Question

Select a product/ service you are familiar with (personal or professional reasons). Select at least three specific product versions (brands, models, locations, organizations) that represent significantly different market segments/ different order winning characteristics. Example products/services include restaurants (budget, family, foodies ); vacation services (online, VIP, adventure ); fitness facilities (masses/general, specialized, boutique); watches (simple/basic, smart, luxury/precision); cars (budget, performance, exotic),...  For each version you should identify/discuss:

• The market segment (give it a name) including its order winning and order qualifier characteristics.
• Key operations management related system characteristics that enable/support its order winning criteria. This includes characteristics related to suppliers, production, capacity, inventories, warranties, human resources, location of facilities, innovation, product design, outsourcing,.... Only discuss those you believe are more relevant to each version and its order winner features.
• Key operations related metrics that are particular to this product/service. Discuss how different metrics are relevant to the different market segments.  

Answer 1

Let's think about Restaurants.

We can distribute the entire restaurant's sector in India into three major market segments
1. Budget, 2. Mid-Range and 3. High-End.

Few Examples to understand the positioning of these segments:
1. Budget: Food Stalls, Fast Food Joints, Street Food Parlours, Ordinary Dhaba, Canteens Take away counters etc.

2. Mid-range: Family Restaurants, Cafe, Upscale Dhaba, Food Chain outlets etc.

3. High End: Fine Dining, Exotic Food Boutiques, Posh Ambiance, Celebrity Chef’s Restaurants, Luxury Hotels.

Segment Details: Budget

Characteristics:

These segment mainly caters to the people looking for most economic or cost-effective service. The key attributes of the consumers/customers of this segment are ‘price sensitivity’. The primary challenge to create a winning strategy for this segment is to design a formula that can deliver a high value against the price.

Operations & Management

Mostly family or individually run units with limited capacity of production as well as service. This entire segment is not quite organised, so the basic principles of supplier management, Inventories, Quality Control Measures are either non-existent or often ignored.

Key operations related metrics

As this sector is not that organised analytical data points and a suitable matric are difficult to establish. Sales figures are one firm component which can be evaluated against gross operational cost and a relative PE factor can be utilised if required to do so.

Segment Details: Mid-Range

Characteristics:

This is the most challenging and complex segment among three as the customers of this segment desire to get high end like ‘quality’ at a budget level ‘price’. This segment is a bit more concise and getting a winning strategy is tricky and varies widely from business to business based on target demographics and psychographics. It is not advisable to draft/design a common winning strategy for this entire segment as it requires a bespoke approach with a good understanding of the uniqueness of each business.

Operations & Management

Players of this segment are a mixed bag there are well organised units that operate besides unorganised players as well. In terms of production or service capacity they can be compared with their High-End rivals but obtaining a generic view of operational and management practices would be a critical task. Although a good percentage of players within this sector are equipped with proper operational tools, systems and management practices. They do recruit skilled manpower and poses a structured human resource policy. They are innovative on their overall approach.

Key operations related metrics

As a mixed bag segment, almost each and every unit is unique in nature. Their strategies do vary vastly right from a good recipe, innovative ambiance to just a customer-friendly service.

Segment Details: High-End

Characteristics:

This is the most profitable segment as the customers are looking for the best quality and ready to pay the price for it. In most cases the players of this segment create a niche for their own.

Operations & Management

These operators are highly organised with a well-drafted business policies, practices and plans as those aspects are mostly looked after by professionals. They deploy best in class equipment and systems as their core focus is to create an unmatched quality which is the main factor for their success & sustainability. They operate in a fashion of a fully professional business unit with state of the art practices with well-drafted quality control, process management, supply chain, and profitability metrics.

Key operations related metrics

Most of these player has their own niche. Their winning strategy is mostly based on their secret recipe and/or exotic service quality which is not directly comparable to each other. It’s a rich experience that makes them stand apart from others