Levels of Strategy
- Corporate strategy
- Business Unit Strategy
- Operational Strategy
Corporate Strategy
Overall purpose of organisation to meet owners’ and stakeholders’ expectations to add value to enterprise.
Strategic Business Unit
Part of the organisation with distinct external market.
Business Unit Strategy
How to compete successfully in a particular market
Operational Strategy
= how component parts of the organisation deliver business and corporate level strategic direction
4 Stage Model of Operations Contribution
- Correct worst problem
- Adopt best practice
- Link business strategy to operational strategy
- Operations provide competitive advantage
4 perspectives of Operations Strategy
- Top-down = what business wants operations to do
- Market requirement = what market position requires operations to do
- Operations resource = what resource and processes can do
- Bottom-up = Learn from day-to-day experience to suggest what operations should do
PESTLE Environment
Political
Economic
Social
Technological
Legal
Environmental
Porter’s five forces - industry profitability
- Rivalry among existing competitors
- Threat of new entrants
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of substitute products
Porter - Cost leadership strategy
- Become low-cost producer in industry
- Standard product
- Economies of scale
Difficult to maintain
Porter - Differentiation strategy
- Unique in industry
- One or more important attributes
- Can charge premium
Features of growth strategies
- Market penetration
- Product expansion
- Market expansion
- Diversification
- Acquisition
concept of price-skimming strategies:
- Set relatively high price at first, then lower over time
- Customers want to be the first
- As life cycle matures, higher demand and more suppliers into the market
4 Steps of Operations Strategy
- Formulation
- Implementation
- Monitoring
- Control
