Chapter 1 provides an overview of operations and places it in the context of the business as being responsible for managing resources to create value. A changing environment changes customers' perspective on value, resulting in a need for businesses to adapt.
Banks Fight Customer Flight, CIO Magazine, April 1, 2004, discusses how banks, eager for financial gains made possible by mergers, ignored customers in the 1990's. After losing many customers, banks have realized that it costs less to keep existing customers than to obtain new ones. The article discusses new approaches to providing the value that will keep banking customers
In Chapter 1, the role of the customer is said to be gaining in importance. In CustomerService: Commerce Bank, Fast Company, May 2002, that trend is documented. The article describes how a 185-branch bank in New Jersey and surrounding states has modeled itself after the superstars or retailing to provide a very unconventional level of service for its customers.
Chapter 1 describes different ways businesses utilize processes to convert resources into value. As customer values change, their expectations of businesses change as well, and businesses must adapt. For a period of time a business may find itself "out of sync" with its customers' desires, and must move quickly to catch up, or it will lose market share. Most businesses go through these cycles. "Can Wendy's Sizzle Again?" (Business Week, November 1, 1999) describes how Wendy's tried to match their capabilities to changing customer expectations by adapting their resources and processes.
