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A crucial stage in the formulation of operations strategy is thederivation of a ranked (or rated) list of competitive factors such asquality, flexibility, cost, etc. This list is used either to infer anappropriate set of strategic operations decisions or alternatively it isused in conjunction with an independently derived list of theorganization's performance to prioritize each of the competitivefactors. Martilla and James[1 ] take the latter approach to derive animportance-performance matrix. The investigations reported in thisarticle examine how the matrix can be modified to reflect managers'perceived relationships between "importance", "performance" and "priority forimprovement". Two investigations are reported; one deals with operationsimprovement at the level of the whole operations function, the other atthe level of the department or micro-operation. A different zoning ofthe importance-performance matrix to that used by Martilla and James isproposed.
Using the modified matrix allowed the managers who participated in theinvestigation to explore improvement priorities in their operations inan effective manner. One of the more significant activities in theoperations strategy formulation process is the derivation of a list ofcompetitive factors (also called critical success factors, performanceobjectives or competitive variables) which is prioritized in terms ofthe relative importance of each competitive factor. Typically such alist ranks or rates those factors which the operations functioncontributes to the competitiveness of the organization. So, for example,quality may be regarded as more important than product or service rangebut less so than price, and so on. All the significant methods ofoperations strategy formulation include some prioritization, for exampleHayes and Wheelwright[2 ], Hill[3 ], Fine and Hax[4 ] andPlatts and Gregory[5 ]. Many of these methods are discussed in Voss[6 ].
After this list has been formulated it can be used in two ways:1
As a translation device between the market aspirations of theorganization and the various areas of operations strategy (often dividedinto structural and infrastructural decisions as in Hayes andWheelwright[2 ]). For example, Hill's[3 ] well-known method of manufacturingstrategy formulation uses these competitive factors in this way.
2
The list of ranked or scaled competitive factors can be used to helpdetermine improvement priorities among the competitive factors. Thisapproach typically involves comparing the importance rating of eachcompetitive factor with some concept of its required performance. Forexample, Platts and Gregory[5 ] develop an approach to formulatingmanufacturing strategy (although there seems no reason...