Page 35 - Operations Strategy

10 CHAPTER 1 • OPERATiOns sTRATEgy
table 1.1 examples of operations management and operations strategy questions

Difference Operations management example Operations strategy example
Longer time-scale ‘What demand fluctuations do we ‘When should we plan to add further
have to deal with over the next few capacity so that we can meet rising
months?’ forecast demand?’
Higher level of ‘Where should we position each ‘How many stores should we have,
analysis product category within our depart- where should we locate them and
ment store?’ how should we supply them?’
Higher level of ‘How do we provide tax advice to the ‘What is our overall business advice
aggregation small business sector in Antwerp?’ capability compared with our other
European activities?’
Higher level of ‘How do we improve our purchasing ‘Should we develop strategic alli-
abstraction procedures?’ ances with selected medical products
suppliers?’

strategy. Just look at some of the high-profile companies quoted in this book, or
that feature in the business press. From Tesco to IKEA, from Ryanair to Singapore
Airlines, it is not just that their operations strategy provides these companies with
adequate support; it is their operations strategy that is the pivotal reason for their
competitive superiority. Even businesses, such as Coca-Cola or Heinz, that are more
marketing and brand-driven need a strong operations strategy. Their brand posi-
tion may be shaped in the consumers’ mind by their promotional activities, but it
would soon erode if they could not deliver products on time, or if their quality was
sub-standard, or if they could not introduce new products in response to market
trends. So, for example, a ‘fast-moving consumer goods’ (FMCG) company that has
operations that are capable of mastering new process technologies, or flexing their
capacity, or running agile yet efficient supply chains, or continually cutting cost out
of the business through its improvement programme, will have a huge advantage
over less capable rivals.

Four perspectives on operations strategy
Just as there is no overall agreement about what ‘strategy’ means, there is no universal
agreement on how ‘operations strategy’ should be described. Different authors have
slightly different views and definitions of the subject. Between them, four ‘perspectives’
on the subject emerge.
1 Operation strategy is a ‘top-down’ reflection of what the whole group or business
wants to do.
2 Operations strategy is a ‘bottom-up’ activity where operations improvements cumu-
latively build strategy.
3 Operations strategy involves translating ‘market requirements’ into operations
decisions.
4 Operations strategy involves exploiting the capabilities of ‘operations resources’ in
chosen markets.

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