How can Operation Strategy be used to understand and exploit a particular offering?
Operations strategy “determines how and where a product or service is to be manufactured, the level of vertical integration in the production process, the deployment of physical resources, and relationships with suppliers”. The operation strategy should be used with the focus on product life cycle. In industry where product life cycle is short such as technology, the operation strategy should be flexible and adaptive to changes. On the other hand, for products with longer life cycle , especially the standardized products, the flexibility gives way to efficiency. Then the operation strategy has to be written with long-term view of the company’s products and values.
Mass-production is no longer the most efficient and cheapest way to produce a large number of low-cost standardized goods, because it does not creates values for customers. Mass-customization is instead the new and preferred method of production. Customization allows consumers to create values by making choices of features of products. Having options to create what the customers exactly want creates the value. Therefore, depending on the product life cycle and target customers segment, the company can choose the right operations strategy by focusing on long-term value creation.