Operational Strategy
Strategy refers to a plan of action designed to achieve a particular goal. All organizations -- including nonprofits and government agencies -- engineer operating strategies and procedures to gauge whether top leadership's priorities are the right ones. These strategies also help companies evaluate the economic landscape, identify customer needs and outperform the competition.
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Strategy Formulation
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In modern economies, global rivalry is an important factor that corporate management does not put in the back burner. This increased level of competition requires that top leadership involves department heads in strategy formulation sessions. As a result, strategy identification and formulation remains a collective effort, making sure that corporate executives hear the feedback of department chiefs, segment heads and business unit leaders. A typical strategy formulation initiative has four steps: defining the corporate mission and vision, assessing the company's core strengths, identifying high-quality products that customers like (that is, the "order winners") and positioning the firm with respect to competitors.
Competitive Priorities
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Competitive priorities cover four main topics: cost, quality, flexibility and speed. Ideas for adapting corporate strategies to operating demands are generally a substantial part of top leadership's discussions. Talks about cost usually relate to how to rein in waste and produce high-quality goods. Quality discussions help operations engineers provide guidance on research and development ideas that might set the company's products apart from competitors'. Flexibility enables the company to adjust its operating tactics to the economy and the competitive arena. Speed is key in operational strategy, as it determines how quickly and efficiently a firm deploys its strategies and gains market share.
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Operations' Role in Corporate Strategy
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Operations departments play an important role in strategy formulation and execution, steering companies to profitability and helping top leadership make sense of emerging opportunities in the marketplace. Specifically, corporate operations personnel provide periodic performance data to senior executives, explaining the challenges that employees face on the ground as well as investments necessary to tap in new economic opportunities. The fact that operations personnel are the go-to people in strategy formulation is key, because ultimately they are the ones implementing senior leadership's stipulations in day-to-day activities.
Strategy and the Internet
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In a global marketplace in which the Internet and electronic processes have become prominent, businesses make sure their operating strategies align with Web-based economic developments. In other words, companies monitor consumer electronic purchases to identify emerging habits and trends. State-of-the-art tools such as electronic customer relationship management software, also known as e-CRM, help firms draw up strategies that are Web-friendly.
Strategic Decisions in Operations
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Strategic decisions in corporate operations cover many work streams, ranging from information technology to accounts receivable management to treasury analysis. Specifically, these decisions help top management have a clear idea of corporate functions, such as human resources, facilities, operating systems, capacity management, products and services, process and technology, quality administration and sourcing.
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