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312 CHAPTER 9 • THE PRoCEss of oPERATions sTRATEgy – foRmulATion And imPlEmEnTATion

requirements with appropriate products. For price seekers, do whatever it takes to keep the costs of
manufacturing and delivery as low as possible. This last ‘price seeker’ segment was the most chal-
lenging. Dow Corning’s sales to this segment were small and declining. Yet, the segment repre-
sented around 30 per cent of the total market for silicones, and was expected to grow significantly.
Dow Corning’s solution was to create a new service offering that was unambiguously tar-
geted at this segment, and allowed their operations to provide exactly what customers’ required.
Called ‘Xiameter’ (rhymes with diameter), it was a ‘no-frills’, limited availability service with low
prices that could only be accessed on the Web (drastically cutting the costs of selling). It offered
only regular products, at minimum order quantities, without any technical advice. Delivery
times were sufficiently long to fit individual orders into the operation’s existing manufactur-
ing schedule.
The Xiameter offering presents a classic illustration of how the ‘translation’ logic that con-
nects the requirements of the market to operations activities works.
It goes something like this.
First – Segment the market. In the silicon market, the most challenging segment for a ‘technically
premium’ firm like Dow Corning is the ‘price seeker’ segment.
Second – Understand how well you are currently serving the market segments. Competition is tough
in the market because competitors are not carrying large sales and R&D overheads.

Third – Decide whether each market segment is worth serving. This ‘low price’ market is worth
pursuing because it is large and growing. And we do have manufacturing expertise and high
production volumes, so potentially could possibly compete.
Fourth – What would operations have to achieve to allow the business to compete? For price-seekers,
be able to supply a good product at low cost, but abandon the technical advice service; most
customers in this segment don’t need it.
Fifth – What does the operation have to do to achieve these things? For Xiameter, make it clear that
it is a ‘no frills’ service (hence the new Xiameter brand), and eliminate excess overheads (hence
Web-based sales). Do not allow customers to ask for anything that increases costs (hence limited
product range, minimum order quantities and delivery times that do not disrupt production
schedules).

The direction of alignment
The process of formulating an operations strategy to achieve alignment can be com-
pleted in two different ‘directions’. Most commonly, firms start with their market
requirements and then align resources to match them. That is, on Figure 9.2, they start
by analysing point Y and then determine what point X should be. Such an approach has
a number of intrinsic advantages, not least of which is the sheer availability of practical
tools and techniques for classifying and identifying market requirements. This direc-
tion of alignment also corresponds with the traditional top-down hierarchy of strate-
gies (discussed in Chapter 1), whereby operations’ role is to support predetermined
market decisions. The alternative approach is for the operation to analyse its resources
and then seek market opportunities that align well with it. That is, again referring to
Figure 9.2, they start by analysing point X and then determine what point Y could
be. However, in practice this is difficult to do. All businesses have markets; they may
not always be well understood and the business may not be good at identifying which
part of a market it is trying to serve but, nevertheless, all businesses have some idea of

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