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To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Operations Operations StrategyStrategy
Chapter 2Chapter 2
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Corporate Strategy• Environmental Scanning• Core Competencies• Core Processes• Global Strategies
Corporate StrategyCorporate Strategy
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
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.”
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Corporate Strategy• Environmental Scanning• Core Competencies• Core Processes• Global Strategies
• Customer Relationship
• New Service/Product Development
• Order Fulfilment
• Supplier Relationship
Corporate StrategyCorporate Strategy
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Corporate Strategy• Environmental Scanning• Core Competencies• Core Processes• Global Strategies
• Strategic Alliances• Collaborative Effort• Joint Venture• Technology Licensing
• Locating Abroad
Corporate StrategyCorporate Strategy
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Competitive PrioritiesCompetitive PrioritiesLink 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Competitive PrioritiesCompetitive PrioritiesLink 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)
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Competitive PrioritiesCompetitive PrioritiesLink 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• Number of years in market
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Competitive PrioritiesCompetitive PrioritiesLink 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Corporate Strategy• Environmental Scanning• Core Competencies• Core Processes• Global Strategies Market Analysis
• Segmentation• Needs Analysis
Competitive Priorities• Cost• Quality• Time• Flexibility
Competitive PrioritiesThe critical dimensions that a process must possess to satisfy its customers
Competitive CapabilitiesThe Cost Quality, Time, and Flexibility dimensions that a process actually possesses and is able to deliver
Competitive PrioritiesCompetitive PrioritiesLink Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
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 QualityConsistent Quality
Time Delivery SpeedOn-time DeliveryDevelopment Speed
Flexibility CustomizationVarietyVolume Flexibility
Competitive PrioritiesCompetitive PrioritiesLink Between Corporate & Functional Area StrategiesLink Between Corporate & Functional Area Strategies
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
The Concept ofThe Concept of Order QualifierOrder Qualifier
• The minimum level for a given competitive The minimum level for a given competitive priority to enter a given marketpriority to enter a given market
• When deciding about competitive priorities we When deciding about competitive priorities we have:have:
– to satisfy the Order Qualifier in each Competitive to satisfy the Order Qualifier in each Competitive PriorityPriority
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
New Service/Product Design• Design• Analysis• Development• Full Launch
Competitive PrioritiesCompetitive PrioritiesLink 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
• 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 Development New 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Functional Area Strategies• Finance • Operations• Marketing • Others
New Service/Product Design• Design• Analysis• Development• Full Launch
Competitive PrioritiesCompetitive PrioritiesLink 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Functional Area Strategies• Finance • Operations• Marketing • Others
New Service/Product Design• Design• Analysis• Development• Full Launch
Competitive PrioritiesCompetitive PrioritiesLink 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
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Corporate Strategy And Key Corporate Strategy And Key Operations Management DecisionsOperations Management Decisions
Capabilities
Performance Gap?
NoNo
YesYes
Operations StrategyDecisions• 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
