SM Assignment II

Karunesh Mathur , Roll No.17,MBA IB14-17

Q1. What Role can Top Management play in helping a company achieve Superior Efficiency, Quality, and Innovation & Customer Responsiveness?

Q2. In What sense innovation be called single most important building block of competitive advantage?

Answer 1:

A company can increase efficiency through a number of steps:• Exploiting economies of scale and learning effects,• Adopting flexible manufacturing technologies,• Reducing customer defection rates,• Implementing just-in-time systems,• Getting the R&D function to design products that are easy to manufacture,• Upgrading the skills of employees through training,• Introducing self-managing teams• Linking pay to performance,• Building a companywide commitment to efficiency through strong leadership,• And designing structures that facilitate cooperation among different functions in pursuit of efficiency goals.

Achieving superior quality demands an organization wide commitment to quality and a clear focus on the customer. It also requires metrics to measure quality goals and incentives that emphasize quality, input from employees regarding ways in which quality can be improved, a

methodology for tracing defects to their source and correcting the problems that produce them, a rationalization of the company’s supply base, cooperation with the supplier that remain to implement total quality management programs, products that are designed for ease of manufacturing, and substantial cooperation among functions.

To achieve superior innovation, a company must build skills in basic and applied research; design good processes for managing development projects; and achieve close integration between the different functions of the company, primarily through the adoption of cross-functional product development teams and partly parallel development processes.

To achieve superior responsiveness to customers often requires that the company achieve superior efficiency, quality, and innovation. To achieve superior responsiveness to customers, a company needs to give customers what they want when they want it.

It must ensure a strong customer focus, which can be attained by emphasizing customer focus through leadership; training employees to think like customers; bringing customers into the company through superior Market research; customizing products to the unique needs of individual customers or customer groups; and responding quickly to customer demands.

Answer 2:

Reference to the service industry, and understanding Innovation as one of the core competency of the service organization.

Services have become the uncompromisable core component of business and, from a management perspective; they have evolved to assume a strategic function. Service leaders successfully introduce products and services to the market far in advance of customer expectation. Moreover, in the customer’s mind, a firm maintains its market leadership position

by continuing to operate at the cutting-edge and by extending conventional parameters. Service firms today are expected to delight customers with their creativity and innovation. Thus, in operational terms, innovation can be translated as a firm’s foresight to ’’think for the customer’’ by creating services that ’’drive’’ the marketplace offer superior value to the customer).

Success stories of firms and individuals in various parts of the world are often featured in business magazines and books. In most cases, their advances in their chosen fields have not been the result of hard work.

Service leaders have not only developed new services as collective packages but, in the process, have created new markets often initiating the growth of a new industry. Today’s managers are not concerned about the challenges caused by the short life-cycle of products and services but, rather, by the possibility of the disappearance of an entire industry. For example, the displacement of the multimillion-dollar music records industry by the introduction of CDs stands as testimony to this phenomenon. Moreover, innovated products and services indirectly destroy the demand for the old, as the latter prove less valuable to the customer.

Innovation or creativity per se are of limited significance in today’s evolving business continuum, as it is the value of the innovation as perceived by the customer that renders an advantage to a product or service.

Innovation results when a firm is able to focus its entire energies to think on behalf of the customer for an outcome that surpasses customers’ present expectation of superior value.

Innovation, therefore, nurtures a culture in which there are fewer hindrances to the creation of a synergy of thoughts and actions on behalf of the customer.

Customers today expect firms to delight them with creativity. Hence, continuous and creative innovation undertaken by a firm on behalf of the customer is, indeed, the only strategy that can sustain the long-term success of the firm.