Chapter 2: Charting and

organizations direction

McGrawHill/Irwin

Copyright2010byTheMcGrawHillCompanies,Inc.Allrightsreserved.

Figure 2.1: The Strategy-Making, Strategy-Executing Process

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Strategic planning is worthless

unless there is first a strategic
vision.
John Naisbitt, Author of Megatrends

McGrawHill/Irwin

Copyright2010byTheMcGrawHillCompanies,Inc.Allrightsreserved.

Developing a Strategic Vision

Phase 1
It articulates the ultimate long-range goal for

your social enterprise.

Involves thinking strategically about
Future direction of company
Managements aspirations
The time to revisit your vision statement is

the point when the enterprise either has

achieved its vision or has substantially
moved away from it.
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 Microsofts corporate vision since 1975 was

to put a computer on every desk and in

every home.
In March 1999 Microsoft drafted a new

company vision that focuses on the power of

the Internet, offering people and
businesses the ability to be connected
and empowered any time, anywhere, and
on any device.

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Key Elements of a Strategic Vision

Expresses managements aspirations for the

business

Provides a panoramic view of where we are

going

Charts a strategic path

Is distinctive and specific to a particular

organization

Captures the emotions of employees and

steers them in a common direction

Is challenging and a bit beyond a companys

immediate reach

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Formulating Vision
How do you envision your social enterprise in

10 years?
How is what you hope to achieve embodied in

this vision?
Communication of VISION is important to gain

commitment and support of the organization

The vision is more like a campaign slogan
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Table 2.2: Characteristics of an Effectively Worded Vision Statement

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 Caterpillar

Be the global leader in customer value

3M dental products division

Become THE supplier of choice to the

global dental professional markets,
providing world class quality and
innovative products.
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Strategic Vision vs. Mission

A strategic vision

concerns a firms future

business path - where
we are going
Markets to be pursued

A companys mission

statement typically
focuses on its present
business purpose - who
we are and what we do

Future product/market/
customer/technology focus

Current product and

service offerings

Kind of company
management is
trying to create

Customer needs and

customer groups being
served
Geographic
coverage

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Key Elements of a
Mission Statement
A complete mission statement should cover three

things:
Customer needs being met
What is being satisfied
Customer groups or markets being served
Who is being satisfied
What the organization does (in terms of business
approaches, technologies used, and activities
performed) to satisfy the targeted needs of the
targeted customer groups
How customer needs are satisfied
A companys mission is not to make a profit! Its true
mission is its answer to What will we do to make a profit?
Making a profit is an objective or intended outcome!
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A Mission Statement Example

Community Health Food Store he People

Garden
To strengthen the Mount Pleasant

community by developing nourishing,

multicultural, and enjoyable food resources
and, in the process, connect people and
build resources to support holistic
community-driven development.

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Formulating Mission Statement

Developing a mission statement entails

defining the who, what, why, for

whom, and how of your social enterprise.
Whom (client statement)- target population
Why (problem statement) - what needs of

target
What (purpose statement) - ultimate result
How (business statement)- strategy to do it
Who (value statement) principles of the
strategy
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Setting Objectives
Phase 2
Purpose of setting objectives

Converts vision and mission into specific performance

targets
Creates yardsticks to track performance
Well-stated objectives are

Quantifiable
Measurable
Contain a deadline for achievement
Spell-out how much of what kind

of performance by when
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Importance of Setting
Stretch Objectives
Objectives should be set at levels that

stretch an organization to
Perform at its full potential,
delivering the best possible results
Push firm to be more inventive
Exhibit more urgency to improve its business
position
Be intentional and focused in its actions

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Types of Objectives Required

Financial Objectives

Strategic Objectives

Outcomes focused

Outcomes focused on
improving competitive
strength and market
standing

on improving financial
performance

$
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The Objectives at Yum! Brands

(KFC, Pizza Hut, Taco Bell)

Open 100 KFC restaurants in Vietnam by 2010

Expand Taco Bell restaurant concept to Dubai, India, Spain

and Japan during 2008 and 2009

Increase number of international restaurant locations from
12,000 in 2007 to 15,000 in 2012
Increase operating profit from international operations from
$480 million in 2007 to $770 million in 2012
Expand Pizza Huts menu to include pasta and chicken
dishes
Decrease the number of company owned restaurant units in
U.S. from 20% of units in 2007 to less than 10% of units by
2010
Increase the number of Taco Bell units in the U.S. by 2%
3% annually between 2008 and 2010
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Objectives Are Needed at All Levels

The objective-setting process is more topdown than bottom up
1. First, set organization-wide objectives
and performance targets
2. Next, set business and
product line objectives
3. Then, establish functional
and departmental objectives
4. Individual objectives are established last
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Crafting a Strategy
Phase 3
Strategy-making involves astute

entrepreneurship
Actively searching for opportunities
to do new things
or
Actively searching for opportunities to do
existing things in new or better ways

Strategizing involves
Developing timely responses to happenings
in the external environment
and
Steering company activities in new directions
dictated by shifting market conditions
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Corporate Strategy
Orchestrated by headquarters executives
and involves
Moves to diversify into different industries
Actions to boost the combined performance

of the companys different businesses

Actions to capture cross-business synergies
Establishing investment priorities and steering

corporate resources into the most attractive

businesses
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Business Strategy
Concerns the actions and approaches crafted
to produce successful performance in one
specific line of business. Is usually the
responsibility of the manager in charge of the
business and involves
Crafting competitive moves to build

sustainable competitive advantage

Seeing that lower-level strategies within

the business are well-matched to the

overall business strategy
Gaining approval of business-level strategic

moves by corporate-level officers and directors

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Functional Strategies
Concerns the game plan for a function,
activity, or process within a business; is
usually orchestrated by the functional head
and involves
Crafting functional strategic initiatives
that will support the overall business strategy
Adding function-related strategic details to

the overall business strategy

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What Is a Strategic Plan?

A
Companys
Strategic Plan

Its strategic vision

and business mission
Its strategic and
financial objectives

Consists of
Its strategy
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