OPERATIONS STRATEGY

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WHAT IS THE ISSUE?
Efficiency: Low-cost strategies across
all functional areas, based on long-
term forecasts, supplier selection on
component costs
 Responsive: Focus on speed, order
fulfillment, service level. Typically,
high product variety and short lifecycle
Independent challenges:
 Mismatch between requirements of
different product attributes
 Which performance measure to emphasize:
cost, time or service level

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DIMENSIONS

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SAMPLE OPERATIONS STRATEGIES
Organizational
Strategy Operations Strategy Examples of Companies or Services
Low Price Low Cost U.S. first-class postage
Wal-Mart
Responsiveness Short processing times McDonald’s restaurants
On-time delivery FedEx
Differentiation: High performance design Sony TV
High Quality and/or high quality processing
Consistent Quality Coca-Cola
Differentiation: Innovation 3M, Apple
Newness
Differentiation: Flexibility Burger King (Have it your way”)
Variety Volume McDonald’s (“Buses Welcome”)
Differentiation: Superior customer service Disneyland
Service IBM
Differentiation: Convenience Supermarkets; Mall Stores
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Location
TRADE-OFFS

 Management must decide which parameters of performance are

critical and concentrate resources on those characteristics

 For example, a firm that is focused on low-cost production may not

be capable of quickly introducing new products

 Straddling – seeking to match a successful competitor by adding

features, services, or technology to existing activities

 Often a risky strategy

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ORDER WINNERS & ORDER QUALIFIERS

 Order qualifiers are those dimensions that are necessary for a firm’s
products to be considered for purchase by customers
 Features customers will not forego

 Order winners are criteria used by customers to differentiate the

products and services of one firm from those of other firms
 Features that customers use to determine which product to ultimately
purchase

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WHICH IS THE BEST?

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