I am learning to use the tools needed to teach Techonomics remotely. This is the first of a series of blog posts for my MBA distance class in Techonomics at Cumberland University. I look forward to the thoughtful responses of my students. Jim Collins in Good to Great describes the “economic engine” of a company. This term relates to the fundamental value proposition that company makes to its customers. It is also the jumping off point for the development of metrics (in our case techonomic metrics) to measure the performance of an organization in pursuit of its economic purpose. Describe the “economic engine” of an organization that you are involved in. As products become information and production capacity becomes virtually infinite, discuss the ramifications for supply and demand and how a company can establish and maintain sales prices and margins.
Economic Engine (CU-Week 1)
Published March 6, 2008 Techonomics 4 CommentsTags: Collins, economic engine, Good to Great, metrics, supply and demand
I am involved with the Cumberland University baseball team and our economic purpose is to win a National Championship every year. Each year we must replace several of our everyday players and some of our pitchers due to them using up their eligibility. For us to obtain our goal we must recruit some of the best players coming from junior colleges, high schools, and transfers. We continue to get outstanding players from all over the country because of our history for being and outstanding club and winning championships. With this success players want to come and be a part of our organization and the success that we strive for each year.
BB
Blog-Week 1
Our school is tuition driven and whether or not the parents see us as a value proposition for education becomes our economic engine. High quality education, safe environment in a caring and nurturing environment add to this engine.
Although we strive to be the absolute best at what we do I don’t believe that we will ever be the best school ever! I think what we do everyday and the three points above become the three circles of the Hedgehog Concept. We must hit the highest of marks in those three categories and this will determine whether parents feel the value piece.
One metric we use to determine economic viability is the actual cost to educate each student and how that compares to our tuition charge. We also measure cost per classroom based on metrics set up for each room. . .teacher wage, electricity, supplies. This metric is primarily used for determining the viability of the addition of programs or changes to existing programs and is another tool for the head of school when determining budgets.
One constraint that will limit supply and demand is the physical plant and its current location. The school is in an urban setting and is confined by streets and houses. Unless school takes a major change and classes for elementary students become available on line we are stuck with limited capacity.
Carl Sabo
I work for Irwin Materials Inc. who is a concrete producer. The economic engine that drives the industry would be the contractors who demand concrete to help build and maintain residential and commercial structures.Another economic engine would be the basic instinct to survive which causes people to build homes for survival. In the concrete industry, information and production depend on the technology used to manage IMI to be effective and efficient. The demand for concrete is high in Rutherford County which forces IMI to maintain the supply with unique products that exceed industry standards along with working with vendors who see the best interests of IMI.As a result of a product that is unique and exceeds industry standards, customers are maintained along with the creation of new ones.
Justin Taylor
Working at a restaurant/ultra-lounge I believe the economic engine of our company is in fact our customers. They are the driving factor in what we carry in our inventory. For example, one of our most common alcoholic drinks that we serve is jagermeister. Whether served as a shot, or mixed with a red bull to make a “jager bomb” there is no doubting its popularity not only at our place, but all over the country. The problem we come across the most is when the demand for Jager on a saturday night exceeds our supply. This can create many unhappy customers. In our business we cannot afford to have unhappy customers. Unhappy customers tend to do business elsewhere and not with us. This in turn drives down our profits as a company but also drives down gratuity to the bartenders and servers. It is the staff, not the management, that tend to suffer the most from this as we usually get paid solely on the tips we make. If we can avoid running out of popular items, we can then raise our profits without raising the prices of our services and also make more money(tips) for the bar staff. This keeps customers, owners and staff members all happy.