The operational strategy of a business is the series of long-term decisions it makes to fulfill its mission. It consists of specific actions management intends to take to achieve a specific aspect of a company’s operations. With the help of operational strategies, the company’s various departments can work together to accomplish their goals.
Types of Operations Strategies
Many different operational strategies are used by businesses to meet the various demands of their target markets. Here are some common operational strategies that a company can use to improve efficiency, capabilities, and competitive advantage:
1. Core competency strategies
The main strengths of a company’s business model are the focus of core competency operations strategies. Core competency operations strategies focus on leveraging existing strengths to maximize profitability by identifying the best core business processes within an organization.
It can also lower production costs, increase revenue generation, foster positive relationships with investors and other stakeholders, and make the organization an exciting place to work for bright people.
2. Corporate strategies
This operations strategy supports a corporate strategy and upholds a company’s mission statement. Businesses that use this operations strategy create production initiatives, key performance indicators (KPIs), and decision-making processes guided by an overall strategic plan developed by company leaders and stakeholders.
3. Competitive strategies
Businesses employing this strategy develop their operational procedures to set their products and services apart from rivals. Businesses can change their operations strategy to gain a competitive advantage by identifying competitive priorities within a specific economy, whether it’s a higher-quality product or a reduced waiting time during production.
A corporate strategy can help your organization achieve its goals by developing company-wide policies and guidelines that allocate resources to each department.
4. Product or service strategies
This operations strategy focuses on quality control of existing products or services and developing new products and services. Businesses that use this model frequently base their operations strategies on product managers’ research and ideas. One strategy businesses can use in this area is to develop products or services tailored to the needs of a specific market.
5. Customer-driven strategies
Organizations that use customer-driven strategies base their operations decisions on the customer experience. Together, the sales and marketing strategies and this operations strategy will manage and fulfill customer expectations.
This information can assist your company in quickly adapting to market changes, identifying threats, taking steps to mitigate them, and leveraging strengths to improve its competencies and market advantage.
6. Cost-driven strategies
Cost-driven strategies can assist an organization in implementing a price-based operational strategy. This frequently occurs in markets where a customer’s final decision to purchase a product is based on the price of that product compared to similar products. To successfully implement this strategy, a company may make its manufacturing process more cost-effective to offer its products at a lower price than competitors.
7. Outsourcing strategies
To manufacture their goods and get them to customers, many sectors rely on the know-how and infrastructure of other businesses throughout the supply chain. Companies that outsource or offshore some operations require a comprehensive outsourcing strategy to deal with vendor, quality control, and logistics issues.
8. Flexibility strategies
Some businesses employ an operational strategy that allows them to compete based on their product, service, or volume flexibility. For example, a business might quickly highlight its capacity to modify its products in response to customer preferences. Another example of flexibility is the ability to hold either a small or large inventory in response to predicted demand.