Published in Operations and Supply Chain Terms category by MBA Skool Team
What is Production Orientation?
Production orientation follows the theory that any product of high quality can be readily sold.
Jean Baptiste Say's Law states that the "production of commodities creates, and is the one and universal cause which creates, a market for the commodities produced.
So, Production Orientation is the general approach of any business that is primarily concerned with manufacturing and production processes.
In a product oriented approach, business focuses and develops products based on what it is good at making or doing, rather than what the customer wants. Sometimes, due to this approach a new product fails in the market which often leads to criticizing of this approach.
Traits of Production orientation are narrow product lines, pricing based on production costs, technical product research, packaging focused on product protection, and minimal marketing.
A production-oriented business is mainly concerned and focused on making or producing as many units as possible. The only target is to produce maximum volume, such a business aims to maximize its profitability by exploiting economies of scale.
In production orientation business, focus is much more on the methodology for increasing the output rather than the needs of the customers.
This approach is effective only where the potential of the product in the market is significant or business operates in very high growth markets or where the potential for economies of scale is significant.
Production orientation companies are Gillette, which focuses on producing the best disposable razor blade in the world.
Another example is of Hero Motocorp. which launched Karizma bike when there was no demand for the racing bikes.
Hence, this concludes the definition of Production Orientation along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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