Operations

Strategy
Chapter 2

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
 Competitive Priorities
Corporate strategy
• environmental scanning
• core competencies
• core processes
• global strategies Market analysis
• segmentation
• needs analysis

Competitive priorities
• cost
• quality
• time
• flexibility

Figure 2.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
 Competitive Priorities
Corporate strategy
• environmental scanning
• core competencies
• core processes
• global strategies Market analysis
• segmentation
Cost 1. Low-cost operations
• needs analysis

Quality 2. Top quality

Competitive priorities
3. Consistent
• cost quality
• quality
Time 4. Delivery
• time speed
• flexibility
5. On-time delivery
6. Development speed
Flexibility 7. Customization
8. Variety
9. Volume flexibility

Figure 2.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
 Competitive Priorities
Corporate strategy
• environmental scanning
• core competencies
• core processes
• global strategies Market analysis
• segmentation
• needs analysis

Competitive priorities
• cost
• quality
• time
• flexibility
Capabilities
• current
• needed
New Service/ • planned
Product Design
• design
• analysis
• development
• full launch

Functional area strategies

• finance • operations
• marketing • others

Figure 2.1
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
 New Service or Product
Development Process
Design
• Development • Service or
strategy product not
• Idea generation profitable
and screening • Need to rethink the
• Service package new offering or
production
or product
architecture
Analysis processes
formulation • Post-launch
• Production • Detailed review review
feasibility of market Development
potential and
production
costs • Detailed Full Launch
specifications
• Process design
• Marketing • Market
program design promotions
• Personnel training • Sales personnel
• Testing and pilot briefed
runs • Distribution
processes
activated
• Old services or
products
withdrawn
• Production of
new offering
Figure 2.2 and ramp-up
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
 Corporate Strategy and Key
Operations Management Decisions
Corporate strategy

Market analysis

Competitive priorities

New Service/
No
Product Design
Performance
Gap?
Yes
Operations strategy
Decisions
• Designing and Improving Processes Capabilities
• Planning and Managing Projects Figure 2.3
• Designing Value Chains
• Operating Value Chains
To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Lower Florida Keys
Health System

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Lower Florida Keys Health System

First Floor
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Lower Florida Keys Health System

Second Floor Third Floor

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.
Chaparral Steel

To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.