Strategic Management

Introduction

Business simulation -
2
 Vision and Mission
Statements - a
Roadmap of Where
You Want to Go and
How to Get There
 VISION (THE DREAM)
• Big picture of what you want to achieve
• An organization’s vision is what it wants to be known
for at some point in the future (5-10+ years)
• They are a simple statement that describes the
future
• A Vision Statement describes the desired future
position of the company
 Great Vision Statement Examples
• “To be the fastest growing, most rewarding and most transformative
leadership community.” – Mandala Leaders
• To be the best quick service restaurant experience. Being the best means
providing outstanding quality, service, cleanliness, and value, so that we
make every customer in every restaurant smile.” – McDonald’s
• To be globally significant in each of our chosen businesses by 2025. Tata
International Ltd
Vision of reliance group
– To build a global enterprise for all our stakeholders, and
– A great future for our country,
– To give millions of young Indians the power to shape their destiny,
– The means to realize their full potential (http://www.relianceada.com/vision)
 Mission (THE WHAT AND WHY)
• Developing mission statements are the next step in the action
planning process.
• An organization's mission statement describes what the group is
going to do, and why it's going to do that.
• Mission statements are similar to vision statements, but they're
more concrete, and they are definitely more "action-oriented" than
vision statements.
• The mission might refer to a problem, such as an inadequate
housing, or a goal, such as providing access to health care for
everyone.
• And, while they don't go into a lot of detail, they start to hint - very
broadly - at how your organization might go about fixing the
problems it has noted.
The Starbucks mission statement describes six guiding
principles that, as you can see, also communicate the
organization’s values

• Provide a great work environment and treat each other

with respect and dignity.
• Embrace diversity as an essential component in the
way we do business.
• Apply the highest standards of excellence to the
purchasing, roasting and fresh delivery of our coffee.
• Develop enthusiastically satisfied customers all of the
time.
• Contribute positively to our communities and our
environment.
• Recognize that profitability is essential to our future
success
Toyota declares its global corporate principles
to be
• Honor the language and spirit of the law of every nation and undertake open
and fair corporate activities to be a good corporate citizen of the world.
• Respect the culture and customs of every nation and contribute to economic
and social development through corporate activities in the communities.
• Dedicate ourselves to providing clean and safe products and to enhancing the
quality of life everywhere through all our activities.
• Create and develop advanced technologies and provide outstanding products
and services that fulfill the needs of customers worldwide.
• Foster a corporate culture that enhances individual creativity and teamwork
value, while honoring mutual trust and respect between labor and
management.
• Pursue growth in harmony with the global community through innovative
management.
• Work with business partners in research and creation to achieve stable, long-
term growth and mutual benefits, while keeping ourselves open to new
partnerships
 Roles Played by Mission and Vision
• Mission and vision statements play three
critical roles:
– communicate the purpose of the organization to
stakeholders,
– inform strategy development, and
– develop the measurable goals and objectives by
which to gauge the success of the organization’s
strategy. These interdependent, cascading roles,
and the relationships among them, are
summarized in the figure.
 Strategies
• A strategy is a statement of how you are going to
achieve something.
• More specifically, a strategy is a unique approach
of how you will use your mission to achieve your
vision.
• Strategies are critical to the success of an
organization because this is where you begin
outlining a plan for doing something.
• The more unique the organization, the more
creative and innovative you need to be in crafting
your strategies.
 Goals
• A goal is a general statement of what you want to
achieve. More specifically, a goal is a milestone(s)
in the process of implementing a strategy.
Examples of business goals are:
– Increase profit margin
– Increase efficiency
– Capture a bigger market share
– Provide better customer service
– Improve employee training
– Reduce carbon emissions
 OBJECTIVES (HOW MUCH OF WHAT
WILL BE ACCOMPLISHED BY WHEN)
• Once an organization has developed its mission
statement, its next step is to develop the specific
objectives that are focused on achieving that
mission.
• Objectives refer to specific measurable results for the
initiative's broad goals.
• An organization's objectives generally lay out how
much of what will be accomplished by when.
 Example
• Earn at least a 20 percent after-tax rate of return
on our investment during the next fiscal year
• Increase market share by 10 percent over the next
three years.
• Lower operating costs by 15 percent over the next
two years through improvement in the efficiency
of the manufacturing process.
• Reduce the call-back time of customer inquiries
and questions to no more than four hours.
Objectives should meet the following
criteria:
• Measurable: What specifically will be achieved and
when will it be achieved?
• Suitable: Does it fit as a measurement for achieving
the goal?
• Feasible: Is it possible to achieve?
• Commitment: Are people committed to achieving
the objective?
• Ownership: Are the people responsible for achieving
the objective included in the objective-setting
process?
 Action Plans
• Action plans are statements of specific actions or
activities that will be used to achieve a goal within
the constraints of the objective.
Putting it All Together
The Three Levels of
Strategy
 Corporate Strategy
• Corporate level strategy defines the business areas in which your firm will
operate.
• It deals with aligning the resource deployments across a diverse set of
business areas, related or unrelated.
• Strategy formulation at this level involves integrating and managing the
diverse businesses and realizing synergy at the corporate level.
• The top management team is responsible for formulating the corporate
strategy.
• The corporate strategy reflects the path toward attaining the vision of
your organization.
• For example, your firm may have four distinct lines of business operations,
namely, automobiles, steel, tea, and telecom.
• The corporate level strategy will outline whether the organization should
compete in or withdraw from each of these lines of businesses, and in
which business unit, investments should be increased, in line with the
vision of your firm.
 Business Strategy
• Business level strategies are formulated for specific strategic
business units and relate to a distinct product-market area.
• It involves defining the competitive position of a strategic business
unit.
• The business level strategy formulation is based upon the generic
strategies of overall cost leadership, differentiation, and focus.
• For example, your firm may choose overall cost leadership as a
strategy to be pursued in its steel business, differentiation in its tea
business, and focus in its automobile business.
• The business level strategies are decided upon by the heads of
strategic business units and their teams in light of the specific
nature of the industry in which they operate.
 Functional Level
• Functional level strategies relate to the different
functional areas which a strategic business unit
has, such as marketing, production and
operations, finance, and human resources.
• These strategies are formulated by the functional
heads along with their teams and are aligned
with the business level strategies.
• The strategies at the functional level involve
setting up short-term functional objectives, the
attainment of which will lead to the realization of
the business level strategy.
 TED TALKS

https://www.ted.com/talks/martin_reeves_your_strategy_needs_a_strategy

https://www.ted.com/talks/martin_reeves_how_to_build_a_business_that_lasts
_100_years