Successful firms design their operations to support the company’s business strategy.⁶ In other words, managers adjust production operations to support the firms’ target markets. Because our four firms use different business strategies, we should expect to see differences in their operations, too. The top-priority operations capability (production capability)—the special ability that production does especially well to outperform the competition—is listed for each firm in Table 7.2, along with key operations characteristics for implementing that capability. Each company’s operations capability matches up with its business strategy so that the firm’s activities—from top to bottom—are focused in a particular direction.

For example, because Toyota’s top priority focuses on quality, its operations, the resource inputs for production, the transformation activities, and the outputs from production are devoted first and foremost to that characteristic. Its car designs and production processes emphasize appearance, reliable performance, and desirable features at a reasonable price. All production processes, equipment, and training are designed to build better cars. The entire culture supports a quality emphasis among employees, suppliers, and dealerships. Had Toyota instead chosen to compete as the low-price car in the industry, as some successful car companies do, then a cost-minimization focus would have been appropriate, giving Toyota’s operations an altogether different form. Toyota’s operations support its chosen business strategy, and did it successfully until quality problems arose in 2008. Soon thereafter, the commitment to quality intensified. By 2012, Toyota had regained its position as the world’s top-selling auto maker. Before the 2008 downturn, the company had more than 35 consecutive years of increasing sales for which quality was the foundation for greatness.

Finally, it should be noted that excellent firms learn, over time, how to achieve more than just one competence. The firms in Table 7.1 eventually became excellent in several capabilities. Aside from dependability, FedEx is also noted for world-class service quality and cost containment. Regarding quality, FedEx was honored in the “2016 Customer Service Hall of Fame,” ranking 9th for service quality among 150 companies in MSN Money’s annual survey. To reduce costs, the company eliminates jobs that become unnecessary with advances in technology, sells off its older inefficient airplanes, and reduces the number of flights by re-routing its air and ground fleets.