Part Two:
STRATEGY FORMULATION and
IMPLEMENTATION
COMPANY VISION
and MISSION
Prepared and Presented by:
LORENZO E. GARIN JR., MPM
NUIC, Instructor
Learning Objectives
Describe a company mission and explain
its value
 Explain why it is important for the mission
statement to include the company basic
product or service, its primary markets,
and its principal technology
 Discuss the importance of company
philosophy, public image, and company
self concept to stockholders
 Describe the company’s board of directors

What is Strategic Management?
Strategic Management
The
set of decisions and actions used
to formulate and implement strategies
that will provide a competitively
superior fit between the organization
and its environment so as to achieve
organizational goals.
What is Company Vision?

Defines the desired or intended future
state of an organization or enterprise in
terms of its strategic direction. Vision
is a long term view, sometimes
describing how the organization would
like the world in which it operates to be.
For example a charity working with the
poor might have a vision statement which
read "A world without poverty
Reasons for having a vision
statement
 Gets
team focused.
 Shows a picture of where the
company is going.
 Instills focus, discipline, and structure
within the organization.
 Ensures that team understands
company direction.
How to write a Vision?





Determine the organization's overriding goal
State what the organization envisions itself to be in
terms of values, employees, growth and contributions
to society.
Look at vision statements of competitors in the
industry
Use wording that will inspire your team. Think of
adjectives and sentences that will get the team excited
and will make them think they are part of something
that is much bigger than something they could have
thought of themselves.
Get other people on the team to critique the draft of the
vision to make sure it's effective and inspiring. If there
are any key customers the organization trusts, ask
them to review the draft too.
What is Company Mission?
Company
Mission
The unique purpose that
sets a company apart from
others of its type and
identifies the scope of its
operation. In product,
market, and technology
Mission


Definition: A sentence describing a company's
function, markets and competitive advantages; a
short written statement of your business goals
and philosophies
A mission statement defines what an
organization is, why it exists, its reason for
being. At a minimum, your mission statement
should define who your primary customers are,
identify the products and services you produce,
and describe the geographical location in which
you operate
Importance of Mission
Benefits from a strong mission
Unanimity of Purpose
Resource Allocation
Mission
Organizational Climate
Focal point for work
structure
Customers
Products
Services
Markets
Technology
Employees
Mission
Elements
Survival
Growth
Profit
Public
Image
Self-Concept
How to write a Mission?



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Ask "What do we do?"; "How do we do it?";
and "For whom do we do it,"
Create a draft mission statement describing
how the company uniquely answers these
questions. Touch on the organization's current
operations and the industry it is in.
Look at competitors in the industry and use
their mission statements for research. Ask
yourself what works and what does not work.
Revise your mission statement as needed.
Get feedback from other members of the
organization once the statement is drafted.
The Difference between
Vision & Mission
Vision - The Future
 Definition: The way in which one
sees or conceives something; a
mental image; An overall statement
of the goal of the organization.
 Vision should describe what will be
achieved in the wider sphere if the
organization and others are
successful in achieving their
individual missions.
The Difference between
Vision & Mission
Mission - The Present
 Definition: An assignment one is sent to
carry out; a self-imposed duty. A mission
statement identifies the reason for the
existence of the organization. The
statement should be linked to the overall
operations and business of the
organization
 A Mission statement is more specific to
what the enterprise can achieve itself.
Which comes first?
That depends. If you have a new start up business,
new program or plan to reengineer your current
services, then the vision will guide the mission
statement and the rest of the strategic plan. If you
have an established business where the mission is
established, then many times, the mission guides the
vision statement and the rest of the strategic plan.
Either way, you need to know your fundamental
purpose - the mission, your current situation in terms
of internal resources and capabilities (strengths
and/or weaknesses) and external conditions
(opportunities and/or threats), and where you want to
go - the vision for the future. It's important that you
keep the end or desired result in sight from the start
To remain competitive, companies
develop strategies that focus on:
1.
Core competence

2.
Synergy

3.
A business activity that an organization does
particularly well in comparison to competitors.
The condition that exists when the
organization’s parts interact to produce a joint
effect that is greater than the sum of the parts
acting alone.
Value Creation


The heart of strategy.
Value can be defined as the combination of
benefits received and costs paid by the
customers.
Levels of Strategy

Corporate-Level Strategy


Business-Level Strategy

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The level of strategy concerned with the question,
“What business are we in?”. Pertains to the
organization as a whole and the combination of
business units and product lines that make it up.
The level of strategy concerned with the question, “How
do we compete?”. Pertains to each business unit or
product line within the organization.
Functional-Level Strategy

The level of strategy concerned with the question, “How
do we support the business-level strategy?”. Pertains to
all of the organization’s major departments.
Three Levels of Strategy in Organization
Corporate-Level Strategy:
What business are we in?
Corporation
Business-Level Strategy:
How do we compete?
Textile Units
Chemicals Unit
Auto Parts Unit
Functional-Level Strategy:
How do we support the business-level strategy?
Finance
R&D
Manufacturing
Marketing
Corporate-Level Strategy:
What business are we in?
Corporation
Business-Level Strategy:
How do we compete?
Textile Units
Functional-Level Strategy:
How do we support the business-level strategy?
Finance
R&D
Manufacturing
Marketing
Strategy Formulation Versus Implementation

Strategy Formulation
 The
stage of strategic management that involves
the planning and decision making that lead to the
establishment of the organization’s goals and of a
specific strategic plan.

Strategy Implementation
 The
stage of strategic management that involves
the use of managerial and organizational tools to
direct resources toward achieving strategic
outcomes.
Situation Analysis
 Analysis
of the strengths, weaknesses,
opportunities, and threats (SWOT) that affect
organizational performance.

Strengths


Weaknesses


Internal characteristics that
organization’s performance.
might
inhibit
or
restrict
the
Opportunities

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Positive internal characteristics that the organization can exploit to
achieve its strategic performance goals.
Characteristics of the external environment that have the potential
to help the organization achieve or exceed its strategic goals.
Threats

Characteristics of the external environment that may prevent the
organization from achieving its strategic goals.
Competitive Strategies
1.
Differentiation

2.
Cost Leadership

3.
a type of competitive strategy with which the
organization seeks to distinguish its products or
services from competitors.
A type of competitive strategy with which the
organization aggressively seeks efficient
facilities, cuts costs, and employs tight cost
controls to be more efficient than competitors.
Focus

A type of competitive strategy that emphasizes
concentration on a specific regional market or
buyer group.
Formulating Functional-Level Strategy
the action plans adopted by major
departments to support the execution of
business-level strategy.
major organizational functions include
marketing, production, finance, human
resources, and research & development.
Strategy Implementation and Control
Implementation is the final step in the
strategic management process and it is
how strategy put into action.
Some people argue that strategy
implementation is the most difficult and
important part of strategic management.
Tools for Putting Strategy into Action
Environment
Organization
LEADERSHIP
• Use persuasion
• Motivate employees
• Shape culture/values
Strategy
STRUCTURAL DESIGN
HUMAN RESOURCES
• Design organization chart
• Create teams
• Determine centralization
• Arrange facilities, task design
• Recruit/select employees
• Manage
transfers/promotions/training
• Direct layoffs/recalls
INFORMATION AND
CONTROL SYSTEMS
• Revise pay, reward system
• Change budget allocations
• Implement information
systems
• Apply rules and procedures
Performance
Board of Directors
 The
group of stockholder
representatives and strategic
managers responsible for
overseeing the creation and
accomplishment of the company
mission.
Organizational Structure of
Corporations
Stockholders
elect
Directors
elect
Officers (Top
Management)
President
Vice
President
Treasurer
Secretary
Board of Directors- job responsibilities

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To establish and update the company mission
To elect the company’s top officers (CEO)
To establish the compensation levels of the top
officers, including the salaries and bonuses
To set broad company policy on such matters as
labor-management relations, product or service lines
of business, and employee benefit packages
To set company’s objectives and to authorize
managers to implement the long term strategies that
the top officers and the board have found agreeable
To mandate company compliance with legal and
ethical dictates
To determine the amount and timing of the
dividends paid to stockholders
THE END
Any clarification?
HAVE A NICE DAY!!! 