OPERATIONS MANAGEMENT

THE STRATEGIC PROCESS

Such inward focus takes us away from the external environment in which we succeed or fail. Inward focus can lead to error. Strategic operational planning determines in large measure whether companies fail or succeed.    .OPERATIONS MANAGEMENT AS STRATEGIC   Operations management is best thought of in strategic terms. Ordinary operations management focuses inward upon internal processes.

Without the ongoing.   . integrated and combined focus. Outward. strategic focus keeps us tuned to the changing environment. Inward operations focus allows us to tune our operations to meet the changing environment. we set ourselves upon for failure.NECESSITY FOR BOTH INWARD AND OUTWARD FOCUS   In this course we emphasized the combined focus.

In the meantime the environment changed.    . Most dot. The failures became overextended in a market that was changing as well as becoming saturated.com¶ ers were focused inward upon their pet ideas of what they wished to present to the market.com bubble is an outstanding example of failure to maintain dual focus. The dot.RECENT FAILURES  In the age of rapidly changing information technology this dual focus is crucially important.

ALERTNESS. Alertness to the changing environment is crucial. 2. Flexibility. the ability to respond rapidly to environmental change. FLEXIBILITY 1. The new Hi Tech company must be alert to change and fast on its feet in responding. 3. . 4. Internal operational management keyed and linked to external strategic focus combines the essentials of alertness and flexibility. is key to survival and success.

A strategy can be broken down into components called tactics.WHAT IS A STRATEGY?  A strategy is a planned action or set of actions designed to achieve a major goal.   . Tactics are the details of a strategy.

When this is done. alertness. a company has competitive advantage. and flexibility.COMPETITIVE ADVANTAGE  An overarching goal is to achieve superior performance over competitors. It depends on maintaining the dual focus (inward & outward). Competitive advantage is never once and for all.    .

Profitability is the return on invested capital.PROFITABILITY & COMPETITIVE ADVANTAGE  In the business world competitive advantage is measured by profitability. Sustained profitability equates to sustained competitive advantage.   .

STRATEGY MUST BE CONCERNED WITH THE RELATIONSHIP BETWEEN: 1. Prices 2. Customer demand 3.STRATEGIES FOR SUSTAINED PROFITABILITY OR COMPETITIVE ADVANTAGE MOST BASICALLY. Cost structure .

BUSINESS MODEL  Created by management ± Shows how strategies lead to Sustained superior performance Sustained competitive advantage Sustained profitability ± ± ± .

cont¶d  Expressed in terms of financial projections ± ± ± ± ± ± Pricing structure Sales volume Revenues Cost structure Profit level Profitability goals .BUSINESS MODEL.

like marketing. etc. accounting.TYPES OF MANAGERS  General Managers ± Bear responsibility for overall performance of company or major division  Functional Managers ± Responsible for a particular function. .

Board of Directors 4. Corporate Staff    . Other senior executives 3. CEO 2.CORPORATE-LEVEL MANAGERS  1.

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