How do you interpret operation
effectiveness versus strategic positioning graph please elaborate each
dimensions of the graph and clearly explains nature and direction of the curve?
effectiveness is basically defined as performing similar activities better than
rivals perform them. Operational effectiveness includes effectiveness but is
not limited to effectiveness .it includes any possible activity for a company
to better utilize its inputs.
contrast to operational effectiveness strategic positioning means performing
different activities comparative to rivals or performing similar activities in
Interpretation of graph:
As in graph there are two
attributes value and relative cost position and these are considered as the
best activities of the firm. These attributes combine to form a productivity
frontier. Productivity frontier basically shows the best practices of the firm
and the effectiveness of unique attributes as compared to competitors’ .This
graph basically shows the maximum value that a company delivering a particular
product or its services can create at a given cost using its best practices
using its best skills ‘management systems and purchased inputs.
The more the curve is in outer
direction it means that company uses best practices available at that time or
it has improved its operational activities so in this graph it shows that
company is performing well and it has improved its activities mostly it means
that strategic position of the company has changed and it was improved.whemever
new technologies or skills or management system are available as inputs the
productivity cure moves outwards
On other hand the outward
movement of cure shows that competition is quiet severe so company needs to
improve its operation in order to remain competitive so it also need to make
strategic position it may have to decide at a time to do different activities
or do activities in a different way by using operational activities like
technologies .management systems etc.
Organizations learn from the
productivity frontier graphs which basically helps organizations to decide
either to pivot or to accelerate.
This graph basically shows that
at what particular cost which company is bearing to bring that particular
product in the market and ultimately to customers is delivering how much valve
to customers. Ultimate purpose of company is to deliver higher value to
customers by keeping their costs very low
Company has a strategic position which is to
deliver high value to customers but in return it is maximizing its operation
effectiveness by using various technologies .skills and techniques to minimize
Y axis of the graph shows high
value attribute and x axis shows low cost relative to that particular value
which is being delivered to customers by company .as graph shows that curve is
far from the origin and is outward so it means that company is providing high
value to customers by keeping its costs low .