Strategy+lecture+note - 1Strategy International...

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1 Strategy, International Competitiveness, and Productivity Today’s lecture covered three main topics: T the concept of strategy and how it relates to competitiveness T prescriptions for national competitiveness T productivity measurement 1 Operations Strategy 1Operations strategy is concerned with setting broad policies and plans for using the production resources of the firm to best support the firm’s long term competitive strategy. Operations strategy fits within the overall hierarchy. As you can see, the operations strategy is derived from the corporate strategy, as is marketing and finance. The strategy defined determines what decisions should be made by operations in managing the production system (recall the production system involves using the 5 P’s to successfully transform inputs in to outputs). In recent history, the role of operations as a strategic weapon was downplayed or even ignored. Companies had mature products in steady markets. It was thought no further gains from the manufacturing side could be achieved; instead, the focus for competitive advantage shifted to marketing and finance. It is now understood that this view was incorrect. Companies are once again wielding operations as a competitive weapon, and achieving stronger market positions because of it. The role of a company’s operations can be classified in one of four categories in the following hierarchy: T Stage 1 - Internally Neutral (don’t mess up). The objective here is limited to minimizing the downside. T Stage 2 - Externally Neutral (keeping up with the Joneses). Here operations is only required to match the performance of the competition. Industry practice is followed, but not initiated. T Stage 3 - Internally Supportive (be consistent with corporate strategy). Here, a strategy is formulated and adhered to. Processes and technologies are screened for strategic consistency. T Stage 4 - Externally Supportive (be a full partner in the company). Here, operations is used to its fullest capability to seek a competitive advantage. Operations is fully involved with all major decisions, adopting a proactive rather than a reactive role.
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Operations Priorities A number of basic dimensions or priorities to operations strategies exist. A company’s overall operations strategy is defined by the degree to which it is positioned along these four dimensions. Cost
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Strategy+lecture+note - 1Strategy International...

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