Chapter 2-operations-strategy
- 2. Functional Area Strategies • Finance • Operations • Marketing • Others New Service/ Product Design • Design • Analysis • Development • Full Launch Figure 2.1Figure 2.1 Capabilities • Current • Needed • Planned Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility The Big PictureThe Big Picture
- 3. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Corporate StrategyCorporate Strategy
- 4. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies • Workforce • Facilities • Market & Financial Know-how • Systems & Technologies Corporate StrategyCorporate Strategy The Study by Potter: ““Do What You Know How To Do.”Do What You Know How To Do.”
- 5. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies • Customer Relationship • New Service/Product Development • Order Fulfilment • Supplier Relationship Corporate StrategyCorporate Strategy
- 6. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies • Strategic Alliances • Collaborative Effort • Joint Venture • Technology Licensing • Locating Abroad Corporate StrategyCorporate Strategy
- 7. Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis
- 8. Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Market Segmentation • Demographics • Psychographics • Industry Factors • Materials (rubber, oil, wood, metal) • Technologies (electronics, robotics) • Industry (banking, health care)
- 9. Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Needs Analysis • Service / Product Needs e.g. price, quality, degree of customization • Delivery System Needs • Attributes of the processes e.g. safety, reliability, courtesy, speed • Resources needed to deliver the service or product • Volume Needs • Demand levels • Demand variability • Demand Predictability • Other Needs • Reputation • After-sale services
- 10. Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility
- 11. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility Competitive Priorities The critical dimensions that a process must possess to satisfy its customers Competitive Capabilities The Cost Quality, Time, and Flexibility dimensions that a process actually possesses and is able to deliver Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies
- 12. Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility Cost Low-cost Operations Quality Top Quality Consistent Quality Time Delivery Speed On-time Delivery Development Speed Flexibility Customization Variety Volume Flexibility Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies
- 13. The Concept ofThe Concept of Order QualifierOrder Qualifier • The minimum level for a given competitiveThe minimum level for a given competitive priority to enter a given marketpriority to enter a given market • When deciding about competitive priorities weWhen deciding about competitive priorities we have:have: – to satisfy the Order Qualifier in each Competitiveto satisfy the Order Qualifier in each Competitive PriorityPriority
- 14. New Service/ Product Design • Design • Analysis • Development • Full Launch Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility
- 15. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility
- 16. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering and ramp-up • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility Development Strategies • Product Variety • Design • Innovation • Service
- 17. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering and ramp-up • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility
- 18. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility Service Package • Supporting Facility • Facilitating Goods • Explicit Services • Implicit Services
- 19. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility Quality Function Deployment • Voice of the Customer • Competitive Analysis • Voice of the Engineer • Correlations • Technical Comparisons • Trade-Offs
- 20. • Post-launch review Full Launch • Market promotions • Sales personnel briefed • Distribution processes activated • Old services or products withdrawn • Production of new offering • Need to rethink the new offering or production processes Development • Detailed specifications • Process design • Marketing program design • Personnel training • Testing and pilot runs • Service or product not profitable Analysis • Detailed review of market potential and production costs New Service or Product DevelopmentNew Service or Product Development ProcessProcess Figure 2.2Figure 2.2 Design • Development strategy • Idea generation and screening • Service package and Quality Function Deployment • Production feasibility
- 21. Functional Area Strategies • Finance • Operations • Marketing • Others New Service/ Product Design • Design • Analysis • Development • Full Launch Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility
- 22. Functional Area Strategies • Finance • Operations • Marketing • Others New Service/ Product Design • Design • Analysis • Development • Full Launch Competitive PrioritiesCompetitive Priorities Link Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies Figure 2.1Figure 2.1 Capabilities • Current • Needed • Planned Corporate Strategy • Environmental Scanning • Core Competencies • Core Processes • Global Strategies Market Analysis • Segmentation • Needs Analysis Competitive Priorities • Cost • Quality • Time • Flexibility
- 23. Corporate Strategy And KeyCorporate Strategy And Key Operations Management DecisionsOperations Management Decisions Capabilities Performance Gap? NoNo YesYes Operations Strategy Decisions • Designing And Improving Processes • Designing Value Chains • Operating Value Chains New Service/ Product Design Market Analysis Competitive Priorities Corporate Strategy Figure 2.3Figure 2.3
Editor's Notes
- #2: This presentation covers the graphical material in Chapter 2 - Operations Strategy.
- #14: There are levels which are considered a minimum to enter a market. This is the concept of Order Qualifier But we cannot excel in all competitive priorities at once. We need to make decisions. Look at the seminar on decision theory and games. Hand out the chapter.