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Unformatted text preview: Some Notes on Operations Strategy and Competitiveness Prepared by Mark A. McComb, Ph.D., CQE 1 Associate Professor of Management Science, School of Business Three general tasks required to craft a strategy I. What is a strategy? So what is a strategy and how does a firm develop one? As you will learn in the required course on Strategic Management (MGT 471), these questions are much harder to get at than you might think. In fact, like many other concepts in business, the very notion of a strategy is itself controversial. 2 In operations management, we arent going to get too immersed in this controversy. We simply need to understand how a firms operations system functions to assist and support the firms strategic direction. A companys strategy identifies the firms long range plan and involves the following: 3 Developing the organizations mission which answers three questions: (1) What business are we in? (2) Who are our customers? And (3) How will our basic beliefs define the business? Carefully scanning the environment for market trends, threats, and opportunities. Specifically identifying the firms core competencies (the unique strengths the firm possesses which can help the firm become successful in the market). In all three of these strategy-making tasks (developing a mission, environmental scanning, and identifying core competencies), the operations function has much to contribute and must be directly involved. Many American firms found themselves at a distinct disadvantage in the 1980s when Japanese firms like Toyota and Honda confronted them with a superior approach to managing operations. Since then, operations management has been much more closely involved in the process of crafty the firms strategy. A firms business strategy also must consider political and social trends, as well as economic trends as it performs its environmental scanning task. This adds a significant level of complexity to strategy development. For one thing, it is easy for those of us who have only lived in the United States to assume that 1 These notes were prepared by Professor McComb to serve as a supplement to Chapter 2 of the text and to be used to prepare for classroom discussion. The notes are not intended to be a replacement for the text. Consult your syllabus. 2 Recently, there has been a kind of revival in the debate over the nature of strategy. For years Michael Porter of the Harvard Business School has advocated that a company develops a strategy by positioning or differentiating itself from other companies. See Porters What is Strategy, Harvard Business Review , November-December, 1996. Porters view follows the military model of strategy in that executives are responsible for developing and executing formal plans. Robert Hayes and David Upton, on the other hand, argue that strategy is often based on operational effectiveness and isnt even fully appreciated by the company until they have begun to implement it. until they have begun to implement it....
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This note was uploaded on 10/25/2011 for the course ACC 201 taught by Professor A during the Spring '11 term at University of Minnesota Crookston.
- Spring '11