Ch2 operations strategy

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    03-Nov-2014
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operation management book chapter 2

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  • 1. Alex Hill and Terry Hill

2. Learningobjectives Understand LEVELS of strategy within business Distinguish between day-to-day and strategicROLES Identify how different levels of strategyINTERFACE with each other Appreciate importance of understandingMARKETS Understand different strategic APPROACHES DEVELOP and IMPLEMENT an operations strategy 3. Lecture outline INTRODUCTION What is STRATEGY? LEVELS of strategy within a business DEVELOPING a strategy IMPLEMENTING a strategy Critical REFLECTIONS SUMMARY 4. What isstrategy?DIRECTIONWHAT to do 5. What isstrategy?DIRECTIONWHAT to doIMPLEMENTATIONHOW to do it 6. > KEY IDEAOperations strategy concernsdeveloping the CAPABILITIES of anorganisation to reflect the NEEDS of itscustomers and markets 7. Levels ofstrategyCORPORATE 8. Levels ofstrategyCORPORATEBUSINESS UNIT 9. FUNCTIONALLevels ofstrategyCORPORATEBUSINESS UNIT 10. Where to INVEST orDIVEST SALES REVENUEprioritiesLevels ofstrategyCorporateDIRECTION OF TOTAL BUSINESSIMPLEMENTATIONAllocation of investment FUNDS 11. Levels ofsBtursainteesgsy unitDIRECTION OF BUSINESS UNITMARKETS in which it competesWhere to GROW its business Nature of COMPETITION Relevant COMPETITIVECRITERIAIMPLEMENTATIONWHICH functional tasks toinvest in HOW to invest in these tasks 12. DIRECTION OF FUNCTIONSupport COMPETITIVEDIMENSIONS within a market forwhich it is solelyor partly RESPONSIBLELevels ofFsutrnactteiognyalIMPLEMENTATION Meeting competitive REQUIREMENTS Selecting APPROACHES to attainimprovement goals Implement the PLAN 13. Levels ofFsutrnactteiognyal 14. Levels ofFsutrnactteiognyal 15. Developing astrategy 16. > KEY IDEAUnderstanding MARKETS is the FIRSTstep in strategy development 17. Developing asUtnrdaetresgtaynding customerrequirementsQUALIFIERSGet and keep a service orproduct ona customers SHORTLISTORDER-WINNERSWIN you the orderonceyou are on theshortlist 18. > KEY IDEAUnderstanding CUSTOMERrequirements: AVOID general descriptions IDENTIFY and WEIGHT order-winnersand qualifiers 19. Developing asUtnrdaetresgtaynding customerrequirementsLeMans(1971)ModernTimes(1936)DinnerRush(2000)Pit stop Factory Restaurant 20. Developing asOtpreartaetgioyns processOperations process Pit stop Factory RestaurantTRANSFORMEDresourcesMaterialsInformationCustomersTRANSFORMING resourcesFacilitiesStaffOUTPUTSGoodsServices 21. Developing asUtnrdaetresgtaynding customerrequirementsKey marketrequirements Pit stop Factory RestaurantORDER-WINNERSQUALIFIERS 22. Developing astrategyWhat is the OPERATIONS process?What are the key MARKETrequirements? 23. Developing asOtpreartaetgioyns processOperations process Pit stop Factory RestaurantTRANSFORMEDresourcesMaterialsInformationCustomersTRANSFORMINGresourcesFacilitiesStaffOUTPUTSGoodsServices 24. Operations process Pit stop Factory RestaurantTRANSFORMEDresourcesMaterialsInformationCustomersTRANSFORMINGresourcesFacilitiesStaffOUTPUTSGoodsServices Car Rain tyres Raw material Pit stop Mechanics Spanners Car with rain tyres Factory Production line Operator Spanner Widget Raw material Order details Customer Restaurant Kitchen Equipment Chef Waiter Food Drink ServiceDeveloping asOtpreartaetgioyns process 25. Developing asUtnrdaetresgtaynding customerrequirementsKey marketrequirements Pit stop Factory RestaurantORDER-WINNERS Delivery speed Price Product design Service designQUALIFIERS Delivery reliability Qualityconformance Price Qualityconformance Qualityconformance Delivery reliability Price 26. Developing asUtnrdaetresgtaynding customerrequirements 27. > KEY IDEAUnderstanding CUSTOMERrequirements: AVOID general descriptions IDENTIFY and WEIGHT order-winnersand qualifiers 28. Developing asThtrea pterogcyess of strategydevelopmentAlternativeAPPROACHES TOP-DOWN vs BOTTOM-UPMARKET-DRIVEN vs MARKET-DRIVING 29. Developing asTotrpa-tdeogwyn approachCORPORATEBUSINESS UNITFUNCTIONAL 30. Developing asBtortatotemg-yup approachConsolidated into formal STRATEGYEMERGING sense of what strategyshould beDay-to-day EXPERIENCES andLEARNING 31. Developing asMtararkteetg-leyd orientationMARKETMARKET DRIVESOPERATIONSOPERATIONS 32. Developing asMtararkteetg-dyriving orientationMARKETOPERATIONOPERATIONS DRIVESMARKETS 33. Developing asAtltrearnteagtivye approachesAspect Prison Camp RestaurantStrategicOBJECTIVESSTRATEGY formeeting theseobjectivesPROCESS ofdeveloping andimplementingstrategy 34. Developing asAtltrearnteagtivye approachesWhat are their strategicOBJECTIVES?What is their STRATEGY to achievethese objectives?What APPROACH has been used todevelop and implement thisstrategy? 35. Developing asAtltrearnteagtivye approachesAspect Prison Camp RestaurantStrategicOBJECTIVESSTRATEGY formeeting theseobjectivesPROCESS ofdeveloping andimplementingstrategy 36. Aspect Prison Camp RestaurantStrategicOBJECTIVES ESCAPE from the camp Get 250 men out Make MONEY Produce GOOD FOODSTRATEGY formeeting theseobjectives Create SMOKE SCREEN DIG 3 TUNNELS PRIMO Market-driving Resource-based CRISTIANO Market-driven Market-ledPROCESS ofdeveloping andimplementingstrategy TOP-DOWN PLANNED BOTTOM UP EMERGENTDeveloping asAtltrearnteagtivye approaches 37. Criticalreflections Operations helps gain FIRST sale whilstalso securing the SECOND sale MARKET or marketing-led? Moving to a BUSINESS-LEVEL strategicdebate 38. Summary What is STRATEGY? Direction and Implementation LEVELS of strategy Corporate - Business - Functional Strategy DEVELOPMENT Understand market Develop capability to support or drivemarket Market REQUIREMENTS Order-winners and Qualifiers APPROACH to developing strategy Top down vs Bottom up Market-led vs Resource-based 39. CASE FOR TUTORIALAPPLE