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An operations strategy is a plan for a company’s operating structure and production capabilities. Choosing the best strategy involves analyzing capabilities, competition, facilities, and considering factors such as shareholder wishes, government initiatives, and public opinion. The ultimate goal is to position the company for maximum efficiency and competitiveness.
An operations strategy is a series of strategic decisions made by a company’s management and defines the company’s operating structure and production capabilities. In choosing the best business operations strategy, the company’s leadership should consider the company’s current capabilities, the wishes of its owners or shareholders, and any other goals for the company, such as its commitment to the environment. Choosing the best business operations strategy is governed by the ultimate goal: strategically positioning the company for maximum efficiency and competitiveness.
Essentially, an operations strategy is a plan of action for operating a successful business. Choosing the right strategy will involve reviewing decisions made earlier. These decisions collectively created the existing structures and capabilities through which the company produces products or services.
When choosing the best business operations strategy for current operations, company managers will first analyze the company’s capabilities, competition, and facilities. This review is likely to include a managerial assessment of manpower, technology, and available capital. The focus is on positioning the company to reap maximum benefits from its distinct competencies.
Choosing the best business operations strategy ultimately depends on the wishes of the business owners. For example, shareholders can exert tremendous influence on operations strategy. For example, shareholders may express a preference for higher dividends than a company’s investment in infrastructure.
Factors beyond the company’s control, such as government initiatives, also influence the choice of a competitive business strategy. For example, passing legislation granting favorable tax status to companies that increase hiring may skew the choice towards a strategy that invests more heavily in workforce development. Significant incentives can tip the balance towards other strategies, such as a focus on increasing manufacturing capacity. If the company is looking for rapid and sustained expansion, the emphasis in crafting a business operations strategy may focus heavily on building capital capacity. This would be considered a business growth strategy
The management review process for choosing the best business operations strategy can also consider public opinion. For example, choosing a business operations strategy that emphasizes a company’s commitment to environmental stewardship may be motivated in part by the competitive advantage it is believed to provide. If the company deepens its commitment to embracing concern for its effects on the environment, it can craft a “green” business strategy in which environmental concerns permeate every aspect of the company’s operation.
Looking to take advantage of a global economy, a company can develop an operating strategy that outsources production to other areas where labor costs are lower. At the same time, that same company may also be looking to open up new markets in those geographic areas because it already has a presence there. This would likely lead the company towards a global business strategy, which is a strategic operational option of multinational corporations.
Asset Smart.
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