Industry growth and technological change interact to create alternative environments with varying levels of dynamism and complexity requiring realignment of operations strategy. My co-author and I investigate the increasing rate of technological change and emphasize an urgent need to include innovation as a competitive priority (along with cost, quality, delivery and flexibility) to proactively adapt operations strategy to fit changing environment. It is also necessary for managers to ensure a fit between their competitive priorities and the development of supporting structures/infrastructures to ensure effective implementation of competitive operations strategy.
An industry ecosystem requires that competitors find viable business models and strategies that can effectively reach new markets and address evolving customer needs. The interaction between industry lifecycle and rate of technological change requires that operations managers constantly adapt their operations strategy to evolving industrial ecosystems. Innovation is an important competitive priority to transform operations strategy and capabilities and to adapt to the requirements of new ecosystems. In this paper, we present a conceptual framework that links the elements of operations strategy with four industry ecosystems. Specifically, we highlight the need for competitive priorities, structural choices and infrastructural choices that fit a specific quadrant of industry ecosystem.
We contend that a firm must manage the transformation of its operations strategy as industry life cycles and rates of technology change. We present a stage-based model for operations strategy that allows it to transform from one industrial ecosystem to another. The proposed framework in this study provides one blueprint for a more proactive role for operations management in helping an organization adapt to changing industrial ecosystems.
The stage-based typology presented in the paper should aid practice in adapting to different industry ecosystems. The model presents clear directions in terms of how capabilities need to be developed in order to maintain a strategic fit throughout the evolution of industry and technology contexts. The innovation competitive priority is essential for such adaptations. In particular, when managers recognize innovation as an element of operations strategy, they can devise methods to proactively contribute towards an organization’s competitive future by managing the fit between various competitive priorities, structural choices and infrastructural choices. In sum, this theoretical study adds to the rich literature on operations strategy and highlights the need for explicit inclusion of innovation as a proactive priority for transforming operations strategy.
STAGE-BASED MODEL
Source: Nair, A. and Boulton, W. R. 2008. Innovation Oriented Operations Strategy Typology and Stage-based Model. International Journal of Operations & Production Management, Vol. 28, Iss. 8, 748-771.