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An operations strategy is a series of strategic decisions made by a company’s management, and it defines the company's operational structure and production capabilities. When choosing the best business operations strategy, the company’s leadership must consider the company's current capabilities, the desires of its owners or shareholders and any other goals for the company, such as its commitment to the environment. The choice of the best business operations strategy is governed by the end goal: strategically positioning the company for maximum efficiency and competitiveness.
Essentially, an operations strategy is an action plan for operating a successful business. Choosing the right strategy will involve revisiting decisions previously made. Those decisions collectively created the existing structures and capabilities through which the company produces products or services.
In choosing the best business operations strategy for current operations, company managers will first review 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 distinctive competencies.
The choice of the best business operations strategy ultimately depends on the desires of the company’s owners. For example, stockholders can exert tremendous influence on operations strategy. For example, the stockholders might express a preference for increased dividends over a company investment in infrastructure.
Factors outside the company’s control, such as governmental initiatives, also exert influence on choosing a competitive business strategy. For example, the passage of legislation granting favorable tax status to companies that increase hiring can tilt the choice toward a strategy that invests more heavily in workforce development. Significant incentives might tip the balance toward certain other strategies, such as focusing on increasing manufacturing capacity. If the company seeks rapid and sustained expansion, then the emphasis on crafting a business operations strategy might focus heavily on building capital capacity. That would be considered a business growth strategy
The managerial review process of choosing the best business operations strategy might consider public opinion as well. For example, choosing a business operations strategy that emphasizes the firm’s commitment to environmental stewardship might be motivated in part by the competitive advantage it is thought to bestow. If the company goes further in its commitment to embrace concern for its effect on the environment, it might craft a "green" business strategy in which environmental concerns imbue every aspect of the company’s operation.
Seeking to take advantage of the benefits of a global economy, a business might develop an operational strategy that outsources production to other areas, where labor costs are less. At the same time, that same company might also seek to open new markets in these geographical areas because it already has a presence there. That likely would lead the company to a global business strategy, which is a strategic operational choice of multinational corporations.