What does
this story
mean to you?
Every
Everymorning
morningin
inAsia,
Asia,
Aa deer
deer wakes
wakes up.
up.
ItItknows
knowsititmust
mustout
outrun
run
The
the fastest
fastest tiger,
tiger,
Or
or itit will
will be
be killed.
killed.
Every morning in Asia,
a tiger wakes
It knows it must run
than the slowest
or it will starve.
up.
faster
deer,
It doesn’t matter whether
you’re
a tiger or a deer-
When
the sun comes up,
you’d better be running.
“ Strategic Management is not a
box of tricks or a bundle of
techniques. It is analytical thinking
and commitment of resources to
action”
- Peter Drucker-
The Five Tasks of
Strategic Management Process
1. Forming a strategic vision of where the organization is headed –
so as to provide long-term direction, delineate what kind of
enterprise the company is trying to become, and infuse the
organization with a sense of purposeful action.
2. Setting objectives – converting the strategic vision into specific
performance outcomes for the company to achieve.
3. Crafting a strategy to achieve the desired outcomes.
4. Implementing and executing the chosen strategy efficiently and
effectively.
5. Evaluating performance and initiating corrective adjustments in
vision, long-term direction, objectives, strategy, or execution in
light of actual experience, changing conditions, new ideas, and
new opportunities.
Strategic Management
The theme Strategic Management refers to the
managerial process of forming a strategic vision,
setting
objectives,
crafting
a
strategy,
implementing and executing the strategy, and then
over time initiating whatever corrective
adjustments in the vision, objectives, strategy, and
execution deemed appropriate.
The Five Tasks of Strategic Management
Task 1
Developing a
Strategic Vision
and a Business
Mission
Revise
as Needed
Task 2
Setting
Objectives
Revise
as Needed
Task 3
Crafting a
Strategy to
Achieve the
Objectives
Improve/Change
as Needed
Task 4
Implementing
and Executing
the Strategy
Improve/Change
as Needed
Task 5
Evaluating
Performance,
Monitoring New
Developments,
and Initiating
Corrective
Adjustments
Recycle to
Tasks1,2,3 or
4 as Needed
Task – 1 Strategic Vision
- What is the organization’s long term direction
- Technology – product – customer focus it intends
to pursue
- Future business scope
“Where we are going ? ”
Mission Statement
- Present business scope
- Stress company’s product & services are
- What type of customers it serves
- What technological business capabilities it has
“ Who we are and what we do ? ”
Strategic Vision Definition
A strategic vision is a roadmap of a company’s
future-providing specifics about technology and
customer focus, the geographic and product
markets to be pursued, the capabilities it plans to
develop, and the kind of company that
management is trying to create.
Mission Statement Definition
A company’s mission statement is typically focused
on its present business scope-”who we are and
what we do”; mission statements broadly describe
an organization’s present capabilities, customer
focus, activities, and business makeup.
The Difference between Strategic
Vision & Mission Statement
A strategic vision portrays a company’s future
business scope (where we are going) where as
company mission statement describe it’s present
business scope (who we are, what we do)
Examples of Strategic Vision and
Company Mission Statement
Microsoft Corporation
For years, one vision drove what Microsoft did: “A computer on
every desk and in every home using great software as an
empowering tool.” But the emergence of the Internet and non-PC
devices like handheld computers and TV-set-top boxes as
increasingly integral parts of everyday life prompted Microsoft in
1999 to broaden its vision to “Empower people through great
software anytime, anyplace, and on any device. “Bill Gates
observed: “We see a world where people can use any computing
device to do whatever they want to do anytime, anywhere. The PC
will continue to have a central role… but it will be joined by an
incredibly rich variety of digital devices accessing the power of the
Internet.”
Examples of Strategic Vision and
Company Mission Statement
Intel
“Our vision: Getting to a billion connected computers worldwide,
millions of servers, and trillions of dollars of e-commerce. Intel’s
core mission is being the building-block supplier to the Internet
economy and spurring efforts to make the Internet more useful.
Being connected is now at the center of people’s computing
experience. We are helping to expand the capabilities of the PC
platform and the Internet.”
Examples of Strategic Vision and
Company Mission Statement
3Com
“3Com’s mission is to connect more people and organizations to
information in more innovative, simple, and reliable ways than any
other networking company in the world. Our vision of pervasive
networking is of a world where connections are simpler, more
powerful, more affordable, more global, and more available to all.”
SLT Vision & Mission
Vision
To lead Sri Lanka to become the hub of
telecommunications in South Asia
Mission
“To anticipate and fulfill the communications
requirements of all sectors of the nation, in a
service oriented work ethic which will provide
total customer satisfaction through the most
modern telecommunication facilities”
Direction
Vision
&
Mission
Task – 2 Setting Objectives
- Convert management statement of strategic
Vision and Business Mission into specific
performance target
- Results and outs comes the organization wants to
achieve
- It help managers to track an organizations
progress
Objectives should be SMART
S
M
A
R
T
– Specific
– Measurable
– Attainable
– Realistic
– Time
Objective stetting is required of all managers.
Every unit in company needs concrete, measurable
performance target that contribute meaningfully
toward achieving company objectives
Two Types of Performance Yard Stick
1. Financial Performance  Financial Objectives
2. Strategic Performance  Strategic Objectives
Strategic & Financial Objectives
Strategic objectives relate to outcomes that
strengthen an organization’s overall business
position and competitive vitality; Financial
Objectives relate to the financial performance
targets management has established for the
organization to achieve
Examples of Strategic & Financial
Objectives
Domino’s Pizza
(Strategic objectives)
“To safely deliver a hot, quality pizza in 30
minutes or less at a fair price and a reasonable
profit”
Examples of Strategic & Financial
Objectives
Ford Motor Company
(Strategic objectives)
“To satisfy our customers by providing quality
cars and trucks, developing new products, reducing
the time it takes to bring new vehicles to market,
improving the efficiency of all our plants and
processes, and building on our teamwork with
employees, unions, dealers, and suppliers.”
Examples of Strategic & Financial
Objectives
3M Corporation
(Financial and Strategic objectives)
“To achieve annual growth in earnings per share of
10 percent or better, on average; a return on
stockholders’ equity of 20-25 percent; a return on
capital employed of 27 percent or better; and have
at least 30 percent of sales come from products
introduced in the past four years”
Task – 3 Crafting Strategy
A company’s Strategy consists of the competitive
efforts and business approaches that managers
employ to please customers, compete successfully,
and achieve organizational objectives.
Crafting Strategy
- How to achieve the targeted results in light of the
organization’s situation and prospects
- Objectives are the “ends” and strategy is the
“means” of achieving them
Basic Concept
A company’s strategy consists of the competitive
efforts and business approaches that managers
employ to please customers, compete successfully,
and achieve organizational objectives
Company Strategy Consists of
-
How to grow the business ?
How to satisfy customers ?
How to out compete rivals ?
How to respond to changing market conditions ?
How to manage each functional piece of the
business and develop needed organizational
capabilities ?
- How to achieve strategic & financial benefits ?
Develop
Competence
To provide
Competitive
advantage
 Strategy-Making Pyramid
Corporate
Strategy
Business Strategies
Functional Strategies
Strategic direction
(Stability,Growth
Retrenchment)
Emphasizes
Improvement
Of the competit
position
(R&D, manufacturing marketing, finance, human resources, etc.)
Achieve
Operationa
Operational Strategies
(regions and districts, plants, departments within functional areas) efficiency
Understanding a Company’s Strategy
Actions to diversify
the
company’s
revenue base and
enter
altogether
new industries or
businesses
Actions to strengthen the
company’s resource base
and
competitive
capabilities
Actions
and
approaches
that
define how the
company manages
R & D, production,
sales and marketing,
finance, and other
key functions
Planned actions and
initiatives to out
compete rivals
Moves to react and
respond to changing
external
circumstances
The pattern of
actions and business
approaches that define
a company’s
strategy
Actions to capitalize
on
new
opportunities or to
defend
against
threats
to
the
company’s
wellbeing
Actions to
geographic
coverage
alter
Actions to merge
with or acquire a
rival company to
strengthen
the
company’s business
position
Actions to form
strategic alliances
and
collaborative
partnerships
A Strategy Example – Mc Donald’s
- Growth Strategy
* Penetrate the market not currently serviced by adding 1,750
restaurants annually (an average of one every five hours), some
company-owned and some franchised, with about 90 percent
outside the United states. Establish a leading market position in
foreign countries ahead of competitors
* Promote more frequent customer visits via the addition of attractive
menu items, low-price specials, Extra Value Meals and children’s
play areas
* Explore opportunities to exploit the company’s global supplier
infrastructure and its core competencies in multiunit management,
site location and unit construction and product marketing
A Strategy Example – Mc Donald’s
- Franchising Strategy
- Store Location and Construction Strategy
- Product Line Strategy
Task – 4 Implementing & Executing
the Strategy
Concerns the managerial exercise of putting a
freshly chosen strategy into place. Strategy
execution deals with the managerial exercise of
supervising the ongoing pursuit of strategy, making
it work, improving the competence with which it is
executed, and showing measurable progress in
achieving the targeted results.
Managing the Strategy Execution Process
primarily
a
hands-on,
close-to-the-scene
administrative task that includes the following
principal aspects:
- Building an organization capable of carrying out the
strategy successfully
- Allocating company resources so that organizational units
changed with performing strategy-critical activities and
implementing new strategic initiatives have sufficient
people and funds to do their work successfully
Cont….
Cont….
- Establishing strategy-supportive policies and operating
procedures
- Putting a freshly chosen strategy into place
- Motivating people in ways that induce them to pursue the
target objectives energetically and, if need be, modifying
their duties and job behavior to better fit the strategy
requirements of successful execution
- Tying the reward structure to the achievement of targeted
results
Cont….
Cont….
- Creating a company culture and work climate conductive
to successful strategy implementation and execution
- Installing information, communication, and operating
systems that enable company personnel to carry out their
strategic roles effectively day in, day out.
- Instituting best practices and programs for continuous
improvement
- Exerting the internal leadership needed to drive
implementation forward and to keep improving on how
the strategy is being executed
Task – 5 Evaluating Performance,
Monitoring New Developments and
Initiating Corrective Adjustment
- Check Weather things are going well internally
- Monitoring out side development closely
- Check corrective actions or adjustment needed
for long term direction, objectives, business
model & strategy
The Benefits of a Strategic Approach to
Management
- Providing better guidance to the entire organisation
- Making managers and organisational members more alert
to new opportunities and threatening developments
- Helping to unify the organisation
- Creating a more proactive management posture
- Promoting the development of a constantly evolving
business model, that will produce sustained bottom line
success for the enterprise
- Providing managers with a rationale for evaluating and
competing budget requests (steering resources into
Cont….
strategy – supportive, result producing areas)
Why Strategic Management is an
Ongoing Process, not a Start Stop Event
- Managers’ responsibility is to track progress, spot
problems and issues early
- Monitor the winds of the market & customer change
- Initiate adjustment needed
Cont….
Readings





Strategic Management / concepts & cases Fred
R David
Strategic Management Theory – An Integrated
Approach Charles W L / Gareth R Jones
Essential Challenges of Strategic Management
William B Rouse
Exploring Corporate Strategy Text and cases
Gerry Johnson / Kevan Scholes
Strategic Management / concepts & cases
Thompson /Strickland
The End
Thank you