STRATEGY, STRATEGIC ‎PLANNING, STRATEGIC ‎DECISION, STRATEGIC ‎CAPABILITY, OPERATIONS ‎MANAGEMENT

Operations Management (5568)
Strategy, Strategic Planning, Strategic Decision & Strategic Capability,
Operation Management & Operation Strategy
STRATEGY
Definitions:
 A common vision that unites an organization, provides consistency in decisions, and keeps the
organization moving in the right direction. (Russell & Taylor III, 2011)
 A set of broad statements that set the direction for the organisation to take. It specifies how to satisfy
customers, how to grow the business, how to compete in its environment, how to manage the
organisation, how to develop capabilities within the business and how to achieve financial
objectives. (Gardiner, 2010)
 A plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result:
 a strategy for getting ahead in the world. (Collins English Dictionary, 2012)
 Strategy is a set of broad statements that set the direction for an organisation to take. It specifies how
to satisfy customers, how to grow the business, how to compete in its environment, how to manage
the organisation, how to develop capabilities within the business and how to achieve financial
objectives. (Commonwealth of Learning, 2012).
Strategy is at the very core of any organisation and it does not matter whether that organisation is in the
manufacturing sector, a service provider, a not-for-profit organisation or a government department. If it
exists, then it must have a purpose. If it has a purpose, then it must have a strategy outlining how it intends to
achieve that purpose.
FIVE Forces Model: There is a model called Five Forces Model developed by Porter (1979) to shape
business strategy are:
 Entry barriers to the market from other organisations. Barriers such as size, proprietary products and
processes, and brand identity.
 Determinants of supplier power, such as differentiation, substitution and cost.
 Determinants of buyer power, such as volume, substitutes, incentives and buyer information.
 Availability of substitute products.
 Existing competitors.
Porter advocated that the formation of strategy is an
analytical process based on a clearly defined position in
the market. He supported this by analysis rather than
prescription. His generic ideas have been widely
accepted by management and academics as the
foundation for competitive strategy.
The words “strategy” and “strategic management”
relate to a number of levels within an organization and a
hierarchy of these together with inter -related strategies
is shown in Figure 1.1. The lowest level of strategy is
often referred to as “Functional strategy” which focuses

on the day-to-day operational activities that the organization is involved in. Within a business there are often
a number of functional strategies which take their lead from the next level of “Business strategy”. This
intermediate level business strategy covers the aggregation of the functional strategies for a single business
unit or organization with a concentration on the tactics that the business will use to address its threats from
competitors and market opportunities with present or targeted customers. The business strategy should reflect
the higher level “Corporate strategy”. This highest strategy level needs to consider the overarching strategy
of the business to address questions concerning the arena in which the business should compete and how the
organization’s activities contribute to its competitive advantage and longer –term sustainability. It should
also reflect the organization’s mission, vision and objectives seen in its business plan. (Burtonshaw-Gunn,
2010).
In general the development of a strategy, whether for a newly established or a mature organization, will
involve addressing the following four key areas:
• Analysis of strategic goals (vision, mission and strategic objectives) along with the analysis of the
internal and external environment of the organization.
• Decision making on the key areas of organizational development and the most effective ways to
address them.
• Implementation by identifying and deploying resources, structures and systems to implement the
strategy efficiently and effectively.
• Support from the provision and maintenance of policies, organizational infrastructure, governance,
culture and leadership which all play a role in supporting strategy implementation.
(Burtonshaw-Gunn, 2010).
Examples of Business Strategies
New companies often face unique challenges. Specific strategies, such as identifying product strengths,
adjusting pricing, or acquiring another business, have historically been used to get a small enterprise off the
ground. Understanding these strategies, and skillfully implementing them, can help entrepreneurs achieve
success.
 Growth Strategy of New Products or Features: A growth strategy entails introducing new
products or adding new features to existing products. Sometimes, a small company may be forced to
modify or increase its product line to keep up with competitors. Otherwise, customers may start
using the new technology of a competitive company. For example, cell phone companies are
constantly adding new features or discovering new technology. Cell phone companies that do not
keep up with consumer demand will not stay in business very long.
 Finding New Markets for Products: A small company may also adopt a growth strategy by finding
a new market for its products. Sometimes, companies find new markets for their products by
accident. For example, a small consumer soap manufacturer may discover through marketing
research that industrial workers like its products. Hence, in addition to selling soap in retail stores,
the company could package the soap in larger containers for factory and plant workers.
 Product Differentiation Strategy: Small companies will often use a product differentiation strategy
when they have a competitive advantage, such as superior quality or service. For example, a small
manufacturer or air purifiers may set themselves apart from competitors with their superior
engineering design. Obviously, companies use a product differentiation strategy to set themselves
apart from key competitors. However, a product differentiation strategy can also help a company
build brand loyalty. Eg. Apple iPad Air vs. competitors.
 Price-Skimming Strategy: A price-skimming strategy involves charging high prices for a product,
particularly during the introductory phase. A small company will use a price-skimming strategy to
quickly recover its production and advertising costs. However, there must be something special

about the product for consumers to pay the exorbitant price. An example would be the introduction
of a new technology.
A small company may be the first to introduce a new type of solar panel. Because the company is the
only one selling the product, customers that really want the solar panels may pay the higher price.
One disadvantage of a price-skimming is that it tends to attract competition relatively quickly.
Enterprising individuals may see the profits the company is reaping and produce their own products,
provided they have the technological know-how. Eg. Walmart, Ikea’s low prices.
 Acquisition Strategy to Gain Competitive Advantage: A small company with extra capital may
use an acquisition strategy to gain a competitive advantage. An acquisition strategy entails
purchasing another company, or one or more of its product lines. For example, a small grocery
retailer on the east coast may purchase a comparable grocery chain in the Midwest to expand its
operations. Eg. Facebook’s Instagram acquisition. (Suttle, 2019).
STRATEGIC PLANNING
Definitions:
 Strategic plan is Future-oriented statement that presents all the information and data needed to
determine the direction of a company or project. There are several elements that go into a corporate
plan: vision, assumptions, objectives, information, analysis, measurement, evaluation, and
opportunity. (Kurian, 2013)
 Strategic planning is the process of determining the strategic plan which includes long-term goals,
policies and plans for an organisation. (Commonwealth of Learning, 2012)
 Strategic plans relate to the long-term needs of the organisation and suggest comprehensive direction
for future action. Essentially a top management responsibility, strategic planning involves
determination of objectives for the overall organisation and the deliberate choice of direction that the
organisation must take. Moving from a functional organisation structure to a project team based
structure to achieve operational efficiency and flexibility is a strategic choice that an organisation
may make, and the course of action used to achieve this will have organisational long-term
implications. (Kaushik, 1980)
 Strategic planning is a sub-system of strategic management. Strategic planning begins with strategic
analysis. The development and assessment of strategic options then follows. It ends with the
definition of strategic project plans to implement the best option. (Grunig & Kuhn, 2018).
Mintzberg's 5 Ps for strategy:
Fig. 1.2

Strategic planning is the process of determining the strategic plan which includes long-term goals, policies
and plans for an organisation. Mintzberg suggests there are five ways in which the term ‘strategy’ is used
(Fig. 1.2). These are called ‘Mintzberg's 5Ps for Strategy’. According to him, strategy can mean any of the
following:
1. Strategy as Plan: The strategy is made in advance of its implementation and is followed up by actual
implementation and development.
2. Strategy as Ploy: This is a specific manoeuvre intended to outperform a competitor.
3. Strategy as Pattern: Strategy can sometimes be explained in terms of a pattern that emerged rather
than something that was preplanned.
4. Strategy as Position: This is represented by finding a niche, providing distinctive product, or by
exploiting existing competences to deter competitors.
5. Strategy as Perspective: This refers organisational culture as strategy can be a result of the way a
company views itself. (Mintzberg’s 5P’s)
Benefits of Strategic Planning
Here are some of the benefits that may occur as a result of strategic planning.
 Motivating staff and volunteers. Thinking about the future is a stimulating and energizing process. It
can create a shared vision, with concrete ideas about how to surmount obstacles in order to achieve
that vision.
 Building a planning team with a common vision. The strategic plan that emerges from the process
is generally more realistic and achievable, and working or interdependent relationships within the
organization are strengthened.
 Confronting key issues and solving problems. Strategic planning sets in motion a dynamic process
that allows the organization to continually reassess, confront change, and grow within an agreed-
upon framework.
 Defining roles and responsibilities. Measurable performance objectives are set and the person(s)
who is responsible for specific activities is identified.
 Challenging the status quo. The process creates an open atmosphere, stressing the interests of the
whole organization. It often answers the question “How can we do things better?” in a more
systematic and thorough way.
 Allowing busy managers and policy makers to concentrate exclusively on the organization’s future
for a short period of time, meaning that they will be able to focus their expertise and insights on self-
assessment and planning future directions.
 Explaining or exposing your organization to others, particularly donors. A thoughtful and clear
strategic plan is often a good marketing tool and can encourage donor support for the organization
and its future directions.
 Developing a renewed sense of organizational mission and consensus, so that individual
perspectives, roles, and problems are subsumed by an overall plan that coordinates all staff members
and volunteers so that agreed-upon goals and objectives are achieved in a timely manner. (Path
Finder Int., 2012)

Figure 1.3 Relationship between strategic planning and strategies.
Characteristics of Strategic Planning
The following features characterize strategic planning:
 It is a systematic process. The mere pretense of results of decisions based on intuition or power is
therefore not strategic planning.
 The underlying analysis and the guidelines developed by strategic planning are long-term oriented.
 The planning process looks at the company as a whole and at important parts of it. It deliberately
avoids getting lost in details.
 The most important tasks in the process should be performed in large part by the management.
 The process concentrates on determining the future success potentials.
 Strategic planning should contribute to the long-term accomplishment of the overriding values and
objectives. (Grunig & Kuhn, 2018)

Strategic Planning Process
There are several steps in the strategic planning process. Many experts or facilitators vary the sequence of
these steps, but there is general consensus about the most important ones to include.
STEP A:
Analyze the shared values and experiences of staff and board. Plan a meeting or
workshop to facilitate strategic planning.
STEP B: Review and update or prepare a Mission Statement for the organization.
STEP C:
Analyze the organization’s external environment (“PEST” – political, economic,
social, and technological factors) and internal environment (resources or inputs,
processes, and performance or outputs).
STEP D:
Conduct a SWOT analysis (assessing the organization’s internal strengths and
weaknesses, and its external opportunities and threats).
STEP E: Create smaller groups for more in-depth planning activities in key areas.
STEP F:
Review the organization’s existing strategic plan (if there is one) to identify
aspects of the plan that are still strategic, those that are no longer strategic due to
changing environments, and gaps or new issues that should be addressed in a
revised plan.
STEP G:
Outline a vision of where the organization should be three to five years from
today (the “vision of success”).
STEP H: Identify the strategic issues facing the organization.
STEP I:
Formulate goals and strategic objectives to address major issues facing the
organization and ensure its longer term growth and sustainability.
STEP J:
Develop work plans showing specific activities, persons responsible, resources
needed, and indicators by which performance will be measured.
STEP K:
Identify next steps for resource mobilization and create a sustainability and
financial plan that costs activities and outlines approaches for generating
sufficient revenue or funding.
STEP L:
Prepare the written detailed five-year strategic plan (mission statement,
environmental or situational analyses, strategic issues, goals and strategic
objectives, activities plans, sustainability and financial plans, monitoring and
evaluation procedures or cycles)
STEP M:
Seek ratification and disseminate the plan to staff, stakeholders, and potential
donors, using this as an opportunity to market the organization or to build useful
working relationships and coalitions.
STEP N:
Implement and institutionalize the plan as a basis for setting performance
standards, decision making, planning, monitoring, and resource mobilization and
allocation. Use and review the plan systematically, updating or revising it after
two or three years, if needed.
(Path Finder Int., 2012)

Fig. 1.5 Strategic Planning Process
Example: WORLD METEOROLOGICAL ORGANIZATION (WMO)
Purpose of the WMO Strategic Plan
The WMO Strategic Plan sets the directions and priorities to guide the activities of Members and all WMO
constituent bodies to enable all Members to improve their core information, products and services, maintain
necessary infrastructure, and to directly benefit from advancements in science and technology.
WMO strategic planning process
WMO has built its strategic planning on the results-based management (RBM) concept, which also steers the
programme definition, implementation and management in the Secretariat. This approach enables the
Organization to better achieve its objectives and assist Members in realizing their own sustainable plans. The
WMO strategic planning process begins with the integration of Members’ input into a high-level planning
document that defines the global societal needs, strategic priorities and expected results.

The four building blocks of WMO RBM Framework are WMO Strategic Plan, WMO Operating Plan, WMO
Results-based Budget and WMO Monitoring and Evaluation System.
Structure of the WMO Strategic Plan
The WMO Strategic Plan 2016-2019 is structured along three global societal needs, seven strategic
priorities and eight expected results. (Fig. 1.6)
Global Societal Needs
 Improved protection of life and property;
 End poverty, ensure sustainable resilient livelihoods, food security, sustainable access to water and
energy, healthy lives, gender equality and economic growth, and combat climate change; and
 Sustainable use of natural resources and improved environmental quality.
Expected Results
 Improved service quality and service delivery
 Reduced disaster risk Improved data-processing, modelling and forecasting
 Improved observations and data exchange
 Advance targeted research
 Strengthened capacity development
 Strengthened partnerships
 Improved efficiency and effectiveness (WMO, 2019)
Fig. 1.6 Schematic
representation of
WMO strategic
planning process

STRATEGIC DECISION
Definitions:
 Strategic decision: The “Chosen alternative that affects key factors which determine the success of
an organization's strategy. In comparison, a tactical decision affects the day-to-day implementation
of steps required to reach the goals of a strategy”. (BD, 2019a)
 Strategic decisions are the decisions that are concerned with whole environment in which the firm
operates, the entire resources and the people who form the company and the interface between the
two. (MSG, 2019)
 Strategic Decisions Making: “SDM is of great and growing importance because of five
characteristics of strategic decisions: They are usually big, risky and hard to reverse having
significant long-term effects, they are the bridge between deliberate and emerging strategy, they can
be a major source of organizational learning, they play an important role in the development of
individual managers and they cut across functions and academic disciplines”. (Papadakis & Barwise,
1998)
Characteristics/Features of Strategic Decisions
 Strategic decisions have major resource propositions for an organization. These decisions may be
concerned with possessing new resources, organizing others or reallocating others.
 Strategic decisions deal with harmonizing organizational resource capabilities with the threats and
opportunities.
 Strategic decisions deal with the range of organizational activities. It is all about what they want the
organization to be like and to be about.
 Strategic decisions involve a change of major kind since an organization operates in ever-changing
environment.
 Strategic decisions are complex in nature.
 Strategic decisions are at the top most level, are uncertain as they deal with the future, and involve a
lot of risk.
 Strategic decisions are different from administrative and operational decisions. Administrative
decisions are routine decisions which help or rather facilitate strategic decisions or operational
decisions. Operational decisions are technical decisions which help execution of strategic decisions.
To reduce cost is a strategic decision which is achieved through operational decision of reducing the
number of employees and how we carry out these reductions will be administrative decision. (MSG,
2019)
Strategic decision making involves the following 3 things:
 The long term way forward for the company
 Selection of proper markets for the company
 The products and tactics needed to succeed in the targeted market.
Overall, a firm can move forward only if it has taken the necessary strategic decisions. Furthermore, whether
the decisions were right or wrong, can only be proved only over a long period of time. If these decisions
were right, and had great insight in the future, then the company can be very successful. However, if these
strategic decisions did not consider empirical evidence of the current market conditions, then the firm can fail
badly. (Bhasin, 2019)

Some important features of strategic decision making are:
1) Strategy is at many times at tangent with marketing decisions: Where marketing decisions are
short term, strategic decision making might consider a long term initiative, such as launching a very
new and innovative product, or changing the existing product lines radically. Technology
or innovation is at the crux of strategic decision making.
2) There is immense risk involved while taking strategic decisions: Naturally, the implemented
plans will show positive or negative results only after 4-5 years, so, the risk in strategic decision
making is huge. Think about the time and energy, not to say natural resources wasted to implement a
plan which failed after 4-5 years. Yet, even after the risk involved, companies have to implement
risky strategic decisions from time to time just because the directors thought a unique product had
demand in the market, or that another product is required in the market. Strategic decisions involve
necessary risk and success is not guaranteed.
3) Strategic decisions involve a lot of Ifs and Buts: Like a mind map and the number of branches and
nodes that form the complete mind map, when a brain starts thinking, the central thought might have
further branches, and these branches will have even more nodes (or sub branches).
Similar to the mind map, a business can face many problems in the course of its run. A competitor
can crop up, the market can become penetrative, the external environment can change, and many
other unforeseen situations can happen. The strategic decision making has to consider all these
alternatives, whether positive or negative. And the plan has to also include the action that the firm
will take, if any of the above business problems or factors come into play.
4) Strategy implementation timelines: In business, timelines are very important. If a product is to be
launched, the launch date is decided at least a year back, the sales phase has to be implemented at
least 2 months before the actual launch so that sellers are in place when the product is launched.
Moreover, the service network is also to be planned before the launch, so that service issues are

sorted out when there are problems after the product launch. If these concepts are not implemented,
the marketing strategy and hence the product can fail miserably.
5) Preparing for the competition’s response: Whenever company changes the market equilibrium,
the competitors, whose businesses the company have directly challenged, are sure to respond. When
they respond, the market changes and the company have to change its strategy accordingly.
In general there are two ways that a company directly affects the competition and the market.
 The company creates a completely new operating norm in the market itself.
 It raises customer expectations and thereby changes the market equilibrium.
Most strategic decisions call for radical changes in the way the company operates in the existing market.
Accordingly, the perception of competitors and customers will change for the company. The company has to
in turn be prepared for the response of competitors in such a case. (Bhasin, 2019)
Implementation of strategic decisions:
While implementing strategic decisions, Decision makers need to have eyes at the front as well as the back of
its head. Decision makers need to look at what was decided at the start, as due to short term pressure, it is
very much possible to deviate from the path which was already set. (Bhasin, 2019)
STRATEGIC CAPABILITY
Definition:
 Strategic capability: Set of capacities, resources, and skills that create a long-term competitive
advantage for an organization. (BD, 2019b)
 Strategic capability can be defined as the resources and competences of an organisation needed for it
to survive and prosper. (Johnson, Scholes & Whittington, 2008)
Competitive advantage derives from strategic capabilities
 Resources: Tangible resources are the physical assets of an organisation such as plant, people and
finance. Intangible resources are non-physical assets such as information, reputation and knowledge.
 Unique resources are those resources that critically underpin competitive advantage and that others
cannot easily imitate or obtain.

Fig. 1.8 Strategic Capabilities and Competitive Advantage
 The term competences is used to mean the skills and abilities by which resources are deployed
effectively through an organisation’s activities and processes.
 Core competences are the skills and abilities by which resources are deployed through an
organisation’s activities and processes such as to achieve competitive advantage in ways that others
cannot imitate or obtain. E.g., marketing skills.
 Threshold capabilities are those needed for an organisation to meet the necessary requirements to
compete in a given market. These could be threshold resources required to meet minimum customer

requirements: for example, the increasing demands by modern multiple retailers of their suppliers
mean that those suppliers have to possess a quite sophisticated IT infrastructure simply to stand a
chance of meeting retailer requirements. Or they could be the threshold competences required to
deploy resources so as to meet customers’ requirements and support particular strategies. Retailers
do not simply expect suppliers to have the required IT infrastructure, but to be able to use it
effectively so as to guarantee the required level of service.
If a firm has resources that are (the VRIO Framework):
 Valuable,
 Rare,
 costly to Imitate, and
 the firm is Organized to exploit these resources (Fig. 1.9)
Then the firm can expect to enjoy a sustained competitive advantage.
Competitive advantage derives from strategic capabilities:
 Strategic capability comprises tangible and intangible resources deployed via competences
 Continual improvement of cost efficiency is vital
 For sustainable competitive advantage strategic capabilities must be valuable, rare, robust or non-
substitutable
 Dynamic capabilities are needed in a changing environment
 Value chain/value network/activity mapping to understand cost and value creation
 Benchmarking establishes relative performance and challenges assumptions
 Management of strategic capabilities involves stretching capabilities and building dynamic
capabilities

OPERATIONS MANAGEMENT
Definitions:
Operations management is…
 “The design, execution, and control of operations that convert resources into desired goods and
services, and implement a company's business strategy”. (BD, 2019c)
 “Management of the conversion process, which converts land, labor, capital, and management inputs
into desired outputs of goods and services”. (Kumar & Suresh, 2009)
 “The systematic design, direction, and control of processes that transform inputs into services and
products for internal, as well as external, customers”. (Krajewski, Malhotra & Ritzman, 2016)
 “A systematic approach to address all the issues pertaining to the transformation process that
converts some inputs into output that are useful and fetch revenue to the organizations”.
(Mahadevan, 2007)
Operations management designs, operates, and improves productive systems -- systems for getting work
done. The food we eat, the movies we watch, the stores in which we shop, and the books we read are
provided to us by the people in operations. Operations managers are found in banks, hospitals, factories, and
government. They design systems, ensure quality, produce products, and deliver services. They work with
customers and suppliers, the latest technology, and global partners. They solve problems, reengineer
processes, innovate, and integrate. An operation is more than planning and controlling; it’s doing. Whether
it’s superior quality, speed-to-market, customization, or low cost, excellence in operations is critical to a
firm’s success. (Russell &Taylor, 2010)
Operations management refers to the systematic design, direction, and control of processes that transform
inputs into services and products for internal, as well as external customers. It can be a source of competitive
advantage for firms in both service as well as manufacturing sectors (e.g. Disney). A process is any activity
or group of activities that takes one or more inputs, transforms them, and provides one or more outputs for its
customers. For organizational purposes, processes tend to be clustered together into operations. An operation
is a group of resources performing all or part of one or more processes. Processes can be linked together to
form a supply chain, which is the interrelated series of processes within a firm and across different firms that
produce a service or product to the satisfaction of customers. (Krajewski, Malhotra & Ritzman, 2016)
Role of Operations in an Organization
Broadly speaking, operations and supply chain management underlie all departments and functions in a
business. Fig. 1.10 shows operations as one of the key functions within an organization. The circular
relationships in Fig. 1.10 highlight the importance of the coordination among the three mainline functions of
any business, namely, (1) operations, (2) marketing, and (3) finance. Each function is unique and has its own
knowledge and skill areas, primary responsibilities, processes, and decision domains. From an external
perspective, finance generates resources, capital, and funds from investors and sales of its goods and services
in the marketplace. Based on business strategy, the finance and operations functions then decide how to
invest these resources and convert them into physical assets and material inputs. Operations subsequently
transforms these material and service inputs into product and service outputs. These outputs must match the
characteristics that can be sold in the selected markets by marketing. Marketing is responsible for producing
sales revenue of the outputs, which become returns to investors and capital for supporting operations.

Functions such as accounting, information systems, human resources, and engineering make the firm
complete by providing essential information, services, and other managerial support. These relationships
provide direction for the business as a whole and are aligned to the same strategic intent. It is important to
understand the entire circle, and not just the individual functional areas. How well these functions work
together determines the effectiveness of the organization. Functions should be integrated and should pursue a
common strategy. Success depends on how well they are able to do so. No part of this circle can be
dismissed or minimized without loss of effectiveness, and regardless of how departments and functions are
individually managed; they are always linked together through processes. Thus, a firm competes not only by
offering new services and products, creative marketing, and skillful finance but also through its unique
competencies in operations and sound management of core processes. (Krajewski, Malhotra & Ritzman,
2016)
The operations function within an organisation is required to make a number of important decisions as part of
its normal processes. These decisions are structural, such as where to locate and how big the facility should
be, infrastructural decisions such as how should planning be performed and how should quality be
determined, and integration decisions such as how all these actions and processes are tied together.
Scope of Operations Management
The scope of operations management based on the interrelationship of three aspects, namely:
1. Structural aspects, in the form of input that will be transformed according to criteria of the desired
products, machinery, equipment, formulas and models.
Fig. 1.10 Integration between Different Functional areas of a Business

2. Functional aspects, namely the link between the component input, with interaction of the planning,
implementation, control, and improvements to obtain optimum performance, so that operations can
be run continuously.
3. Environmental aspects, is the tendency that occurs outside the system, such as community,
government, technology, economics, political, social, cultural, demonstrated ability to adapt.
Each manager will carry out basic functions of management processes. Management process consists of
planning, organizing, setting up employees, directing, and controlling. Operations managers to implement
these management processes indecision making in operations management functions. So, the scope
of operations management can be defined in following important decisions:
1. The design of products and services
2. Manage the quality
3. The strategy process
4. Strategic location
5. Layout strategy
6. Human resources
7. Supply chain management
8. Inventory management
9. Scheduling
10. Maintenance (Economics Education, 2010)
OPERATIONS STRATEGY
Definitions:
Operations Strategy is defines as…
 “The means by which operations implements the firm’s corporate strategy and helps to build a
customer-driven firm”. (Krajewski, Malhotra & Ritzman, 2016)
 “A plan that details how a business will use its production resources to meet its goals. Many business
managers will put together a detailed operation strategy in order to clearly present to subordinate
staff their plans for how their portion of the business should function in order to attain its
objectives”. (BD, 2016d)
 “A process by which key operations decisions are made that are consistent with the overall strategic
objectives of the firm. (Mahadevan, 2007)
 “The pattern of decisions and actions that shape the long-term vision, objectives and capabilities of
the operation and its contribution to overall strategy. It is the way operations resources are developed
over the long term to create sustainable competitive advantage for the business”. (Slack, Chambers,
Johnston & Betts, 2006)
So, Operational strategies refers to the methods companies use to reach their objectives. By developing
operational strategies, a company can examine and implement effective and efficient systems for using
resources, personnel and the work process. Service-oriented companies also use basic operational strategies
to link long- and short-term corporate decisions and create an effective management team.
Importance of Operations Strategy
As customers all over the world increase in their taste for quality and grow in sophistication, the operation
function of the company becomes increasingly important; thus, the need for an operations strategy in gaining
competitive advantage over the myriad of competitors home and abroad. The core function of operations

strategy therefore is to make available a plan as to the best utilization of resources. This is to enable the
realization of objectives enshrined in the corporate strategy. Generally, resources tend to be limited and so
there is the need for a plan that clearly shows the most effective way to use resources. An organization’s
resources may constitute employees, machines, technology, information and the like.
Designing of operation strategy
There is no single ‘best’ operations strategy for an organization. Instead managers try to identify the features that they
think will give the best results. There are many factors to consider in these decisions, particularly:
 Higher strategies – which give the aims and context for the operation strategy;
 Other internal constrains and strength- including the experience and skills of the organization,
existing products and processes, reputation, location and so on ;
 Customer demand – including the type of products, quality ,timing , price, after sales support etc
 Competitors – other organizations trying to meet the same customer demands;
 Other external constraints and features – including economic conditions, legal requirements, market
conditions etc.
Operations strategy has a long-term concern for how to best determine and develop the firm's major
operations resources so that there is a high degree of compatibility between these resources and the business
strategy. Very broad questions are addressed regarding how major resources should be configured in order to
achieve the firm's corporate objectives. Some of the issues of relevance include long-term decisions
regarding capacity, location, processes, technology, and timing. (Fig. 1.11)
Operations strategy specifies the means by which operations implements corporate strategy and helps
to build a customer-driven firm. It links long-term and short-term operations decisions to corporate
strategy and develops the capabilities the firm needs to be competitive. It is at the heart of managing
processes and supply chains. A firm’s internal processes are only building blocks: They need to be organized
to ultimately be effective in a competitive environment. Operations strategy is the linchpin that brings these
processes together to form supply chains that extend beyond the walls of the firm, encompassing suppliers as
well as customers. Since customers constantly desire change, the firm’s operations strategy must be driven
by the needs of its customers. (Krajewski, Malhotra & Ritzman, 2016)

Difference between Strategic and Operational Planning
(Path Finder Int., 2012)
Fig. 1.11 Connection between Corporate Strategy
and key OM decisions

Differences between Strategic, Administrative and Operational decisions
Strategic Decisions Administrative Decisions Operational Decisions
Strategic decisions are long-term
decisions.
Administrative decisions are
taken daily.
Operational decisions are not
frequently taken.
These are considered where The
future planning is concerned.
These are short-term based
Decisions.
These are medium-period based
decisions.
Strategic decisions are taken in
Accordance with organizational
mission and vision.
These are taken according to
strategic and operational
Decisions.
These are taken in accordance
with strategic and administrative
decision.
These are related to overall Counter
planning of all Organization.
These are related to working
of employees in an
Organization.
These are related to production.
These deal with organizational
Growth.
These are in welfare of
employees working in an
organization.
These are related to production
and factory growth.
REFERENCES
BD. (2019a). Strategic decision. businessdictionary.com Retrieved from http://www.businessdictionary.com/definition/strategic-decision.html
BD. (2019b). Strategic capability. businessdictionary.com Retrieved from http://www.businessdictionary.com/definition/strategic-capability.html
BD. (2019c). Operations management. businessdictionary.com Retrieved from http://www.businessdictionary.com/definition/operations-
management.html
BD. (2019d). Operations Strategy. businessdictionary.com Retrieved from http://www.businessdictionary.com/definition/operational-strategy.html
Bhasin, H. (2019). What is strategic decision making and what does it involve? Marketing9. Retrieved from https://www.marketing91.com/strategic-
decision-making/
Burtonshaw-Gunn, Simon A. (2010). Essential Tools for Operations: Tools, Models and Approaches for Managers and Consultants. Chichester: John
Wiley.
Collins English Dictionary [digital edition]. (2012). Retrieved from https://www.dictionary.com/browse/strategy?s=t
Commonwealth of Learning. (2012). C4: Operations Management. Vancouver: Commonwealth of Learning.
Economics Education. (2010). Scope of Operations Management. Retrieved from http://neweconomicseducation.blogspot.com/2012/03/scope-of-
operations-management.html#
Gardiner, D. (2010). Operations management for business excellence, 2nd
ed. Auckland, New Zealand: Pearson Education.
Grunig, R. & Kuhn, R. (2018). The Strategy Planning Process: Analyses, Options, Projects, 2nd
ed. Berlin: Springer-Verlag.
Johnson, G., Scholes, K. & Whittington, R. (2008). Exploring Corporate Strategy, 8th
Ed. Harlow: Prentice Hall.
Kapucu, N. (2016). Strategic planning. In Encyclopædia Britannica. Retrieved from https://www.britannica.com/topic/strategic-planning-
organization
Kaushik, M. (1980). Addendum 1 for C2: Management and Organisations. New Delhi: Indira Gandhi National Open University/COL.
Krajewski, L. J., Malhotra, M. K. & Ritzman, L. P. (2016). Operations Management: Processes And Supply Chains. 11th /Global Ed. Boston: Pearson
Education.
Kumar, S. A. & Suresh, N. (2009). Operations management. New Delhi: New Age Int.
Kurian, G. T. (2013). The AMA Dictionary of Business and Management. New York: AMACOM.
Mahadevan, B. (2007). Operation Management: Theory and Practice. New Delhi: Pearson Education.
Mintzberg’s 5P’s of Strategy. (n.d.) Retrieved from http://www.free-management-ebooks.com/news/mintzbergs-5ps-of-strategy/
MSG. (2019). Strategic Decisions - Definition and Characteristics. Management study guide. Retrieved from
https://www.managementstudyguide.com/strategic-decisions.htm
Papadakis, V., & Barwise, P. (1988a). Strategic decisions. Berlin: Spinger-Verlag.
Path Finder Int. (2012). Strengthening Your Organization: Strategic Planning, A Series of Modules and Reference Materials for NGO and CBO
Managers and Policy Makers. Retrieved from https://www.pathfinder.org/publications/strengthening-your-organization-strategic-planning/
Roberta S. Russell & Bernard W. Taylor III. (2011). Operations management: Creating Value Along the Supply Chain -7th - Hoboken, NJ: John
Wiley.
Russell, R. S. and Taylor, B. W. (2010). Operations management: Creating Value Along the Supply Chain. 7th
ed. Hoboken, NJ: John Wiley.
Suttle, Rick. (2019, February 12). Different Types of Business Strategies. Small Business - Chron.com. Retrieved from
http://smallbusiness.chron.com/different-types-business-strategies-4634.html
WMO. (2019). Strategic Planning. Retrieved from https://www.wmo.int/pages/about/spla_en.html

STRATEGY, STRATEGIC ‎PLANNING, STRATEGIC ‎DECISION, STRATEGIC ‎CAPABILITY, OPERATIONS ‎MANAGEMENT

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to STRATEGY, STRATEGIC ‎PLANNING, STRATEGIC ‎DECISION, STRATEGIC ‎CAPABILITY, OPERATIONS ‎MANAGEMENT

Similar to STRATEGY, STRATEGIC ‎PLANNING, STRATEGIC ‎DECISION, STRATEGIC ‎CAPABILITY, OPERATIONS ‎MANAGEMENT (20)

More from Libcorpio

More from Libcorpio (20)

Recently uploaded

Recently uploaded (20)

STRATEGY, STRATEGIC ‎PLANNING, STRATEGIC ‎DECISION, STRATEGIC ‎CAPABILITY, OPERATIONS ‎MANAGEMENT