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Strategy specifies how the firm will employ its production capabilities to support its corporate strategy.
Operations Strategy is the tool that helps to define the methods of producing goods or a service offered to the customer
pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources.
A plan to transform an organization's overall strategic objectives into operational deliverables. It involves the design of the product or service and the processes by which the product or service is produced; the way in which production is managed and controlled; and the design of processes for the constant improvement of the operations
Strategy Process
Customer Needs
Example
More Product
Corporate Strategy
Given the choices customers face today, how do they decide which product or service to buy? Different customers are attracted by different attributes. Some customers are interested primarily in the cost of a product or service and, correspondingly, some companies attempt to position themselves to offer the lowest prices.
Price , however is not only basis on which a firm can compete. For example, we do buy premium shirts from Louis Philippe for their performance or features and they definitely not the cheapest available.
under-designed products and services will lose customers to product that cast a little more.
Delivery
A firms ability to deliver more quickly than its competitors may be critical . A company that can offer an on site repair service in only 1 or 2 has a significant advantage over a competing firm that guarantees service only within 24 hours
Coping
its Volume
A company ability to respond to increases and decreases in demand is important to its ability to compete. When demand is increasing and strong= costs are continuously reduced
But when demand decreases it led to laying off employees and related reduction in assets.
Flexibility
speed: CHANGE IT
Refers to the ability of a company to offer a wide variety of products to its customers. An important element of this ability to offer different products is the time required for a company to develop a new product and to convert its processes to offer the new product.
Delivery
promised
This dimension relates to the firms ability to supply product or service on or before a promised delivery due date. For a service firm such as Federal Express, delivery reliability is the cornerstone of its strategy.
In the Kaplan and Nortons Generic Strategy Map, under the Financial Perspective, the Productivity Strategy is generally made up from two components:
1.
2.
Improve cost structure: Lower direct and indirect costs Increase asset utilization: Reduce working and fixed capital
In the Kaplan and Nortons Generic Strategy Map, under the Financial Perspective, the Revenue Growth Strategy is generally made up from two components:
1.
2.
In the Kaplan and Nortons Generic Strategy Map, under the Customer Perspective, there are three ways suggested as means of differentiating a company from others in a marketplace: 1. Product leadership
2.
3.
Customer intimacy
Operational excellence
In the Kaplan and Nortons Generic Strategy Map, under the Learning and Growth Perspective, there are three principle categories of intangible assets needed for learning:
1.
Strategic competencies
2.
3.
Strategic technologies
Climate for action
Customer Needs
Enterprise capabilities
Operations & Supplier capabilities R&D Technology Systems People Distribution
Support Platforms
Financial management
Information management
Strategy Map
Financial Perspective
What it is about!
Improve Shareholder Value
Customer Perspective
Internal Perspective
Build-Increase-Achieve
1)
2)
a) b)
c) d)
Process-based
Capacities that transforms material or information and provide advantages on dimensions of cost and quality
Systems-based
Capacities that are broad-based involving the entire operating system and provide advantages of short lead times and customize on demand
Organization-based
Capacities that are difficult to replicate and provide abilities to master new technologies