Maureen P. Cualan, Ph.D.
• An organization’s mission defines its
reason for existence
• Expressed through a mission
statement
• For businesses: answers “What
business are we in?”
• Missions vary based on the nature of
the organization
• Goals stem from the mission
• Provide detail and scope
• Influence public and
stakeholder perception
• Goals serve as the foundation
for organizational strategies
Organizational strategy:
• Guides direction and aligns functional
units
• Crucial for success or failure
• Strategies lead to functional tactics
across departments
Three basic business strategies:
Low cost – compete thro
affordability
Responsiveness – adapt quickly
customer needs
Differentiation – stand out f
competitors
A long-range plan for the
operations function that specifies
the design and use of resources to
support the business strategy
Business strategy is a long-
range plan for a business.
• Provides a plan for using resources
to support long-term competitive
strategy
• Aligns with the business strategy to
ensure operational effectiveness
• Guides decisions on:
Facility location, size, and type
Worker skills and capabilities
Technology, equipment, and special
processes
Quality control methods
• Ensures the operations function
efficiently produces goods and
services
• Business strategy is shaped by three key elements:
Mission – defines the business, customers, and core values
Environmental Scanning – analyzes market conditions and trends
Core Competencies – identifies internal strengths and capabilities
• These guide the company’s long-range strategic plan
A mission answers:
• What business are we in?
• Who are our customers?
• What values guide us?
• Environmental scanning
entails monitoring external
trends to identify business
opportunities and threats
Helps companies:
1. Spot gaps in customer
needs vs. competitor
offerings
2. Detect threats from
emerging competitors or
changing expectations
Market Trends
• Speed, quality, price rise of e-commerce
Economic Trends
• Interest rates, inflation, recession
Political Trends
• EU formation, China trade relations →
global strategic alliances Social
Trends
• Smoking stigma → tobacco firms shift
focus or diversify
Companies now think globally, forming
strategic alliances to access new markets
Staying ahead means constant scanning
and adaptive strategy
• A company’s unique
strengths or capabilities
Strategy must align with
competencies to create
market value
• Companies thrive when
they compete where
their strengths matter
most
• A company’s unique strengths or
capabilities
Strategy must align with
competencies to create market value
• Companies thrive when they
compete where their strengths
matter most
• Success comes from leveraging
strengths, not ignoring them
Business strategy should amplify
what the company does best
• Once a business strategy is set, an operations
strategy must follow
Operations strategy:
• Designs and manages resources to support
business goals
• Focuses on competitive priorities (Four broad
categories) —key capabilities that give a market
edge
• Operations and marketing must collaborate to
align strategy with market needs
Goal: Use operations to win in the marketplace
• Competing on cost means offering products at
lower prices than competitors
Operations strategy supports this by:
Cutting labor, material, and facility costs
Investing in automation and employee training
Minimizing waste and maximizing efficiency
Typically involves:
• Limited product range
• Low customization
• Streamlined processes
• Quality is customer-defined:
Longevity (e.g., Volvo) vs. Performance (e.g., BMW)
Two essential dimensions:
• High-Performance Design - Superior features, durability, precision, and
service
• Goods & Services Consistency - Reliable, repeatable delivery of the
intended product
To succeed, companies must ensure:
• Product Design Quality: Meets customer needs
• Process Quality: Produces error-free results
• Both must align:
⚬ A perfect process for an unwanted product = failure
⚬ A great product made poorly = customer loss
Winning on quality means delivering the right product, made right—every
time.
• Customers demand fast, on-time service
Time priorities include:
• Rapid Delivery: How quickly orders arrive
• On-Time Delivery: Reliability of delivery schedules
• Development Speed: Time to bring ideas to market
Operations must:
Streamline processes and eliminate delays
Use tech (e.g., barcodes) to boost speed
Employ flexible workforce for peak demand
• Ability to adapt to changing customer needs
Two dimensions:
• Product Flexibility: Variety and
customization
• Volume Flexibility: Adjusting output to
match demand
Requires:
General-purpose equipment
Skilled, multi-tasking workforce
Role of Technology in Operations
• Enhances speed, quality, and innovation
• Enables real-time global communication
• Supports competitive priorities (cost,
quality, time, flexibility)
• Must align with core competencies and
strategic goals
Strategic Considerations
• Avoid chasing trends—invest based on
strategic fit
• Technology may require rethinking business
strategy
