Question

Chapter 4-  Building Competitive Advantage Through Functional-Level Strategies -:

Answer the following questions:

1.    Explain how an enterprise can use functional level strategies to increase its efficiency.

2.    Explain how an enterprise can use functional level strategies to increase its quality.

3.    Explain how an enterprise can use functional level strategies to increase its innovation.

4.    Explain how an enterprise can use functional level strategies to increase customer responsiveness.

Answer 1

Answer1- Functional business strategy is an area of operations management based on specific functions of a particular department. Functional strategy is a part of a company’s business strategy, it acts like a backbone of the organization and it provides more information regarding the resources and capabilities on which the overall business strategy is designed. The main functions of functional level strategy are integrating the activities within a specific functional area. Some of the activities are advertising, promotion, inventory management, purchasing and market research.

The functional level strategies are related to different areas like marketing, production, distribution channels, etc. Each functional level strategy influences the other strategy. Finally the functional level strategy influences the production and other related activities that make the activities in a planned way and helps them to reach the efficiency levels in production activities and also the employees. Efficiency = outputs/ inputs A Company is a place where all inputs are transferred to outputs the efficiency of the employees or machines can be calculated by measuring the quantity of inputs that are used to produce a given output. If a company uses minimum inputs to produce outputs, then the company can said to be efficient. Economies of scale are the unit cost reduction that is associated with the total large scale production levels. If the economies of scale occur in the production, then it the company is said to be efficient as the fixed cost of the company is used in an efficient way to produce a large volume of output. Hence, with the help of functional level strategies the company can gain economies of scale in turn helps to achieve efficiency levels of the company.

Answer 2- Functional business strategy is an area of operations management based on specific functions of a particular department. Functional strategy is a part of a company’s business strategy, it acts like a backbone of the organization and it provides more information regarding the resources and capabilities on which the overall business strategy is designed. The main functions of functional level strategy are integrating the activities within a specific functional area. Some of the activities are advertising, promotion, inventory management, purchasing and market research.

Through functional level strategy the efficiency of the employees will increase that enhances the quality of the products. The action plans that are followed by the organization develop the efficient and effective production systems that will in turn develop a quality product. Hence the functional level strategies are linked with one another as the operations are interrelated. The main success of the functional strategy lies on time factor at the time plays a crucial role in planning and implementing the changes that need to be implemented in the organization. For example: if an advertisement and sales promotional activities that are aimed to increase the sales of the products need to be started in correct and in a planned order to reach the customer. Finally the functional strategies in a business strategy help to enhance the quality of the products as the products are produced by the efficient employees of the organization who are committed and engaged towards their work.

Answer 3- Functional business strategy is an area of operations management based on specific functions of a particular department. Functional strategy is a part of a company’s business strategy, it acts like a backbone of the organization and it provides more information regarding the resources and capabilities on which the overall business strategy is designed. The main functions of functional level strategy are integrating the activities within a specific functional area. Some of the activities are advertising, promotion, inventory management, purchasing and market research.

Innovation plays important role in developing new products as a result the customer needs are satisfied that creates the source of competitive advantage. Besides innovation can improve the quality of the existing products with the help of new production methods, which reduces the cost of making the products, thereby the products can be provided for the customers for lower prices when compared to the competitors. Through functional level strategy the innovation of product or process can be achieved. As the new product launching can be attained through innovation that drives towards the superior profitability. The functional strategies are of different types like marketing strategies, market research, production, distribution channels, etc. each functional level strategy influences the other strategy. With the help of these strategies a company can plan for innovation of new products and process that are helpful in gaining competitive advantage over other competitors and helps in gaining more profits.

Answer 4- Functional business strategy is an area of operations management based on specific functions of a particular department. Functional strategy is a part of a company’s business strategy, it acts like a backbone of the organization and it provides more information regarding the resources and capabilities on which the overall business strategy is designed. The main functions of functional level strategy are integrating the activities within a specific functional area. Some of the activities are advertising, promotion, inventory management, purchasing and market research.

Through functional level strategy the efficiency of the employees will increase that enhances the quality of the products. The action plans that are followed by the organization develop the efficient and effective production systems that will in turn develop a quality product. Hence the functional level strategies are linked with one another as the operations are interrelated. Innovation plays important role in developing new products as a result the customer needs are satisfied that creates the source of competitive advantage. Besides innovation can improve the quality of the existing products with the help of new production methods, which reduces the cost of making the products, thereby the products can be provided for the customers for lower prices when compared to the competitors. Through functional level strategy the innovation of product or process can be achieved. As the new product launching can be attained through innovation that drives towards the superior profitability. Superior responsiveness to customers is the strategy where the company gives the customers what they deserve and the price for which they are willing to pay for the price and the company is satisfying the needs of the customers. Customer responsiveness is the important factor that the company is focused on the needs of the customers. The discussed points like innovation and the quality of the product can satisfy the needs of the customers. In order to achieve the customer responsiveness to the customer then the company needs to develop a strategy of listening to the customers and focusing on the customer needs and satisfying them to achieve the superior responsiveness of the customers.

The Functional level strategy helps the company to develop the plans to enhance the levels ot the production. Thereby, achieving economies of production through which efficiency will be increased and the quality ot the products also increases, hence the functional strategy helps the company Identity and satisfy the needs ot the customers through which the superior responsiveness to customers is also achieved.