Introduction All businesses irrespective of industry have a basic vision – the purpose of the company, the reason for its creation and existence. It determines the direction in which efforts will be made to make the company sustainable in the long run. Based on the concept of production possibility frontier curve, it can be conceded that resources are scare and companies must make clear choices on allocating them optimally for the best possible outcome. The company management must determine all the markets where their product or service can be presented for customer consumption. Since a company cannot possibly serve all these markets and all the customers in them; they must segment the customers based on their needs and wants or their ability to pay for the goods or service or even depending on their geographic location and target a segment best suited to their product/ service profile and business vision. This segmentation and targeting will help the company determine where and how they should be (not would like to be) positioned for sustained demand and create a continuous revenue stream. Thus, everything finally originates from who is the company’s customer, what does he want and how would he like to be served so that they remain loyal and become repeat customers. Operations strategy of a business involves planning and strategizing resource allocation, capability augmentation and process improvements for a longer term to achieve the performance objectives of acquiring market share, customers and retaining them in the face of competition as well as macro level changes affecting the competitive dynamics of the entire industry. The decision to design, develop and produce new products or services to market it originates from the choices and plans for formulating the customer benefit package (CBP) and not the other way around . CBP is the additional/ peripheral goods or services related to the primary product or service offering that is provided to the customers. An unrelated factor is the offering of variants which are not connected the product or service but is of some beneficial use to the customer for which they are not charged separately. The CBP design influences the design and cost of a product or service because the entire value chain is optimized to attain the strategic objectives in terms of profitability. Identify two organizations in an industry having different value chain The value chains of different businesses are not alike. Consider the example of car maker BMW and airline services company Qantas. BMW is an automobile company where the typical value chain would resemble as under. Primary activity consists of inbound and outbound logistics, operations (assembly of cars), sales and marketing and the servicing function where most of the CBP would be focused. The support functions are generally common across most manufacturing businesses which produce goods. Profitability depends on the value addition on the goods and increase in the perceived value of the goods by the customers for which they are ready to pay a price that is more than the cost of the goods and the CBP. The primary activities in the value chain though have the same grouping as that of manufactured products but the functions within each activity are different. The operations are more people oriented and cannot be automated like an assembly line of a BMW. The services are concentrated on resolving customer complaints like lost baggage, poor in-flight service, cleanliness in the flights etc. There is a challenge of standardization of activities in service industry where human interaction, human behaviour play a significant role and the situations are not common but highly specific on a case to case basis. The Customer Benefits Packages in Goods and Services Business BMW has a special CBP for their 7 series customers. They offer encore delivery, extra priority for providing service, pickup and delivery of the vehicle, detailing and 24X7 concierge service. A customer will be given a detailed orientation of the car few weeks after he/ she takes the delivery of the vehicle. It is aimed to explain the latest features and functionalities of the car so that the customer can appreciate the value for his money. The company also provides once a year spa service for the car to clean it professionally and increase the life and feel of the automobile. Service appointments are accepted over phone or email and assured within 48 hours. Dealers can become part of the BMW Clubs International Council. These large customers like dealers get special discounts for parts and accessories. They have discounts at the BMW Lifestyle shop and guided tours of BMW museum and facilities to see how the entire car is built from scratch. Qantas has a huge loyalty program comprising of 8 million plus members, strong partner network and unrivalled redemption options. The loyalty programs comprise of more than 100 different offerings. The airline uses technology and multiple communication channels to use their assets as a source of leverage to connect with their customer network. The airlines aim from the loyalty programs is customer acquisition, repeat purchases, which means increased retention and continuing at a steady price point with good margins. The Qantas frequent flyer (QFF) points are valid for 2 years. Customers have free access to the lounge. The communication programs focus on explaining customers the methods to earn more points and spend them effectively. The educational aspect of engagement builds an emotional connect for the brand as it sends out a message that the airline cares what the customers do with the points and not just rack them up and allow to expire. The knowledge of the ways to use the points like calculating approximate flyer miles to go for a vacation spot would more likely motivate customers to use them with friends or family. This is additional business for Qantas. Partnership programs with other airlines like Emirates helps Qantas enable its customers to access newer destination with the same QFF benefits and service quality. Customers are offered world – class cuisine and choice of wines inflight, personal entertainment in the latest aeroplanes. The airlines are contributing to growth in tourism and business by providing important connectivity between crucial business hubs and cities. A flyer who needs to visit certain destinations only covered by Emirates and not Qantas continues to get the same Qantas experience with the partnership. There are other beneficial partnerships like with Airbnb and few car rental companies, travel insurance company, restaurant tie-ups, holiday package offers, cruise, ski packages etc. Being a Qantas customer also allows travellers to choose extra legroom seats, specific seats in the flight, access valet parking, and of course the lounge services. The car company CBP is more focused around the product, its features, maintenance, repairs, servicing and providing spare parts. The idea is to enable the customer to use the product intensely and appreciate its features. Greater involvement with the product will help them appreciate the price point and the value derived by investing in the automobile. Satisfied customers are more likely to recommend the product to other prospective buyers in their network which is more effective than any other form of advertisement. The satisfied customer will more likely buy another product of BMW if they need a second or nth car or while changing the current one. The CBP of BMW is designed to evoke a feeling of comfort and care, a zeal to maintain the bond beyond the sales transaction which is a means to gaining customer loyalty. The airline company’s CBP is more enriched and spread wider touching all those factors connected to a person’s need to travel. Ideally, choice of seats, meal plans, access to various sectors, in-flight on-demand entertainment, baggage and e-checking are the CBPs that a person would seek. Qantas is trying to maintain contact with the traveller beyond the point of simply flying from point A to B. They are connected through the rental services, insurance products while travelling, restaurant bookings, valet parking all of which are essential for a flyer and left without a choice, a person would be forced to seek out options individually for each factor. The objective of airline CBP is maintaining customer focus and loyalty because unlike a good like an automobile which is not purchased often, air travel is more frequent and there are wider choices and therefore opportunities to switch. Customer’s Viewpoints of the Value Chain Design A customer seeking to buy a BMW 7 series will want exclusivity, certain level of customization, and hand holding. This is the same need for Qantas frequent flyers. The product – BMW 7 series is a high end one and the customer for such items will not be concerned with the price. Hence, the value chain maintaining a focus on superior car at a lower cost will not hold an appeal. Frequent flyers would seek price deals or benefit of using their loyalty points to lower their cost of travelling while maintaining access to the superior services. Personalized services like drop and pick of cars for repairs or servicing, first preview of new releases, BMW exclusive club members’ offer which will allow the high net-worth individuals to connect with people of their strata will create higher engagement between the customer and BMW. At this price level, there are many cars of similar stature and performance. The technology of all the cars in this segment will be largely similar with often comparable features. The differentiation through peripheral benefits will be the deciding factor. Scope for extra baggage, choice of seats, different choices of meals and drinks can be offered by any other rival airline. Qantas too will need to provide preferential treatment to their frequent flyers through a program which motivates others to be loyal customers. The choice of sectors and strategic partnerships with other airlines will also play a crucial role in ensuring sustained loyalty. The operations strategy of the BMW should be to cater to a niche which is ready to peruse the offering at the set price point but enriching it with benefits that creates a distinctive persona of the company. In contrast, Qantas must maintain the price point with rivals yet maintain a lower cost to cater to the CBPs which will ensure a strong revenue stream into the future. Management’s Viewpoints of the Value Chain Design Qantas’s loyalty programs are aimed to bring about innovation in the value chain towards loyalty and create avenues for marketing analytics to usher in additional effectiveness. The frequent flyer program generates more membership and therefore higher earnings before interest and tax. The redemption rates have been high. The success of the program has helped Qantas gain significant insight into their customer’s behaviour. Analytics and data about customer behaviour makes it convenient to create impactful engagement programs and predict the outcome of certain benefits in terms of revenue. The management of Qantas has modified the organization structure, systems, processes and the measurement parameters to suit the customer benefit package for optimized outcome. e-CRM has helped Qantas to evaluate the effectiveness of their communication programs and success in enabling customers to use the points in different ways. This is the foundation or predictive modelling. The predictive modelling works in favour of increasing retention rates of customers as Qantas is continuously trying to evaluate if a customer would switchover to another airline company. It is cheaper to retain a high value customer then to apply efforts on acquiring new ones and making them stick . BMW’s value chain is designed to produce an exemplary engineering product with features and functionalities that are valuable for customers. The CBP is designed to maintain the continuity of relationship with the customer. The peripheral offerings are related to proper maintenance of the product which signifies that BMW is not just concerned with sales of the car but ensuring that the customer is constantly educated on using it to its fullest extent. One of the major issues in automobiles is their servicing and cleaning for upkeep. By providing cleaning services which can be done by any garage in the neighbourhood, BMW is assuring the quality stamp of the name which motivated the customer to buy the car in the first place. Operations management in both good or services business should optimize the primary activities to reduce waste and thus, cost. The strategic vision should be developed around the customer and his/ her attributes, the motivation to buy a product and specifically buy the one sold by the company in concern like in the context of this paper – BMW or Qantas. Analysing the offerings of competitors will help devise CBPs which can be the source of sustained competitive advantage as the primary offering can be imitated and hence may not produce any strategic differentiation. As the CBPs are designed, the resource allocation, alignment of capabilities and the process of producing the serving the offering can be optimized to create a synergy. Whether it is a long-term purchase like a car or a short-term utilization like a flight; there are adequate scope of sustaining customer attention, engagement, involvement and loyalty through the design of peripheral benefits. It is the benefits from the add-ons which nurtures the customer’s attention.