operations strategy - ANS operations strategy, which is a set of competitive priorities coupled with supply chain structural and infrastructural design choices intended to create capabilities that support a set of value propositions targeted to address the needs of critical customers.
...
operations strategy - ANS operations strategy, which is a set of competitive priorities
coupled with supply chain structural and infrastructural design choices intended to create
capabilities that support a set of value propositions targeted to address the needs of critical
customers.
Strategic decisions define the competitive objectives of an organization, establishing both the
specific performance targets and the means by which the targets will be achieved.
LEVELS OF STRATEGIC PLANNING
see pg 27 - ANS Within most firms, planning processes take place at several different
levels. Internally, there is a hierarchy of strategic plans consisting of
(1) corporate planning,
(2) strategic business unit (SBU) planning, and
(3) functional planning.
These three levels should be closely linked (as shown in Figure 2-1) so that they are mutually
consistent and supportive.
Strategic plans made at all levels need to take into account the business environment, including
economic conditions, competitor actions, market opportunities, regulatory changes, and so on.
A firm's culture also typically influences the objectives it sets and the decisions it makes in
strategic planning. For example, one firm might be more aggressive or more risk averse than
another firm.
In this section, we examine the objectives and interactions of strategic planning at the three
levels. The remainder of the chapter focuses on operations strategy, one of the areas of
functional strategy development.
corporate strategy - ANS corporate strategy
Determines the overall mission of the firm and the types of businesses that the firm wants to be
in.
,corporate strategic planning - ANS Corporate Strategic Planning
Describe how operations strategy fits within a firm's overall strategic planning process.
Many firms are involved in more than one business.
For example, General Electric operates more than 20 diverse businesses, from aircraft engines
to financial services.
Corporate strategic planning addresses the portfolio of businesses owned by a firm. Of the
three levels of strategic planning, corporate strategic planning is broadest in scope and the least
constrained. Decisions made at this level limit the choices that can be made at lower strategic
planning levels.
Essentially, a corporate strategy communicates the overall mission of the firm, and identifies the
types of businesses that the firm wants to be in.
For a large, multidivisional firm, key decisions in corporate strategy address what businesses to
acquire and what businesses to divest. Corporate strategy typically covers a long time horizon,
setting the overall values, direction, and goals of the firm as a whole. It also establishes how
business performance will be measured and how risks will be managed
business unit , strategic planning
SBU
strategic business unit
Business model - ANS strategic business unit
The semi-independent organizations used
to manage different product and market segments.
business unit strategy
Determines how a strategic business unit will compete.
business model
The combination of the choices determining the customers an SBU will target, the value
propositions it will offer, and the supply chain/operations
business unit , strategic planning continued - ANS Because products and markets differ
across business divisions, a separate management team (usually headed by a president or vice
president) is usually needed to run each of these semi-independent organizations, or strategic
business units (SBUs). An SBU can be organized along product, market, or geographic
dimensions.
, Business unit strategy essentially deals with the question, "How should our business unit
compete?" To answer this question managers make choices regarding what customers and
market segments they will deem critical, what products to offer, and specifically how they will
create advantages over the business unit's competitors. These choices collectively form the
business model that the unit will pursue. There are numerous types of business models
• . For example, long ago Gillette developed the "razor and blades" business model—give away
the razor but make your money on the replacement blades.
• Many businesses follow this same type of model (printers, industrial equipment). Dell
successfully applied the "direct sales" business model in computers—sell computers directly to
the end consumer. A "loyalty" business model rewards customers for continuing to deal with the
firm. This model has been widely implemented in the airline industry (through the frequent flier
program) and in the retail trade (e.g., as in Best Buy's "Reward Zone" program).
• Changes in technologies, competitors, and markets can at the same time destroy the viability
of an existing business model while giving rise to new ones. Consider, for example, how
customers' growing concerns over sustainability issues have opened up the possibility of new
business models that offer organic and eco-friendly products. These kinds of changes make it
important for operations and business strategy managers to continually evaluate their existing
busines
swot analysis
see page 27, for model - ANS swot analysis
A strategic planning technique to help firms identify opportunities where they can develop a
sustainable competitive advantage and areas where the firm is significantly at risk.
A business unit's strategy and business model are both shaped by the corporate strategy, by the
specific requirements of the SBU's products and markets, and by the SBU's operating
capabilities. One technique that managers use to assess these attributes is SWOT analysis
(short for Strengths-Weaknesses-Opportunities-Threats).
A SWOT analysis helps managers match strategies with strengths and opportunities while also
reducing risks associated with weaknesses and threats. SWOT can be used in various ways—to
kick off strategic thinking or as a serious detailed strategic assessment/planning tool. Questions
often considered in a typical SWOT analysis are summarized in Table 2-1 on the next page.
Functional Strategic Planning
functional strategy
what critical questions must the functional strategy address? - ANS functional strategy
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