Chapter 2 Operation

Strategy
By:
C.M. Dhakal
 1. Global View of Operation.
Modern organizations act locally and think
globally.
Globalization is the process of expanding the
business activities around the globe.
The factors responsible for globalization are:
Improved transportation and communication.
Open financial system.
Increased demand for imports.
Reduced import quotas and other trade barriers.
So operation manager should considered various
complexities in case of opening the facilities abroad.
 2. Global Operation Focus.
Managing global operations would focus on the
following key issues.
1. Reduce cost
2. Improve the supply chain.

3. Provide better goods and services.

4. Understand market.

5. Learn to improve operation.

6. Attract and retain global talent
3.Developing Mission and Strategies.
For managing operation activities effectively,
operation manager should prepare mission, so
he/she knows where it is going and a strategy
shows how to get there.
Mission is purpose and scope of its operation i.e.
the business we are in.
Mission statement provides boundaries and
focus for organizations and the concept around
which the firm can unite.
The mission statement can include:
 Cont..
1. Product design
2. Quality management
3. Process design
4. Location
5. Layout design
6. Human resource
7. Supply chain management
8. Inventory
9. Scheduling
10. Maintenance
 Cont..
On the other hand, strategy is an organization’s action plan
to achieve the mission.
Strategy sets direction by identifying the key issues or
activities that help to develop specific goals and plans.
Strategy can aim at both operational effectiveness and
achieving the competitive advantages.
Firms achieve mission through strategy from the following
ways:
Differentiation.
Cost leadership
Response.
 4. Achieving Competitive
Advantages Through Operation
Strategies provide an opportunity for operation
manager to achieve competitive advantage.
Competitive advantage is capacity of firm to compete
with competitor of a firm.
In other word, it is creation of system that has a
unique advantage over competitor.
Competitive advantage can be achieved through:
1. Differentiation.
2. Response
3. Cost
5. Strategy Development and Implementation.
A SWOT analysis is a formal review of the internal
strength and weakness as well as external opportunities
and threats.
The main purpose of developing strategy is to creating a
company specific business model that will best fit with the
company’s resources and capabilities.
The procedures of developing and implementing strategy
are:
1. Critical success factors and core competencies
2. Build and staff the organization.
3. Integrate OM with other activities.