Understanding Operations Strategy for Business Success

Operations strategy is defined as the ‘pattern of decisions and actions that shape the long-term vision, objectives and capabilities of the operation and its contribution to the overall strategy of the business’. Most businesses expect their operations strategy to improve operations performance over time. Initially, they contribute little to the success of the business. Eventually, they become directly responsible for its competitive success.

The four perspectives on operations strategy

Top-Down: “Follow the Company’s Vision” Your operations should support what the entire company is trying to achieve. If the company wants to be the premium brand, your operations need to focus on quality. Do not just prioritize speed or low cost.

Outside-In: “Start with What Customers Want” Determine where you want to compete in the market. Then design your operations to deliver exactly what those customers value. If you’re targeting budget-conscious customers, your operations should prioritize efficiency and cost reduction.

Bottom-Up: “Learn from Daily Work” Pay attention to what’s actually happening on the ground every day. The small improvements, problem-solving, and lessons from frontline workers can build into major competitive advantages over time.

Inside-Out: “Use Your Strengths” Figure out what you’re genuinely good at (your unique capabilities and resources), then find markets where those strengths matter most. Don’t try to compete everywhere – compete where you can win.

The best operations strategies combine all four perspectives. You need alignment with company goals, market awareness, continuous learning from experience, and a realistic understanding of your own capabilities. It’s like having four different lenses to make sure you’re seeing the complete picture before making important decisions.

The most effective approach confidently integrates all four viewpoints instead of fixating on just one, ensuring that operations robustly support the business vision and effectively respond to genuine market needs while relentlessly improving and leveraging the organization’s inherent strengths.