operations 3

Competitiveness 3 levels

Global market place, industry, and single firms

Global marketplace

competitiveness is measured considering its:

a)Gross Domestic Product;

b)Import/Export ratio;

c)Increases in productivity.

Industries

competitiveness is measured by:

a)Number of major players;

b)Average market share;

c)Average profit margin.

Single firms

measured by:

a)Market share;

b)Earnings per share;

c)Revenue growth;

d)Profit margins.

Productivity

Output divided by input, most common measure of competitiveness

Single factor productivity

Output/ labor, output/ materials, output/ capital

Multi factor productivity

Output/ labor+materials+overhead, output/ labor+energy+capital

Total factor productivity

Goods and services produced/ all inputs used to produce them

Barriers to entry

Economies of scale, capital investment, access to supply and distribution channels, learning curves

Economies of scale

process of lowering of cost of production with the increase of units produced.

Capital investment

To become “players” in a specific market usually requires a large initial investment in      - facilities,

       - equipment and

       - training

Learning curves

reflect the fact that as workers repeat their tasks, they will improve performances.

•They measure the relationship between the processing time per unit and the number of units produced

Competition between industries increases when

Firms are relatively equal in size and resources

•Products and services are standardized

•Industry growth is slow or exponential