Operations Strategy in a

Global Environment

2-1
 Outline
1- Reasons to Globalize
2- Mission, Goals, and Strategy
-Mission
- Strategy
3- Competitiveness
-Competing on Marketing,
-Competing on Cost,
-Competing on Operation

4- SWOT Analysis
5- key steps in strategy formulation

2-2
 Reasons to Globalize

Reasons to Globalize
Tangible 1. Reduce costs (labor, taxes, tariffs, etc.)
Reasons 2. Improve supply chain
3. Provide better goods and services
4. Understand markets
Intangible 5. Learn to improve operations
Reasons 6. Attract and retain global talent

2-3
Mission, Goals, and Strategy

2-4
Developing Missions and
Strategies
Mission statements tell an
organization where it is going

The Strategy tells the

organization how to get there

Strategy is a plan for

achieving organizational goals
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 Mission, Goals, and Strategy
 Mission
 The reason for an organization’s existence

 Mission statement answers the question “What business

are we in?”
 Goals

 Provides more details and describes the scope of the

mission
 Can be viewed as organizational destinations
 A foundation for developing the organizational strategies

 Mission and Goals are relate to how organization wants to be

perceived by the public, its employees, suppliers, and
customers.
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Mission, Goals, and Strategy
 Strategy
 A roadmap for reaching the organizational destinations
 Organizations have two strategies:
− Organizational Strategy
− Functional Strategy

• Tactics
• The methods and actions taken to accomplish strategies
• The “how to” part of the process
• Operations
• The actual “doing” part of the process
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 Mission

 Mission - where are

you going?
 Organization’s
purpose for being
 Answers ‘What do
we provide society?’
 Provides boundaries
and focus

2-8
 Factors Affecting Mission
Philosophy
and Values

Profitability
Environment
and Growth
Mission

Customers Public Image

Benefit to
Society

2-9
 Strategy
 Action plan to
achieve mission
 Functional areas
have strategies
 Strategies exploit
opportunities and
strengths, neutralize
threats, and avoid
weaknesses
 SWOT
2 - 10
 Strategic Process
Organization’s
Mission

Functional
Area Missions

Finance/
Marketing Operations
Accounting

2 - 11
 Outline
1- Reasons to Globalize
2- Mission, Goals, and Strategy
-Mission
- Strategy
3- Competitiveness
-Competing on Marketing,
-Competing on Cost,
-Competing on Operation

4- SWOT Analysis
5- key steps in strategy formulation

2 - 12
 Competitiveness
Definition: How effectively an organization meets the wants and needs of
customers relatively to others that offer similar goods or services.

− Organizations must have a competitive factor to sell

their goods and services in the market.
− It is an indictor of determining whether a company
prospers, barley gets by, of fails.
− Organizations compete through some combination of
their marketing and operations functions such as
pricing, delivery time, and product and service
differentiation.

2 - 13
 Competing on Marketing
Marketing influences competitiveness in several ways:
 Identifying consumer wants or/and needs
− A basic input in an organization’s decision-making process and central
to competitiveness.
− The ideal is to achieve a perfect match between those wants and needs
and the organization’s goods or/and services
 Price and Quality
− Two key factors in consumer buying decisions.
− It is very important to understand the trade-off decision consumer make
between price and quality.
 Advertising and Promotion

− Two approaches that allow organizations inform potential customers

about features of their products or services, and attract buyers.
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 Competing on Cost

Provide the maximum value as

perceived by customer. Does not
imply low quality.

© 2011 Pearson Education, Inc. publishing as Prentice Hall 2 - 15

 Competing on Operations
Operations influences competitiveness in several ways:

 Product and service design

− special features of a product/service can be a key factor in
consumer buying decision
 Location
− is important in the retail sector and to customers convenience
 Quality
− Customers are willing to pay more for a product/service if
they perceive a higher quality.
 Quick response
− In handling customer complaints, brining new/improved
product, delivering orders
2 - 16
 Competing on Operations
Operations influences competitiveness in several ways:

 Flexibility
− Ability to respond to changes (market, product features, demand,
etc)
 Inventory Management
− The capability to match supplies of goods and demands with
acceptable level of stock
 Supply Chain Management
− Coordinating internal and external operations to achieve timely
and cost-effective delivery
 Service
− After-sale (delivery, setup, warranty, technical support, etc.)
 Managers and workers
− If they are competent and motivated, they can provide a distinct
competitive edge. 2 - 17
 Outline
1- Reasons to Globalize
2- Mission, Goals, and Strategy
-Mission
- Strategy
3- Competitiveness
-Competing on Marketing,
-Competing on Cost,
-Competing on Operation

4- SWOT Analysis
5- key steps in strategy formulation

2 - 18
 SWOT Analysis
Mission

Internal External
Strengths Opportunities

Analysis
Internal External
Weaknesses Threats

Strategy
The four elements of SWOT are strengths, weaknesses, opportunities,
and threats. Its purpose is to maximize opportunities and minimize
threats in the environment, while maximizing the advantages of the
organization's strengths and minimizing the weaknesses. 2 - 19
 key steps in strategy formulation
1. Link strategy to the organization’s mission or vision
statement
2. Assess strengths, weakness, opportunities, and threat
(SWOT) and identify core competencies
3. Identify order winners and order qualifiers
- order winners: Characteristics of an organization’s goods
or services that cause it to be perceived as better than the
competition
- order qualifiers: Characteristics that customer perceived
as minimum standards of acceptability to be considered as
a potential for purchasing
4. Select one or two strategies to focus on.

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 Summary
1- Reasons to Globalize
2- Mission, Goals, and Strategy
-Mission
- Strategy
3- Competitiveness
-Competing on Marketing,
-Competing on Cost,
-Competing on Operation

4- SWOT Analysis
5- key steps in strategy formulation

2 - 21