What is strategy?

 Linguistically the word derives from the Greek word strategos, meaning ‘leading an
army’.
 Setting broad objectives that direct an enterprise towards its overall goal.
A plan of action or policy designed to achieve a major or overall aim. It can be used to identify
the key steps to take to reach your business goals, evaluate your company’s strengths and
weaknesses. Ang strategy ay isang plano o hanay ng mga plano na nilalayon upang makamit ang
isang bagay, lalo na sa mahabang panahon. Kumbaga ang mga layunin na pinili at inaksyon mo
dapat mong ma achieve para maging successful ang business
Strategic Decision
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.
Ito ay detalyadong plano na nagbibigay ng direksyon upang maabot ang iyong mga layunin,
kumbaga mayroon kang business and may goal ka sa iyong business, dapat kailangan yon
iachieve para maging successful ang company mo.

Operations’ is not the same as ‘operational.

Operations are the resources that create products and services. Operational’ is the opposite of
strategic, meaning day-to-day and detailed.
* Supporting business strategy – developing the capabilities which allow the organization to improve.
* Driving business strategy – the third and most difficult role of operations.

THE STRATEGIC ROLE OF THE OPERATIONS FUNCTION

Hayes and Wheelwrights Four Stages of operations Contribution
- The ability of any operation to play these roles within the organization can be judged by
considering the organizational aims or aspirations of the operations function. Professors Hayes
and Wheelwright of Harvard University developed a four-stage model which can be used to
evaluate the role and contribution of the operations function.

 Stage 1: Internal Neutrality

- This is the very poorest level of contribution by the operations function. It is holding the
company back from competing effectively.
 Stage 2: External Neutrality
- The first step of breaking out of stage 1 is for the operations function to begin comparing itself
 with similar companies or organizations in the outside market (being ‘externally neutrality’).
 Stage 3: Internally Supportive
- Stage 3 operations are among the best in their market, yet stage 3 operations still aspire to be
clearly and clearly the very best in the market.
 Stage 4: Externally Supportive
- Yet Hayes and Wheelwright suggest a further stage – stage 4 – where the company views the
operations function as providing the foundation for its competitive success. Operations look to
the long term.
FOUR PERSPECTIVES ON OPERATIONS STRATEGY
 Operations strategy is a top-down reflection of what the whole group or business wants to do.
 Operations strategy is a bottom-up activity where operations improvements cumulatively build
strategy.
 Operations strategy involves translating market requirements into operations decisions
(sometimes called the ‘outside-in’ perspective).
 Operations strategy involves exploiting the capabilities of operations resources in chosen
markets (sometimes called the ‘inside-out’ perspective).

Top-down and Bottom-up view of Operations Strategy

Top-down strategies
• perspective on operations strategy is that it should take its place in this hierarchy of strategies.
• Its main influence, therefore, will be whatever the business sees as its strategic direction.
• provides an orthodox view of how functional strategies should be put together.
Bottom-up strategies
• This idea of strategy being shaped by operational-level experience over time is some- times called the
concept of emergent strategies
• This view of operations strategy is perhaps more descriptive of how things really happen, but at first
glance it seems less useful in providing a guide for specific decision making.

WHAT IS THE DIFFERENCE BETWEEN A ‘MARKET REQUIREMENTS’ AND AN ‘OPERATIONS RESOURCES’

VIEW OF OPERATIONS STRATEGY?
Market-requirements-based strategies
• No operation that continually fails to serve its markets adequately is likely to survive in the long term.
• Without an understanding of the right priority between its performance objectives (quality, speed,
dependability, flexibility and cost).

The Market influence on performance objectives

• Operations seek to satisfy customers through developing their five performance objectives.
• For example, if customers particularly value low-priced products or services, the operation will place
emphasis on its cost performance.

FOUR STAGE OF PRODUCT/SERVICE LIFE CYCLE

Introduction Stage
- When a product or service is first introduced, it is likely to be offering something new in terms of
its design or performance, with few competitors offering the same product or service.
it is how will you introduce your product or service with something amazing or new or something that
will make your target customers think that they should try your product or service
Growth Stage
- As volume grows, competitors may enter the growing market. Keeping up with demand could
prove to be the main operations preoccupation. Rapid and dependable response to demand will
help to keep demand buoyant, while quality levels must ensure that the company keeps its share
of the market as competition starts to increase.
kailangan makisabay ka sa competitor, it is the stage where you need to take the next step in growing
your business
Maturity Stage
- Demand starts to level off. Some early competitors may have left the market and the industry
will probably be dominated by a few larger companies. So, operations will be expected to get the
costs down to maintain profits or to allow price cutting, or both.

Decline Stage
- After time, sales will decline with more competitors dropping out of the market. There might be
a residual market, but unless a shortage of capacity develops, the market will continue to be
dominated by price competition. Operations objectives continue to be dominated by cost.

A STRATEGIC VIEW OF OPERATIONS IMPROVEMENT PRIORITIES

• Judging importance to customers – Earlier we introduced the idea of order-winning, qualifying and less
important competitive factors, and one could take these three categories as an indication of the relative
importance of each performance factor.
• Judging performance against competitors – At its simplest, a competitive performance standard would
consist merely of judging whether the achieved performance of an operation is better than, the same or
worse than that of its competitors.

THE PROCESS OF OPERATIONS STRATEGY

What is called the ‘process’ of strategy is concerned with ‘how’ strategies are put together. So, the
‘process of operations strategy’ means the method that is used to determine what an operations
strategy should be.

What should the formulation process be trying to achieve?

1. Is operations strategy comprehensive?
2. Is operations strategy coherent?
3. Does operations strategy have correspondence?