Strategic Management

(Part 1)

Evolution of Strategy
Strategic Vision
Strategic Mission
Strategy
 Strategy is concerned with deciding what
business an organisation should be in,
where it wants to be, and how it is going to
get there.
Strategic Management
 Strategic management is an organisation-
wide task involving both the development
and implementation of strategy.
 It demands the ability to steer the
organisation as a whole through strategic
change under conditions of complexity and
uncertainty.
Strategos
 The word strategy came from the
Greek word strategos, which means a
General.
 At that time strategy meant the art
and science of directing military forces.
 Today, the term strategy is used in
business to describe how an
organisation is going to achieve its
mission and objectives.
Evolution Of Business Strategy
 Business policy can be traced back to
1911, when Harvard business school
introduced an integrative course in
management for GM based on case
study.
 Introduction in B schools came in
1959 with publication of Gordon and
Howell reports sponsored by Ford
foundation.
Long Term Planning (In the
‘60s )

 Organisations focused on setting clear

long term goals and working towards
them. The growth was to come from the
same line of business in which the
companies were operating.
 Capability – Opportunity Fit (In
the ’70s)

 Environment threats and opportunities started

assuming greater importance in strategy
planning.
 Resource constraints, particularly the oil shock,
and limited opportunities in the traditional line
of business were mainly responsible for the
shift in focus.
 Growth through integration and diversification
formed the core of strategic plans of many
companies.
 Planning to Gain Competitive
Advantage (In the ’80s)

 With severe competition from the Japanese

and the newly industrialised countries, the
emphasis in the 80s shifted to competitive
advantages and offering better value to the
customer then the competitor could.
 Mergers, acquisitions and takeovers to gain
the advantage of size also became popular.
 Capability in a Turbulent
Environment (In the ’90s)
 In the 90s onwards the trend became more
complex with unprecedented uncertainty.
 Global competition, path breaking technology,
shifting consumer tastes and ever changing
exchange rates are making it a tough proposition
for planners.
 Hence the shift from matching capability to coping
ability in a turbulent environment (copability).
 Adaptive Planning-(Day 1990)
 One major outcome is that many companies are
doing away with long term plans. They have now
started managing with intuition and experience.
There is a greater emphasis on issues
management.
 That is in order to cope with the environment,
companies continuously monitor the environment
(both internal and external) to identify issues that
may have significant bearing on company
operations.
 Globalisation Era
 Individual companies do not posses all the skills
and technology required to exploit the global
market.
 As a coping mechanism, companies are moving
in the direction of strategic alliances and joint
ventures to be able to compete on a global scale.
There is a clear shift from competition to
collaboration.
 Five Tasks Of Strategic
Management

Vision & Mission Objectives Craft Implement

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Revise Improve Recycle
What Is a Vision?
 "Every organization has a destiny: a
deep purpose that expresses the
organization's reason for existence.
Visions exist on different levels of the
organization's identity”. P. Senge
What Is a Vision?
 "To choose a direction, an executive must
have developed a mental image of the
possible and desirable future state of the
organization. This image, which we call a
vision, may be as vague as a dream or as
precise as a goal or a mission statement."
Warren Bennis
Vision Tips
A well-stated vision statement:
 Is brief.
 Is catchy and easy to remember.
 Is inspiring and a challenge to future
achievement.
Vision Tips
 Is believable and consistent with your
strategic values and your mission.
 Serves as a rallying point with all important
stakeholders.
 Clearly states the essence of what your
organization must become.
 Allows for flexibility and creativity in
execution.
Vision Examples: Matsushita

 In full awareness of our

responsibilities as manufacturer, we
will devote ourselves to the progress
and development of society and the
well-being of people, thereby
contributing to the growth of human
civilization.
Vision Examples
 At General Electric (GE) the vision is
'We bring good things to life'.
 The Ford Motor Company vision is 'to
become the world's leading consumer
company for automotive products and
services'.
 To be the world’s best in chemicals
and electronic imaging. Eastman
Kodak
Vision Ought to Be Compelling
 In order for you to get your employees
passionate about your vision, it has to be
compelling. It has to matter… not just to
your management team, but also to your
employees. “To triple sales revenue next
year,” doesn’t do it. For, who cares? Only a
few.
 To make a difference to customers, to the
community, to the world. To improve the
lives of human beings. That matters.
Live the Vision
 It’s also important for management not just
to speak the vision, but also to live the
vision. Apple computer did this.
 The entire design team for the apple II GS
computer signed their name on the artwork
for the computer’s mother board? So that
on each and every apple II GS computer,
the team’s signatures appear in copper
script.
 That’s involving employees in living the
vision.
Mission Statement: Definition
 The company mission embodies the
strategic decision-makers business
philosophy, and also reveals the
image the company seeks to project,
and indicates the principal product or
service areas, and the primary
customers needs the company
attempts to satisfy.
Business Philosophy
 Company philosophy reflects basic
values, aspirations and philosophical
priorities that the strategic decision-
makers are committed to emphasize
in the management of their firms.
(Generally unwritten-yet pervasive code
of behaviour).
Mission Statement: Presumed
Benefits
 To communicate a sense of the firm’s
direction & purpose so that coherent
short-term & long-term objectives are
developed. Employees, stockholders
& customers come to know where the
firm is headed.
 To inspire & motivate.
Mission Statement: Presumed
Benefits
 To serve as a control mechanism to
keep the firm “on track”, to keep it
from wandering into unrelated
businesses.
 They serve as boundary lines to make
decisions. Neither too narrow(rigid)
nor too wide (without clear goals &
direction).
Mission Statement Dimensions
“Clayton Instruments Company designs
and manufactures highly reliable
monitoring equipment for use in
harsh or unusual environments within
the process industries.”
Note that this mission statement has
both an internal and an external
dimension.
Mission Statement Internal
Dimension
• Internally, it describes the products
which the company offers: “highly
reliable monitoring equipment.” And
it also lists the functions the company
performs: “design and
manufacturing.”
Mission statement components
• Externally, it identifies the customer:
“the process industries.” And it sites
the company’s “market position” - the
reason why customers would prefer
to buy products and services from the
company. Specifically, the company’s
products are “for use in harsh or
unusual environments.”
Mission a Strategic Tool
 Developing your mission statement is
the step which moves your strategic
planning process from the present to
the future.
 Your mission statement must “work”
not only today but for the intended
life of your strategic plan of which
your mission statement is a part.
Mission Statements Examples
 Our business is renting cars. Our mission is
total customer satisfaction. (Avis Rent-a-
Car)
 We are committed to improve health care
throughout the world. (Baxter Travenol)
Mission Statements Examples
Our mission is to provide any customer a
means of moving people and things up,
down, and sideways over short distances
with high reliability than any similar
enterprise in the world. (Otis Elevator)
Mission Statements Examples
 We believe our first responsibility is to the
doctors, nurses and patients, mothers and
all who use our products and services.
(Johnson & Johnson)
 Mission

“Absolutely Positively Overnight”

MindTree Consulting Mission
 Its mission is to deliver business
enabling solutions and technologies,
by creating partnerships with its
customers, in a joyous environment
for its people.
Helping them stand tall
 “I took a paint brush, suddenly
I got an idea,
 Blue is limitless imagination,
 Yellow is bubbles of joy and
 Red is action.”
 Chetan K.S, a student with
motor and speech disability
about his creation, the famous
red, blue and yellow logo.
MindTree Values
 These values are caring, learning,
achieving, sharing and social
responsibility, the CLASS values in
short.
 Every employee is assessed for these
values during the annual appraisal
process.
MindTree Values
 MindTree believes that these five
values bind the employees of
MindTree as one large family.
 The CLASS values act as the common
chord among the employees who
belong to nine different nations
cutting across three continents.
Difference between Mission &
Vision
 Your Mission Statement describes
what business you’re in and who your
customer is. As such, it captures the
very essence of your enterprise.
 Unlike your mission statement, your
vision statement is a projection in the
future. Your vision is your dream,
your aspiration, your "hope to
accomplish."
AMD's Vision

 We at AMD share a vision of a world

that is enhanced through information
technology, which liberates the
human mind and spirit.
AMD's Vision

 With a strong commitment to our

core values and mission, we
anticipate and respond quickly to
changing customer needs while
preserving a culture that brings out
the best in each of us.
AMD's Mission

 AMD produces integrated circuits,

providing programmable products in
concert(design) with applications
solutions to manufacturers of
equipment for personal and
networked computation(calculations)
and communication.
AMD's Mission

 Successful accomplishment of this

mission will enable AMD to grow
faster and earn a higher return on
equity than the semiconductor
industry.