Page 109 - Operations Strategy

84 CHAPTER 2 • OPERATiOns PERfORmAnCE
table 2.6 Firms can use various criteria to ‘focus’ their operations

Ideal operations Ideal market require-
Focus criteria resource conditions ments conditions
Operations segmenta- Performance objec- Products and services Market segmentation
tion based on market tives Cluster products/ with similar market is based clearly on cus-
criteria services by market requirements have tomer requirements
requirements similar processing
requirements
Product/service speci- Similar products and Products and services
fication Limit number services require similar are targeted on spe-
of products/services technologies, skills cific market segments
in each part of the and processes
operation
Geography Cluster The geographic area Market segmentation
products/services by where products and can be based on geo-
the geographic mar- services are created graphic regions
ket they serve has a significant
impact on operations
performance
Variety Separately The nature of tech- Market segmentation
cluster high-variety nology, skills and can be based on the
products/services and processes is primarily degree of product/
low-variety products/ determined by the service choice required
services together variety with which by customers
products/services are
created

Volume Separately The nature of tech- Market segmentation
cluster high-volume nology, skills and can be summarised
products/services and processes is primar- as ‘mass markets’ ver-
low-volume products/ ily determined by sus more ‘specialised
services together the volume at which markets’
products/services are
created
Operations segmenta- Process requirements The process require- Products and services
tion based on resource Cluster products/ ments (types of with similar process-
criteria services with similar technology, skills, ing requirements are
process requirements knowledge etc.) targeted on specific
together of products/ser- market segments
vices can be clearly
distinguished

● Geographic focus – Sometimes operations can be segmented in terms of the geographic
market they serve. This may be because the characteristics of a company’s different
market segments are largely defined by their geographic location. Alternatively, it
may mean that the nature of the service offered by an operation is geographically
limited. Most high-contact operations, such as fast-food restaurants, would fall into
this category.

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