
opera/ons
func/on
and
its
rela/onship
to
business
objecIves
and
business
strategy;
(conInued)
• The
design
of
the
operaIons
system
has
an
impact
on
the
achievement
of
business
objecIves.
• For
example,
the
extent
and
use
of
technology
has
an
impact
on
whether
an
LSO
achieves
its
objecIves.
The
use
of
technology
eg
computers,
robo/cs
decreases
the
need
for
human
labour,
reduces
disrup/ons
caused
by
human
error
and
minimises
both
labour
costs
and
the
/me
it
takes
to
complete
tasks,
while,
at
the
same
/me,
increases
the
quality
of
the
tasks
completed.

7. Characteris/cs
of
opera/ons
management
within
large-­‐scale
manufacturing
and
service
organisa/ons;
(ie
know
the
differences
between
the
two)
• A
manufacturer
will
transform
inputs
into
tangible
products.
• Tangibles
are
physical
products
which
can
be
handled
and
stored
before
they
are
sold
to
the
consumer,
such
as
bread,
clothing
or
a
car.
• In
manufacturing
organisa/ons,
produc/on
and
consump/on
occur
at
different
/mes.
• The
produc/on
process
and
consump/on
are
not
linked.
That
is,
there
is
liZle
customer
involvement
in
produc/on.
• Manufacturers
usually
mass-­‐produce
standardised
products
(products
with
the
same
characteris/cs).

8. Characteris/cs
of
opera/ons
management
within
large-­‐scale
manufacturing
and
service
organisa/ons;
(ie
know
the
differences
between
the
two)
• A
service
organisa/on
will
transform
inputs
into
services.
• Services
are
intangible,
which
means
that
they
cannot
be
stored.
• In
a
service
organisa/on,
produc/on
and
consump/on
occur
at
the
same
/me.
For
example,
transport.
The
customer
may
actually
need
to
be
present
when
the
service
is
being
delivered.
• Can
customise
to
meet
the
needs
of
par/cular
clients

9. Characteris/cs
of
opera/ons
management
within
large-­‐scale
manufacturing
and
service
organisa/ons;
(ie
know
the
differences
between
the
two)
• SAC/exam
hint
• Also
provide
examples
from
case
study
(if
specified)
or
else
provide
your
own
examples.
• refer
to
a
large-­‐scale
organisa/on
of
your
choice.

10. Examples
of
Goods
&
Service
providers
Goods
provider
Service
provider
Clothing
manufacturer
Food
Bakeries
Car
manufacturer
So_
drinks
Furniture
Travel
agency
Transport
Hotels
Hospitals
Airport
Schools/
universi/es

11. Key
Elements
of
an
Opera/ons
System
Input
Transforma/ons
Output

12. Inputs
• Resources
needed
to
make
a
product
or
service
• Staff,
Informa/on,
raw
materials,
physical
facili/es,
capital
equipment,
financial
resources
Transforma/on/Processes
• Tasks,
ac/vi/es,
strategies
used
to
transform
the
inputs
into
outputs.
Output
• The
actual
good
produced
or
the
service
provided

13. Type
of
LSO
Inputs
Processes
Output
Airport
Ground
staff,
pilots,
cabin
crew,
security,
plane,
terminals
Passenger
arrives
and
checks
in,
goes
through
security
checks,
proceeds
to
the
departure
gate,
boards
the
plane,
flys
to
des/na/on.
Passengers
arriving
safely
WITH
luggage.
Car
manufacturer
Workers,
robots,
car
parts,
produc/on
line.
The
shell
of
the
car
moves
along
the
produc/on
line
having
parts
added
by
robots
and
workers.
Car

14. SAC/Exam
Hint
• Key
elements
of
an
opera/ons
system.
• List,
define
and
provide
specific
examples
from
case
study.
QuesIon
1E
2012
VCAA
exam
(2
marks)
2e.
Describe
one
difference
between
the
opera/ons
management
of
a
manufacturing
organisa/on,
such
as
Websters,
and
a
service
organisa/on.
QuesIon
3C
2011
(3
marks)
Outline
three
differences
between
the
opera/ons
management
of
service
and
manufacturing
organisa/ons.

15. VCAA
2010
Exam
QuesIon
4
(6
marks)
• The
Charity
Founda/on
is
a
service
organisa/on
assis/ng
children
who
have
been
affected
by
natural
disasters.
It
aims
to
raise
money
and
collect
goods
to
distribute
to
children
in
need.
• Iden/fy
and
explain
the
key
elements
of
The
Charity
Founda/on’s
opera/ons
management
system.
In
your
answer
provide
one
example
of
each
key
element.

16. Strategies
adopted
to
op/mise
opera/ons
Facili/es
Design
&
Layout
Materials
Management
Management
of
Quality
Technology

17. Facili/es
and
Design
Layout
• When
choosing
the
best
loca/on
&
layout,
an
opera/ons
manager
needs
to
consider
whether
or
not
there
is:
• enough
physical
space
for
the
an/cipated
volume
of
produc/on
• effec/ve
use
of
produc/on
equipment
and
technology
• an
adequate
loca/on
of
stock
and
warehousing
requirements
• an
efficient
flow
of
the
good
or
service
through
the
system
• conformity
with
legal
regula/ons
(such
as
site
and
building
constraints
and
occupa/onal
health
and
safety
standards).

18. VCAA
Exam
2011
QuesIon
2C
• Freda
Campbell
is
sejng
up
a
new
business
in
Melbourne
that
will
manufacture
and
sell
furniture.
• Iden/fy,
describe
and
jus/fy
a
facili/es
design
and
layout
strategy
that
Freda
could
use
for
manufacturing
the
furniture.
(5
marks)
QuesIon
2d.
The
key
elements
of
an
opera/ons
management
system
are
inputs,
processes
and
outputs.
• Discuss
how
ethical
and
socially
responsible
management
prac/ces
could
affect
each
of
these
elements.
(6
marks)

19. Fixed
posiIon
layout
• Used
for
big
project
produc/on.
• Eg.
large-­‐scale,
bulky
ac/vi/es
such
as
the
construc/on
of
bridges,
ships,
aircra_
or
buildings.
• More
efficient
to
bring
materials
to
the
site;
workers
and
equipment
come
to
the
one
work
area.
This
layout
is
used
when
it
would
be
too
difficult
to
move
the
product.
• Disadvantage
is
storage
—
materials
needs
change
constantly
and
it
can
be
hard
to
find
space
to
store
them
safely.

20. Product
layout
• Machinery
and
equipment
are
arranged
in
line
and
components
are
added
to
the
product
in
a
sequence
of
steps.
• A
motor
vehicle
being
produced
on
an
assembly
line
is
an
example
of
this
type
of
layout.
• Best
suited
to
the
manufacture
of
high-­‐volume,
standardised
goods.
• The
product
would
normally
move
along
a
highly
automated
produc/on
line,
using
a
conveyor
belt.
• Costs,
reduced
because
of
the
use
of
technology
and
staff
complete
specialised
tasks.
• It
can,
however,
be
very
expensive
to
set
up
a
capital-­‐intensive,
automated
assembly
line.
Also,
staff
can
become
bored
with
repe//ve,
low-­‐skilled
ac/vi/es.
A
problem
on
the
produc/on
line
can
some/mes
mean
that
the
whole
factory
needs
to
be
shut
down.

21. Process
(func/onal)Layout
• Equipment
and
machinery
which
perform
a
similar
func/on
are
arranged
together.
• Suited
to
organisa/ons
which
deal
with
a
variety
of
products.
• A
manufacturer
of
sports
shoes
or
brake
pads,
for
example,
would
commonly
use
this
type
of
layout.
• A
process
layout
lends
itself
to
batch
produc/on,
as
in
the
case
of
a
bakery,
where
different
types
of
breads,
rolls
or
buns
are
manufactured
in
limited
numbers.
Each
batch
would
be
completed
at
a
produc/on
stage
and
then
would
move
on
to
another
stage.
• In
service
organisa/ons
such
as
banks
or
hospitals,
a
process
layout
is
used
to
deal
with
the
different
needs
of
customers.
A
disadvantage
of
this
layout
is
that
the
work
for
staff
can
be
monotonous
if
they
are
only
involved
in
one
stage
of
the
process.

22. Retail
layout
• Exposure
is
a
cri/cal
considera/on
to
the
layout
of
retail
stores.
• Stores
such
as
Kmart
and
Big
W
channel
customers
through
departments
or
sec/ons.
• They
are
exposed
to
other
aisles
or
sec/ons
as
they
move
from
one
point
to
another.
• It
can
be
difficult
to
move
efficiently
from
one
part
of
the
store
to
another
because
barriers
are
established
to
‘showcase’
or
‘display’
items
for
sale.
Retailers
such
as
Coles
and
Woolworths
use
approaches
such
as:
• loca/ng
high-­‐impulse
or
high-­‐margin
products
in
prominent
loca/ons,
o_en
at
the
end
of
aisles
or
near
checkouts
• loca/ng
‘high-­‐draw’
items
such
as
bread
and
dairy
products
on
opposite
sides
of
the
store
• loca/ng
‘power
items’
(high-­‐priority
items
for
most
shopping
trips)
at
intervals
throughout
a
series
of
aisles.

23. Office
layout
• Efficient
movement
of
informa/on
and
proximity
to
resources
(such
as
the
photocopier,
computers,
printers
and
storage
areas)
are
priori/es
for
the
layout
of
an
office.
• Loca/ng
worksta/ons
together
in
departments
that
are
required
to
communicate
constantly
may
also
be
important.
• In
a
manufacturing
organisa/on,
the
office
layout
is
o_en
informal
and
may
overlook
the
factory
floor
so
managers
can
easily
supervise.
For
a
service
provider,
such
as
an
accountant
or
a
doctor,
clients
need
to
feel
welcome,
but
privacy
is
a
concern,
so
the
layout
of
the
office
should
reflect
this.
• An
office
might
also
need
to
provide
a
space
(such
as
a
lunch
room)
that
enables
employees
to
take
a
break
from
the
work
environment
if
required.
Personal
storage
space
and
mee/ng
rooms
may
also
be
required.
Office
layout
is
o_en
open
plan
or
in
pods.
With
staff
working
closely
together
a
code
of
conduct
is
o_en
adopted
called
‘cubicle
e/queZe’.
This
really
means
watch
the
sights,
sounds
and
smells
—
it
may
even
advise
what
lunch
foods
might
be
cubicle
unfriendly.

24. Materials
management
• Materials
management
is
a
strategy
which
opera/ons
managers
use
to
op/mise
opera/ons.
• Materials
management
involves
managing
the
use,
storage
and
delivery
of
materials
to
ensure
the
right
amount
of
inputs
are
available
when
required.

25. Master
producIon
scheduling
• (MPS)
describes
what
is
to
be
produced
and
when.
• Schedule
linked
to
specific
delivery
dates
or
contracts
for
delivery
in
the
future.

26. Materials
requirements
planning
• (MRP)
is
completed
a_er
the
organisa/on
has
a
clear
understanding
of
the
quan//es
to
be
produced
and
the
/me
frame
involved.
It
is
an
itemised
list
of
all
materials
involved
in
produc/on
to
meet
the
specified
orders.
Such
planning
must
consider:
• lead
/mes
required
by
suppliers
—
that
is,
whether
items
need
to
be
ordered
weeks
or
months
in
advance
• the
exact
number
of
inputs
to
complete
the
task
• the
amount
of
stock
(inventory)
on
hand
• purchasing
procedures
—
for
example,
whether
the
organisa/on
wishes
to
take
advantage
of
bulk
purchasing
discounts
offered
by
suppliers.

27. Just
in
Time
•
(JIT)
system
of
inventory
control.
• This
approach
makes
sure
that
the
right
amount
of
materials
will
arrive
just
as
they
are
needed
for
produc/on.
• Reduces
storage
costs
and
reduces
the
risk
of
any
waste
occurring
in
storage,
thus
increasing
compe//veness.
However,
supplier
deliveries
must
be
reliable
and
must
be
received
at
the
appropriate
/me.

28. The
management
of
Quality
• Quality
management
is
the
strategy
which
an
organisa/on
uses
to
make
sure
that
its
product
meets
customer
expecta/ons.
Three
quality
approaches
are
• quality
control,
• quality
assurance
and
• total
quality
management
(including
employee
empowerment,
con/nuous
improvement
and
improved
customer
focus).
When
managing
quality,
LSOs
will:
• minimise
waste
and
defects
• strictly
conform
to
standards
• reduce
variance
in
final
output.

29. Quality
control
• Quality
control
reduces
problems
and
defects
in
the
product
using
inspec/ons
at
various
points
in
the
produc/on
process.
• Many
organisa/ons
have
minimised
errors
and
waste
by
ensuring
that
standards
are
met.
• Specifica/ons
or
benchmarks
are
set
before
the
physical
checks
are
completed.
Actual
performance
is
then
compared
to
the
established
criteria.
If
the
established
standards
are
met
it
is
likely
that
the
business
will
be
mee/ng
customer
expecta/ons.
Compe//veness
increases
as
the
costs
associated
with
waste
and
faulty
products
are
reduced.
• In
a
service
organisa/on,
an
inspec/on
of
employee
performance
can
be
used
as
a
means
of
quality
control.
A
bank
might
inspect
teller
accuracy,
speed
or
courtesy.
In
a
call
centre
calls
might
be
monitored
for
quality
assurance
and
control
purposes.

30. Quality
assurance
• A
quality
system
is
in
place
to
ensure
that
set
standards
are
achieved.
• Eg.
Cer/fied
to
the
ISO
9002
standard.
• The
ISO
9000
series
of
quality
cer/fica/ons
is
a
widely
used
interna/onal
standard.
‘ISO’
stands
for
Interna/onal
Organiza/on
for
Standardisa/on.
Mee/ng
these
interna/onal
Standards
is
voluntary,
but
many
organisa/ons
comply
with
their
requirements
to
remain
compe//ve
locally
and
interna/onally.
• The
ISO
provides
guidelines
on
how
organisa/ons
should
establish
quality
assurance
systems
by
adop/ng
specific
procedures,
controls,
and
recording
and
documenta/on
measures.

31. Total
quality
management
• (TQM)
is
a
commitment
to
excellence
that
emphasises
con/nuous
improvement
in
all
aspects
of
an
organisa/on's
opera/on
by
sharing
responsibility
among
all
the
members
of
the
organisa/on.
• The
aim
of
TQM
is
to
create
a
defect-­‐free
produc/on
process,
and
maintain
a
customer
focus
in
opera/ons.
• Improves
the
price
compe//veness
of
an
organisa/on,
but
can
also
improve
product
quality,
allowing
the
business
to
aZain
compe//ve
advantage.
• To
achieve
TQM
objec/ves
a
number
of
approaches
may
be
used,
such
as
employee
empowerment,
con/nuous
improvement
and
improved
customer
focus

32. Quality
circles
• Teams
of
up
to
10
workers
meet
regularly
to
solve
problems
related
to
process,
design
or
quality.
• The
groups
o_en
make
presenta/ons
to
management
with
their
ideas,
in
order
to
improve
the
performance
of
the
organisa/on.
•
Such
programs
have
resulted
in
substan/al
cost
savings
for
organisa/ons
—

33. ConInuous
improvement
• Involves
a
constant
evalua/on
of,
and
improvement
in,
the
way
things
are
done
in
an
LSO.

34. VCAA
2012
Exam
QuesIon
1
In
the
chocolate
industry,
four
large-­‐scale
organisaIons
dominate
the
market,
collecIvely
accounIng
for
92%
of
all
chocolate
sales.
Currently
these
four
organisaIons
compete
on
price.
The
smallest
of
the
four
organisaIons,
Websters,
is
less
able
to
take
advantage
of
economies
of
scale
than
the
three
larger
organisaIons.
As
a
result,
Websters
has
decided
to
focus
on
compeIng
on
quality
rather
than
price
to
ensure
its
long-­‐term
success.
Sam
Webster,
grandson
of
the
founder
of
the
business,
is
currently
the
CEO
and
has
idenIfied
that
numerous
changes
must
be
made.
As
the
focus
of
Websters
shias
to
quality,
it
will
need
to
measure
quality
as
part
of
its
operaIons
management.
A
human
resources
audit
has
idenIfied
that
the
current
staff
do
not
have
the
necessary
capabiliIes
to
implement
this
change.
To
allow
the
staff
to
develop
the
necessary
capabiliIes,
Mr
Webster
has
idenIfied
two
preferred
opIons.
•
improve
the
capabiliIes
of
the
current
staff
•
purchase
and
import
state-­‐of-­‐the-­‐art
equipment
from
Belgium
While
the
purchase
of
equipment
will
be
more
expensive
iniIally,
it
will
improve
producIvity
and
reduce
waste
and
carbon
emissions
in
the
longer
term.
b.
IdenIfy
and
explain
two
methods
from
the
strategy
of
managing
quality
that
Websters
could
use
to
ensure
a
high-­‐quality
chocolate
product.
(4
marks)

35. Use
of
technology
• RoboIcs
describes
special
forms
of
technology
capable
of
complex
tasks.
Robots
are
used
in
engineering
and
specialised
areas
of
research,
as
well
as
on
assembly
lines
where
a
programmable
machine
capable
of
doing
several
different
tasks
is
required.
• Robo/cs
allows
a
degree
of
precision
and
accuracy
generally
unmatched
by
human
labour.
• In
addi/on,
robots
work
without
complaint
or
demands
for
wage
rises
in
condi/ons
that
would
be
soul
destroying
and
o_en
dangerous
for
employees.
• Robots
and
robo/cs
are
very
high
cost
items
that
are
unaffordable
for
most
small
and
medium-­‐scale
manufacturers

36. Computer
aided
design
(CAD)
• (CAD)
so_ware
generates
three-­‐dimensional
diagrams
from
a
set
of
given
input
data
(parameters);
once
the
design
has
been
created,
it
can
be
viewed
from
mul/ple
angles,
assis/ng
both
the
designer
and
the
end
user
to
visualise
what
will
be
produced.
It
is
used
in
a
range
of
organisa/ons.

37. Computer
aided
manufacture
•
(CAM)
is
so_ware
used
to
allow
the
manufacturing
process
to
become
computer
directed
by
designing
and
controlling
the
process.
• The
CAD
so_ware
can
be
linked
to
CAM
so_ware
to
manufacture
designs
that
are
accepted
by
clients.
CAM
can
also
be
used
more
broadly
to
calculate
how
much
of
each
input
would
be
required

38. Computer
integrated
manufacturing
•
(CIM)
uses
a
computerised
system
to
combine
CAD
and
CAM
to
manage
the
en/re
produc/on
process.
Product
design,
analysis,
planning,
purchasing,
cos/ng,
inventory
control
and
distribu/on
can
be
controlled
by
computer

39. VCAA
2013
Exam
Ques/on
2d.
• Discuss
the
likely
consequences
of
banks
or
other
large-­‐scale
organisa/ons
introducing
new
technology
to
op/mise
opera/ons.
(6
marks)

40. •
ethical
and
socially
responsible
management
of
an
operaIons
system.
• Define
ethics
&
social
responsibility.
• Managing
inputs
appropriately
• Managing
suppliers
appropriately
• Managing
staff
appropriately
• Managing
the
customer
rela4onship
appropriately

41. VCAA
2010
Exam
QuesIon
5
(6
marks)
• Ethical
and
socially
responsible
management
is
an
important
part
of
an
opera/ons
management
system.
• Iden/fy
and
describe
two
opera/ons
management
strategies.
Discuss
the
benefits
to
an
organisa/on
of
adop/ng
an
ethical
and
socially
responsible
approach
to
management
in
these
areas.

42. VCAA
2013
Exam
• Alice
Smith
has
read
the
biographies
of
many
great
business
leaders.
She
would
like
to
follow
in
the
footsteps
of
these
successful
leaders.
Alice
has
just
taken
over
as
the
CEO
of
The
Traveller’s
Helpmate,
a
business
that
publishes
print
and
online
travel
guides.
Her
observa/on
is
that
her
staff
are
professional,
highly
educated
and
independent.
In
private
conversa/ons,
some
staff
have
said
that
they
felt
underappreciated
by
the
previous
CEO
as
posi/ve
feedback
was
rarely
provided.
Ques/on
3c.
• Alice
wants
The
Traveller’s
Helpmate
to
be
seen
as
ethical
and
socially
responsible.
To
meet
this
goal,
she
is
reviewing
the
key
elements
of
her
opera/ons
system.
•
Describe
one
ethical
and
social
responsibility
issue
that
Alice
may
consider
from
each
of
the
three
elements
of
the
opera/ons
system.
(6
marks)

43. ProducIvity
and
business
compeIIveness,
their
importance
for
and
impact
on
the
opera/ons
system;
What
is
produc/vity?
• Produc/vity
is
the
ra/o
of
outputs
to
inputs
and
is
a
measure
of
the
efficiency
of
produc/on.
• It
is
the
number
of
goods
or
services
produced
by
an
organisa/on
compared
to
the
inputs
required
to
produce
those
goods
or
services.
• Produc/vity
increases
when
a
business
increases
output
levels
without
increasing
inputs
OR
when
it
decreases
the
inputs
required
and
keeps
output
at
the
same
level.

44. Factors
that
determine
the
level
of
producIvity
at
a
large-­‐scale
organisaIon.
• The
skill
level
and
training
of
staff.
• The
use
of
technology.
• The
quality
and
maintenance
of
equipment
and
facili/es.
• The
layout
of
facili/es.
• Communica/on
processes
between
management
and
staff
and
between
staff.
• Workplace
safety.

45. Improving
produc/vity
• Improved
communica/on
between
management
and
employees.
• management
style
-­‐
Par/cipa/ve
management
styles
can
increase
worker
produc/vity.
• human
resources
strategies
eg
recogni/on
and
reward
programs
aimed
at
improving
worker
mo/va/on.
•
Automa/ng
work
processes.
• Improving
the
design
and
layout
of
facili/es
in
a
workplace
.

46. • ‘Business
compe//veness’
refers
to
the
ability
of
an
organisa/on
to
sell
products
in
a
market.
• Compe//ve
advantage
occurs
when
an
organisa/on
is
able
to
produce
goods
or
services
beZer
than
its
compe/tors.
Eg
providing
a
par/cular
product
or
service
faster,
beZer
or
cheaper
than
rival
organisa/ons.

47. Organisa/ons
essen/ally
compete
in
two
ways:
• cost
—
providing
customers
with
lower
priced
goods
or
services
• differen/a/on
—
providing
customers
with
superior
value
in
terms
of
service
(flexibility,
speed,
quality)
or
added
features
compared
to
lower
priced
compe/tors.

48. CompeIIve
scope
Refers
to
the
range
over
which
the
organisa/on
intends
to
compete.
For
example:
•
the
number
of
countries,
• markets,
• industries
or
• customers
that
the
organisa/on
services.