Post on 21-Apr-2015
transcript
By Prof Ajit Deva MBA Dept RNSIT
Module 2 Strategy Formulation
Developing a Strategic Vision Involves thinking strategically aboutFirm’s future business plansWhere to “go”
Tasks IncludeCreating a roadmap of the futureDeciding future business position to stake
outProviding long-term directionGiving firm a strong identity
Developing a Strategic Vision
Charts a company’s future strategic course
Defines the business makeup for 5 years (or
more)
Specifies future technology- product-
customer focus
Indicates capabilities to be developed
Requires managers to exercise foresight
Characteristics of
How to creatively prepare a company for the future
How to keep the company responsive to
Evolving customer needs
Competitive pressures
New technologies
New market opportunities
Growing or shrinking opportunities
Entrepreneurial Challenges in Forming a Strategic Vision
Mission Vs. Strategic Vision A mission statement
focuses on current business activities –“who we are and what we do”• Current product and
service offerings• Customer needs
being served• Technological and
business capabilities
A strategic vision concerns a firm’s future business path –“where we are going”• Markets to be pursued• Future technology-
product-customer focus• Kind of company that
management is trying to create
Characteristics of a Mission Statement
Defines current business activitiesHighlights boundaries of current businessConveys
Who we are, What we do, and Where we are nowCompany specific, not generic – so as to give a
company its own identityA company’s mission is not to make a profit!
The real mission is always – “What will we do to make a profit?”
Characteristics of a Mission Statement
Strategy Formulation
Strategy formulation refers to the process
of choosing the most appropriate course of
action for the realization of organizational
goals and objectives and thereby achieving
the organizational vision
Steps involved in Strategy Formulation
1. Setting Organizations’ objectives.
2. Evaluating the Organizational
Environment
3. Setting Quantitative Targets
4. Aiming in context with the divisional plans
5. Performance Analysis
6. Choice of Strategy
Strategic Objective
A broadly defined objective that an organization must achieve to make its strategy succeed.
Financial Objective Goals related to returns that a firm will
strive to accomplish during the period covered by its Financial Plan.
Balanced Score Card
The Balanced scorecard is a strategic planning
and management system that is used
extensively in business, industry, government,
and non profit organizations worldwide to align
business activities to the vision and strategy of
the organization, improve internal and external
communications, and monitor organization
performance against strategic goals.
Company Philosophy
Company Philosophy is nothing but the way we do things in the company.Vision
Values Customer Focus Development of People Entrepreneurship Quality Teamwork
Company Philosophy Measures
Customer Focus Supplier Focus People Focus Internal Focus
Tools Kaizen Mistake Proofing Suggestion System Target cost system
Company Philosophy
Concepts Marketing Concepts Quality first Recurrence prevention Speak with data Upstream Management
Principles Elimination of waste People empowerment and involvement
The hierarchy of strategic Intent
The hierarchy of Strategic Intent
Strategic Intent refers to the purposes the
organization strives for. It is the leveraging of a
firm’s internal resources, capabilities and core
competencies to accomplish the firm’s vision,
mission and objectives in a competitive
environment. It is all about winning competitive
battles and gaining leadership position by
putting organizational resources to best use.
The hierarchy of Strategic Intent
The process of establishing the hierarchy of
strategic intent is very complex.
In this hierarchy, the vision, mission, business
definition and objectives are established.
Establishing the hierarchy of the strategic intent
is the first step in the strategic management
process
Strategic intent is an obsession with winning.
Merging the Strategic Vision Objectives and
Strategy Strategy Formulation
Determination of mission and objectives
SWOT analysis
Strategic Alternatives
Evaluation and Choice
Implementation
Evaluation and Control
The hierarchy of Strategic Intent
Creating and communicating a vision
Designing a mission statement
Defining the business
Setting objectives