Once a business strategy has been developed, an operations strategy must be formulated. This will provide a plan for the design and management of the operations function in ways that support the business strategy. The operations strategy relates the business strategy to the operations function. The operations strategy focuses on specific capabilities of the operation that give the company a competitive edge. These capabilities are called competitive priorities. By excelling in one of these capabilities, a company can become a winner in its market. These competitive priorities and their relationship to the design of the operations function are shown in Figure 2-3. Each part of this figure is discussed next.
Capabilities that the operations function can develop in order to give a company a competitive advantage in its market.
Operations managers must work closely with marketing in order to understand the competitive situation in the company's market before they can determine which competitive priorities are important. There are four broad categories of competitive priorities:
1. Cost Competing based on cost means offering a product at a low price relative to the prices of competing products. The need for this type of competition emerges from the business strategy. The role of the operations strategy is ...