chap03 emergent strategy
TRANSCRIPT
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Performance objective A
P e r f o r m a n c e o b
j e c t i v e B
Operations
Resources
Market
RequirementsOPERATIONS
STRATEG
Strate!ic
Reconci"iation
#
Topics in operations strate!$ treate% in t&is c&apter
Time' tra%e(offs an% tar!etin!
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PRO)*+T,SER-I+E
TE+.NO/OG
MAR0ETING OPERATIONS
1&ere %oes t&e business !et its competitive
a%vanta!e#
T&e 2tec&no"o!ica"3
specification of its
pro%uct,service#
T&e 4a$ it positions
itse"f in its market#
T&e 4a$ it pro%uces its
!oo%s an% services#
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OPERATIONS
PRO)*+T , SER-I+E
TE+.NO/OG
MAR0ETINGOPERATIONS
PRO)*+T , SER-I+E
TE+.NO/OG
OPERATIONS
MAR0ETING
PRO)*+T
SER-I+E
TE+.NO/OG
T&e contribution of eac& area
4i"" c&an!e over time
MAR0ETING
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STRATEGIES O5 -O/0S1AGEN1ER0
6789 ( 6778
BE5ORE 67:;
5ER)INAN) PORS.E ( : ( P/ANT ON STREAM
67>7
67>7 1AR ( P/ANT T*RNE) TO PRO)*+TION O5 1AR -E.I+/ES
67:; NOR).O55 P*T IN +.ARGE
67:;
NOR).O55 TA0ES .A/5 A STRATEG ( PEOP/ES +AR
A))S EM.PASIS ON ?*A/IT' TE+.NI+A/' E@PORT' SER-I+E STAN)AR)S
67:7 ( 67;
INTEN)E) STRATEG REA/IE)
+AR I)EA/ 5OR POST 1AR +ON)ITIONS
RAPI) E@PANSION IN -O/*ME
NO NE1 MO)E/S C1OR0 ON NE1 MO)E/ .A/TE) IN 67:D
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679 ( 67:
699 MO)E/ INTRO)*+E)
SA/ES IN+REASE) B*T PRO5ITS S?*EEE)
67 ( 67F
PRESS*RES O5 +OMPETITION BE+OME SE-ERE
NE1 STRATEG 5ROM A*)I ( 5RONT 1.EE/E) )RI-E' ST/IS.'
1ATER+OO/E)
OT.ER /INES )ROPPE)
PRO)*+TION RATIONA/ISE) ON 1OR/) BASIS
MAR0ETING EMP.ASISE) PER5ORMAN+E' RE/IABI/IT AN) SER-I+E
67F ( 67;7
GO/5 ESTAB/IS.E) AS MAR0ET /EA)ER
+ONTIN*E) EMP.ASIS ON TE+.NI+A/ E@+E//EN+E
O/) )ESIGNS PERIO)I+A// 5AS.IONAB/E
MAIN E*ROPEAN +OMPETITOR SEEN AS 5IAT
SOME PRESS*RE 5ROM APANESE MAN*5A+T*RING
677
IN+REASE) +OMPETITION AN) +.ANGES IN TASTES
RESPONSE ( IN+REASE) A)-ERTISING
( )ESIGN STARTE) 5OR 699
ORIGINA/ STRATEG *N+.ANGE) IN ESSENTIA/S
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6779 ( 677
IN+REASING PRESSS*RE ON +OSTS 5ROM APANESE MAN*5A+T*RERS
GERMAN /ABO*R +OSTS AN) E@+.ANGE RATE ARE )ISA)-ANTAGEO*S
/ATTER/ E*ROPEAN RE+ESSION IN+REASES PRESS*RE+OST +*TTING MEAS*RES ( EAST E*ROPEAN P/ANT ( AGGRESSI-E
P*R+.ASING
677F ( 8999
)E-E/OPING SEPARATE BRAN)ING STRATEGIES TO O++*P )I55ERENT
MAR0ET SEGMENTS
)E-E/OP SEPARATE PRO)*+TS 5ROM +OMMON P/AT5ORMS TO
RE)*+E +OST
+ONTIN*E AGGRESSI-E +OST RE)*+TION AN) PRO+ESS IMPRO-EMENT
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MINTBERG=S +ON+EPT O5 EMERGENT STRATEGIES
NOT A// INTEN)E) STRATEGIES ARE REA/ISE)
an% H
NOT A// REA/ISE) STRATEGIES ARE INTEN)E)
Emer!ent strate!ies %erive from t&e s&are% un%erstan%in! of mana!in! t&e
resources of t&e or!aniJation
T&e concept of emer!ent strate!ies t&erefore &as a particu"ar si!nificance
for operations strate!$
)E/IBERATI-E STRATEGIES
*NREA/ISE)
STRATEGIES
EMERGENT
STRATEGIES
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Market
Requirements
Strate!ic
Reconci"iation
Operations
Resources
Emer!in!'
an$
4orkin!
ve&ic"e
Maturin!'
simp"e
robust
ve&ic"e
More
sop&isticate%
performance'
qua"it$
*ncertain
rejection of
-1 tra%itiona"
pro%ucts
Bui"%in! up
capacit$ an%
capabi"it$
S$stemisation
of resources
an%
processes
Minor
reconfi!ura(
tion for ne4
mo%e"
5ra!mente%
acquisition of
ne4
resources
Mu"tip"e
ne4
%esi!ns
Ne4
699
mo%e"
Stan%ar%iJe%
%esi!n
67:(676
Imp"ementin!
strate!$
678(67;
+ontinuit$
of strate!$
677(67:
Minor
c&an!e an%
continuit$
67(67F9
Searc&in!
for viab"e
strate!$
Simp"e
%esi!n
Market requirements' operations resources an% strate!ic reconci"iationat -1 for &a"f a centur
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+"arif$in!
aroun%
st$"e'
qua"it$ an%
variet$
Se!mentation
aroun%
performance'
st$"e an% variet$
Increasin!"$
competitive
aroun% price
Bran%in!
4it&
price'
qua"it$'
an% st$"e
A%apt best
practices from
en"ar!e%
!roup
Accommo%ate
ne4 mo%e"s
an%
acquisitions
)rastic
reconfi!uration to
increase
efficienc$' re%uce
costs
+ontinuous
process
improvement
an% cost
re%uction
+ommon
pro%uct
p"atforms
)esi!n for
"o4(cost
manufacture
Pro%uct
%eve"opment
pat&s
)efine%
ran!e
67F6(67F
Emer!ent
strate!$
67F(67;7
+ontinuin!
4it& minor
c&an!es
6779(677
Major
c&an!e
Cinterna"D
677F(8999
Imp"ementin!
strate!$
Market
Requirements
Strate!ic
Reconci"iation
Operations
Resources
Market requirements' operations resources an% strate!ic reconci"iationat -1 for &a"f a centur
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Inten%e%
Strate!$
Rea"ise%
Strate!$
)e"iberate
Strate!$
MintJber!=s concept of emer!entstrate!$
*nrea"iJe%
Strate!$
Emer!ent
Strate!$
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Or%er 4inners an% qua"ifiers
/o4 .i!&
Ne!ative
Or%er 1inners
?ua"ifiers
Positive
Neutra"
Ac&ieve% Performance
+ o m p e t i t i v e B
e n e f i t
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A%%in!
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/o4 .i!&
Ne!ative
Or%er 1inners
?ua"ifiers
Positive
Neutra"
Ac&ieve% Performance
+ o m p e t i t i v e B
e n e f i t
)e"i!&ts
)e"i!&ts become or%er 4inners an% or%er4inners become qua"ifiers
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1&at service %imensions are %e"i!&t' or%er
4inners an% qua"ifiers K no4' an% in t&e future#
)e"i!&ts
Or%er 1inners
?ua"ifiers
To%a$ Tomorro4
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)e"i!&ts
Or%er 1inners
?ua"ifiers
To%a$ Tomorro4
Bu%!et .ote" +&ain
+entra" reservation
/ocation CautoroutesD
/ocation CrestaurantsD
Price
/o$a"t$ car%s
+entra" reservation
/ocation CautoroutesD
/ocation CrestaurantsD
Price
/o$a"t$ car%s
+"ean"iness
)Lcor
+"ean"iness
)Lcor
Service
#
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)e"i!&ts
Or%er 1inners
?ua"ifiers
To%a$ Tomorro4
+entra" reservation Price
/ocation CautoroutesD
/ocation CrestaurantsD
Price
/o$a"t$ car%s
+entra" reservation
/ocation CautoroutesD
/ocation CrestaurantsD
/ocation CrestaurantsD
Price
/o$a"t$ car%s
+"ean"iness
)Lcor
+"ean"iness
)Lcor
Service
#
Bu%!et .ote" +&ain
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)e"i!&ts
Or%er 1inners
?ua"ifiers
+entra" reservation
/ocation CautoroutesD
/ocation CrestaurantsD
/ocation CrestaurantsD
Price
/o$a"t$ car%s
+"ean"iness
)ecor
Price
1&at aspects of service
4i"" form tomorro4s
%e"i!&ts' or%er 4innersan% qua"ifiers#
1&at ne4 capabi"ities
4i"" operations nee% to
%eve"op to %e"ivert&ese#
More' sma""er sites
+&eap "an%costs
Bui"% at "o4cost
Operate at
"o4 cost
Searc& processes5"eib"e %esi!n
/o4 fie% costsStan%ar%iJation
/o4 over&ea%s
/o4 "abor costsNe4 tec&no"o!$
Partners&ip %ea"s 4it&restaurants
Bu%!et .ote" +&ain
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Tra%e(offs
2)o $ou 4ant it !oo%' or %o $ou 4ant itTues%a$#3
2No suc& t&in! as a free "unc&3
2ou can=t &ave an aircraft 4&ic& f"ies at t&espee% of soun%' carries :99 passen!ers an%
"an%s on an aircraft carrier Operations are just
t&e same3 CSkinnerD
2Tra%e(offs in operations are t&e 4a$ 4e are4i""in! to sacrifice one performance objective to
ac&ieve ece""ence in anot&er3
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+ompetitive
Objective
A
+ompetitive
Objective
B
Mo%e" II Pivot an% 5unctionCS"ack' 6776D
+ompetitive
Objective
A
+ompetitive
Objective
B
Mo%e" I 5unctionCSkinner' 6778
.a$es an% Pisano' 677D
T4o 4a$s of i""ustratin! t&e tra%e(off concept
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Performance measure A P
e r f o r m a n c e m e a
s u r e B
Performance measure A
P e r f o r m a n c e m e a s u r e B
Performance measure A
P e r f o r m a n c e m e a s u r e B
2Natura"3 5rontier
of Performance
@
T&ree sc&oo"s of tra%e(off t&ou!&t
2It=s a"" about positionin!3
Ce! SkinnerD
2Must aim to be !oo% at
ever$t&in!3
Ce! Sc&onber!erD
2ou &ave to c&oose 4&en
to reposition an% 4&en to
overcome tra%e(offs
t&rou!& improvement3
Ce! .a$es an% PisanoD
6 8
>
@>@8
@6
@
Repositionin! vs improvement
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Tra%e(off c&an!e% because improve%
s$stem attributes &ave enab"e% bot& A
an% B to be improve% 4it&outc&an!in! t&eir re"ative position
Pivot
Base
Base
A B
Tra%e(off c&an!e% because improve%
s$stem attributes &ave enab"e% A to
be improve% 4it&out re%uction in B
Pivot
Base
Base
A
B
Tra%e(off c&an!e% because A is no4
require% to &ave &i!&er performance but
s$stem attributes &ave not improve% so
performance of B is "o4er
Pivot
Base
A
B
Pivot
Base
A B
Ori!ina" tra%e(off
ImproveNet improvement in performance because tra%e(off is overcome
R e p o s i t i o n
+ & a n ! e
i n r e " a t i v e p e r f o r
m a n c e o f c o m p e t i t i v e
o b j e c t i
v e s
Repositionin! vsimprovement
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vs
vs
vs
Service +ost
!oo%
ba%
!oo%
ba%
)e!ree an%
number of
service c&ecks
+ost of
provi%in!
service
Avera!e
4aitin! time
for service
+ost of
provi%in!
service
Abi"it$ to keep
4aitin! time s&ort
even in peak perio%s
vs+ost of
provi%in!
service
Ran!e of
servicesoffere%
+ost of
provi%in!service
Eamp"es of services vs cost tra%e(offs
at an auto quick fit center
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vs
vs
vs
Service+apita"
epen%iture
!oo%
ba%
!oo%
ba%
vs
Eamp"es of services vs capita"
epen%iture at an auto quick fit center
)e!ree an%
number of
service c&ecks
Avera!e
4aitin! time
for service
Abi"it$ to keep
4aitin! time s&ort
even in peak perio%s
Ran!e of
servicesoffere%
+apita" cost of
purc&asin! computer
%ia!nostics equipment
+apita" cost of provi%in!
etra p&$sica" capacit$ or
automate% processes
+apita" cost of provi%in!
etra capacit$ for peak
"oa%in!
+apita" cost of
purc&asin! 4i%erran!e of equipment
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+apita"
epen%iture
!oo%
ba%
!oo%
ba%
Service
vs+apita" cost of
provi%in! computer
%ia!nostic equipment
+ost of provi%in!
service
Eamp"es of cost vs capita"
epen%iture at an auto quick fit center
!oo% !oo%
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1orkin!
capita"
!oo%
ba%
!oo%
ba%
Service
vs
/eve" of parts
inventor$ kept instock
Abi"it$ to rep"ace
part 4it&out an$%e"a$
1orkin!
capita"
!oo%
ba%
!oo%
ba%
+ost
vs/eve" of parts
inventor$ kept in
stock
+ost of arran!in! for
out of stock part to be
%e"ivere%
1orkin!
capita"
!oo%
ba%
!oo%
ba%
+apita"
epen%iture
vs/eve" of parts
inventor$ kept in
stock
+apita"
epen%iture on
stora!e space
Eamp"es of 4orkin! capita" re"ate% tra%e(offs at an auto quick fit center
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E t % %
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Performance objective A
P e r f o r m a
n c e o b j e c t i v e B
@
Eten%e%
performance
frontier
Natura"
performancefrontier
Area ?
Area P
Reconci"iation as improvement b$ pus&in! back
t&e performance frontier of a tra%e(off
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+ost performance
- a r i e t $
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Marketse!ment
A
Market
se!ment
B
OperationA
Operation
B
Operation
+
Market
se!ment
A
Market
se!ment
B
Market
se!ment
+
OperationA
Operation
B
Operation
+
Market an% operationsse!mentation matc&e%
Market an% operationsse!mentation not matc&e%
Se!mentation of markets an% operations resources
Market
se!ment
+
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Is"an%
Arm$ 6
Arm$ 8
Burnin! bri%!es be&in% $ou increases
commitment but re%uces f"eibi"it$
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/earnin! an%
improvement
Structura"
vu"nerabi"it$
but butbut
Operations Resources Market RequirementsStrate!ic reconci"iation
+"ear"$
focuse%
resources
Appropriate
resources
/imite%
capabi"ities
Risk of
market
c&an!e
+"ear"$
tar!ete%
market
+"arit$ of
objectives
5ocuse% operations can e&ibit positive an% ne!ative
c&aracteristics in bot& market an% operations perspectives
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6st tra%e(off
Staff sc&e%u"in! in
retai" "oans
Response
time*ti"isation
of staff
8n% tra%e(off
/eve" of service purc&ase%
from cre%it a!enc$
Operationa"
cost of cre%it
informationSpee% an%
qua"it$ of
information
>r% tra%e(off
Retai" "oans on(site
investment
Operations costan% spee% of
service+apita"
investment in
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B
A I%ea"
performance
? u a " i t $
o f s e r v i c e
/imite% Broa%Superficia"
Specific
Ran!e of services
B
A
? u a " i t $
o f s e r v i c e
.i!& /o4Superficia"
Specific
+ost of provi%in! services
I%ea"
performance
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A I%ea"
performance
? u a " i t $
o f s e r v i c e
/imite% Broa%Superficia"
Specific
Ran!e of services
A
? u a " i t $
o f s e r v i c e
.i!& /o4Superficia"
Specific
+ost of provi%in! services
I%ea"
performance
+ +
A I%ea"
performance
? u a " i t $
o f s e r v i c e
/imite% Broa%
Ran!e of services
A
? u a " i t $
o f s e r v i c e
.i!& /o4
+ost of provi%in! services
I%ea"
performance
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A I%ea"
performance
? u a " i t $
o f s e r v i c e
/imite% Broa%Superficia"
Specific
Ran!e of services
A
? u a " i t $
o f s e r v i c e
.i!& /o4Superficia"
Specific
+ost of provi%in! services
I%ea"
performance
A I%ea"
performance
? u a " i t $
o f s e r v i c e
/imite% Broa%
Ran!e of services
A
? u a " i t $
o f s e r v i c e
.i!& /o4
+ost of provi%in! services
I%ea"
performance
+ +
))