Chap03 Emergent Strategy

8/9/2019 Chap03 Emergent Strategy

1/35

© Nigel Slack and Michael Lewis 2003

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!


2/35


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#


3/35


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


4/35


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


5/35


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


6/35


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


7/35© Nigel Slack and Michael Lewis 2003

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



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



+"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



Inten%e%

Strate!$

Rea"ise%

Strate!$

)e"iberate

Strate!$

MintJber!=s concept of emer!entstrate!$

*nrea"iJe%

Strate!$

Emer!ent

Strate!$



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



A%%in!



/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



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



)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



Price

/o$a"t$ car%s

+"ean"iness

)Lcor

+"ean"iness

)Lcor

Service

#



)e"i!&ts

Or%er 1inners

?ua"ifiers

To%a$ Tomorro4

+entra" reservation Price



Price

/o$a"t$ car%s

+entra" reservation




Price

/o$a"t$ car%s

+"ean"iness

)Lcor

+"ean"iness

)Lcor

Service

#

Bu%!et .ote" +&ain



)e"i!&ts

Or%er 1inners

?ua"ifiers

+entra" reservation




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


18/35


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


19/35


+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


20/35


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


21/35


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


22/35


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


23/35


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


24/35


+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%


25/35


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


26/35

E t % %


27/35


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


28/35


+ost performance

- a r i e t $


29/35


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

+


30/35


Is"an%

Arm$ 6

Arm$ 8

Burnin! bri%!es be&in% $ou increases

commitment but re%uces f"eibi"it$


31/35


/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


32/35


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


33/35


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


34/35


A I%ea"

performance

? u a " i t $

o f s e r v i c e


Specific

Ran!e of services

A

? u a " i t $

o f s e r v i c e

.i!& /o4Superficia"

Specific


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


I%ea"

performance


35/35

A I%ea"

performance

? u a " i t $

o f s e r v i c e


Specific

Ran!e of services

A

? u a " i t $

o f s e r v i c e

.i!& /o4Superficia"

Specific


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


I%ea"

performance

+ +

))

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Chap03 Emergent Strategy

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