Strategy

Chandler defined strategy as: "The determination of the basic long term
goals and objectives of an enterprise and the adoption of the courses of action
and the allocation of resources necessary for carrying out this goals".

Andrews defined strategy as: "The pattern of objectives, purposes, goals

and the major policies and plans for achieving these goals stated in such a way
so as to define what business the company is in or is to be and the kind
of the company it is or it is to be".

Ansoff explained strategy as: "The common thread among the organization's
activities and product markets, that defines the essential nature of
business that the organization was or planned to be in the future"

Glueck define the strategy as: "A unified, comprehensive, and integrated
plan designed to assume that the basic objectives of the enterprise are achieved.

Strategy is a pattern of action a company takes to attain goals/targets.

A company’s overriding goal is superior performance.

Superior performance in comparison to its competitors.

Superior performance thought in terms of profitability

Profitability compared to its competitors in the industry.

If a company maintains above average profitability in the industry,

it has superior performance.

And such company is having competitive advantage.

It is said to have sustained competitive advantage if it

-maintains above average profitability for a number of years.

Profitability is measured by return on investment (ROI).

ROI is capital invested in the company.

Capital is sum of money invested by shareholders, equity plus,

debt owed to creditors.

Capital used to buy resources required to produce

& sell goods /services.

If a company is efficient if it has positive ROI.

“The world keeps changing” It always has and always will.

This is the fundamental importance of strategic management,

That requires of strategic planning to take decisions.

Decisions now to guide an organization’s future directions.

In terms of future directions, the basic problem of any company is

survival.

And to survive over the long term, a company must have two strategic
capabilities:

The ability to prosper and the ability to change.

The four key elements of the strategic management process:

1. Situation analysis (or Environmental scanning or analysis)

2. Strategy formulation
3. Strategy implementation
4. Strategy evaluation

Mission /Vision Statements

The Mission originally meant the job of missionary.
The persons devoted to some task, goal and vision.
Vision is the formal declaration of f what the company is trying to do and achieve.
Vision as the word itself indicates is the visualisation of what a company wants to do.
It has some material parameters like time period, clear definition of what to achieve etc.
The best mission statements are catalysts.
The worst ones are framed artwork that hangs in your reception
Up on the walls but no one pays attention to and never put into practice
None of the real people in the company say those things.
Vision is what you foresee your company wanted to be.
Mission is the path to achieve that vision.
Vision and mission their purpose is to provide a platform to think strategically.
Vision statements are design oriented while mission statements are execution oriented
In fact, it is the corporate vision that should determine its mission.
Vision is the bigger picture, future oriented
Mission is more immediately focused on the present.
Vision defines the end game.
Mission is the road map that will take you there.
Mission statements tend to deal with pricing, quality, marketplace and other
-items throughout the value chain.
Mission statements are now overused and least productive tools in business today.
They fail to serve their intended purpose. Chances are one could not remember.
Because they are developed by committees usually to satisfy the CEOs.
For a statement to be memorable motivational can be a maxim of 10 words.
Shorter is better.

"To give ordinary folk the chance to buy the same thing as rich people."
Walt Disney
"To make people happy."
Boeing (1950)
"Become the dominant player in commercial aircraft and to bring the world into
the jet age"
Infosys' Vision:
"To be a globally respected corporation that provides best-of-breed business
solutions, leveraging technology, delivered by best-in-class people."
Infosys' Mission Statement :
"To achieve our objectives in an environment of fairness, honesty, and courtesy
towards our clients, employees, vendors and society at large."

According to Derek Abell

Important first step in crafting mission statement is definition of the company’s business.

What is our business?

What will it be?

What should it be?

A company should define its business in terms of three dimensions. :

Who is being satisfied? (What customer groups?)

What is being satisfied? (What customer needs and how customer’s needs are being satisfied, by

what skills, knowledge, or distinctive competencies?

Derek Abell stresses the need for a customer oriented approach rather than

a product oriented business definition.

Product oriented approach focuses only on the physical characteristics of the product sold and

markets served. This approach undermines the true mission because product is only the physical

manifestation of applying a particular skill to satisfy a particular need for a particular customer

group.

But it would be a problem because demands are likely to shift and

-the company should anticipate demand shifts and capitalize on the

-changes in environment.

It answers the question -What will our business be?

Microsoft managers realized this.

“To empower people through great software, any time, any place on any device.”
It means, it wants its software to run on any device,not just Personal computers,
or servers, including video game terminals, hand-held computers, smart phones,
- embedded processors, and set-top boxes.

Boeing (In 2016) People working together as a global enterprise for aerospace leadership.

3M
"To solve unsolved problems innovatively"

Objectives and goals.

Goals are desired states of affairs or preferred results that
organizations attempt to realize and achieve".
Objectives explain the purpose of reaching that goal.
Chales perrow identified the following types of goals.:
Official goals: these are formally stated goals of an organization
described in its charter and annual reports and they are emphasized in
public statements.
Operative goals: are the outcomes that the organization actually seeks
to attain through its operating policies and activities to uncertainty
and to provide organizational design alternatives to choose from.
Operational goals: define performance objectives and desired
behaviours between supervisory personnel and their subordinates.
Goals have four main characteristics:
1.Precise and measurable, gives managers a yardstick or standard to
against which they can judge their performance.
2.They address crucial issues to maintain focus. Managers should
select limited number of major goals.
3.Challenging but realistic: They are incentives to employees to
improve their operations. If they are not realistic employees
will give up.
4.They specify a time period, a give date not after that.

Objectives: the objectives are statements of anticipated outcomes.

Objectives are stated in measurable terms.
While is an open-ended statement of what an organization wants to
accomplish without quantification and time criteria, objectives can be
considered as providing both.
Goals and objectives provide the foundation for all managerial
activities.
The area where an organization can establishes goals and objectives.
1.Efficiency (Cost reduction)
2.Profitability (Increase in net profit)
3.Growth (Increase in total assets, sales etc)
4.Wealth for shareholders (Dividends, stock markets appreciation)
5.Resource utilization(ROI, ROE)
6.Brand reputation ( As a leading firm)
7.Contribution to employees( job security, compensation)
8.Contribution to society (Taxes, community service)
9.Market leadership (market share)
10.Leadership in technology (Innovation creativity)
 Steiner pyramid of business policy.

Policies are guides to action. “They are guides to action or channels for thinking”.
(Steiner, Miner and Gray)

Major policy: Lines of business (Code of ethics)

Secondary policy: selection of geographical area, customers, major products)
Functional policies (marketing, production, research, finance, procurement, etc

Procedure and standard operating plan (Handling incoming orders, services,

customer complaints, shipping to foreign countries.

Rules( Delivery of pay cheques, loitering around plant, security, guard duty,
use of company car, smoking etc)

Procedures: are series of sequential related steps to achieve a stated and.

Standard operating plan is a well established formalised procedure.
Three Levels Of Strategy:
Business firms usually have three levels/types of strategies
Strategy may be formulated at the corporate level,
business level and functional level.

Corporate strategy:
Having the largest domain identifying overall goals of corporation.
It concerns itself with the whole corporation as a unit and consequently,
Answers the purpose or the mission of the organization.
It describes a company's overall direction in terms of its general attitude
towards growth and management of its various business and product lines.
Corporate strategy deals with three key issues or roles facing the corporation as a whole.

1. Directional strategy – the firm’s overall orientation towards growth,

stability and retrenchment.
The two basic growth strategies are concentration and diversification.
The growth of a company could be achieved through merger, acquisition,
takeover, joint ventures and strategic alliances.
Turnaround, divestment and liquidation are the various types of retrenchment strategy.
2. Portfolio analysis – The industries or markets in which the firm
competes through its products and business units. In portfolio analysis,
top management views its product lines and business units as a series
of portfolio investment and constantly keep analyzing for a profitable
return. Two of the most popular strategies are the BCG Growth Share
matrix and GE business screen

3. Parenting strategy – the manner in which the management

coordinates activities and transfers resources and cultivate qualities
among product lines and business units.

Business strategy:
It usually occurs at the business unit or product level it emphasizes improvement
-of the competitive position of a corporation's products or services in the specific
-industry or marketing segment served by that business unit.
Its role is essentially positioning strategies to secure for themselves an identity
-and position in the market.
The aim here is to increase the business value, and to increase the brand awareness
-and value perceived by the customers.

Functional strategy:
It is the approach taken by a functional area to achieve corporate and business unit objectives and
strategies by maximizing resource productivity.
It is concerned with developing nurturing a distinctive competence to provide a company or business
unit with a competitive advantage

Profitability. (Maximum return to the shareholders.)

Central or overriding goal is to increasing long run returns to the shareholders

who are the legal owners, providers of risk capital, receive their rewards by
dividends and by capital appreciation in the stock markets.
The emphasis is on long term returns not short term gains.
Managers may be under pressure to to maximise short term profitability.
This normally ignores R&D, capital investment, innovation.
Even leads to unethical pursuits as in the case of Enron.