Page 47 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes Hercules bicycles. Their ability to design bicycles that met India specific needs at low cost
made it possible for them to provide the right product at the right time and make them
market leaders.
TI Cycles operational strategy of producing elegant, high quality bicycles became the
corporate strategy of the company. This resulted in its inability to compete with Hero
Cycles. It did not develop the capabilities to compete on price, and hence it could not
provide value when there was a shift in the needs of the market.
Questions
1. How did TI cycle loose its way?
2. Analyse the bicycle market in India.

Source: Upendra Kachru, Production and Operations Management – Text and Cases, First Edition, Excel Book, New Delhi,
2007.

2.5 Summary

 The objective of operations strategy should be to give the firm a competitive advantage.

 Performance depends on the functionality, quality, speed, timeliness, and flexibility of
the product offering.
 The business strategies are basically competitive strategies whose objectives are about
how to compete successfully in particular markets.
 A firm pursuing a cost-leadership strategy attempts to gain a competitive advantage
primarily by reducing its economic costs below that of its competitors.
 In a differentiation strategy, a firm seeks to be unique in its industry along some dimensions
that are widely valued by buyers.

 The generic strategy of focus rests on the choice of a narrow competitive scope within an
industry.

 Richardson, Taylor and Gordon have developed a six-element framework for operational
strategy. Their framework elements are Technology Frontiersman, Technology Exploiters,
Technological Serviceman, Customizers, Cost-minimizing Customizers and Cost
Minimisers.
 Implementing the operations strategy involves the organizing, directing/implementing,
and controlling the different facets of management effectively.
 Value is a core concept in a business’s strategy because it directs organizations to strive to
understand the customer buying process.

 Implementing strategy is normally considered through a systems perspective that views
management as a three-stage process which are at Organization Level, Process Level and
Job/Performer Level.

2.6 Keywords

Corporate Level Strategies: Strategies that are concerned with the broad and long-term questions
of what business the organization is in or wants to be in, and what it wants to do with those
businesses.
Flexibility: It is the ability of the OM system to give the customer the product desired.

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