The Concept of Strategy

zStrategy Æ Greek term: “Strategos”

zStrategic thinking has its roots in military
Operations Strategy strategy
{“The branch of military science dealing with
Dr.Chayakrit Asvathitanont, Ph.D. military command and the planning and
For IBM4710: International Operations Management conduct of a war.”

zAnd has evolved to focus on business

{“An elaborate and systematic plan of action.”

Competitive Strategy: The Positioning

Competitive Strategy: The Positioning View
View
zOptions for firm positioning:
{Cost leadership
{Differentiation
{Focus

zAnd, within each of the three:

{Variety-based
{Needs-based
{Access-based

International Business Strategy:

Levels of Strategy-Making An alternative

Corporate Strategy

Region A Region B Region C

Business Strategy Business Strategy Business Strategy

Finance & Accounting Operations Marketing

1
International Business Strategy:
An alternative
Corporate Strategy
Business Strategy
Finance & Accounting
Business Strategy: Views the Firm Might
Take
Strategy-Making in Context
Views to Develop Strategy
1. Best Product
z Classic competitive strategy: low-cost, unique
Business Strategy set of features, or niche segment
2. Total Customer Solution
Operations Marketing { Customer center and satisfy them is priority,
close relationship to customer
Region A
3. System Lock-in
z comprehends, company, customers, suppliers
Region B and its product & service to please customers
Business Strategy: Dimensions along
which Customers Assess Performance
zCost
zQuality
zAvailability
zFeatures/Innovativeness
zEnvironmental performance
Strategy-Making: Cross-Functional
Participation
2
 Operations Strategy: Connecting Operations
Operations Strategy: Goals Goals to Customer Concerns

zCost
zQuality
zAvailability
zFeatures/Innovativeness
zEnvironmental Performance

Operations Strategy: Decision Categories Strategy-Making: Step 1

z Structural decisions z Infrastructural z Understand what position the firm wants to or

{Vertical integration decisions can take in the marketplace by learning about:
{Process technology {Sourcing {Competitors
{Capacity {Suppliers
{Information technology
{Complementary product or service offerings and firms
{Facilities {Supply chain offering them
coordination
{Spaces outside the industry into which the firm might
{Business processes expand
and policies {Customer needs in terms of:
{Capabilities z Cost
development z Quality
z Lean operation z Availability
z Quality z Features/innovativeness
z Flexibility z Environmental performance

Strategy-Making: Step 2 Strategy-Making: Step 3

zUnderstand what capabilities the firm has to zIntegrate or synthesize the activities and
offer, can or should develop both within and capabilities of the functions to achieve:
across the key functional areas of the firm: {Coherent strategic fit in support of a desired
{Operations strategic direction
{Marketing {Development of a set of capabilities to pursue a
{Research and development new strategic direction
{Human resources
{Finance and accounting
zAs well as outside the firm with supply chain
partners