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Operations Strategy

Overall Definition:

Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:"Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In other words, strategy is about:

Where is the business trying to get to in the long-term (direction, vision, goal)
Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)
How can the business perform better than the competition in those markets? (advantage)?
What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?
What external, environmental factors affect the businesses' ability to compete? (environment)?
What are the values and expectations of those who have power in and around the business? (stakeholders)

Strategy at Different Levels of a Business

Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement"….but without sales nothing will happen.

Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities, joint ventures and mergers and acquisitions.

Operational Strategy - is concerned with how each part of the business is organized to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes and people.

How Strategy is Managed - Strategic Management
In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above. In practice, a thorough strategic management process has three main components, shown in the figure below:

Strategic Analysis - This is all about the analyzing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:
Environmental Analysis - a technique for understanding the "environment" in which a business operates
Scenario Planning - a technique that builds various plausible views of possible futures for a business
Market Segmentation - a technique which seeks to identify similarities and differences between groups of customers or users
Competitor Analysis - a wide range of techniques and analysis that seeks to summaries a businesses' overall competitive position
Critical Success Factor Analysis - a technique to identify those areas in which a business must outperform the competition in order to succeed
SWOT Analysis - a useful summary technique for summarizing the key issues arising from an assessment of a businesses "internal" position and "external" environmental influences.
Strategic Choice - This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.Strategy ImplementationOften the hardest part. When a strategy has been analyzed and selected, the task is then to translate it into organizational action.

Sounds confusing? It can be. Let Street Level Consultants help you sort it out.


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