9.

OM strategy plays a crucial role in the success of a product throughout its life cycle. As a
product transitions from introduction to growth, maturity, and decline, OM strategies need
to adapt to align with the changing demands and market conditions. Here is a breakdown of
how OM strategies evolve during a product’s life cycle:
Introduction Stage:
During the introduction stage, the focus is on establishing a strong product presence and
gaining market acceptance. The primary OM objectives are:
1. Product design and development critical
2. Frequent product and process design changes
3. Short production runs
4. High production costs
5. Limited models
6. Attention to quality
Growth Stage:
As the product gains traction and demand increases, OM strategies shift towards optimizing
production efficiency and scalability. Key goals include:
1. Forecasting critical
2. Product and process reliability
3. Competitive product improvements and options
4. Increase capacity
5. Shift toward product focus
6. Enhance distribution
Maturity Stage:
In the maturity stage, the product reaches its peak market penetration, and the focus shifts
from growth to maintaining market share and profitability. OM strategies emphasize:
1. Standardization
2. Fewer rapid product changes, more minor changes
3. Optimum capacity
4. Increasing stability of process
5. Long production runs
6. Product improvement and cost cutting
Decline Stage:
As sales decline and competition intensifies, OM strategies focus on minimizing costs and
managing the product’s evetual withdrawal from the market. Key objectives include:
1. Little product differentiation
2. Cost minimization
 3. Overcapacity in the industry
4. Prune line to eliminate items not returning good margin
5. Reduce capacity

10. Achieve competitive advantage

• Differentiation: Apple is a company that differentiates itself by offering innovative
products and services that are perceived as unique and superior by its customers.
Apple’s products, such as the iPhone, iPad, Mac, and Apple Watch, have distinctive
features, design, and functionality that set them apart from competitors. Apple also
provides a seamless user experience across its devices and platforms, such as iOS,
macOS, iCloud, and Apple Music. Apple’s differentiation strategy allows it to charge
premium prices and maintain a loyal customer base.
• Cost leadership: Walmart is a company that achieves cost leadership by offering low
prices and a wide variety of products to its customers. Walmart leverages its
economies of scale, efficient operations, and supply chain management to reduce its
costs and pass the savings to its customers. Walmart also uses advanced technology,
such as data analytics, AI, and automation, to optimize its processes and improve its
productivity. Walmart’s cost leadership strategy enables it to attract and retain price-
sensitive customers and gain a large market share.
• Response: Zara is a company that excels in response by delivering fast fashion to its
customers. Zara uses a flexible and agile supply chain that allows it to produce and
distribute new collections in a matter of weeks, rather than months. Zara also uses
customer feedback, market trends, and data analysis to design and creat products
that meet the changing preferences and demands of its customers. Zara’s response
strategy allows it to offer fresh and fashionable products at affordable prices and
maintain a competitive edge in the dynamic fashion industry.
14.
Some possible cost-saving advantages that firms might experience by using outsourcing are:

 Outsourcing can reduce labor costs by hiring workers from lower-wage countries or
regions.
 Outsourcing can lower capital costs by transferring fixed assets and investments to the
outsourcing provider.
 Outsourcing can improve operational efficiency by leveraging the expertise and
experience of the outsourcing provider in specific functions or processes.
 Outsourcing can enhance flexibility and responsiveness by allowing the firm to adjust
its production capacity and output according to the market demand.
 Outsourcing can enable the firm to focus on its core competencies and strategic goals
by delegating non-core activities to the outsourcing provider.