A conceptual synergy model of strategy formulation for manufacturing

With the increasing level of competition in many competitive environments, a body of research regards the ability to formulate and implement a formulated strategy as an equally important source of competitive advantage. The rate of change in both internal and external environments of manufacturing firms is increasing, which necessitates that increased attention be paid to strategic planning and strategy formulation. This paper reviews the concepts of strategy, strategic planning and strategy formulation. It then discusses the common strategy determinants and describes the characteristics of several planning frameworks and methodologies. A conceptual synergy model for strategy formulation is proposed, and its features and characteristics are presented along with a discussion of its applicability in manufacturing enterprises. Introduction Recent developments of the World Trade Organisation and other international trade agreements have forced industries worldwide to face a new era of intense global competition. The new manufacturing environment, characterised by intense global competition, rapid technology changes, and product variety proliferation, calls for a strategic management of the manufacturing function (Dangayach and Deshmukh, 2001; Hum and Leow, 1996; Pun et al., 2004). Manufacturing firms have to compete effectively not only in the local context, but in wider regional and global marketplaces also. They should identify competitive priorities and formulate and implement viable strategies for sustaining growth and survival. Many scholars (Hill, 1997; Johnson and Scholes, 1997) classified strategy into three levels, namely, corporate, business, and functional strategies. Within this hierarchy, manufacturing strategy can appear in two places, first at the corporate level, taking a broad view over a set of related or separate businesses, and second, it can appear as one of the functional strategies at the business level (Mills et al., 1995). From Skinner (1969, 1978) to Hayes and Wheelwright (1984) until more recent times (Barnes, 2002; Dangayach and Deshmukh, 2001; Hayes and Upton, 1998; Swamidass et al., 2001), many strategy writers have emphasised the importance of manufacturing strategy (or operations strategy more generically) within the broader consideration of organizational level strategy. The contributions of manufacturing are realised through the deployment of strategic decisions in a number of manufacturing areas, so as to align the company’s skills and resources with its competitive strategy and enhance its ability to compete on dimensions generally classified as quality, cost, delivery and flexibility (Platts and Gregory, 1991; Pun et al., 2004). The relative importance of the competitive criteria would depend on customer demands and The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at www.emeraldinsight.com/researchregister www.emeraldinsight.com/0144-3577.htm A conceptual synergy model