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THE MARKET REQUIREMENTS AND OPERATION RESOURCES PERSPECTIVES

Perspective in Operation and their requirements

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hsweswe29
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5 views

THE MARKET REQUIREMENTS AND OPERATION RESOURCES PERSPECTIVES

Perspective in Operation and their requirements

Uploaded by

hsweswe29
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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THE MARKET REQUIREMENTS AND OPERATION RESOURCES PERSPECTIVES

Market-requirements-based strategies

Operations that continuously fail to serve the markets adequately is unlikely to survive in the
long term. Without an understanding of what markets require, it is impossible to ensure that the
operation is achieving the right priority between the performance objectives; quality, speed,
dependability, flexibility and cost.

The market influence on performance objectives

Operations seek to satisfy the customers through developing their five performance objectives.
For example, if the customers value low-priced products or services, the operations will place
emphasis on cost performance. Alternatively, the customers emphasis on fast delivery will make
speed important to the operations, and so on. Operations strategy should reflect on the
requirements of the business’s markets.

Order-winning and qualifying objectives

Order-winning factors are things which directly and significantly contribute to winning
business. They are considered by customers as key reasons for purchasing the product or service.
Raising the performance in order-winning factor will either result in more business or improve
the chances of gaining more business. For example, in smartphone markets, order-winning
factors include cutting-edge technology, extended camera capabilities, long battery life, or
unique and innovative designs. These differentiate from its competitors and attract the customers.

Qualifying factors may not be the major competitive determinants of success, but are
important in another way. These are aspects of competitiveness where the operation’s
performance has to be above the level of performance just to be considered by customers.
Performance below the ‘qualifying’ level of performance will possibly disqualify the company
from being considered by many customers. Using smartphone example again, the qualifying
factors include features like reliable call quality, basic internet connection, and a certain type of
durability. If a smartphone fails to meet these requirements, it will likely be eliminated from
customers’ consideration. But any further improvement above the qualifying level is unlikely to
gain the company much competitive benefits.

To order-winning and qualifying factors can be added less important factors which are neither
order-winning nor qualifying. They do not influence on customers in any significant ways.
Competitive factors can be classified as order-winners or qualifiers.
Different customer needs imply different objectives

If an operation produces products and services for more than one customer group, it will need
to determine the order-winning, qualifying, and less important competitive factors for each
group. As example, for the customer who concerns in photography, the smartphone company’s
objective is to improve camera sensor and image stabilization to deliver high quality image and
video. If the customer seeks to gaming, the company should focus on graphic resolution, battery
optimization, and advanced chipset performance to bring comfortable gaming experience.

The product/service life cycle influences on performance objectives

One way of generalizing the behavior of both customers and competitors is to link it to the life
cycle of products and services that the operation is producing. The exact form of the life cycle
will vary, but they are generally shown as sale volume passing through four stages; introduction,
growth, maturity, and decline. Each stage of life cycle requires different strategies of operations
management for the implications.

Introduction stage: When a product or service is first introduced, it is likely to be offering


something new in terms of its design or performance. The needs of customers are unlikely to be
well understood, so operations management needs to develop the flexibility to cope with any
changes and be able to give the quality to maintain product/service performance.

Growth stage: As volume grows, competitors may enter the growing market. Keeping up with
demand could prove to be the main operations preoccupation. Rapid and dependable response to
demand will help to keep demand buoyant, while quality levels must ensure.

Maturity stage: Demand starts to level off. So, operations will be expected to get the cost down
in order to maintain profit or to allow price cutting, or both. Cost and productivity issues are
likely to be the operation’s main concerns.

Decline stage: After time, sale will decline and there might be a residual market because
competitors are dropping out of market. Operations objective continue to be dominated by cost
as the market will be taken over by price competitions.

Operations strategy objectives will change depending on the stage of the business’s products
and services.

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