HSC Business Studies Syllabus Notes

Summary:

The text discusses various aspects of operations management and its strategic role in achieving business objectives. It explores different approaches, such as cost leadership and goods/service differentiation, that businesses can adopt to gain a competitive advantage. The influence of external factors, including globalization, technology, legal regulations, and environmental sustainability, on operations is also highlighted. The interdependence of operations with other key business functions, such as finance, marketing, and human resources, is emphasized. The text further delves into the operations processes, including inputs (transformed resources and transforming resources) and the transformation process itself. The significance of the 4V’s (Volume, Variety, Variation in Demand, and Visibility) in shaping operations strategies is discussed.

Excerpt:

HSC Business Studies Syllabus Notes

TOPIC 1: OPERATIONS
Role of Operations Management
– Operations: the processes through which inputs are transformed outputs

Strategic Role of Operations Management
– Strategic role of operations management is to carry out efficient processes to help achieve business objectives.
– Aims – more efficiency, reducing costs, improving quality

Cost Leadership
– Having the lowest costs or being the most price-competitive in the market – products made cheaply
– High volume of sales is required to generate enough revenue to cover costs and make a profit
– Products – fewer features, lower quality, lower cost packaging
– Economies of Scale: the cost advantages that can be created as a result of an increase in scale of operations
➢ If an input is purchased at a lower cost, more inputs can be purchased – more materials lead to more output for the same cost to the business. The output is then sold, and the business makes a profit.

WOW has CL in parts of its operations, e.g. essential products have lower costs to attract customers

Product Differentiation: business seeks to be competitive based on the characteristics of its product that set it apart from its rivals:
– Allows a business to gain a wider market share and meet customers’ ever-increasing expectations
– Customisation: involves changing a product’s features to suit a customer’s precise preferences.

Differentiation through operations may be achieved through:
➢ Better quality – incorporation of new technology
➢ Custom-designed products – more features and applications