To sell their products or services, businesses that make commodities or provide services must be fiercely competitive. They base their operating strategy on a number of dimensions. These factors include price, quality, and flexibility. A corporation can improve its operational strategy and increase its competitiveness in both domestic and international markets by evaluating these factors (Holweg et al., 2018). They show the degree to which a business can develop goods that satisfy the demands of global markets while boosting domestic revenue.
Customers will purchase the good or service at a lower cost if two products have similar quality but different prices. The profitability employed in the market is related to the gap between price and cost, even though pricing is a tool for competition (Chikán et al., 2022). Cost is thus a crucial factor that might enable price reductions while still being advantageous to businesses (Hill, 2020). Some businesses engaged in price competition may be good with a reduced rate of return, but the majority of businesses prioritize lowering the cost of goods or services over accepting lower earnings.
The second important dimension is quality. The ability of a service or item to satisfy customers and fulfill their needs is referred to as quality. Customers will typically pay more or wait longer for a product if it is of higher quality. Since most businesses strive for high quality in their services and products, this factor heavily influences organizational strategy (Hill, 2020). The last dimension, flexibility, refers to the company’s capacity to adapt to client-requested changes (Hill, 2020). A product or service’s design may change, the volume that is required may rise or fall, or there may be other adjustments. The firm’s production system and manufacturing technologies are significantly responsible for the flexibility of the system.
Reference List
Chikán, A., Czakó, E., Kiss-Dobronyi, B. and Losonci, D. (2022) ‘Firm competitiveness: A general model and a manufacturing application’, International Journal of Production Economics, 243(1), pp. 108–116.
Hill, A. (2020) Manufacturing Operations Strategy: Texts and Cases. London: Bloomsbury Publishing.
Holweg, M., Davies, J., De Meyer, A., Lawson, B. and Schmenner, R.W. (2018) Process Theory: The principles of operations management. Oxford: Oxford University Press.