THE GLOBAL

ENVIRONMENT
AND OPERATIONS
STRATEGY:
STRATEGY
FORMULATION
1 Strategy Formulation
Definition
Strategy? Formulation?
Strategy
A strategy entails combining
organizational operations as well
as utilizing and distributing
scarce resources within the
organizational environment in
order to achieve current goals.
Formulation
Formulation is a word that is
used in a variety of contexts,
both material and abstract or
formal.
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When developing a strategy, a company
must consider the changing environment
and be prepared for any changes that may
arise (Saylor, 2014).

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Strategy Formulation
● Strategy formulation is an analytical process that involves
determining the optimal course of action to achieve the organization's
goals and vision.
● This process is critical to a company's success because it establishes a
framework for the actions that will result in the desired outcomes.
● A firm that does not take the effort to establish a strategic plan will be
unable to give direction and concentration to its personnel.

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Core Competencies
● Formulating strategies is a cyclical process in which involves taking
a theoretical approach known as a resource-based view in which an
organisation objectively looks at all its resources and capabilities to see how
best they can give an organisation competitive advantage.

● This process of exploiting the unique combination of resources and

capabilities has given rise to the term of core competencies which have been
defined as the ability of an organisation to coordinate all its technologies and
production skills in order to deliver its strategy.

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Core Competencies
●Core competencies are the building blocks on which
organisations are able to strategize so it is vital to identify them
correctly using four specific criteria: 

1. Does it provide significant value?

2. Does it allow to increase or dominate market share?
3. Is it difficult for competitors to imitate?
4. Does it provide competitive advantage?

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Order Qualifiers and Winners
Order Qualifiers
It is a screening criterion that
permits a firm's product/service to
even be considered by a customer as
possible candidate for purchase.
Order Winners
It is a criterion that differentiates the
firm's product/service from others'
and wins the purchase.
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Order Qualifiers and Winners
● Order winners and qualifiers are both market & time-specific.

● For example, high quality may be vital in one market, not in another.

● Characteristics that are order winners today probably will not remain so,
because competition will try to copy winning characteristics and the
needs of customers will change.

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Environmental Scanning
● The key to effective strategic management is to make major managerial
decisions that shape actions by the firm that will correspond positively
with the context within which those actions ultimately take place.
● Organizational environment consists of both external and internal
factors. Environment must be scanned so as to determine development
and forecasts of factors that will influence organizational success. 

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Environmental Scanning
● It refers to possession and utilization of information about occasions,
patterns, trends, and relationships within an organization’s internal and
external environment. It helps the managers to decide the future path of
the organization.
● Scanning must identify the threats and opportunities existing in the
environment.

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Environmental Scanning
Internal Analysis
This includes employee interaction with
other employees, employee interaction
with management, manager interaction
with other managers, and management
interaction with shareholders, access to
natural resources, brand awareness,
organizational structure, main staff,
operational potential, etc
External Analysis
Examining the industry
environment needs an appraisal of
the competitive structure of the
organization’s industry, including
the competitive position of a
particular organization and its main
rivals.
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Operations Strategy
● Operations management is the profession that encompasses planning,
implementing, and supervising that production.
● Some people think of operations as the daily tasks and tactics that transform
materials or actions into a product or service, but operations strategy goes a
level higher to determine operations approaches and goals.
● Operations strategy is only one part of overall business or corporate strategy,
but it’s crucial for competitiveness and success. Without a strong operations
strategy, companies fail to keep up with changing markets and lose out to
more strategic competitors

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Operations Strategy
● The seven main functions of operations are (Eby, 2017):
1. Product management
2. Supply chain
3. Inventory
4. Forecasting
5. Scheduling
6. Quality
7. Facilities planning and management

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Quality-Based Strategies
● Quality-Based Strategic Planning, then, focuses on:

1. Measuring and understanding the dynamics of the environment in

which the organization desires to operate.
2. Understanding and developing the experience base (the skills and
capabilities, or competencies) necessary to flexibly recognize and
respond to those dynamics.
3. Constantly modifying the system to actually respond to (rather than
simply react to) the dynamics.

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Time-Based Strategies
● Strategy that focuses on reduction of time needed to accomplish
tasks.  Organizations have achieved time reduction in some of the
following:

● Planning time:  The time needed to react to a competitive threat, to

develop strategies and select tactics, to approve proposed changes to
facilities, to adopt new technologies, and so on.

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Time-Based Strategies
●Product/Service Design Time:  The time needed to develop and
market new or redesigned products or services. 
●Processing Time:  The time needed to produce goods or provide
services.  This can involve scheduling, repairing equipment, methods used,
inventories, quality, training, and the like.
●Changeover Time:  The time needed to change from producing one
type of product or service to another.  This may involve new equipment
settings and attachments, different methods, equipment, schedules, or
materials. 

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Time-Based Strategies
●Delivery Time:  The time needed to fill orders.

●Response Time for Complaints:  These might be customer

complains about quality, timing of deliveries, and incorrect shipments.  These
might also be complains from employees about working conditions (e.g.
safety, lighting, heat or cold), equipment problems, or quality problems.

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Agile Operations
● Agile strategic management can significantly increase the probability
that your organization achieves its goals. It requires genuine leadership.
 It leverages the power multi-disciplinary teamwork, iterative design and
improvements, and a continuous focus on top priorities.
● It is used in goal setting, strategy development, product and service
design, and process improvement.

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Agile Operations
● Goals can provide clarity regarding what is most important to the
organization and how those will be measured. Establishing goals
centered on the customers, employees, processes and financial results are
all important in creating a successful organization.
● Strategies define how you plan to achieve the goals. Strategies should be
developed based on your sweet spot, rich customer insights, deep
competitive analysis, market research,  and critical research in other
areas.

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Agile Operations
● Agile strategic management can significantly increase the probability
that your organization achieves its goals. It requires genuine leadership.
 It leverages the power multi-disciplinary teamwork, iterative design and
improvements, and a continuous focus on top priorities.
● It is used in goal setting, strategy development, product and service
design, and process improvement.

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Agile strategic management recognizes that you
need to build learning and a degree of flexibility
into the decision-making process (Wilden, n.d)

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Thanks!
Any questions?

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