Types of Competitive Priorities
Competitive priorities are categorized broadly in the below categories:
1. Expertise in Product or Service
Organizations can become the market leaders of products/ services in which they acquire expertise using operational strengths in specific aspects such as process capabilities and functionalities.
2. Fast Delivery Speed/ Time
Customer satisfaction can be obtained by adopting flexible capacity into the production, process, and timely supply. Delivery time or speed is considered an important competitive weapon. Organizations today compete with each other for delivering a better quality of products/ services in a shorter time as much as possible.
So, we can say that this competitive priority’s main focus is on speed i.e. fast delivery and timely delivery. Fast delivery is receiving orders in a much quicker way. On-time or timely delivery is related to the number of times deliveries are done at a given time. One more weapon is development speed that includes the time required to bring a thought process or an idea into the market.
For example, companies such as Amazon and Flipkart, Dominos and Pizza Hut, etc. compete on a delivery time basis because customers prefer fast delivery nowadays and organizations that are able to fulfill their requirements of fast delivery/ service are emerging as industry leaders.
3. Flexibility in Production
To encounter change, an organization is required to develop a capability. The process of adapting the change starts with monitoring the trends of the environment in order to make compatibility with the requirements of the society through environmental scanning. In case competitors have a competitive advantage through widening their product lines, quality improvement, or reducing the cost of products, then, it may lead to a threat to similar products of competing organizations. Moreover, new players offering substitute products in the market may also put competition and challenges. In order to prevent such situations, an organization must build desired flexibility in its production, and also, the necessary modification must be done in operations strategy.
So, we can say that flexibility is also a competitive weapon as it consists of the capability of producing a wide range of products, introducing new products, quick modification of existing products, and fast response to the needs of customers. Operations strategy is addressed by the flexibility that includes a fast response in changing the volume of production. For example, while handling growth-related strategies like expanding into new markets; expansion flexibility connects marketing and operations strategy.
Flexibility is of two types i.e. Volume flexibility and Customization.
Ability, through which acceleration or deceleration of production rate is done in order to handle demand fluctuations, is termed as volume flexibility.
This ability of an organization is related to satisfy the particular requirements of each customer. In this, organizations offer products/ services by allowing better flexibility to customers in choosing products/ services and customize them according to their needs.
For example, Dell, which is a computer technology-based company has created a competitive advantage over its competitors by providing its customers the ability to the customization of the products (such as server hardware), and also, a variety of options are available that customers can choose from.
4. Less Cost-based Production and Processes
In order to meet the competition, it is required to lower down the per-unit cost of each product. Also, organizations must access the cost review on different production costs such as labor, overhead, and material cost. An organization having a sound production system and operations strategy will provide feasibility for reducing costs. This results in eliminating all wastage as well.
One of the major tasks under operations strategy is to ensure the desired level of quality is being maintained and also, customer needs are being fulfilled through it. Different factors that are considered in quality are performance quality, product reliability, low-defect rate, product durability, etc.
For example, the aim of fast-food company McDonald’s is related to maximizing the quality of its products within the available resources or constraints like price and cost constraints. To maintain the consistency level of quality of its products, a production line method is used in McDonald’s. Through this consistency level of quality, the expectations of customers are satisfied.
6. Product Variety and Product Mix
Product mix or product portfolio is considered a whole range of products/ services that an organization offers to its customers. It includes product lines or associated items that customers are supposed to use or look for a similar range of products/ services.
Different organizations produce various products to enhance the experience of customers by providing them variety while choosing products. The size of operations has an important role in this as production costs will be less if the volume is high. So, operations strategy should be aligned as per the product mix of the desired level.
For example, let’s consider a product mix of well known Coca-Cola Company. Suppose, there are two product lines that the company currently operates i.e. Juice and Soft drinks. Different products that fall under the product line of soft drinks are Fanta, Coke, Diet Coke, Sprite, and Coke Zero. On the other side, the Juice product line includes categories such as Orange, Mixed Fruit, Guava, Mango, etc.
In the above case, Coca-Cola’s consistency would be at the upper-end as the whole range of products that are in a product line, comes under a single category i.e. beverage. Also, for each product, channels related to production and distribution would be similar.