2. Corporate Strategy is:
The direction and scope of an organisation over
the long-term which achieves advantage in
a changing environment through its
configuration
of resources and competencies with the aim of
fulfilling stakeholder expectations
3. Let’s think Strategically:
Inputs Outputs
Inputs Customer
Value
Conversion
Process
Company
Competencies
+
Company
Strategy
+
Customer
Value System
From Operational:
To Strategic:
4. Strategy Hierarchy
Key strategic
decisions
Influences on
decision making
Business
strategy
What is the mission?
What are the strategic
objectives of the firm?
How to compete?
Customer/market dynamics
Competitor activity
Core technology dynamics
Financial constraints
Corporate
strategy
What business to be in?
What to acquire?
What to divest?
How to allocate cash?
Economic environment
Social environment
Political environment
Company values and ethics
Functional
strategy
How to contribute to the
strategic objectives?
How to manage the
operational resources?
Skills of function’s staff
Current technology
Recent performance of the
function
5. Vocabulary of Strategy
• Mission Statement:
– Overriding purpose in line with the share holders
expectations
• Vision:
– Desired Future state
– Focus of company attention
• Strategic Objectives
– Precise statement of business goals
• Strategic plans
– How you will achieve your strategic goals
• Values
– Statement guiding how you will behave
6. Why do we do Strategy?
To gain Competitive Advantage
“A competitive advantage is gained by offering customers
greater value, either by means of lower prices or by providing
greater benefits and service that justifies higher prices”
Michael Porter (1985)
7. Strategy - Market v’s Resource
• Market based:
– traditional approach
– operations is perfectly adjustable
– focussed on successfully following the dictates of the
market
• Resource based:
– based on the idea of core competency
8. Competencies
To be in the game: (Hygiene Factors)
• Threshold Competencies
– Resources, activities and processes needed to
meet the customers minimum requirements
9. Competencies
To do well in the game you need to create:
• Core Competences
– Activities (processes and skills) that are difficult
for competitors to imitate and therefore underpin
competitive advantage
10. Competencies
To win the game you need to develop:
• Distinctive competencies
– Unique Resources: Resources that are difficult to imitate or obtain
– Unique Processes: Processes that are difficult to imitate or obtain
• Characteristics of Distinctive Competencies:
– They cannot be (easily) transferred (sold) to other firms
– They will affect customer buying decisions
– Are capable of creating major competitive advantage if utilized
properly
11. Operations Strategy
Major decisions about, and management of: core
competencies, capabilities and processes, technologies,
resources and key tactical activities necessary in the function or
chain of functions that create and deliver product and service
combinations and the value demanded by the customer.
14. Trade-offs
In operations systems, possible trade-offs are:
• Low price against available variety:
– systems that have to operate at low cost will normally be set-
up to produce a small number of configurations
• Speed against flexibility:
– changes to the requirement will reduce the speed of service e.g., any change
to the timing or destination of a package may affect the speed of the delivery
• Personalized attention against volume of customers:
– a call centre may set time limit targets for its operators specifying a maximum
call length and this action may force the operator to be dismissive with the
customer reducing the quality of the service experience
