Download Operation Strategy Target

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A CASE STUDY: OPERATIONS STRATEGY
ANALYSIS
Prepare an “Operations Strategy” analysis for a
small or medium sized business organization
(preferably a company with a limited or single
product/service line produced at a single or
limited number of sites).
The overall purpose of the analysis is to
determine, with some specificity, how the
company competes in the marketplace through its
operations.
Simply make a statement to this effect. In the outline below, the
use of the term “product” does not imply that a
manufacturing company should be selected.
Substitute “service” for “product” if a service
organization is selected.
I. GENERAL INTRODUCTION (2 or 3 pages).
A. Name of the firm, location, major product(s),
market segment served.
B. Apparent product strategy of the company (60
or less words).
C. General financial posture (financial report not
necessary).
D. Major competitors. Position of company in the
industry (estimated market share, etc.).
E. Substitutes for company’s products.
F. Nature of entry/exit constraints (barriers!) to the
industry.
G. Importance of industry suppliers/power of
customers.
H. Intensity of rivalry in the industry.
II. OPERATIONS (6 to 10 pages).
A. Product(s): Where is the firm’ product(s) on the
product life cycle? What is the breath of product
line relative to competitors? Is product change/
development a factor in the industry?
B. Process: General classification. Identify
significant inputs/outputs. Level of automation?
Estimate of position on the product/process
matrix. Industry leader or follower in process
technology? Is process technology important in
the industry?
C. Level of Vertical Integration: Does the company
practice vertical integration to the industry? What
is the apparent motivation – cost? control?
quality? risk?
D. Demand Management: Does demand for the
firm’s products vary significantly? Does this
present significant problems? How is the varying
demand met – varying employee work hours,
subcontracting, inventory, backorders, hiring/
firing? Does the firm attempt to control/alter
demand patterns? If so, how?
E. Capacity: Does the company have a small/large
range of volume output capability? Do unit costs
vary significantly with volume? If so, how? Has
the firm periodically in the past increased
capacity? If so, do capacity increases lead/lag
demand?
F. Facility Location: What motivated the company
to locate where it did? Is location of firms in the
industry dictated more by customer location, raw
material/labor? politics? other factors? Does the
firm’ location provide any advantages/
disadvantages over competitors in the
marketplace? Are firms in this industry sensitive
to location?
G. Use of Inventories: Does this company produce
“to-stock” or “to-order”? What relative advantages
are offered by this choice? What general level of
inventories are maintained in finished goods, raw
materials, work-in-process?
H. Organization/Work Force/Management: Is job
specialization prevalent? Job enlargement? Job
enrichment? Is worker motivation a problem with
this type of production process?
I. Quality: Define briefly the important
“dimensions of product quality”. Is there
significant staff involvement in quality
management? Is there a quality differential among
the products sold by industry members?
J. Productivity/Efficiency: Are any formal
measures of productivity used in the firm? Are
they computed for each organization unit? For the
firm as a whole? For each product? Is a formal
productivity improvement program in place?
K. Cost Measurement: What cost/profit measures
are routinely available and used by operations
management? Is a formal cost accounting system
used?
L. Overall Operations Posture in the Firm: Choose
one of the following “stages” as the most
representative of the operations function and
justify/explain. (1 page maximum).
1. Internally Neutral: Operations is primarily
reactive to internal pressures placed upon it -
does not have its own planning mechanism.
2. Externally Neutral: Operations works hard to
keep up with the industry practice and maintain
“neutrality” or parity with competitors.
3. Internally Supportive: Operations does work
consciously to be compatible with and supportive
of the firm’s business unit strategy.
4. Externally Supportive: Operations actively seeks
ways to develop competitive advantages for the
firm – operation is a leading factor in the firm’s
attempt to develop a competitive advantage.
M. Other Factors: Are there other specialized
factors that are not covered elsewhere in this
outline that significantly impact the operations
posture of this firm, e.g., government regulations,
worker safety, international issues, social
responsibility, etc.
III. CONCLUSIONS (Two pages maximum)
Do the firm’s operations activities appear to be
compatible with the firm’s product strategy for
competing in the marketplace? Are significant
incompatibilities noted (i.e., incompatibilities
between the operations strategy and the business
strategy, between the operations strategy and the
other functional strategies, or between the
decision categories within operations)? Does
operations make a significant contribution to this
firm’s competitive advantage or success in the
marketplace – or is the firm more driven by
marketing, etc.? Are there significant
environmental changes that could arise in the
future that will impact operations?
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