The document discusses strategic planning and operations strategy. It provides an overview of the strategic planning process, including preparing a mission statement, creating a vision, setting goals, formulating strategies, designing tactics, evaluating performance, and measuring results. It also discusses different types of operations strategies such as competing on price, quality, time, and flexibility. Examples are provided of strategic plans for individuals and companies. The document also covers topics like measuring productivity, types of productivity measures, and ways to improve productivity.
2. Strategic Planning
A process for getting from where the
company is today to where company
would like to be in the future.
A process for getting from “here” to
“there.”
3. Strategic Planning Steps
Preparing a mission statement
Creating a vision
Setting goals
Formulating strategies
Designing tactics
Evaluating process and taking corrective
action
Measuring results or outcomes
4. Strategic Planning Steps
Mission
What is our business? (Who we are?)
Focus is on “today” (Here!)
Vision
What we hope to be.
Focus is on “future” (There!)
5. Strategic Planning Steps
Goals
What we must do to achieve vision.
Should be measurable.
Strategies
In broad terms, what must we do to achieve
goal?
Does not say how.
6. Strategic Planning Steps
Depends on opportunities and threats
Conduct environmental scan
Also depends on companies strengths
(core competencies) and weakness
Conducting an environmental scan and
identifying companies strengths and
weakness is a SWOT analysis.
7. SWOT
Internal S = Strengths W= Weakness
External O = Opportunities T = Threats
8. Strategic Planning Steps
Tactics
What must we do to make strategies work?
Evaluation and corrective action
Are tactic working?
Are they moving you closer to achieving
goal?
If not, take corrective action by changing
tactics.
9. Strategic Planning Steps
Outcome
Outcome of strategic planning process
Tells us if strategic planning process was
successful.
Was goal was achieved?
If not, repeat.
10. Example 1: Strategic Plan
Mission Sue is a 17 yr. old high school senior
Vision Be successful in business
Goal Become a CFO of a major co. at 35
Strategies Get a business degree
Tactics Go to CSUN, major in Finance, get
internship with Fidelity Investments,
become president of SFA, get 3.8 or
better GPA
Evaluation/
Corrective
action
Are tactics working?
Outcome Position at age 35
11. Example 2: Strategic Plan
Mission Ed is a 42 yr. old overweight male
Vision Look better, feel better
Goal Lose 80 lbs. in 6 mos.
Strategies Diet, exercise
Tactics Go on Jenny Craig diet, join 24 Hr.
Fitness Center, get a trainer, go to
gym 5 days/wk.
Evaluation/
Corrective action
Track weight loss weekly; adjust
tactics if necessary
Outcome Weight lost at end of 6 mos.
12. Example 3: Strategic Plan
Mission We are in business of selling men’s
dress shoes in SFV
Vision Expand market area to include So. Ca.
Goal Capture 30% of So. Ca. market in 1 yr.
Strategies Expand product line, increase
marketing effort
Tactics Carry women’s shoes; carry more
shoe lines including athletic shoes and
sandals; Advertise in major
newspapers.
Evaluation/
Corrective action
Are tactics working?
Outcome Market share 1 year from now
13. Starbuck’s Strategic Plan
Mission statement
'Establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining
our uncompromising principles while we grow.‘
What’s wrong with Starbuck’s mission
statement?
14. Starbuck’s Strategic Plan
Goal
To establish Starbuck’s as the most
recognized and respected brand in the
world.
What is requirement that goal should
meet?
Does Starbuck’s goal meet it?
15. Starbuck’s Strategic Plan
To achieve this goal, the Starbuck’s
plans to
rapidly expand its retail operations,
grow its specialty sales and other
operations, and
selectively pursue opportunities to
leverage the Starbuck’s brand through the
introduction of new products and
the development of new distribution
channels.
17. Answer
They are Strategies - board statement
of what company will do to achieve
goals, but doesn’t say how.
Tactics would tell us, for example, how
the company plans to expand retail
operations.
For example, open more retail stores in
airports and malls.
18. FedEx’s Mission
FedEx provides access to a growing
global marketplace through a network of
supply chain, transportation, business and
related information services.
19. Lexus has revolutionized the luxury motoring
experience through its passionate commitment
to the finest products and the most satisfying
automobile ownership experience.
We vow to value the customer as an important
individual; to do things right the first time; and to
always exceed expectations.
We brought together these principles in the
Lexus Covenant, which inspires our dealers and
associates to treat customers as they would treat
guests and to go to any lengths to serve them
better.
Lexus’ Mission
20. More on Lexus
“In order to make certain that a Lexus is
a Lexus no matter where it is built, the
entire workforce at Cambridge was
trained to follow the Passionate Pursuit
of Perfection that drives Lexus
associates worldwide.”
Is there any connection between Lexus
and McDonald’s?
21. CSUN College of Business/Econ
Mission
The College of Business and Economics at
California State University, Northridge is dedicated
to educating the leaders of tomorrow.
By offering a challenging curriculum, smaller class
sizes, state-of-the-art facilities, and nationally
recognized programs, the College offers a truly
unique educational experience.
22. Developing an Operations
Strategy
Operations Strategy is a plan for using
the operational capabilities of a
company to decide how it will compete.
Will it compete on
Price,
Quality,
Time,
Flexibility?
One, some or all?
23. Competing on Price?
Offering product at a lower price relative
to competition
Works if there are many competitors
offering same product or service.
If you of a product with a high degree of
customization, does it make sense for
you to compete on price?
Must also have lower ??? relative to
competitors.
24. Competing on Quality?
Quality of product
Quality of service
Both
Does competing on quality mean that a
company can’t compete on price
because it, if it offers better quality, it will
charge a higher price?
Depends on how quality affects ???
If it increases ????, yes.
If it decreases ???, not necessarily.
25. Competing on Time?
Time/speed one of most important
competition priorities
Time related issues involve
Rapid delivery:
Focused on shorter time between order
placement and delivery
On-time delivery:
Deliver product exactly when needed every
time
26. Competing on Flexibility?
Product flexibility:
Easily switch production from one item to
another
Easily customize product/service to meet
specific requirements of a customer
Volume flexibility:
Ability to ramp production up and down to
match market demands
28. Measuring Productivity
Partial measures
output/(single input)
Multi-factor measures
Uses some but not all inputs
output/(multiple inputs)
Total measure
uses all inputs
output/($ value of all inputs)
29. Measures of ProductivityMeasures of Productivity
Partial Output Output Output
measures Labor Machine Energy
Multifactor Output Output
measures Labor + Machine Labor + Capital + Energy
Total Goods or Services Produced
measure $ value of all inputs used to produce them
30. Units of output per kilowatt-hour
Dollar value of output per kilowatt-
hour
Energy
Productivity
Machine
Productivity
Labor
Productivity
Examples of Partial Productivity MeasuresExamples of Partial Productivity Measures
Units of output per labor-hour
Dollar value of output per labor-hour
Units of output per machine-hour
Dollar value of output per machine-
hour
38. Measuring Productivity
Measure Outputs Inputs
Partial Units or dollars Units or dollars
Multi-factor Units or dollars Dollars
Total Units or dollars Dollars
39. Summary
Output in units/Input in hrs. = Output
per input hour
Output in $/Input in hrs. = X
Produced output worth $X per input hr.
Output in units/Input in $ = Y
Produced Y units per $ spent on input
Output in $/Input in $ = Z
Produced Z units per $ spent on input
41. Improving Productivity
Eliminate bottleneck operations
Eliminate non-value added steps
Use improved technology
Improve quality
Less rework
More good units produced the first time
Productivity should measure number of good
units produced the first time