business studies

Operations

refers to the business processes that involve transformation and value adding.

• reduce costs 

• improve quality to better satisfy customers

Strategic role

How the operations function helps to achieve the long term goals of the business. This is achieved through product differentiation and cost leadership

Cost leadership

Aiming to have the lowest costs or to be the most price-competitive in the market.

Economies of scale:

Costs advantages created as a result of an increase in scale of business operations. This involves purchasing in bulk to lower the overall cost per unit. 

Good services/differentiation: Goods

• Varying product features

• Varying product quality

• Varying any augmented factors (add-ons or additional benefits. 

E.g. Free car servicing, purchasing additional non-standard features for a new car)

Good services/differentiation: Services

• Varying the amount of time spent on a service

• Varying the level of expertise

• Varying the qualifications and experience of the service provider

• Varying the quality of materials/technology used in service delivery