Question: Read the case study below and answer the questions that follow. ENHANCING OPERATIONAL PERFOMANCE In most industries, regardless of whether the average profitability of the
Read the case study below and answer the questions that follow. ENHANCING OPERATIONAL PERFOMANCE In most industries, regardless of whether the average profitability of the industry is high or low, some firms are more profitable than others. The superior performers have something special and difficult to imitate that allows them to do better than their rivals. In strategy, these unique skills and resources are mentioned as sources of competitive advantage. Bharadwaj,Varadarajan and Fahy (2008) classify two broad sources of competitive advantage:- unique resources (assets) and distinctive skills (capabilities). Day and Wensley, 2016 characterize superior skills as the distinctive capabilities of a firm's personnel that set them apart from the personnel of competing firms and superior resources as more tangible requirements for advantage that enable a firm to exercise its capabilities. These two sets of sources allow a business to perform the various primary and secondary value activities that compose its value chain at a lower cost or lead to differentiation. They create competitive positional advantages in the form of superior customer value by differentiated goods/services, and/or lower relative costs through cost leadership. Firm-specific skills and resources are also referred to as the "drivers" of cost and/or differentiation advantages. There are varieties of drivers in the literature these include resource-based drivers such as economies of scale and scope, brand equity, and reputation, and skills-based drivers such as the skills underlying the innovativeness and superior quality of a business's offerings. Superior skills and resources do not give a business a competitive advantage. They only offer the business an opportunity to use its skills and resources to achieve competitive cost and/or differentiation advantages. Thus, one must identify the skills and resources that have the greatest potential to endow the firm with enduring competitive advantages. Aaker, (2010) stated that multiple sources of competitive advantage are necessary for a business to compete successfully. Logistics management has always been concerned with lead-times. In particular, the order-to-delivery cycle has been seen as a major element in the customer service process. However, companies are now increasingly coming to recognise that the way in which time is managed throughout the logistics system - from procurement of materials through to the receipt of payment for goods sold - is a key determinant of competitive advantage. Not only is work-in-progress and inventory reduced through a shortening of total logistics lead-time, but responsiveness and flexibility to marketplace requirements is dramatically enhanced. One of the goals of any company selling a product or service is differentiation. A company pitches its unique selling proposition that is going to be most advantageous for it. Successful differentiation requires a good product or service and customer insight (customers perception of a companys product and those of competitors). Setting its products or service apart from its competitors is necessary to create preference and loyalty. Here are a few examples on how companies have maintained competitive advantage. Apple Appealing Design, robust software Hands-on software, simple product design and unified iTunes ecosystem. BMW Ultimate driving machine The ultimate driving machine. It gives many professional reviews on how BMWs drive its ergonomic design, maneuverability, non-overweight engine. Nike Brand Power Brand power, strong bonding with top athletes (Michael Jordan, Brazilian national soccer team), and performance-focused product design. Nike produces products that are customers recognize to be of high value with exclusive features. Nike is also known to use guerrilla marketing to publicize its products e.g. Nikes use of small Gone Running signs in amusing situations. Singapore Air Distinctive services at premium costs Distinctive premium services on long-haul business flights at practical costs. It was the first to introduce many services like video-on-demand, hot scented towels, hot meals etc. It uses a young fleet of aircrafts, and its well-dressed Singapore Girl cabin crew is a brand icon.
Question
Mckinsey Consultants have been advocating for businesses to adopt the Business Process Engineering (BPR) methodology to influence their operational performance. Critically evaluate this methodology and how it can be implemented at Apple and Nike.
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