The impact of market focus on operations practices

Abstract

A key element of successful organisations is the alignment of their strategy and tactics. This study explores the relationship between a firm's competitive strategy and its operations practices in the context of a developing economy. Two competitive strategies are examined; a niche market strategy characterised by targeting specific market segments, and a broad market strategy characterised by serving a wide range of market segments. Three sets of operations practices consistent with the adoption of lean manufacturing, Total Quality Management, and relationship development in a supply chain context, are explored. Using survey data from senior managers in Thailand, results show that for firms adopting a niche market focus, competitive strategy directly influences process management and relationship development, which in turn affect workforce commitment. Only workforce commitment has a direct effect on operational performance. In contrast, for firms adopting a broad market focus, competitive strategy directly influences workforce commitment, which in turn affects process management and relationship development practices. It is the latter practices that directly influence operational performance.

Keywords:

• competitive strategy
• market focus
• process management
• workforce commitment
• relationship building
• operational performance
• empirical study
• cluster analysis

Acknowledgement

The authors would like to thank respondents working in all cases for giving such valuable information about the history and practical points of view of their adoption and adaptation of the operations practices. We also thank the Thailand Research Fund (TRF), the Higher Education Commission of Thailand, and Thammasat University, who supported the research funding of this project.