Operations Strategy

-Context-

prof. Fabio Nonino

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SOME QUESTIONS TO BE ANSWERED

 What intrinsic capabilities should the organization try and develop as the
foundation for its long-term success?
 Should the organization sacrifice some of its objectives in order to excel
at others?
 Where should the organization locate its resources?
 What process and technologies will be required?
 What facilities are needed?
 How should the organization’s resources and processes be improved and
developed over time?

Operations strategy is concerned with all these, and

even more, decisions

Adapted from: Slack and Lewis (2003); Lowson (2002)

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DIMENSIONS OF OPERATIONS STRATEGY

CONTEXT

OPERATION
STRATEGY

PROCESS CONTENT

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DIMENSIONS OF OPERATIONS STRATEGY

CONTEXT

OPERATION
STRATEGY

PROCESS CONTENT

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OPERATIONS STRATEGY IN CONTEXT

ENVIRONMENT

COMPETITIVE STRATEGY Empirical studies (Ward and Duray,

NETWORK STRATEGY
2000) suggest that:

CORPORATE STRATEGY  the effect of the context on the

operations strategy is mediated by
BUSINESS STRATEGY the competitive strategy
 the relationship between
competitive strategy and firm’s
performance is mediated by
OPERATION
STRATEGY
operations strategy

PERFORMANCE
Adapted from: Ward and Duray (2000)
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THE EXTERNAL CONTEXT

The external environment usually includes:

 Competitors
MAIN ACTORS INVOLVED IN
 Customers OPERATIONS
 Suppliers
 Economic trends
 Cost of workforce
MAIN EXTERNAL FACTORS
 Cost of materials
INVOLVED IN OPERATIONS
 Technologies
 Government laws
 Political and legal conditions
 Demographic/Cultural and social factors
 …

Source: Schroeder (1989)

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CONTEXT: THE INTERNAL ENVIRONMENT

 Availability of financial resources

 Availability of materials resources
 Location and age of existing facilities
 Skills and abilities of the workforce
 Existing organization culture MAIN INTERNAL
 Organizational routines FACTORS
INVOLVED IN
 Operative procedures OPERATIONS
 Availability of proprietary technologies
 Availability of patents
 Availability of brands
 Knowledge
 Information flow
 …

Source: Schroeder (1989)

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 Operations Strategy
-Context-

prof. Fabio Nonino

Thanks to