Now Its Now
2
Operations Strategy
Defining how firms compete
Chapter Objectives
•
Introduce the concept of operations strategy and its various components, and show how it relates to the overall business strategy of the firm.
•
Illustrate how operations strategy pertains to adding value for the customer. •
Identify the different ways in which operations strategy can provide an organization with a competitive advantage.
•
Introduce the concept of trade-offs between different strategies and the need for a firm to align its operations strategy to meet the needs of the particular markets it is serving.
•
Explain the difference between order-qualifiers and order-winners as they pertain to operations strategy.
•
Describe how firms are integrating manufacturing and services to provide an overall “bundle of benefits” to their customers.
STEELMAKER DOFASCO DOES
A TURNAROUND THROUGH
STRATEGIC REFOCUSING
It is no secret that Canadian steelmakers are under pressure. The industry is increasingly facing competition from steelmakers in developing countries such as Brazil, China, and
India where labour costs are low. While some other Canadian steel makers struggle, Hamiltonbased Dofasco, in business since 1912, has turned around its losses from a decade ago through a revised strategy. The company also owns or has partial ownership in facilities in the
United States and Mexico.
Until the late 1980s, the company competed on price by producing as much steel as possible at the lowest possible prices. However by the early 1990s increased competition resulted in Dofasco not being able to compete profitably. As a result, by 1992 it found itself in debt and losing money.
Realizing that the current “competing on cost” strategy (cost leadership) was untenable,
Dofasco refocused its strategy to developing new and innovative products, and to providing its customers with solutions for high-quality and specialized applications (product
Operations Strategy
Defining how firms compete
Chapter Objectives
•
Introduce the concept of operations strategy and its various components, and show how it relates to the overall business strategy of the firm.
•
Illustrate how operations strategy pertains to adding value for the customer. •
Identify the different ways in which operations strategy can provide an organization with a competitive advantage.
•
Introduce the concept of trade-offs between different strategies and the need for a firm to align its operations strategy to meet the needs of the particular markets it is serving.
•
Explain the difference between order-qualifiers and order-winners as they pertain to operations strategy.
•
Describe how firms are integrating manufacturing and services to provide an overall “bundle of benefits” to their customers.
STEELMAKER DOFASCO DOES
A TURNAROUND THROUGH
STRATEGIC REFOCUSING
It is no secret that Canadian steelmakers are under pressure. The industry is increasingly facing competition from steelmakers in developing countries such as Brazil, China, and
India where labour costs are low. While some other Canadian steel makers struggle, Hamiltonbased Dofasco, in business since 1912, has turned around its losses from a decade ago through a revised strategy. The company also owns or has partial ownership in facilities in the
United States and Mexico.
Until the late 1980s, the company competed on price by producing as much steel as possible at the lowest possible prices. However by the early 1990s increased competition resulted in Dofasco not being able to compete profitably. As a result, by 1992 it found itself in debt and losing money.
Realizing that the current “competing on cost” strategy (cost leadership) was untenable,
Dofasco refocused its strategy to developing new and innovative products, and to providing its customers with solutions for high-quality and specialized applications (product