Competitive priorities operationalize a company’s competitive strategy
Competitive priorities operationalize a company’s competitive strategy. Cost and differentiation advantages are operationalized in terms of cost, quality, flexibility and speed. The priorities are then used to generate supply objectives related to supplier service and responsiveness consistent with the organization’s strategy.
- Competing on cost
Organizations that compete on cost try as much as possible to pursue the elimination of all waste. In the past generations, firms in this category produced standardized products for large markets. With time, they stabilized production process and improved yield. Currently, the cost structure is analyzed for the entire reduction potential. For example, Southwest Airlines has used a low-cost strategy to support their design of service and to promote efficiency in operations and committed personnel. It only uses the Boeing 737 type or airline to facilitate crew changes and streamline training. It also helps them in reducing inventory costs, maintenance and record-keeping.
- Competing on quality
Majority of businesses use quality as a defensive or reactive mode. Quality is limited to meeting some design specifications or minimizing defect rates. For firms to benefit from quality, they must take it as an opportunity to please their customers. It should not be a means of reducing rework costs, and a means to avoid problems. For example, the Ritz-Carlton hotel company is a quality award winner. It is a recognized symbol of quality. The hotel’s system is designed to understand the expectations of more than half a million customer base globally. The employees are trained to strive to meet the customers‘ needs. Their processes are well defined and uniform. As a result, they have attracted a vast customer base hence growth.
- Competing on flexibility
Flexibility has become a competitive weapon to respond to variations that have come up in production. Flexibility enables an organization to produce a wide variety of products, modify existing ones react to customer needs quickly and introduce new products to the market. Examples of an organization that has successfully competed on flexibility include Anderson Windows. Anderson Windows used to produce a limited number of products. When customers demanded uniqueness, Anderson introduced more options to their standard windows. The number of products produced increased from 28,000 to 86,000. This allowed customers to combine thousands of options available.
- Competing on speed
Today, speed is a significant source of competition. The overdependence of the internet has made customers expect immediate response and rapid delivery. Organizations have realized that rate is a critical component in businesses, and they are embracing it. McDonalds’ and Poslaju have always competed on speed.
Technologies help organizations to meet the needs of customers by helping service and manufacturing processes operate efficiently. It has completely changed how work is accomplished in every industry. Technology is a competitive necessity in manufacturing and innovation.
- Hard technology – this refers to equipment and devices that undertake various tasks to create and deliver goods and services.
- Soft technology – soft technology is the application of information, the internet, computer software and analysis to facilitate the process of creating and delivering goods and services.
For example, Bench Limited has used technology to offer solutions to bookkeeping and other accountant tasks every day. It is a company with intuitive software that does bookkeeping for customers. Most businesses find it challenging to take bookkeeping tasks effectively. Businesses make sure that they do not go over their budget for them to realize profits. Bookkeeping is not only essential, but it can also take up a lot of time. Some people do not even know how to do bookkeeping correctly. The organization has a technology that provides a 401(k) option to bookkeeping employees or personnel. It also helps employees to enrol and start saving for their retirement.