Business Strategy Lecture 3
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Transcript of Business Strategy Lecture 3
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8/3/2019 Business Strategy Lecture 3
1/27
1
Management Accounting Business Strategy
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning Model
Reassess anddevelop the
Organizationsmission andobjectives
Reassess anddevelop the
Organizationsmission andobjectives
Formulatestrategies
Formulatestrategies
Implementstrategies
Implementstrategies
Evaluateresults
Evaluateresults
Analyzethe
environment
Analyzethe
environment
IdentifyOpportunities
Andthreats
IdentifyOpportunities
Andthreats
Analyzethe
Organizationsresources
Analyzethe
Organizationsresources
IdentifyStrengths
andweaknesses
IdentifyStrengths
andweaknesses
Identify theOrganizationsCurrent vision
mission,Objectives, and
Strategies
Identify theOrganizationsCurrent vision
mission,Objectives, and
Strategies
What is Strategy ?
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning Model
What dowe Want to
Become ?
Intellectual thoughts aboutfuture Vision
General Motors vision is to be the world leader in transportation productsand related service
Reassess anddevelop the Organizations
mission and objectives
Reassess anddevelop the Organizations
mission and objectives
Formulatestrategies
Formulatestrategies
Implementstrategies
Implementstrategies
Evaluateresults
Evaluateresults
Analyzethe
environment
Analyzethe
environment
IdentifyOpportunities
Andthreats
IdentifyOpportunities
Andthreats
Analyzethe
Organizationsresources
Analyzethe
Organizationsresources
IdentifyStrengths
andweaknesses
IdentifyStrengths
andweaknesses
Identify the OrganizationsCurrent vision mission,
Objectives, and Strategies
Identify the OrganizationsCurrent vision mission,
Objectives, and Strategies
Vision
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning Model
What dowe Want to
Become ?
Intellectual thoughts aboutfuture
Vision
General Motors vision is to be
the world leader intransportation products and
related service
Vision
It is the wish to become leader in
some fieldWhere theorganizationaspires to be
in future?
One the
organizationstrives to achieve
in long term
It is wish to contribute to somemajor cause
General Motors vision is to be the world leader in
transportation products and related service
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Strategic Planning Model
Vision
Vision
Dells vision is to create a company culture where environmentalexcellence is second nature
HowHow thethe organizationorganization wantswants toto bebe perceivedperceivedinin thethe futurefuture whatwhat successsuccess lookslooks likelike
AnAn expressionexpression ofof thethe desireddesired endend statestate
ChallengesChallenges everyoneeveryone toto reachreach forfor somethingsomethingsignificantsignificant inspiresinspires aa compellingcompelling futurefuture
ProvidesProvides aa longlong--termterm focusfocus forfor thethe entireentireorganizationorganization
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Strategic Planning ModelComponents of Vision
Core ideology Core Values - timeless guiding principles
Core Purpose - reason for being
Envisioned future Big Hairy Audacious Goals (BHAG) -clearly articulated goals
Vivid description - a graphic description of whatsuccess and the future will be like
Recognition of service to stakeholders Owners/creditors
Employees
Customers
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Strategic Planning ModelVision Descriptors
Adept
Aggressive
Agile
Aligned
Assertive
Available
Best-in-class
Challenging
Clear
Competent
Complex
Compliant Conservative
Coordinated
Critical
Direct
Disciplined
Effective
Efficient
Enduring
Expanding
Expert
Fast
Fast-paced
Financially-sound
Focused
Growth Healthy
Improving
Incentivized
Equal
Increasing
Solid
Solvent
Stable
State of the Art
Strong
Streamlined
Sufficient
Strategic
Sustainable
Timely
V
alue-added Vigilant
Visionary
World-class
Informative
Innovative
Leading
Logical
Major
Nimble
Pioneering
Protected
Organized
Over-Arching
Quick Ready
Responsive
Savvy
Simple
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning ModelVision
Tysons vision is to be the worlds first choice for protein solutionswhile maximizing shareholder value (Good statement, unless Tysonprovides non protein products)
General Motors vision is to be the world leader in transportationproducts and related service (Good statement)
Pepsi Cos responsibility is to continually improve all aspects of theworld in which we operate- environment, social, economic creating abetter tomorrow than today (Too vague, it should reveal beverage andfast food)
Samsonites vision is to provide innovative solutions for the travellingworld (Need to be more specific, may relate with product benefits)
ICMAPs vision is to be the preference in value optimism for thebusiness (__________________)
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning ModelImportance of Vision
Shared Vision --
Creates commonality of interests
Reduce daily monotony Provides opportunity & challenge
Profit & vision are necessary to effectivelymotivate a workforce
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Strategic Planning Model
What is ourBusiness ?
Reason for existence Mission
FedEx is committed to our people Service Profit Philosophy. We willproduce outstanding financial returns by providing totally reliable,competitively superior, global, air-ground transportation of high-prioritygoods and documents that require rapid, time-certain delivery
Reassess anddevelop the Organizations
mission and objectives
Reassess anddevelop the Organizations
mission and objectives
FormulatestrategiesFormulatestrategies
ImplementstrategiesImplementstrategies
Evaluateresults
Evaluateresults
Analyze
theenvironment
Analyze
theenvironment
IdentifyOpportunities
Andthreats
IdentifyOpportunities
Andthreats
Analyzethe
Organizationsresources
Analyzethe
Organizationsresources
IdentifyStrengths
andweaknesses
IdentifyStrengths
andweaknesses
Identify the OrganizationsCurrent vision mission,
Objectives, and Strategies
Identify the OrganizationsCurrent vision mission,
Objectives, and Strategies
Mission
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning Model
What is ourBusiness ?
Statement for purpose thatdistinguishes one organizationfrom other similar organization
MissionCreed statement, statement ofpurpose, statement of beliefs,
statement of philosophy
Mission
What is ourmission ?
Reason for your
existence
Basis for establishing objectives
and formulation of policies
FedEx is committed to our people Service Profit Philosophy. We will produce outstandingfinancial returns by providing totally reliable, competitively superior, global, air-groundtransportation of high-priority goods and documents that require rapid, time-certain delivery
Reveals wh
om organizationwants to serve
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning Model
Mission
Mission
CapturesCaptures thethe essenceessence ofof whywhy thethe organizationorganizationexistsexists WhoWho wewe are,are, whatwhat wewe dodo ExplainsExplains thethe basicbasic needsneeds thatthat youyou fulfillfulfill ExpressesExpresses thethe corecore valuesvalues ofof thethe organizationorganization
ShouldShould bebe briefbrief andand toto thethe pointpoint EasyEasy toto understandunderstand IfIf possible,possible, trytry toto conveyconvey thethe uniqueunique naturenature ofofyouryour organizationorganization andand thethe rolerole itit playsplays thatthatdifferentiatesdifferentiates
itit fromfrom othersothers
FedEx is committed to our people Service Profit Philosophy. We will produce outstandingfinancial returns by providing totally reliable, competitively superior, global, air-groundtransportation of high-priority goods and documents that require rapid, time-certain delivery
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8/3/2019 Business Strategy Lecture 3
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Strategic Planning ModelMission Statement Components
Customers - who are the firms customers
Products or services what are the firms' major products or services
Markets Geographically where does the firm goes?
Technology is the firm technologically current?
Concern for survival, growth, and profitability - is the firm committedto growth and financial soundness
Philosophy what the beliefs, values, aspiration, and ethicalpriorities of the firm
Self concept what is the firms distinctive competence or majorcompetitive advantage
Concern for public image is the firm responsive to social,community, and environmental concerns?
Concern for employees are employees a valueable asset for thefirm
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Strategic Planning ModelMission Statement Components
MissionElements
Customers Markets
Employees
PublicImage
Self-Concept Philosophy
SurvivalGrowthProfit
ProductsServices
Technology
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Strategic Planning ModelCharacteristic of mission statement
Broad in scope
Les than 250 word
Inspiring
Utility of firms products
CSR
Environment
Reconciliatory
Enduring
Include nine components
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Strategic Planning ModelCharacteristic of mission statement
Declaration oforganizational attitude
Feasiblealternatives
Motivationalguidelines
length Future outlook
Stakeholders
Customer Orientation
Social policy
Anticipation of customers
Customers
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Strategic Planning ModelMission
Pepsi : We aspire to make PepsiCo the worlds (3) premier productcompany, focused on convenient food and beverages (2). We seek toproduce healthy financial rewards for investor (5) as we provideopportunities for growth and enrichment to our employees (9), ourbusiness partners and communities (8) in which we operate. And in
everyth
ing we do, we strive to act with h
onesty, openness, fairness andintegrity (6) (customers. Technology, self concept is missin)
Ben & Jerrys mission is to make, distribute and sell the finest qualityall-natural ice cream and related products in a wide variety ofinnovative flavors made from Vermont dairy products. To operate the
Company on a sound financial basis of profitable growth, increasingvalue for our shareholders, and creating career opportunities andfinancial rewards for our employees. To operate the Company in a waythat actively recognizes the central role that business plays in thestructure of society by initiating innovative ways to improve the qualityof life of a broad communitylocal, national and international.
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Strategic Planning ModelGood and Bad - Mission
To Make People Happy
To Explore the Universe
and Search for Life
and to Inspire the
Next Generation ofExplorers
NASA
Walt Disney
Does a good job of expressing the core values
of the organization. Also conveys uniquequalities about the organization.
Too vague and and unclear. Need more
descriptive information about what makes the
organization special.
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Strategic Planning ModelGood and Bad - Mission
COMPONENTS
Organization Customers ProductsServices Markets
Concern for
Survival,
Growth,Profitability Technology
PepsiCo Yes No No Yes No
Ben & Jerry's No Yes Yes Yes No
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Strategic Planning ModelGood and Bad - Mission
COMPONENTS
Organization PhilosophySelf-
ConceptConcern forPublic Image
Concern forEmployees
PepsiCo Yes No No No
Ben & Jerry's No Yes Yes Yes
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Strategic Planning ModelImportance of mission
Mission
Resource Allocation
Unanimity of Purpose
Organizational Climate
Focal point for workstructure
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Strategic Planning ModelProcess of developing vision and mission statements
Involvement of managers
Read literature
Develop statements throughdifferent individuals
Develop single statement
Discuses , modify and finalize
Communicate
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Strategic Planning ModelVision vs Mission
What do we Want to Become ?What is our Business ?
Ultimate destination Means to destination
The vision is more broadand future oriented
the goal on the horizon
The mission is more focused h
ow you will get to th
eh
orizon
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Strategic Planning ModelBenefits of having clear mission and vision statement
Clarity of purpose
Base of all sp activities
Direction
Focal point
Divergent views
Sense of share expectations
Send of work Promote motivated organization
Organizational performance
Synergy
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Strategic Planning ModelImportance (benefits) of vision and mission statement
Unanimity of propose
Standard
Organizational climate
Focal point for individuals
Translation of objectives
Translation of organizational purpose and objectives
2x average return on shareholders equity
Positive relationship to company performance
30% high return on certain financial measures
Research results are mixed, however, firmswith formal statements --
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Questions ?
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Thank You