The document discusses operation strategy and how it helps companies achieve their mission and gain competitive advantage. It defines operation strategy as the means and ways a company uses in each department to achieve its overall mission. Effective operation strategies consider factors like flexibility, environment, and core competencies. They also involve decisions related to goods/service design, quality, supply chain management, and more. Developing a customer-driven operation strategy requires market segmentation and needs assessment. The goal of operation strategy is more effective, cheaper, and faster production to satisfy customers.

1. Chapter - 2
Operation’s Strategy in Global
environment

2. Operation’s Strategy WHY?
• Operation’s Strategy is made to achieve the
“Mission of the Company”.
• MISSION:
1. Every company should have a mission because
Economic success indeed survival is the result of
identifying mission to satisfy a customer’s needs
and wants.
2. The organization’s mission is its purpose – what it
will contribute to the society.

3. MISSION
• The mission statement provides the
boundaries and focus for organizations and
the concept around which firm can rally. The
mission states the rationale for the
organization’s existence.

4. Achieving Competitive Advantage
• There are three conceptual ways for achieving the
company’s mission or making an operational
strategy to achieve Competitive Advantage.
1. Differentiation
2. Low Cost Leadership
3. Competing on Response

5. What is Operation’s Strategy?
• After the organization has stated its mission, the
means and ways that we settle to achieve the
mission in each department of a company are called
the “operation’s strategy”.
• Each functional area has a strategy for achieving its
targets and helping the organization reach it’s
overall mission.
• The strategies exploit opportunities and strengths,
neutralize threats and avoid weaknesses.

6. Stages Of Strategy
• Corporate Strategy
• Functional Strategy
• Operational Strategy

7. Strategic Considerations
• There are three strategic considerations that a
company must bear in mind while developing
the Corporate Strategy, They are:
1. Flexibility:
a) Scenario Building
b) Reality Checks
c) Communications
d) Employment
e) Flexible Budget Cycle
( Continued )

8. Strategic Considerations
2. Environment
To keep abreast of the changes in the environment,
the management must keep the process of
environmental scanning in its system.
3. Core Competencies
a) Workforce
b) Facilities
c) Market and Financial Awareness
d) System and Technology

9. Global Strategies
• After the world changed to a global village where
no country is working in isolation whether
technically or economically, most of the big
companies have gone or trying to go across the
borders in an urge to expand their business.
• There are two effective Global strategies that most
of the firms need to follow for going across the
border.
1. Strategic Alliance
2. Locating Abroad

10. Strategic Alliance/ Locating Abroad
• Strategic Alliance can be done in the
following ways:
1. Collaboration
2. Joint Venture
3. Technology Transfer
• Locating Abroad

11. Customer driven operation’s Strategy
• When the products are produced keeping in
view the requirements of the clients/ end
users, it is said to be “Customer driven
operation’s Strategy”. For this the company
must do market analysis. Market analysis can
be done in two steps:
1. Market Segmentation
2. Needs Assessment

12. Customer driven operation’s Strategy
1. Market Segmentation:
• Demographic Factors
• Psychological Factors
• Industry Factors
2. Needs Assessment:
• Product or Service Needs
• Delivery System Needs
• Volume Needs

13. Ten Operational Management
Decisions
• All the above strategies can be achieved
when managers make effective decisions
in the 10 areas of the Operation’s
Management. These are also known as 10
strategic OM decisions.
They are: ( NEXT )

14. Ten OM Decisions
1. Goods & Service design 2. Quality
3. Process & capacity Design 4. Location Selection
5. Layout Design 6. H.R & Job Design
7. Supply-Chain Mgmt. 8. Inventory Mgmt.
9. Scheduling 10. Maintenance
Any company taking care of all the above decisions
on solid grounds and implementing them in true
spirit will end up in better, cheaper and faster
production.