The Operation Strategies And Cost Leadership

1399 Words6 Pages
Executive Summary

This business report discusses and explores the operation strategies and cost leadership of both IKEA and Fruity fro-yo and how it relates to business operations. The success of the business will also be assessed through the identified operations strategies that each of the businesses applies into their operations. This results in increased operations efficiency, which is discussed within this business report.

Strategic role of management - Cost leadership Cost leadership:
Cost leadership refers to the strategies to produce goods or services at the lowest possible cost whilst still being appealing to customers. Businesses will have the ability to gain an advantage over their competitors by reducing the costs of
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They do this by sourcing their products from low-wage countries and by offering a very basic level of service, allowing for cheaper prices of products and an increased customer appeal.

Strategy 1: New product or service design and development

New product or service design and development supports operations management as it allows for product flexibility and caters for customers changing preferences in products. Products must be updated and improved depending on the markets demands to keep up with customer’s wants and needs and to retain businesses competition. This results in an increased amount of sales and profits.
Fruity fro-yo utilized new product or service design and development when implementing the manufacturing of fro-Yo popsicles. However in doing this, FFY had to minimize production costs spent on factory waste. To do this they came up with the idea to turn the waste into a fruity cream product. This strategy along with relevant research and experimentation greatly minimizes the waste disposal costs resulting in a decrease of input costs and increased profits.
IKEA implements new product service design and development to offer their quality products at a cheaper price to suit people’s contemporary needs and circumstances. They focus on the price and quality, design and function, environment and health of their new product service design and development to minimize waste and
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