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Capacity strategy is an approach to increasing and decreasing business capacity to meet demand. Capacity
like labor and equipment that can be scaled to increase business output. The following are common types of capacity
strategy.

Lead Strategy
Business Guide
An upfront investment in more capacity that you need. This can be done when capacity is inexpensive or difficult to obtain.
For example, a new vineyard anticipates using less than 10 acres of land in its first 5 years but purchases 100 acres of land
as a long term investment in the business.

Lag Strategy
Waiting until your current capacity is stretched to its limits before adding more capacity. For example, a call center with 10
staff that doesn't hire more employees until everyone is working overtime. This may serve to boost efficiency
productivity as current resources are heavily utilized. It tends to result in poor performance such as slow response or
failures.

Incremental Strategy
Adding capacity in small increments when you approach full capacity. For example, a data center that adds 20 servers when
its capacity touches 90%.

Dynamic Strategy
Adding capacity, large or small, before it's required based on forecasts. For example, a data center that adds 200 servers
based on next month's sales forecasts.
Overview: Capacity Strategy
Business Capacity
Type
Capacity Management
Definition An approach to scaling business capacity.
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