Concepts of Strategic Intent,

Stretch, Leverage, and Fit

 Strategic Management
• Strategy Management is defined as a dynamic
process of formulation, implementation,
evaluation, and control of strategies to realise
the organization’s strategic intent
 Strategic Intent
• It refers to purpose for what organization
strives for. Organization must define “what
they want to do” , “why they want to do”.
• This “why they want to do” underlines the end
result and in management terms it is known as
strategic intent.
• Strategic Intent has a hierarchy: Vision,
Mission, Goals and Objectives
 STRATEGIC INTENT
• "Companies that have risen to global leadership over the
past 20 years invariably began with ambitions that were
out of all proportion to their resources and capabilities.
But they created an obsession with winning...this
obsession [is] strategic intent (Hamel & Prahalad,
1989)."
• The strategic intent of an organisation describes how the
firm’s energy and resources are channelled into a
focused and unified overall goal (Daft et al., 2010; Hamel
& Prahalad, 1989). It is the strategic direction and
destiny to be pursued by the company (Landrum, 2008).
Hierarchy of Strategic Intent
 VISION
• Burt Nanus a well known expert of organizational vision has defined vision as “
a realistic, credible and attractive future for an organization”.
• Realistic: Vision must be based on reality to be meaningful for an organization;
It should not be a merely day dreaming but a dream to be converted into
reality.
• Credible: Vision must be believable to be relevant to the members of
organization. One of the purpose of vision is to aspire those in org. to achieve a
level of excellence.
• Attractive: Vision must be attractive as to inspire and motivate the org.
members. People must want to be a part of future of org.
• Future: Vision is always for future

Kotter (1990) defines it as a "description of something(an organization, a

corporate culture, a business, a technology, an activity) in the future"
 Features of good vision
• It should be idealistic( should be realistic).
• Good vision clarifies the direction.
• Good vision encourages the org. members commitment
from them.
• Good vision reflects uniqueness of org. ,its distinct
competence, what it stands for and what it is able to
achieve.
• Good vision is consistent with org values and cultur.
• Good vision is easily understood by those who are
responsible to convert it into reality
 Examples of vision
• Infosys- To be globally respected company that
provides best of breed software solutions by
best-in-class people.
• Tata tea- to be India’s foremost tea based
beverage company
 Mission
• Is defined a fundamental unique purpose that sets a
business apart from other firms of its type and identifies its
scope of its operations in product and market terms. Its is a
statement which defines the role that org. plays in society.
Difference b/w Vision and mission
 Vision is forward looking and mission states what org. is
and why it exists.
 Vision emphasis on long term concept with very high level
of achievement and mission deals with products , services
offers, way these are offered.
 Examples of mission statement
• Infosys: To achieve our objectives in a environment
of fairness, honesty and courtesy towards our
clients, employess, vendors and society at large.
• Tata tea:
 Achieve market and thought leadership for
branded tea in india.
 Drive long term profitable growth.
 Co create enhanced value for stakeholders.
Make tata tea a great place for work
 Goals and Objectives
• These are the base of measurement.
• Goals are the end results, that the
organization attempts to achieve.
• On the other hand, objectives are time-based
measurable actions, which help in the
accomplishment of goals. These are the end
results which are to be attained with the help
of an overall plan, over the particular period.
 Concept of Stretch, Leverage and Fit
• Stretch is "a misfit between resources resources
and aspirations " †
• Leverage refers to concentrating, accumulating,
complementing, conserving, and recovering
resources in such a manner that inadequate
resource base is stretched to meet the
aspirations that an organisation dares to have. †
• Fit means positioning the firm by matching its
organisational resources to its environment.
 Stretch

• The gap between resources and aspirations is

stretch. Where current resources and
capabilities are unlikely to be adequate to
meet the requirements of enterprise strategic
intent, they will need stretching in order to
meet the demands of that intent.
• A firm’s strategic intent should represent an
ambition that stretches far beyond the current
resources and capabilities of the enterprise. 
 Strategy as Leverage

• Hamel and Prahalad describe stretch and

leverage as the two sides of the same
coin. Stretch relates to aspiration. Leverage
relates to the use of capabilities and resources
to achieve these aspirations.
• Resource leverage is defined by Hamel and
Prahalad in terms of doing more (or adding
more value) with what you have. 
 strategic fit
• The strategic fit is the traditional way of looking at strategy. Using
techniques such as SWOT analysis, which are used to assess
organizational capabilities and environmental opportunities,
Strategy is taken as a compromise between what the environment
has got to offer in terms of opportunities and the counteroffer that
the organization makes in the form of its capabilities. 
• Strategic fit expresses the degree to which an organization is
matching its resources and capabilities with the opportunities in
the external environment. The matching takes place
through strategy and it is therefore vital that the company has the
actual resources and capabilities to execute and support the
strategy. 
 The product /service concept

• A product or service concept is the way in which a firm likes to

position its products / services in the market, in terms of product
features, quality, price service, distribution, differentiating elements
etc. While trying to position its products / services in a distinct
manner, the company should not lose sight of its present and
potential rivals competitive environment changing preferences of
customer etc.
• Coca-cola focused on its soft drink business missed seeing the market
for coffee bars and fresh fruit juices that eventually impinged on its
soft drink business.
• A firm therefore needs to define its business in a way that allows it to
focus on its strengths in a pin pointed way and march ahead of its
rivals with confidence.