Page 341 - Operations Strategy

316 CHAPTER 9 • THE PRoCEss of oPERATions sTRATEgy – foRmulATion And imPlEmEnTATion
● Look out for cycle-time shifts – Not all changes necessarily drive markets towards higher
rates of imitation. For instance, the advent of hub and spoke control in airports gave
less dominant regional airlines an invaluable source of competitive advantage over
the major carriers. However, regardless of the direction of change, such shifts can be
difficult to adjust to and therefore need to be actively sought out and analysed. At
the same time, as in the airline example, they also represent major opportunities.

example Clean and green (CAg) Recycling services
With the widespread adoption of copying and printing technologies, paper usage for most firms
exploded, leaving them with vast quantities of paper to dispose of. Recognising this require-
ment as a potential opportunity for a new business, Clean and Green began operating in late
1990 as a venture in and around the town of Maastricht – initially targeting medium-sized busi-
nesses with a confidential paper removal and recycling service. The idea was to allow businesses
to dispose of their paper without worrying about negative environmental impact (in effect, CAG
was also offering intangible enhancement to their clients’ reputation for citizenship) while also
preventing confidential information leaks. As a support to its relatively focused operations, its
marketing effort emphasised the quality and dependability of the service. Initially, the opera-
tion consisted of dedicated collection receptacles and a number of vehicles (capacity and pro-
cess technology decisions). Additionally, the firm made special contractual arrangements with
paper producers (a supply network decision).
The firm entered the next phase of its development when ‘green’ politics were increasingly
influential at the national and local level and many publicly provided recycling services were
developed. Having built up a reputation with local businesses, the firm was invited by a con-
sortium of local authorities to tender for a domestic paper collection contract. This was not just
an increase in requirements but also a very different kind of market. It required the company to
collect and recycle a wider range of paper from more sites and without any value being placed
upon the confidentiality of its service. It needed to add capacity and enhance its process tech-
nology in order to both increase flexibility and reduce costs. After negotiating with the con-
sortium (who were keen to assist in the development of a range of potential contractors), CAG
was awarded a contract with an understanding that it would take almost 12 months to acquire
and develop the requisite operational capability.
After the award of this first very large contract, CAG won more public and private work and
over time both added extra capacity and introduced other types (different materials etc.) of
recycling process. This was an essentially incremental process over a period of about four years –
leveraging and developing existing capability while introducing new relationships with other
physical recycling plants.
The firm’s next significant strategic decision was to gamble on future recycling legislation in
the Netherlands and the rest of Europe. Over an 18-month period it invested heavily in a ‘com-
plete recycling’ capability that allowed it to collect a large percentage of all recyclable household
waste. This meant extra collection capacity (vehicles and staff), different collection and sorting
systems and new external relationships (including political lobbying). In particular, growth
of the firm and the nature of the work meant that significantly more temporary staff were
employed. This necessitated the introduction of new control and training systems.
Future legislation was likely to ‘require’ much higher levels of domestic waste to be recycled,
which would introduce a step change in market requirements. Unlike CAG’s previous experi-
ence, in trying to achieve a sustainable advantage for this new market it deliberately developed
capability before the market required it.

M09 Operations Strategy 62492.indd 316 02/03/2017 13:27