---
date: '2025-09-04'
description: how operating choices support a firm's competitive priorities
id: Strategy and Competition
modified: 2026-06-05 15:08:38 GMT-04:00
tags:
  - commerce4qa3
title: Strategy and Competition
created: '2025-09-04'
published: '2025-09-04'
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slug: thoughts/university/twenty-five-twenty-six/commerce-4qa3/Strategy-and-Competition
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---
Operations management chooses and runs the processes that produce a good or service. Those choices become strategy when they commit the firm to a way of competing.

## competitive priorities

The chapter separates five priorities:

- cost
- quality
- delivery speed and reliability
- flexibility
- service

Each priority requires operating choices that can keep the promise. Fast delivery may require spare capacity or inventory. Low cost may favor high use of equipment and a narrower process. Flexibility may require equipment and workers that can switch between products. A firm can pursue several priorities, though its process has to resolve the conflicts between them.

## decision horizons

The time horizon changes which decisions are still reversible.

| Horizon           | Decisions in the chapter                                             |
| ----------------- | -------------------------------------------------------------------- |
| long term         | facility location and size, markets, and quality objectives          |
| intermediate term | demand forecasts, staffing, distribution, equipment, and maintenance |
| short term        | purchasing, shift schedules, and inventory control                   |

A facility decision fixes capacity for years. A shift schedule uses that capacity for one operating period. Strategy reaches daily work through decisions that get smaller and easier to change.

## capacity policy

The chapter gives three ways to time capacity additions against demand:

- A lead policy adds capacity before demand arrives. It lowers the chance of a shortage and leaves more unused capacity.
- A tracking policy adds capacity close to forecasted demand. Forecast error can create either shortages or unused capacity.
- A lag policy waits for observed demand. It raises utilization and accepts more shortage risk.

The policy choice depends on the cost of unused capacity relative to the cost of turning demand away. See [[thoughts/university/twenty-five-twenty-six/commerce-4qa3/supply chain analytics and capacity growth|capacity growth]] for the chapter’s timing model.

source: [[thoughts/university/twenty-five-twenty-six/commerce-4qa3/Chapter 1.pptx|chapter 1 slides]]