For developing an efficient operations strategy, an organisation needs to identify its competitive dimensions. Cost, quality, time and flexibility are the main competitive dimensions of an organisation. An organisation may not adopt all the four competitive dimensions together. It needs to select competitive dimensions that are more feasible for its goods/services and fit its core competencies.
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Operations Competitive Dimensions
Important competitive dimensions of an organisation are discussed as follows:
It is one of the main competitive dimensions of an organisation. Most organisations adopt a cost-leadership strategy that aims at producing standardised products and selling them at low prices. An organisation that adopts a cost-leadership strategy attempts to reduce its economic costs below its competitors for gaining a competitive advantage. An organisation can reduce its costs by eliminating the wastage of materials, emphasising on efficient processes and limiting the product range.
Some factors to be kept in mind while formulating the strategy related to the cost aspect are as follows:
- How should an organisation carry out price mechanism, that is, should the prices be kept low with respect to competitors?
- Should the organisation put a limit or a cap on the price of products so that it does not affect the overall profit scenario?
- Should the organisation go for automation to reduce the cost of processing products or should it deploy low-wage labour?
The main aim of an organisation is to achieve a high level of customer satisfaction by providing high-quality goods and services. Quality is all about reducing the number of defects in products or meeting the specified value standards of an organisation. For maintaining a high level of quality, an organisation should determine the expectations of its customers towards the quality of a good or service and make the required effort to meet those expectations.
The following factors are considered while formulating a strategy related to quality dimensions:
- What should be the minimum acceptable quality of the products?
- What processes need to be developed, implemented or enhanced for providing customers with the quality acceptable to them?
- What needs to be done to improve the quality of the products?
An organisation can ensure the quality of its products with the help of the following ways:
- Improving the design and features of goods
- Adopting the most appropriate manufacturing process
- Procuring high-quality inputs
- Having an efficient machinery and a modern plant needed for manufacturing
- Having efficient human resource
Organisations focus on the timely delivery of products to get an edge over their competitors. Time acts as the most crucial strategic tool adopted by an organisation to achieve a competitive edge in the market. For example, Domino’s adopts a strategy of delivering pizzas in 30 minutes. In case, the delivery of pizza is late, the organisation provides pizzas free of cost. Nowadays, organisations are concerned about introducing their products in the market before their competitors. Organisations need to consider the following factors while considering a competitive advantage related to time:
- At what time should the product be introduced in the market to gain advantage with respect to competitors?
- How to reduce delays while delivering the product?
It refers to the capability of an organisation to respond to changes in situations with respect to product improvement and innovation. Nowadays customers prefer to purchase more customised products. Organisations that are able to provide customised products get a competitive advantage in the market. Therefore, organisations need to be flexible enough to increase or decrease the quantity of products for meeting market demand.
Corporate Strategy Design and Competitiveness
An organisation selects a competitive dimension that is feasible for its goods/services and fits its core competencies. Based on that competitive dimension, corporate strategies are designed. Here, the key element in managing competitiveness is an adequately formulated corporate strategy.
The corporate strategy, in order to eliminate the gap between potential and real performances of business activities, aims at developing efficient business mission and corporate objectives with respect to the current market environment. This helps in developing an adequate relation between the market environment and organisational resource possibilities.
The corporate strategy is designed as a pattern of decisions that determines an organisation’s corporate objectives, principal policies and plans to achieve those objectives and policies. A successful corporate strategy gives an overall direction towards organisational growth by managing businesses and product lines.
It defines approaches that an organisation needs to take to attract customers, withstand competitive pressure and improve market position. Corporate strategies can be applied to create a competitive advantage by developing unrivalled competencies, such as marketing and design.
Corporate strategies need to be organised to be effective in a competitive environment. It could be done by co-ordinating the organisation’s overall goals with its core processes. Corporate strategies determine the market that the organisation intends to serve and the responses that the organisation will make to change the environment.
For example, a corporate strategy determines resources that could help an organisation in developing core competencies and core processes, which the organisation could employ in the international market.
Based on the corporate strategy, market analysis is done to identify an organisation’s target customers, their needs and the strengths of the competitor. This information is used in developing capabilities that the organisation needs to develop.
These capabilities help the organisation in developing products/services and processes that are needed to be competitive in the market.
Thus, the corporate strategy provides an overall direction for carrying out all the organisation’s functions to achieve competitiveness.
Competitiveness can be defined as an ability of an organisation to offer products/services that meet the quality standards of the market at prices that are at par with other organisations in the market and provide adequate returns on investment to the organisation in producing them.
Competitiveness cannot be achieved merely by developing corporate strategies. These strategies can provide a direction, but achieving competitiveness is a process.
It requires real-time implementation of corporate strategies to produce and sell products/services that can compete with competitors’ products/services based on lower cost, higher quality, superior services or similar attributes.