Operational Objectives Central to Strategy
When you facilitate the strategic planning process, you focus on six basic objectives for the corporation (Birnbaum, 128):
- Financial
- Marketing/sales
- Product/services
- Operations
- Human resources
- Community.
It's a good list as it includes all the obvious objectives you might want to form. Consider making a couple objectives under each major category and you're done. That's simple. Sometimes things are forgotten. Marketing always seems to come first as it drives the top line. Operations is melded into human resources in today's environment as your objective many times is to reduce the head count to increase efficiency. That head-count reduction might have worked over the last eighteen months, but by now it is wearing thin, as are your worn out employees. You could lean on your suppliers to reduce costs, or convert to a quality system of some sort that focuses, for instance, on continuous improvement. I'm thinking those are nice strategies, but didn't we take care of them in the eighties? What do we do now in operations?
There's a picture of an Chrysler automobile manufacturing line that says it all (Simpson, 280). It shows three seemingly different models of Chryslers (two Grand Cherokees, a Chrysler 300C, and a Chrysler Voyager) all going down the same production line. Chrysler, although late to the flexible manufacturing game, is following a platform strategy, that of focusing on the commonalities in a group of products in order to cross-pollinate each of the products with like parts and processes. They do it to save costs and therefore increase profitability.
So, where does platform strategy fit into your strategic plan? Under marketing and product objectives, you might consider what products you are going to manufacture. You make sure that you have the technology strengths to manufacture the products you are targeting, and then firm up your product line strategy by segmenting all the different products in different lines. Right here you have an option to add a platform strategy to what you are doing. If you can figure out a way to provide like parts to many of your different products and product lines, you are on the way to a platform strategy. When the New Beetle came out, for instance, it really wasn't so new (Marion, 84). It fit into a product platform inside the world-wide Volkswagen scheme composed of VWs, Skodas, Seats and Audis. It's new design and all the hoopla related to it fostered growth across the platform as the New Beetle's use of platform parts reduced engineering costs and production costs as the volume of parts used across the platform increased with the bump in sales of New Beetles.
Now, there are impacts as a result of this decision. You have to consider product architecture, design, manufacturing and sourcing, and, finally, customer service. If you do it correctly, however, the platform strategy allows you to reduce costs significantly while at the same time increasing the diversity of your product line and its utility to consumers.
Reference
Birnbaum, William S. If Your Strategy Is So Terrific, How Come It Doesn't Work? AMACOM. 1990.
Bowman, Daniel. Effective Product Platform Planning in the Front End. In Simpson. 19.
Marion, Tucker J. and Timothy W. Simpson. Platform Leveraging Strategies and Market Segmentation. In Simpson. 73.
Simpson, Timothy W., Zahed Siddique, and Jianxin Jiao, editors. Product Platform and Product Family Design. Springer Science+Business Media, Inc. 2006.