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Part One
Introduction
Figure 3.4 The top-down perspective of operations strategy and its application to the printing services group
Functional strategy
strategy of the corporate group of which it is a part. Similarly, within the business, functional
strategies need to consider what part each function should play in contributing to the strategic
objectives of the business. The operations, marketing, product/service development and other
functions will all need to consider how best they should organize themselves to support the
business’s objectives.
So, one perspective on operations strategy is that it should take its place in this hierarchy
of strategies. Its main influence, therefore, will be whatever the business sees as its strategic
direction. For example, a printing services group has a company which prints packaging for
consumer products. The group’s management figures that, in the long term, only companies
with significant market share will achieve substantial profitability. Its corporate objectives therefore
stress market dominance. The consumer packaging company decides to achieve volume
growth, even above short-term profitability or return on investment. The implication for
operations strategy is that it needs to expand rapidly, investing in extra capacity (factories,
equipment and labour) even if it means some excess capacity in some areas. It also needs to
establish new factories in all parts of its market to offer relatively fast delivery. The important
point here is that different business objectives would probably result in a very different
operations strategy. The role of operations is therefore largely one of implementing or
‘operationalizing’ business strategy. Figure 3.4 illustrates this strategic hierarchy, with some
of the decisions at each level and the main influences on the strategic decisions.
‘Bottom-up’ strategies
The ‘top-down’ perspective provides an orthodox view of how functional strategies should be
put together. But in fact the relationship between the levels in the strategy hierarchy is more
complex than this. Although it is a convenient way of thinking about strategy, this hierarchical