organization management
How Effective Management of Operations Contributes To Competitive Advantage at Giordano
Globalization, fierce competition, and unpredictable changes in customer tastes are some of the issues that threaten the future of many companies. Companies need to manage their operations effectively to counteract the effects of these market forces and gain competitive advantage.
Competitive advantage has been defined as something that a company does particularly well (David, 2011, p. 9). This means possessing a unique resource, capability, or technology. Porter (1985) pioneered the view that competitive advantage is best achieved through the activities, or operations, of a company because a certain configuration of activities is difficult to imitate, unlike assets, which rivals could easily acquire. Russell and Taylor (2011, p. 18) supported this view by stating that processes, not products, give a company competitive advantage. Pieterson (2010) defined competitive advantage as the gap between value, as perceived by customers, and cost incurred in delivering that value. Since value is created through operations, effective management of operations represents the greatest potential for achieving competitive advantage.
Operations refer to the activities that transform inputs such as raw materials or information into outputs that customers value (Russell & Taylor, 2011). Operations determine how well a company satisfies its customers. Operations management refers to the design and improvement of the systems used to create the company’s goods and services (Russell & Taylor, 2011; Open University, 2013). Operations management encompasses decisions about product design, product quality, work processes, facilities, procurement, and personnel motivation. Whether a company competes on cost, quality, or differentiation, operations elements can be adjusted to meet these goals.
Giordano is an apparel retailer founded in 1981 in Hong Kong (giordano.com.hk). Its brands include Giordano
Globalization, fierce competition, and unpredictable changes in customer tastes are some of the issues that threaten the future of many companies. Companies need to manage their operations effectively to counteract the effects of these market forces and gain competitive advantage.
Competitive advantage has been defined as something that a company does particularly well (David, 2011, p. 9). This means possessing a unique resource, capability, or technology. Porter (1985) pioneered the view that competitive advantage is best achieved through the activities, or operations, of a company because a certain configuration of activities is difficult to imitate, unlike assets, which rivals could easily acquire. Russell and Taylor (2011, p. 18) supported this view by stating that processes, not products, give a company competitive advantage. Pieterson (2010) defined competitive advantage as the gap between value, as perceived by customers, and cost incurred in delivering that value. Since value is created through operations, effective management of operations represents the greatest potential for achieving competitive advantage.
Operations refer to the activities that transform inputs such as raw materials or information into outputs that customers value (Russell & Taylor, 2011). Operations determine how well a company satisfies its customers. Operations management refers to the design and improvement of the systems used to create the company’s goods and services (Russell & Taylor, 2011; Open University, 2013). Operations management encompasses decisions about product design, product quality, work processes, facilities, procurement, and personnel motivation. Whether a company competes on cost, quality, or differentiation, operations elements can be adjusted to meet these goals.
Giordano is an apparel retailer founded in 1981 in Hong Kong (giordano.com.hk). Its brands include Giordano
References: Barnes, D. (2007). Operations Management. London: Thomson Learning Brown, S., Blackmon, K., Cousins, P., & Maylor, H. (2001). Operations Management: Policy, Practice and Performance Improvement. Oxford: Heinemann David, F. R. (2011). Strategic Management: Concepts and Cases. Upper Saddle River, NJ: Pearson Open University (2013). Understanding operations management.[online] Available from: http://www.open.edu [Accessed 25th November 2013] Pieterson, W. (2010). Defining competitive advantage: how much more value do you deliver than your competitors? European Business Review. Available from: http://europeanbusinessreview.com [Accessed 25th November 2013] Porter, M. E. (1985). Competitive Advantage Creating and Sustaining Superior Performance. New York, NY: Free Press Russell, R. S. & Taylor B. W. (2011). Operations Management Creating Value Along the Supply Chain. Hoboken, NJ: Wiley