Page 40 - Operations Strategy

WHAT is OPERATiOns sTRATEgy And HOW is iT diffEREnT fROm OPERATiOns mAnAgEmEnT? 15
because competition was forcing margins lower as competitors undercut prices. Soon
they realised that the greatest potential for profitable growth lay in the conference mar-
ket, where competition was not yet as fierce and where its high (but expensive) service
levels, ability to give presentation advice and innovation were valued. The right-hand
side of Figure 1.7 illustrates how this analysis of the company’s customers and competi-
tors sets the performance objectives for its operations strategy.
In this case the ‘translation’ logic goes something like the following:

1 There are several segments in the lighting design and supply market, but the fastest-
growing segment is the conference market.
2 Competition is getting tougher in the theatre market because the large international
lighting groups are able to provide lower-cost lighting solutions. Also, exhibition
venues are increasingly developing in-house operations and encouraging exhibitors
to use the in-house service. Margins are being squeezed in both markets.

Figure 1.7 the ‘market requirements’ and ‘operations resource’ analysis of the lighting company

Operations resources Market requirements
Operations strategy should build Operations strategy should satisfy
operations capabilities the organisation’s markets

Resources Customers
Equipment Professional theatres
Sta (static, low margins)
Reputation Exhibitions (slow
Relationships growth, low margins)
(internal and Conferences etc.
external) (fast growth, higher
Experience margins)

Operations Performance
Capabilities strategy decisions objectives Market position
Application of Location Aesthetically Traditionally
leading-edge Virtual reality innovative designs di erentiated on high
lighting and technology Presentation advice service level in
sound technology Supplier High customisation theatre and exhibition
Articulation of development markets, innovation
client requirements Equipment of lighting solutions and service in
Fast and
tracking system dependable supply conference market
Organisational
Processes structure Competitors
Integration of Sta meetings
equipment Big groups dominating
supply and client professional theatres
requirements In-house operations
Design process growing in exhibitions
Supplier liaison market
process Conferences market
still fragmented

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