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CHAPTER 2: OPERATIONS STRATEGY AND MANAGEMENT
2.1 Objective
This chapter is the second of the first module on “Process Management and Strategy.” Whereas chapter 1
focused on the process view of operations, this chapter focuses on the strategic role that operations and
processes play in the overall enterprise.
We start out with a brief summary of what strategy is in section 2.1. We emphasize how we can represent
strategic positioning and the idea of differentiation by using the competitive product space (building on
the product attributes defined in Chapter 1). We have found this graphical representation very powerful.
strategic fit can be achived when a firm is trying to serve customers with varying (and potentially
conflicting) needs. The case discusses how customer needs vary based on the life cycle position of
products and how Wriston can achieve strategic fit by having some part of its process focus on
complexity (high variety and low volumes) while the rest of the process focuses on simplicity (high
volumes and low variety). Once the corporate strategy is in place (strategic position is defined),
operations strategy is finished (a process structure has been chosen and implemented), one must manage
the process. The concept of the operations frontier is very powerful to distinguish operational
2.2 Additional Suggested Readings
For this chapter, we assign two cases with following suggested assignment questions:
1. Why do overhead costs (Exhibit 2) vary so greatly from plant to plant in Wriston Manufacturing’s
network?
2. Why have managers in the Heavy Equipment Division under-invested in the Detroit Plant?
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3. What do your recommend should be done with the Detroit Plant? Justify your recommendation.