“Ideas will convert in

reality when you do

something to convert in
reality”
- ISAAC RIVERA

Welcome to the
Business Strategy
BUSINESS STRATEGY
• The concept of strategy
The origin of the term strategy comes from the ancient
Greek words “stratos” (meaning arm), “strategia” or
“strategos”, which meant the art of “generalship” or to
demonstrate thinking like a general (Henderson, 1989;
Mintzberg & Quinn 1991, Patton 1989, Rubin 1988).
• Strategies are the means by which the enterprise achieves
its objectives (Morden 2007).
• Mintzberg (1987) defines strategy in terms of 5Ps + 2
(Perspective, Plan, Pattern, Position or positioning, Ploys,
Using power and Politics).
• M.Porter: Link – what is strategy
• Strategy process
1. Strategy formulation
2. Strategic planning
3. Strategy evaluation and selection
4. Strategy implementation 2
* Competitive Advantage: is an advantage over
competitors gained by offering consumers greater
value

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* Core competency : is a well-performed internal
activity central (not peripheral or incidental) to a
company’s competitiveness and profitability

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BUSINESS STRATEGY
STRATEGY VS TACTIC
BUSINESS STRATEGY
LEVELS OF STRATEGY
Figure 2.1: The Strategy-Making, Strategy-Executing Process

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“If you don’t know where
you are going, any road
will take you there.”

Cheshire Cat to Alice

Lewis Carroll, Alice in Wonderland

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 Vinamilk
Vinamilk will be the fastest and
sustainable growing healthy dairy and
food company by building a long-term

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competitive advantaged product portfolio
across the scale

1 Values
VISION
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Vinamilk continues to expand Mission
its existing geographical Integrity
coverage and product Fair
portfolios to maintain its
sustainably dominant position
Compliance
in the local market and Ethic
maximizing its shareholder Respect 9
value.
Examples of Strategic Visions

Caterpillar
Be the global leader in customer value.

eBay
Provide a global trading
platform where practically anyone
can trade practically anything.
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 Mission Statement: OSHA

Occupational Safety and Health Administration

 To promote the safety and health of America’s workers by setting and

enforcing standards;
 Providing training, outreach, and education;
 Establishing partnerships;
 Encouraging continual process improvement in workplace safety and
health.

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 Business goals and objectives
Goals: “intentions behind decisions or actions, the states of
mind that drive individuals or organizations to do what
they do” (Mintzberg 1999)
• Operational goals can be expressed as objectives. It is
more general statement than objective (objective can
be quantification if possible).
– Eg: The objective: ‘reduce budget by 5%)
• Non operational goals: Eg. “Seek truth”

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 Business goals and objectives

Objectives are the specific outcomes that an organisation

wishes to achieve by carrying out its activities.
Objectives should always be stated as precisely as
possible, so we can measure whether objectives have
been achieved.
Objectives may be long term and short term

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CHAPTER 1 :OBJECTIVES

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 Functions of objectives

They have several functions :

• Break down the objectives of organisation into clear
statements of what needs to be done at each level
• Clear statements of what action needs to be taken
• Focus for all activities
• Targets
• Control the performance
• Basis for evaluating

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 A Hierarchy of Objectives

– Corporate objectives: Mission

Profitability, Market share,

Growth, Cash flow, Customer
satisfaction, the quality of the objectives
firm’s products, human resources. Corporate

- Functional objectives :
Increasing the number of
SBU objectives

customer by 10%.
- Individual objectives : related to Functional objectives
people. These are short-term
activities.
Individual objectives

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• Financial • Strategic
Objectives Objectives
– Communicate top – Are related to a
management’s targets firm’s marketing
for financial standing and
performance. competitive vitality.
– Are focused internally – Are focused
on the firm’s externally on
operations and competition vis-à-
activities. vis the firm’s rivals.

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 SETTING FINANCIAL
OBJECTIVES
Examples of Financial Objectives
♦ An x percent increase in annual revenues
♦ Annual increases in after-tax profits of x percent
♦ Annual increases in earnings per share of x percent
♦ Annual dividend increases of x percent
♦ Profit margins of x percent
♦ An x percent return on capital employed (ROCE) or return on
shareholders’ equity investment (ROE)
♦ Increased shareholder value—in the form of an upward-trending stock
price
♦ Bond and credit ratings of x
♦ Internal cash flows of x dollars to fund new capital investment

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 SETTING STRATEGIC
OBJECTIVES
Examples of Strategic Objectives
♦ Winning an x percent market share
♦ Achieving lower overall costs than rivals
♦ Overtaking key competitors on product performance or quality
or customer service
♦ Deriving x percent of revenues from the sale of new products introduced
within the next five years
♦ Having broader or deeper technological capabilities than rivals
♦ Having a wider product line than rivals
♦ Having a better-known or more powerful brand name than rivals
♦ Having stronger national or global sales and distribution capabilities
than rivals
♦ Consistently getting new or improved products and services to market
ahead of rivals

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