Operations Strategy and Competitiveness

 https://www.youtube.com/watch?v=3piqI-AQ6Qk
The key role of grand strategy is to
co-ordinate and direct all the
resources of a firm towards the
attainment of its goals and
objectives and vision. It is a
statement of strategic action.

It is the long-range game plan of an

organization and provides a road
map to achieve the corporate
mission.
 Grand vs
Operational
Strategy
Operational Strategy: A plan specifying how an organization will allocate resources in order to support
infrastructure and production. An operations strategy is typically driven by the overall business strategy of the
organization, and is designed to maximize the effectiveness of production and support elements while minimizing
costs.

Operational Effectiveness: Ability to perform similar operations better than the competitors

For superior business performance, both operational effectiveness and a good strategy are essential
Survival of the fittest: Global Competition

• Changing Nature of World Business

• International Companies
• Strategic Alliances and Production Sharing
• Fluctuation of International Financial Conditions
 Corporate Mission

Assessment of Distinctive
Global Business Business Strategy Competencies or
Conditions Weaknesses
Product/ Service
Plans

Competitive Priorities
(Cost, Time, Quality, Flexibility)

Operations Strategy
Positioning the Production
System
Production/Service Plan
Outsourcing Plans
Process and Tech Plans
Strategic Allocation of Resources
• Understanding the competitive market dynamics
• Identify order qualifying and order winning attributes

• Order Qualifier: Threshold or minimum level of requirement that pull the customers
• Order Winner: Perception that certain add ins that are differential on price being paid and acts as delighter

• Identify Strategic Options for Sustaining Competitive Advantage

• Devise the Overall Corporate Strategy
• Arrive the Operations Strategy
• Product design
• Type of production processing system
• Type of finished goods inventory
• Technology

• Basic Product Design: Custom and Standard

• Production Process: Product Focused (Assembly line) and Process Focused Production

• Finished goods Inventory: Produce-to-stock and Produce-to-order

Product life cycle
• Time spent on product design and development is increased

• Continuously changing product models affect the production systems. Need for flexible production systems that
can be changed to other products

• Need advanced systems like CAD/ CAM to respond to the market changes at higher pace
• Outsourcing Plans

• Process and Technology Plans

• Strategic allocation of resources

• Facility Planning: Capacity, Location and Layout

 Homework

Service Strategy