Operations Strategy as One of the Most Important Considerations in an Organization - Essay Example

?Operations Strategy Introduction Operations strategy is one of the most important considerations in an organization which aims to achieve its corporate objectives. The onset of global business has made this become clearer considering that the need to compete is necessary to be taken into special account. In fact, as the market become sophisticated, so are the customers and this therefore needs special considerations among organizations to work out for efficient operations. This means that an operation needs not to be focused greatly on a single perspective or consideration, but there are different factors or business aspects that need to be taken into account. For instance, it is not only enough to focus the whole energy of an organization on production activities, but considering that there are existing processes in the business world as it continuously evolves, other aspects need to be substantially focused and even strategic actions have to be implemented. History The existence of business itself paves way to the formulation of operations strategy. Businesses ended up to the creation of business strategies. These led to the formulation of effective operations strategies (Waters, 1999). Businesses have to function efficiently and this is the reason why strategies are necessary to be integrated with the whole business operation. In fact, this is evident on how the United States’ business evolved over time. The evolution of business policy and management started between 1930 and 1960 as highly influenced by American dominance in the global market (Amatori & Jones, 2003). It is during this period that business was considered as an isolated American subdiscipline. During this time, the United States has become one of the leading countries that introduced business sophistication into the world. This resulted to significant innovation and major changes how the business including its operations was conducted. Throughout history, businesses evolved and primarily this is sped up by the onset of globalization in the modern business world. In globalization, there is increasing interdependence between national systems through different aspects including trade, military alliance, domination and cultural imperialism (Waters, 2001). It is not surprising therefore that the business world has significant changes over time due to the fact that interdependence between nations existed. This includes maximization of resources and operation. This is the very reason why business has become international and has turned into a good opportunity for international organizations to maximize their operations and resources. As the effect, each organization that tries to compete with each other is trying to create competitive strategies for their competitive advantage (Porter, 1990). For instance, marketing strategies existed and companies are after of stimulating needs not just relying purely on production oriented operation approach (Boone & Kurtz, 2006; Kotler et al., 1999). In short, the need for operations strategy is necessary in order to compete. The need for innovation is not just on producing new service or product offerings, but there is substantial consideration on business operation approach in which strategies are become its integral parts in the process. In other words, as business itself evolved, its corresponding operation which has been an integral part in its existence has also become so involved with business strategic formulation. This is in line with the creation of competitive advantage due to spiraling growth of competition everywhere most especially that the world has become so compressed when it comes to interdependence in trade. Thus, every organization is expected to formulate their very own operation strategies in order to sustain their ventures and even maximize their full advantage in their respective industries. Relevance It is important to understand that the relevance of operations strategy at present can be traced back to how business has substantially evolved. Operations element of a business provides value for the customer (Tan & Matthews, 2009). In this reason, operations strategies are specific actions that a company can do in order to provide standard quality of product and service offerings to prospective customers. This adds to the ability of a certain organization to satisfy customers’ needs and eventually achieve its corporate goals. With operations strategy, an organization will be able to improve its production performance and distribution systems (Kubr & International Labour Office, 2002). Supply chain management is one of the most concerns in a business operation. Furthermore, total quality management and control are other important activities especially in industries where there is increasing growth of fierce competition. This is evident in the case among car producer companies and even customer technology producers. In these industries, what matters is how each organization creates competitive advantage over the other through a sound operation management. In other words, with operations strategies, an organization is push to consider both external and internal considerations in business which primarily consider operation capabilities such as quality, innovation, flexibility of volume and variety requirements, delivery speed and reliability, political, economic, social and technical elements (Brown et al., 2005). In the case of Apple Incorporated, one of its main goals in order to provide the best customer service and standard quality product offerings is a timely delivery in which customers’ needs are addressed accordingly. However, there is so much to be considered in this case considering that the company is within a business environment that needs to consider different factors and competitive forces. This is evident on the availability of different key players in the said industry which are willing to compete and be a cut above the other. Strengths The good thing about operations strategy is its ability to support and enhance company’s competitive strength (Bruner, 2004). The strength of the operation may be measured through asset efficiency, cost, flexibility, quality, innovation, and other methods or ways for differentiation. This is the very reason why operations strategy is strongly linked to competitive strategies. It enhances the ability of an organization to reach for its maximum potential. For instance, Apple Incorporated is good at stimulating market needs and by this it has created a specific strategy that will make it a cut above the other, differentiation. There are generally two types of differentiation and one of them is focused differentiation strategy. What is the good thing about focused differentiation strategy has something to do with stimulating specific needs in the market. For instance, Apple Incorporated is renowned for its cutting-edge technology and innovation. It has become the leading company in its industry that tries to differentiate its product offerings with remarkably enticing features that at some point creates significant awareness to its specific customers in the market. Its latest innovation on design of its product offerings with the involvement of technological advancement makes Apple Incorporated the leading company that especially applies focused differentiation strategy. Furthermore, in focused differentiation strategy, there is an assurance that a saturated effort will be given to the specific market segment in the industry. With this strategy, there is lesser complexity due to saturated effort that could bring competitive advantage. However, a company applying this principle should see to it that its moves are not copied by its competitors. Focused differentiation strategy is prone to be copied and thus further significant measures should be employed to maintain competitive edge. As can be noticed, the focused differentiation strategy of Apple Incorporated is not only linked to its product offerings. The entire operation is involved in the process which means that operations strategy is necessary to be linked with the different factors that are to be achieved such as asset efficiency, cost, flexibility, quality, innovation, and other methods or ways for differentiation. This means that operations strategy is an effective way in order to achieve what a certain company aims to achieve in the long run. On the other hand, an effective operations strategy is also an effective tool for a certain organization to increase its market value and power. Every company wants to increase its power in the marketplace. One of the ways to increase a firm’s power in the marketplace is by undergoing a process in which several steps in the production and distribution of products or services are controlled by a single company or entity. For instance, in vertical integration, there is a good promise that the company’s power in the marketplace is obtainable. The good thing about vertical integration is the opportunity of the firm to create specific competitive advantage in the marketplace. This is about creation of value. By trying to have control within the production and distribution of the product or service offerings, a company is certainly able to cut cost or definitely will realize the real worth of its offerings to further ensure customer satisfaction. Weaknesses However, one of the noted weaknesses of operations strategy is its dependence on the four important factors in the business environment (Waters, 2006). For instance, under political factors, prior to the formulation of effective operations strategy, an organization must be able to address the issue about trade barriers, industry regulations, government spending and priority, and more. These are some of the most important aspects in the political factors under the business environment. Considering that an organization was not able to clearly consider these factors, its implementation of the right operation can be affected at some point. For instance, the failure of GE-Honeywell merger was due to political factor. The regulatory authorities in the case of GE-Honeywell merger had contributed its significant failure. It was hard to get approval from the European Commission due to the fact that such merger was believed to eventually lead to monopoly and may essentially harm the competition in the future. It is good to look at the weaknesses of operations strategy in the case of merging companies. Merging companies are considering important strategic operation which the bottom line is to come up with maximum advantage in the competition. Mergers are not just implemented without great or significant reasons. Two companies need some integration due to the fact that it may result to creating more values than staying apart from each other. Such of this reason can be manifested by understanding different sensible motives for mergers. The first motive is to ensure more strength and knowledge in a specific industry by having horizontal mergers. Most of this type happens between banks. The second motive is about trying to create a close connection between two or more operations. For instance, a company that is in line with raw materials may integrate with a company in charge with production or marketing. In this way, when the two are integrated, there is a substantial control on the raw materials and production and more. This creates a more sensible value for the two companies. The third motive is about integrating different lines of business which will result to a company which is a conglomerate of different companies. This ensures that such company may at least have as many as possible to be offered in the market. Such will also create a sensible value. These motives are good and they promise significant results. However, one of the reasons mergers failed is due to the complex tasks involved in integrating two or more companies especially when there is also a need to integrate different production process, accounting methods or even corporate culture. These three are basic important reasons why mergers fail even if there is a promising motive behind the integration process. On the other hand, it is believed that the most valuable asset that a company can have is its human resource. Thus, if these employees are not motivated to take their new roles in the acquiring firm, the best of them might leave. Thus, creating a significant failure for the newly integrated firms. Understanding the weaknesses of operations strategy from the point of view of merging companies gives essential backgrounds that the business itself is a complex area for exploration. There are many considerations needed and failure to acknowledge them may result to inefficient operation and eventually failure at certain extent. Current trends As stated earlier, global operations is considered a significant trend in the business world and its operations. However, there are other significant trends aside from this and they involve mass customization, lean operations, agile operations, integration of operations, e-business, just-in-time operations, total quality management, quick response or efficient customer response, outsourcing, strategic view, and time-based competition (Waters, 2006). A single world market, competition everywhere are just some of the noted characteristics in a highly globalize business operations. Thus, this signifies that the need for global operations is indeed a necessity among organizations that are trying to become a cut above the other. Business is not just about creating a need or demand for product or service offerings but it is actually a matter of how to meet it once ignited (Kotler et al., 1999). Thus, the current trend in the operation involves mass customization in which high volume operations are involved in order to meet significant market demand. In the advent of modern information technology, communication has become a necessity that even companies adapted new breakthroughs just to be able to communicate and connect effectively with the potential customers. Thus, there is no wonder why e-business is becoming one of the prevailing trends in operations strategy. These are just some of the current trends in the operations strategy applied in the current business process. Different organizations may actually employ a combination of these trends in order to reach its full potential. One of these organizations is Apple Incorporated. Apple Incorporated and its operations strategy As stated earlier, Apple Incorporated is renowned for its focus differentiation strategy for its product offerings. However, under this specific strategy is a combination of operations strategies from the latest trend today. One of these is its total quality management in which its product and service offerings must be able to come out in the market with guaranteed standard quality. Apple Incorporated ensures the value proposition of its product offerings to be reliable by offering flexible, innovative, cutting-edge technology and dependable products based on its high standard quality production and innovative goal. On the other hand, Apple Incorporated ensures that its differentiation strategy is maintained by relying to a third party especially on the innovative aspect of the production process. In line with this, the company is renowned for its outsourcing strategy that helps ensures it can give much focus on how to stimulate needs for its product offerings. Apple Incorporated designs, manufactures and markets its offerings. However, in order to maximize its effort on marketing activities, it tries to create aggressive efforts on understanding and stimulating market needs. These are just some of the major operations strategies employed by Apple Incorporated which only shows that in modern business, it is necessary to combine the latest trends in operations management. The outcomes Apple Incorporated is one of the leading customer technology producers, designers, manufacturers and marketers in the world. Its operations strategies are remarkably combination of the latest trends in business today. This means that its success in the operation is a remarkable way to create specific market segment and eventually competitive advantage. Thus, so far Apple Incorporated has achieved a remarkable performance with its current employed operations strategies. Conclusion Operations strategy therefore is just a way among different organizations to help them achieve corporate aims. Thus, it is important that an organization should understand its needs. It is in line with this that there is a remarkable guidance on what specific strategies need to be combined for implementation. References Amatori, F., & Jones, G. (2003). Business history around the world. Cambridge: Cambridge University Press. Boone, L. E., & Kurtz, D. L. (2006). Contemporary Marketing (12th ed.). Ohio: South-Western. Brown, S., Lamming, R., Bessant, J., & Jones, P. (2005). Strategic operations management. Oxford: Butterworth-Heinemann. Bruner, R. F. (2004). Applied mergers and acquisitions. New Jersey: John Wiley and Sons. Kotler, P., Armstrong, G., Saunders, J., & Wong, V. (1999). Principles of Marketing (2nd ed.). England: Prentice Hall. Kubr, M., & International Labour Office (2002). Management consulting: a guide to the profession (4th ed.). London: International Labour Organization. Porter, M. E. (1990). Competitive Strategy. New York: Free Press. Tan, K. H., & Matthews, R. (2009). Operations Strategy in Action: A Guide to the Theory and Practice of Implementation. Cheltenham: Edward Elgar Publishing. Waters, D. (1999). Operations management. London: Kogan Page Publishers. Waters, M. (2001). Globalization (2nd ed.). New York: Routledge. Waters, D. (2006). Operations strategy. London: Cengage Learning EMEA. Read More