CHAPTER 2

OPERATIONS STRATEGY & COMPETITIVENESS

Introduction to operations strategy
Strategy formulation is the development of long-range plans for the effective management of
environmental opportunities and threats, in light of corporate strengths and weaknesses (SWOT).
It includes defining the corporate mission, specifying achievable objectives, developing
strategies, and setting policy guidelines.
Mission
An organization’s mission is the purpose or reason for the organization’s existence. It tells what
the company is providing to society—either a service such as housecleaning or a product such as
automobiles. A well-conceived mission statement defines the fundamental, unique purpose that
sets a company apart from other firms of its type and identifies the scope or domain of the
company’s operations in terms of products (including services) offered and markets served.
Research reveals that firms with mission statements containing explicit descriptions of customers
served and technologies used have significantly higher growth than firms without such
statements. A mission statement may also include the firm’s values and philosophy about how it
does business and treats its employees. It puts into words not only what the company is now but
what it wants to become—management’s strategic vision of the firm’s future. The mission
statement promotes a sense of shared expectations in employees and communicates a public
image to important stakeholder groups in the company’s task environment.
Some people like to consider vision and mission as two different concepts: Mission describes
what the organization is now; vision describes what the organization would like to become. We
prefer to combine these ideas into a single mission statement.
Objectives
Goals/Objectives are the end results of planned activity. They should be stated as action verbs
and tell what is to be accomplished by when and quantified if possible. The achievement of
corporate objectives should result in the fulfillment of a corporation’s mission. In effect, this is
what society gives back to the corporation when the corporation does a good job of fulfilling its
mission. The term goal is often used interchangeably with the term objective.
Some of the areas in which a corporation might establish its goals/objectives are:
 Profitability (net profits)
 Efficiency (low costs, etc.)
 Growth (increase in total assets, sales, etc.)
 Shareholder wealth (dividends plus stock price appreciation)
 Utilization of resources (ROE or ROI)
 Reputation (being considered a “top” firm)
 Contributions to employees (employment security, wages, diversity)
 Contributions to society (taxes paid, participation in charities, providing a needed product
or service)
 Market leadership (market share)

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  Technological leadership (innovations, creativity)
 Survival (avoiding bankruptcy)
 Personal needs of top management (using the firm for personal purposes, such as
providing jobs for relatives)
Strategies
A strategy of a corporation forms a comprehensive master plan that states how the corporation
will achieve its mission and objectives. It maximizes competitive advantage and minimizes
competitive disadvantage. For example, even though Cadbury Schweppes was a major competitor
in confectionary and soft drinks, it was not likely to achieve its challenging objective of
significantly increasing its profit margin within four years without making a major change in
strategy. Management therefore decided to cut costs by closing 33 factories and reducing staff by
10%. It also made the strategic decision to concentrate on the confectionary business by divesting
its less-profitable Dr. Pepper/Snapple soft drinks unit.
Management was also considering acquisitions as a means of building on its existing strengths in
confectionary by purchasing either Kraft’s confectionary unit or the Hershey Company.
The typical business firm usually considers three types of strategy: corporate, business, and
functional.
1. Corporate strategy describes a company’s overall direction in terms of its general attitude
toward growth and the management of its various businesses and product lines. Corporate
strategies typically fit within the three main categories of stability, growth, and retrenchment.
2. Business strategy usually occurs at the business unit or product level, and it emphasizes
improvement of the competitive position of a corporation’s products or services in the specific
industry or market segment served by that business unit. The role of each of the individual
functional strategies, such as operations, finance, and marketing, is to find ways to best support
the business strategy. Just as the players on a football team support the team’s strategy, the role of
everyone in the company is to do his or her job in a way that supports the business strategy. In
today’s highly competitive, Internet based, and global marketplace, it is more important than ever
for companies to have a clear plan for achieving their goals.
3. Functional strategy is the approach taken by a functional area to achieve corporate and
business unit objectives and strategies by maximizing resource productivity. It includes three
types of strategies (i.e Marketing Strategy-it defines marketing plans to support the business
strategy, Finance Strategy-it develops financial plans to support the business strategy,
Operations Strategy- it develops a plan for the operations function to support the business
strategy). It is concerned with developing and nurturing a distinctive competence to provide a
company or business unit with a competitive advantage..
Business firms use all three types of strategy simultaneously. A hierarchy of strategy is a
grouping of strategy types by level in the organization. Hierarchy of strategy is a nesting of one
strategy within another so that they complement and support one another. Functional strategies
support business strategies, which, in turn, support the corporate strategy(ies).

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 Corporate strategy

Business strategy

Functional strategy

marketing operations Finance

strategy strategy strategy

Figure 2-1: the three types of strategy: corporate, business, and functional.

The role of operations strategy

Operations strategy is narrower in scope, dealing primarily with the operations aspect of the
organization. Operations strategy relates to products, processes, methods, operating resources,
quality, costs, lead times, and scheduling. The role of operations strategy is to provide a plan for
the operations function so that it can make the best use of its resources. Operations strategy
specifies the policies and plans for using the organization’s resources to support its long-term
competitive strategy. The role of operations strategy is to provide a long-range plan for the use
of the company's resources in producing the company's primary goods and services.
Remember that the operations function is responsible for managing the resources needed to
produce the company’s products or services. Operations strategy is the plan that specifies the
design and use of these resources to support the business strategy. This includes the location, size,
and type of facilities available; worker skills and talents required; use of technology, special
processes needed, special equipment; and quality control methods. It is the role of operations
strategy to provide an overall plan for the use of all these resources. The operations strategy must
be aligned with the company’s business strategy and enable the company to achieve its long-term
plan.
Mission and strategies
An organization’s mission is the reason for its existence. It is expressed in its mission statement.
For a business organization, the mission statement should answer the question “What business are
we in?” Missions vary from organization to organization, depending on the nature of their
business. A mission statement serves as the basis for organizational goals, which provide more
detail and describe the scope of the mission. The mission and goals often relate to how an
organization wants to be perceived by the general public, and by its employees, suppliers, and
customers.

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Goals serve as a foundation for the development of organizational strategies. These, in turn,
provide the basis for strategies and tactics of the functional units of the organization.
Organizational strategy is important because it guides the organization by providing direction for,
and alignment of, the goals and strategies of the functional units. Moreover, strategies can be the
main reason for the success or failure of an organization.
Strategies and Tactics
If you think of goals as destinations, then strategies are the roadmaps for reaching the
destinations.
Strategies provide focus for decision making. Tactics are the methods and actions used to
accomplish strategies. They are more specific than strategies, and they provide guidance and
direction for carrying out actual operations, which need the most specific and detailed plans and
decision making in an organization. You might think of tactics as the “how to” part of the process
(e.g., how to reach the destination, following the strategy roadmap) and operations as the actual
“doing” part of the process.
Operations Strategy in Services
Strategies in pure service organization face some difficulties that are often less sever for
manufacturing firms. For example:
There are fewer entry barriers.
There are no inventories to stock pile against fluctuating demands.
Because services are often abstract, pricing policies may be at extreme variance from
costs, and rarely allow a fair compensation between firms.
Because services have high customer contact, the quality of the service is often based on
the perception of the customer.
Services are labor intensive limiting the use of equipment based strategies.
Location is important factor in service.
Personnel are a major part the service process. If they leave, the strategy may be undone.

As with manufacturing, service operations require a strategic approach. Metters, King-

Metters, Pullman and Walton describe the strategic planning process as a hierarchy consisting of
strategic positioning, service strategy, and tactical execution.
Strategic positioning involves first defining the firm's target market. In other words, what is the
set of customers the firm seek to serve. Next, the firm must determine its core competence or
what will distinguish it from other service firms, i.e., cost leadership, differentiation, or focus. At
this point, the firm then must make decisions regarding its mission and high-level goals and
objectives.
At the service strategy level, the service firm must define its service concept, operating system
and service delivery system. The service strategy links the firm's strategic position with tactical
execution. The firm begins by determining its competitive priorities, and its order winners and
order qualifiers. Competitive priorities are the characteristics of the firm or things that it does
better than other service firms (e.g., low cost, quality, service, or flexibility). The firm's
competitive priority(s) must be both an order qualifier and an order winner. The order qualifier is

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a characteristic that the service must possess in order to compete in the market. If the firm lacks
this then the consumer will not even consider purchasing the firm's service. The order winner is
the characteristic that will cause the consumer to purchase the firm's service over its competitors.
The service concept then is the set of competitive priorities that the target market values.
The operating strategy describes how the firm's different functions (marketing, finance, and
operations) will support the service concept. If the firm's order winning competitive priority is
quality, what will operations do to ensure quality of the service and how will marketing promote
this characteristic?
The service delivery system defines the components of the system necessary to execute the
service concept. Examples of the needed variables are capacity requirements, quality
management systems, and management policies. Each of these should support the firm's
competitive priorities so that the firm is clearly distinct from its competitors.
Finally, the firm approaches tactical execution issues. Tactical execution involves the day-to-day
activities required to function and support the service strategy. Included are capacity
management, facility location, inventory management, facility layout, supplier selection,
operations scheduling, staffing, and productivity improvement.
Operations Strategy in Manufacturing
The main objectives of manufacturing strategy development is to translate required competitive
dimensions (typically obtained from marketing) into specific performance requirements for
operations and to make the plans necessary to ensure that operations (and enterprise) capabilities
are sufficient to accomplish them . The steps for prioritizing these dimensions are as follows:
1. Segment the market according to the product group.
2. Identify the product requirements, and profit margins of each group.
3. Determine the order winners and order qualifiers
4. Convert order winners into specific performance requirements.
The process of achieving a satisfactory manufacturing segmentation that maintains focus is often
a matter of deciding which products or product groups fit together in the sense that they have
similar market performance characteristics or place similar demands on the manufacturing
system.
Operations Competitiveness
Companies must be competitive to sell their goods and services in the marketplace.
Competitiveness is an important factor in determining whether a company prospers, barely gets
by, or fails. Business organizations compete through some combination of price, delivery time,
and product or service differentiation.
Marketing influences competitiveness in several ways, including identifying consumer wants and
needs, pricing, and advertising and promotion.
1. Identifying consumer wants and/or needs is a basic input in an organization’s decision-
making process, and central to competitiveness. The ideal is to achieve a perfect match
between those wants and needs and the organization’s goods and/or services.
2. Price and quality are key factors in consumer buying decisions. It is important to
understand the trade-off decision consumers make between price and quality.
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 3. Advertising and promotion are ways organizations can inform potential customers about
features of their products or services, and attract buyers.
Operations has a major influence on competitiveness through product and service design, cost,
location, quality, response time, flexibility, inventory and supply chain management, and service.
Many of these are interrelated.
1. Product and service design should reflect joint efforts of many areas of the firm to achieve
a match between financial resources, operations capabilities, supply chain capabilities, and
consumer wants and needs. Special characteristics or features of a product or service can be
a key factor in consumer buying decisions. Other key factors include innovation and the
time-to-market for new products and services.
2. Cost of an organization’s output is a key variable that affects pricing decisions and profits.
Cost-reduction efforts are generally ongoing in business organizations. Productivity is an
important determinant of cost. Organizations with higher productivity rates than their
competitors have a competitive cost advantage. A company may outsource a portion of its
operation to achieve lower costs, higher productivity, or better quality.
3. Location can be important in terms of cost and convenience for customers. Location near
inputs can result in lower input costs. Location near markets can result in lower
transportation costs and quicker delivery times. Convenient location is particularly important
in the retail sector.
4. Quality refers to materials, workmanship, design, and service. Consumers judge quality in
terms of how well they think a product or service will satisfy its intended purpose.
Customers are generally willing to pay more for a product or service if they perceive the
product or service has a higher quality than that of a competitor.
5. Quick response can be a competitive advantage. One way is quickly bringing new or
improved products or services to the market. Another is being able to quickly deliver
existing products and services to a customer after they are ordered, and still another is
quickly handling customer complaints.
6. Flexibility is the ability to respond to changes. Changes might relate to alterations in design
features of a product or service, or to the volume demanded by customers, or the mix of
products or services offered by an organization. High flexibility can be a competitive
advantage in a changeable environment.
7. Inventory management can be a competitive advantage by effectively matching supplies of
goods with demand.
8. Supply chain management involves coordinating internal and external operations (buyers
and suppliers) to achieve timely and cost-effective delivery of goods throughout the system.
9. Service might involve after-sale activities customers perceive as value-added, such as
delivery, setup, warranty work, and technical support. Or it might involve extra attention
while work is in progress, such as courtesy, keeping the customer informed, and attention to
details. Service quality can be a key differentiator; and it is one that is often sustainable.
Moreover, businesses rated highly by their customers for service quality tend to be more
profitable, and grow faster, than businesses that are not rated highly.
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 10. Managers and workers are the people at the heart and soul of an organization, and if they
are competent and motivated, they can provide a distinct competitive edge by their skills and
the ideas they create. One often overlooked skill is answering the telephone.
How complaint calls or requests for information are handled can be a positive or a negative. If a
person answering is rude or not helpful, that can produce a negative image. Conversely, if calls
are handled promptly and cheerfully, that can produce a positive image and, potentially, a
competitive advantage.
The operations strategy relates the business strategy to the operations function. It focuses on
specific capabilities of the operation that give the company a competitive edge. These
capabilities are called competitive priorities. By excelling in one of these capabilities, a
company can become a winner in its market.
The operations strategy relates the business strategy to the operations function. It focuses on
specific capabilities of the operation that give the company a competitive edge. These capabilities
are called competitive priorities. Competitive priorities is capabilities that the operations
function can develop in order to give a company a competitive advantage in its market. By
excelling in one of these capabilities, a company can become a winner in its market.
Competitive Priorities
Operations managers must work closely with marketing in order to understand the competitive
situation in the company’s market before they can determine which competitive priorities are
important. There are four broad categories of competitive priorities:
1. Cost:- is a competitive priority focusing on low cost. Competing based on cost means offering
a product at a low price relative to the prices of competing products. The need for this type of
competition emerges from the business strategy. The role of the operations strategy is to develop
a plan for the use of resources to support this type of competition. Let’s look at some specific
characteristics of the operations function we might find in a company competing on cost. To
develop this competitive priority, the operations function must focus primarily on cutting costs in
the system, such as costs of labor, materials, and facilities. Companies that compete based on cost
study their operations system carefully to eliminate all waste. They might offer extra training to
employees to maximize their productivity and minimize scrap. Also, they might invest in
automation in order to increase productivity. Generally, companies that compete based on cost
offer a narrow range of products and product features, allow for little customization, and have an
operations process that is designed to be as efficient as possible.
2. Quality: is a competitive priority focusing on product and service quality. Many companies
claim that quality is their top priority, and many customers say that they look for quality in the
products they buy. Yet quality has a subjective meaning; it depends on who is defining it. For
example, to one person quality could mean that the product lasts a long time, such as a Volvo, a
car known for its longevity. To another person quality might mean high performance, such as a
BMW.
When companies focus on quality as a competitive priority, they are focusing on the dimensions
of quality that are considered important by their customers. Quality as a competitive priority has
two dimensions. The first is high performance design. This means that the operations function
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will be designed to focus on aspects of quality such as superior features, close tolerances, high
durability, and excellent customer service. The second dimension is product and service
consistency, which measures how often the product or service meets the exact design
specifications. A good example of product consistency is McDonald’s, where we know we can
get the same product every time at any location. Companies that compete on quality must deliver
not only high-performance design but product and service consistency as well.
A company that competes on this dimension needs to implement quality in every area of the
organization. One of the first aspects that need to be addressed is product design quality, which
involves making sure the product meets the requirements of the customer. A second aspect is
process quality, which deals with designing a process to produce error-free products. This
includes focusing on equipment, workers, materials, and every other aspect of the operation to
make sure it works the way it is supposed to. Companies that compete based on quality have to
address both of these issues: the product must be designed to meet customer needs, and the
process must produce the product exactly as it is designed. To see why product and process
quality are both important, let’s say that your favorite fast-food restaurant has designed a new
sandwich called the “Big Yuck.” The restaurant could design a process that produces a perfect
“Big Yuck” every single time. But if customers find the “Big Yuck” unappealing, they will not
buy it. The same would be true if the restaurant designed a sandwich called the “Super Delicious”
to meet the desires of its customers. Even if the “Super Delicious” was exactly what the
customers wanted, if the process did not produce the sandwich the way it was designed, often
making it soggy and cold instead, customers would not buy it. Remember that the product needs
to be designed to meet customer wants and needs, and the process needs to be designed to
produce the exact product that was intended, consistently without error.
3. Time:- is a competitive priority focusing on speed and on-time delivery. Time or speed is one
of the most important competitive priorities today. Companies in all industries are competing to
deliver high-quality products in as short a time as possible. Today’s customers don’t want to wait,
and companies that can meet their need for fast service are becoming leaders in their industries.
Making time a competitive priority means competing based on all time-related issues, such as
rapid delivery and on-time delivery. Rapid delivery refers to how quickly an order is received;
on-time delivery refers to the number of times deliveries are made on time. When time is a
competitive priority, the job of the operations function is to critically analyze the system and
combine or eliminate processes in order to save time. Often companies use technology to speed
up processes, rely on a flexible workforce to meet peak demand periods, and eliminate
unnecessary steps in the production process. 4. Flexibility:- is a competitive priority focusing on
offering a wide variety of products or services. As a company’s environment changes rapidly,
including customer needs and expectations, the ability to readily accommodate these changes can
be a winning strategy. This is flexibility. There are two dimensions of flexibility. One is the
ability to offer a wide variety of products or services and customize them to the unique needs of
clients. This is called product flexibility. A flexible system can quickly add new products that
may be important to customers or easily drop a product that is not doing well. Another aspect of

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flexibility is the ability to rapidly increase or decrease the amount produced in order to
accommodate changes in the demand. This is called volume flexibility.
Companies that compete based on flexibility often cannot compete based on speed, because it
generally requires more time to produce a customized product. Also, flexible companies typically
do not compete based on cost, because it may take more resources to customize the product.
However, flexible companies often offer greater customer service and can meet unique customer
requirements. To carry out this strategy, flexible companies tend to have more general-purpose
equipment that can be used to make many different kinds of products. Also, workers in flexible
companies tend to have higher skill levels and can often perform many different tasks in order to
meet customer needs.
Why Not Focus on All Priorities?
You may be wondering why the operations function needs to give special focus to some priorities
and not all. Aren’t all the priorities important? The reason is that as more resources are dedicated
toward one priority, fewer resources are left for others. This is called a trade-off. Trade-off is
the need to focus more on one competitive priority than on others. For example, XYZ restaurant
might be known for making a “home-made” pizza with the freshest ingredients. However,
because of the ingredients they use, they may not be able to offer the pizza at the lowest price.
Also, since they are making each pizza individually, they may not be able to produce pizzas very
quickly. So they have had to make a trade-off.
It is important to know that any business must achieve a basic level of each of these priorities. In
XYZ pizza example, even though they are not competing based on price, they still cannot offer
the pizza at such a high price that customers would not want to pay for it. Also, even though they
are not competing based on time, they still have to produce the pizza within a reasonable amount
of time; otherwise, customers will not be willing to wait for it. To help them decide which
competitive priorities to focus on, we can distinguish between order winners and order
qualifiers. Order qualifiers are those characteristics that potential customers perceive as
minimum standards of acceptability for a product to be considered for purchase. However, that
may not be sufficient to get a potential customer to purchase from the organization. Order
winners are those characteristics of an organization’s goods or services that cause them to be
perceived as better than the competition.
Order qualifiers are Competitive priorities that must be met for a company to qualify as a
competitor in the marketplace. They are those characteristics that potential customers perceive as
minimum standards of acceptability for a product to be considered for purchase. However, that
may not be sufficient to get a potential customer to purchase from the organization. Order
winners are competitive priorities that win orders in the marketplace. They are those
characteristics of an organization’s goods or services that cause them to be perceived as better
than the competition. Characteristics such as price, delivery reliability, delivery speed, and
quality can be order qualifiers or order winners. Thus, quality may be an order winner in some
situations, but in others only an order qualifier. Over time, a characteristic that was once an order
winner may become an order qualifier, and vice versa.

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Obviously, it is important to determine the set of order qualifier characteristics and the set of
order winner characteristics. It is also necessary to decide on the relative importance of each
characteristic so that appropriate attention can be given to the various characteristics. Marketing
must make that determination and communicate it to operations.

Using XYZ pizza example, order qualifiers might be low price (say, less than Birr40.00) and
quick delivery (say, under 15 minutes), because this is a standard that has been set by competing
pizza restaurants. Their order winner may be “fresh ingredients” and “home-made taste.” This
may be what makes them different from all the other pizza restaurants. Knowing the order
winners and order qualifiers in a particular market is critical to focusing on the right competitive
priorities.
Translating Competitive Priorities into Production Requirements
Operations strategy makes the needs of the business strategy specific to the operations function
by focusing on the right competitive priorities. Once the competitive priorities have been
identified, a plan is developed to support those priorities. The operations strategy will specify the
design and use of the organization’s resources; that is, it will set forth specific operations
requirements. These can be broken down into two categories:
1. Structure—Operations decisions related to the design of the production process, such as
characteristics of facilities used, selection of appropriate technology, and the flow of
goods and services through the facility.
2. Infrastructure—Operations decisions related to the planning and control systems of the
operation, such as the organization of the operations function, the skills and pay of
workers, and quality control approaches.
Together, the structure and infrastructure of the production process determine the nature of the
company’s operations function.
The structure and infrastructure of the production process must be aligned to enable the company
to pursue its long-term plan. Suppose we determined that time or speed of delivery is the order
winner in the marketplace and the competitive priority we need to focus on. We would then
design the production process to promote speedy product delivery. This might mean having a
system that does not necessarily produce the product at the absolutely lowest cost, possibly
because we need costlier or extra equipment to help us focus on speed. The important thing is that
every aspect of production of a product or delivery of a service needs to focus on supporting the
competitive priority. However, we cannot neglect the other competitive priorities. A certain level
of order qualifiers must be achieved just to remain in the market. The issue is not one of focusing
on one priority to the exclusion of the others. Rather, it is a matter of degree.
Note:- By now you should have a clear understanding of how an operations strategy is developed
and its role in helping the organization decide which competitive priorities to focus on. There are
four categories of competitive priorities: cost, quality, time, and flexibility. A company must make
trade-offs in deciding which priorities to focus on. The operations strategy and the competitive
priorities dictate the design and plan for the operations function, which includes the structure and
infrastructure of the operation. This is a dynamic process, and as the environment changes, the
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organization must be prepared to change accordingly. Operations strategy plays a key role in an
organization’s ability to compete.
Why Some Organizations Fail
Organizations fail, or perform poorly, for a variety of reasons. Being aware of those reasons can
help managers avoid making similar mistakes. Among the chief reasons are the following:
 Neglecting operations strategy.
 Failing to take advantage of strengths and opportunities, and/or failing to recognize
competitive threats.
 Putting too much emphasis on short-term financial performance at the expense of research
and development.
 Placing too much emphasis on product and service design and not enough on process design
and improvement.
 Neglecting investments in capital and human resources.
 Failing to establish good internal communications and cooperation among different
functional areas.
 Failing to consider customer wants and needs.
The key to successfully competing is to determine what customers want and then directing
efforts toward meeting (or even exceeding) customer expectations. Two basic issues must be
addressed. First: What do the customers want? (Which items on the preceding list of the ways
business organizations compete are important to customers?) Second: What is the best way to
satisfy those wants? Operations must work with marketing to obtain information on the relative
importance of the various items to each major customer or target market. Understanding
competitive issues can help managers develop successful strategies.
Operation Competitive Dimensions
Competitiveness: how effectively an organization meets the needs and wants of customers
relative to others that offer similar products (goods and services).
Distinctive competencies- are those special attributes or abilities possessed by an organization
that give it a competitive edge.
The major competitive dimensions that form the competitive position of a company include:
1. Cost “make it cheap”
To successfully compete in niche markets, affirm must be the low cost producer, but even
doing this does not always guarantee profitability and success. It is more applicable When
customers are highly price sensitive, in commodity market.
2. Product quality and reliability ”make it good”
Quality can be divided into product quality and process quality. Consistent quality
3. Delivery speed “make it fast”
A company’s ability to deliver more quickly than its competitors may be critical. Example
rapid delivery Mc Donald restaurant, express mail.
4. Delivery reliability” delivered it when promised”

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 Relates to the ability of the firm to supply the product or services on or before promised
delivery due date. Example, express mail.
5. Coping with changes in demand “change its volume”
The ability of the firm to respond to increases and decreases in demand.
There are two types of changes in demand
 Increase in demand: preferable than decrease in demand because, unit cost
decreases as out put level increases due to economies of scale.
 Decrease in demand: challenging (difficult) because, it affects social welfare of
employees, laying off, early retirement, there will be idle resources, and the like.
6. Flexibility and new product introduction” change it”
It focuses on fashion design. The time required for the company to develop a new product
and to convert its process to offer the new product is very important. Flexibility is the
ability of a company to offer a wide variety of products to its customers. Flexibility is
more applicable when the product life cycle is short.
7. Other product specific criteria “support it”
Greater warranty, installation, after sale service, financing, maintenance

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