Business Note

Searage Arabi

Operations
role of operations management
• Strategic role of operations management – cost leadership, good/service differentiation
! Cost leadership: aiming to have lowest costs or to be the most cost price competitive in
the market. Although trading with the lowest costs, the overall business should still be
profitable.
o EOS & cost management: cost advantages that can be create as a result of increase
in scale bus operations
! Goods/service differentiation
o Product differentiation: distinguishing products (goods/services) in some way of its
competitors
Product differentiation: Goods
- Varying the actual product features
- Varying product quality: (High/low quality)
- Varying any augmented features: adds on/additional benefits associated with good
Product differentiation: services
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Varying the amount of time spent on a service

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Varying the level of expertise brought to a service

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Varying the qualifications & experience of service
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Varying quality of materials/technology

• goods and/or services in different industries
! Goods in different industries
- Standardized goods: mass produced. Uniform in quality and meet predetermined
level of quality
- Customized goods: varied accordingly to the needs of customers.
- Perishable goods: have short life span, inexpensive& brought on relative basis
(e.g.: fruits and vegetables:
- Non-perishable goods: More durable than perishable goods (e.g.: motor
vehicles, electoral appliance, clothing etc.)
! Services in diff industries
- Can be both customized and standardized
- Customized: legal, medical, accounting services
- Standardized: Visiting a GP
- Self – service: encouraging customer tot take initiative to help themselves

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Searage Arabi

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Interdependence with other key business functions
The Four Main Business Functions
Incorporating:
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Operations:
Manufacturing
Provision of services
Other value adding
Domestic/global

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