MGT3059 Week 1 Project

Competitive Advantage

After an organization has a good understanding of its position in the marketplace and available opportunities, the

organization can develop the overall organization strategy.

An organization can choose to create a competitive advantage through differentiation, cost, or response. Think

of an organization that uses each of these strategies and you will probably come up with some of the leaders in that industry. For example, Nordstrom has utilized a differentiation strategy in department stores. Nordstrom is

known for a high level of customer service, and customers expect more when shopping there. Walmart is known

for its everyday low prices and cost advantages. McDonald's is known for competing on cost. Amazon has built a

reputation on its response to changes in the marketplace. Through its innovative technology, Amazon can update

its website and information offered to each customer based on previous purchases.

Depending on the overall strategy, there are six speci�c strategies that an operations manager can utilize.  These are: 

Flexibility in design and volume

Low cost

Delivery

Quality

After-sales service

Broad product line

An operations manager must consider all aspects of OM when determining the strategy appropriate for meeting

the overall organization goals. Each aspect will have an impact on the costs of the operations functions. However,

in some cases, customers are willing to pay extra for the products based on a strategy. For example, a high-quality

product with after-sale support may be more worthwhile to a customer to have the peace of mind such a

purchase ensures.

Part of achieving a competitive advantage is designing a process that will deliver a product or service in which people are interested.  When considering process design, it is useful to think of your product or service has being

largely standardized (little variety, as with adhesive bandages) or more easily customizable (lots of variety, as with

how you order a Subway sandwich).  Similarly, it is also helpful to think of the product as being one that is

produced in large numbers (like a Snickers candy bar) or in small batches (as with the production of wedding

cakes).  The Supplemental Media entitled “Process Design Dimensions” goes into greater depth with these two

dimensions of process design. 

Additional Materials

Process Design Dimensions

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