IMDR PUNE JULY-SEPT.

2011
M P Pusalkar

What is strategy ?

Long term direction of an organisation Scope of an organisations activities Gaining advantage over competition Addressing changes in business environment Building on resources/competencies
Affected by Values/ Expectations of Stakeholders

Strategic Decisions Are ......

Complex in nature Made in situations of uncertainty Affect operational decisions

Require an integrated approach

Involve considerable change

VOCABULARY OF STRATEGY

MISSION

MISSION STATEMENT

Overall Purpose Of The Organisation In Line

With Values & Expectations Of Stakeholders

MISSION
Organisation....... Why it exists ? / What is our business / What will it be / What should it be

Needs Of The Society Organisation Fulfils

MISSION

Role an organisation plays in society Based on set of tasks organisations perform in light of priorities

Serves organisation for many years

( Maybe reformulated as organisation grows)

MISSION Good Mission Statement ......... Feasible Precise Clear Motivating Distinctive Incorporates strategy Indicates how objectives are to achieved

MISSION STATEMENTS
HCL
To Be A World Class Competitor

Marico
The 3 Ps Of Marico..People/Products/Profits

Ranbaxy
To become a Research based international Pharma Company

MISSION STATEMENTS
CANARA BANK

To Be Most Competitive & Progressive

Institution In Our Banking Industry

MISSION STATEMENT

FORD MOTOR COMPANY We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world

MISSION STATEMENTS
NIKE Inc
To Bring Inspiration & Innovation To Every Athlete In The World

P&G
We will provide branded products & services of superior quality & value that improve the lives of the worlds consumers now & for generations to come.

VISION
(STRATEGIC INTENT)

Desired Future State Aspiration Of The Organisation Leads To An End What The Firm Would Ultimately Like To Become Encapsulates Basic Strategic Intent

VISION STATEMENTS
BA

Service that matters for people who

value how they fly

VISION STATEMENTS

GCPL
We are dedicated to Deliver Superior Stakeholder Value by providing solutions to existing & emerging consumer needs in the Household & Personal Care business
We will achieve this through Enduring Trust & Relentless Innovation Delivered with Passion & Entreprenurial Spirit

VISION STATEMENTS HUL Grow Our Business Competitively, Profitably,& Sustainably

The Key Pillars To Achieving This Are.... Winning with brands & Innovation Winning in the market place Winning through continuous improvement Winning with people

Benefits Of A Vision Statement

Impairing & Exhilarating Shared sense of purpose Foster long term thinking Competitive, original & unique

 BUSINESS

POLICY

Study of the function and responsibility of senior management, the crucial problems that affect success in the total enterprise, and the decisions that determine the direction of the organisation and shape its future.

 BUSINESS POLICY Integrates the knowledge and experience gained in various functional areas of management Deals with the constraints and complexities of real life businesses Cuts across narrow functional boundaries Makes study and practice of management more meaningful

Development Of Strategic Management

Ad hoc Policy making Planned Policy Formulation Concept Of Strategy Strategic Management

GOALS & OBJECTIVES

What an organisation hopes to accomplish

GOAL

General statement of aim or purpose

OBJECTIVE

Quantification of a Goal
An organisation has to translate its purpose into long term goals and short term objectives for realising its mission and vision

Example... Canara Bank..... GOAL: Focus on Growth/ Inovativeness/ High Profits Highly involved employees Objective: 10% growth YOY/ 5 New initiatives/year/ etc

Core Competence
Not core capability & technology but .... Which transcends products & markets Helps organisation to harmonise multiple technologies, learnings & relationship across levels & functions Feeds into core products which can become BUs Provides access to a variety of markets Makes significant contribution to customers perceived benefit Difficult for competition to imitate
SONY : miniaturisation Black & Decker: Small electric engines

Levels At Which Strategy Operates....

Single strategy may not only be inadequate but inappropriate

Multiple strategies at different levels

Companies organised based on divisions/profits/SBUs

What is strategic management ?

learn from internal/external environments, establish strategic direction, create strategies intended to help achieve established goals in an effort to satisfy key stakeholders
The process through which organisations analyze &

Emphasis on general management responsibilities essential to relate organisation to environment and achieve objectives

Levels At Which Strategy Operates......

Corporate Office

SBU A

SBU B

SBU C

Finance

Marketing

Operations

HR

IT/Systems

Strategic Architecture Framework or map for leveraging corporate resources towards the strategic intent. Draws upon a wide variety of information to present a view of the evolution of an industry Identifies the core competencies to build and their constituent technologies Provides a framework within which innovation can be planned and managed
C K Prahalad

Strategic Control

Monitoring the extent to which the strategy is achieving the objectives & suggesting corrective action Lies between two extremes of strategic planning & financial control Relationship between Centre (strategic shaper) & Business Units

Strategic Control Centre adds value by .... Defining & Shaping overall strategy Deciding balance of activities & role of each BU Defining & Controlling organisation policies Fostering organisation learnings between BUs Defining standards & assessing performance of separate BUs

Strategic Control

Premise control
Identify key assumptions Keep track of change ( e.g Govt policy/ R&D breakthrough) Assess impact on strategy

Implementation control
Whether plans, programmes and projects are guiding organisation towards its objectives

Strategic surveillance
Designed to monitor broad range of events inside & outside the company that are likely to affect strategy

Special alert control

Rapid response & immediate reassessment of strategy in light of sudden & unexpected events

Phases In The Strategic Management Process

Establishment Of Strategic Intent Formulation Of Strategies Implementation Of Strategies Strategic Evaluation

Strategic Control

Establishment Of Strategic Intent

Creating & communicating a Vision Designing a Mission statement

Defining the business

Setting Objectives

Formulation Of Strategies

Performing environment appraisal Doing organisational appraisal Considering corporate level strategies Considering business level strategies Undertaking strategic analysis Exercising strategic choice Formulating strategies Preparing a strategic plan

Implementation Of strategies
Activating

strategies Designing structures and systems Managing behavioural implementation Managing functional implementation Operationalising strategies

Performing Strategic Evaluation & Control Performing strategic evaluation

Exercising

strategic control and

strategies

Reformulating

Working Model Of Strategic Management Process

Strategic Intent SWOT Analysis Strategic Alternatives Strategic Analysis & Choice Strategy Implementation Strategic Evaluation

Strategic Control

ELEMENTS OF STRATEGIC MANAGEMENT

Environment

Strategic Capability Expectation & Purpose

The Strategic Position

Business level strategies Organising

Strategic Choices

Strategy into Action

Enabling

Corporate level & International

Develop directions & methods

Managing change