Page 95 - Operations Strategy

70 CHAPTER 2 • OPERATiOns PERfORmAnCE
a predisposition towards market or operations concerns, the relative balance is likely
to experience some kind of change over time.

mapping operations strategies
To understand how an organisation’s operations strategy changes over time is to under-
stand how it views its markets, how it sees the role of its operations resources and, most
of all, how it has attempted to achieve reconciliation between the two. It also illustrates
how an organisation understands its markets and how its resources evolve, often react-
ing to external pressures and internal possibilities. Of course, the minutiae of the thou-
sands of decisions that constitute the mechanics of the reconciliation process over time
are the key to understanding how the balance between markets and resources moves.
Ideally, we need to map the pattern and flow of each of these decisions, but this would
be an immense task if our historical perspective is to be longer than a few years. Often,
though, it is at the nature of an organisation’s products or services that one looks to
see how the internal reconciliation process resolved itself. Products and services are,
after all, the outward manifestation of the reconciliation process. Within their design
they embody the characteristics that the company hopes will satisfy the market and, at
the same time, exploit its resource capabilities. The following example illustrates this.

example vW: The first seventy years 10

For years, Ferdinand Porsche had dreamt of designing a ‘people’s car’. Presenting his ideas to
the Reich government in 1934, he found enthusiastic support for the idea. By 1939 the factory
was completed, although the Second World War meant that it was almost immediately turned
over to the production of war vehicles. By the end of the war, two-thirds of the factory had been
destroyed, the local infrastructure was in ruins and both material and labour were in desperately
short supply. Although attempts were made to sell the plant, no one seemed to want a ruined
plant. In 1948, the occupying authorities appointed Heinrich Nordhoff to run the business.
Nordhoff had faith in the basic concept of Porsche’s design but added an emphasis on quality
and engineering excellence. Throughout the 1950s the company overcame the difficulties of
manufacturing in a recovering economy, and expanded both its manufacturing and its sales
operations. The car itself, however, hardly changed at all. In fact, Nordhoff actively suppressed
any change to the design. Nothing would be allowed to interfere with the core values of a sim-
ple, cheap, robust and standardised people’s car. Yet the world was changing. Local economies
were recovering fast and customers were demanding more choice and touches of luxury in
their motor vehicles. Eventually, Volkswagen was forced to introduce a new model (the 1500).
In all essentials, however, the company strategy was unchanged. During the early part of the
1960s, the 1500 model helped to take some of the pressure off the company. But consumer tastes
were still moving faster than the company’s response. Although sales held up, increased costs,
together with stiff price competition, were having a severe effect on the company’s profitability.
By the end of the 1960s profits were declining and, in an attempt to find a new way forward,
Volkswagen introduced several new products and acquired some smaller companies – most
notably Auto Union GmbH from Daimler Benz, which later would form the nucleus Audi.
Out of this somewhat rudderless period (Nordhoff had died in 1968), the company eventually
started to find a coherent strategy, with new models formed around the designs emerging from
Audi. More in tune with modern tastes, they were front wheel drive, water-cooled and more stylish

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