Operations-Based Strategy

Analysis of the article Operations-based Strategy by Hayes and Upton.

This article explains how operations-based strategy can be used to attack or defend competition. There are examples of companies that successfully used an operations strategy to beat competition and also companies who failed to use an strategy and were attacked by their competition. It must be noted that these strategies are hard to formulate and companies do not come up with these strategies overnight. Instead, these strategies emerge or get recognized after an incident. Wal-Mart perfected its innovative approach to retailing for several years in rural America before it attacked the urban areas. Similarly South-west patiently built its skills and its confidence for years in Texas before growing nationwide.

Strategies that combine new and existing operating capabilities can give rise to powerful hybrid strategies that can be used for competitive advantage. It is important the companies keep looking for new ways instead of quietly following best practices. Companies should be able to learn and adapt quickly. Imitating competitors operations is easy and can be achieved in a few years, but the ability to learn and effectively use these skills is much more challenging and generally takes much longer.

Comments:

Operations-based strategy is fundamental to any organization - big or small. Organizations should continuously monitor there operations and the way their competitors operate. It is important for top management to understand that this should be part of their corporate strategy and is an area to gain competitive advantage. Time and time again we have seen companies compete on operations. For example, when Fedex started offering online tracking of packages, UPS was quick to follow.