Академический Документы
Профессиональный Документы
Культура Документы
Process of Crafting
and Executing
Strategy
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
“If you don’t know where
you are going, any road will
take you there.”
The Koran
Fig. 2.1: The Strategy-Making, Strategy-Executing Process
Developing a Strategic Vision
Phase 1 of the Strategy-Making Process
• Involves thinking strategically about
– Future direction of company
– Changes in company’s product/market/customer
technology to improve
• Current market position
• Futurevision
A strategic prospects
describes the route a company intends
to take in developing and strengthening its business. It
lays out the company’s strategic course in preparing for
the future.
Strategic Vision vs. Mission
• A strategic vision concerns • The mission statement of a
a firm’s future business firm focuses on its present
path - “where business purpose - “who we
we are going” are and what we do”
– Markets to be pursued – Current product and
– Future product/market/ service offerings
customer/technology focus – Customer needs being
– Kind of company served
management is – Technological
trying to create and business
capabilities
Characteristics of a Mission
Statement
• Identifies the boundaries of the current
business and highlights
• Conveys
– Who we are,
– What we do, and
– Why we are here
Nike
“To bring innovation and inspiration
to every athlete in the world.
Mayo Clinic
“The best care to every patient every day.”
Examples: Vision Slogans
Scotland Yard
“To make London the safest major city in the world.”
Greenpeace
“To halt environmental abuse and
promote environmental solutions.”
Charles Schwab
“To provide customers with the most useful and
ethical financial services in the world.”
Setting Objectives
Phase 2 of the Strategy-Making Process
• Purpose of setting objectives
– Converts vision into specific performance targets
– Creates yardsticks to track performance
• Well-stated objectives are
– S Specific
– M Measurable
– A Attainable
– R Realistic
– T Time-bound
Types of Objectives Required
Financial Objectives Strategic Objectives
Outcomes focused Outcomes focused on
on improving financial improving competitive vitality
and future business position
performance
$
McDonald’s Financial
and Strategic Objectives
• Place more emphasis on delivering an
exceptional customer experience
• Add approximately 350 net
new McDonald’s restaurants
• Reduce general and administrative
spending as a percent of total revenues
• Achievements
– Systemwide sales and revenue growth of 3-5%
– Annual operating income growth of 6-7%
– Annual returns on incremental invested capital in high teens
Nissan’s Financial Objectives
• Increase sales to 4.2 million cars and trucks by
2008 (up from 3 million in 2003)
• Cut purchasing costs 20% and halve the number
of suppliers
• Have zero net debt
Business-Level
Business Strategies
Managers
Two-Way Influence
Functional
Functional Strategies
Managers
Two-Way Influence
Operating
Managers Operating Strategies
Implementing and Executing Strategy
Phase 4 of the Strategy-Making Process
• Operations-oriented activity aimed at
performing core business activities in a
strategy-supportive manner
• Tougher and more time-consuming
than crafting strategy
• Key tasks include
– Improving efficiency of strategy being executed
– Showing measurable progress in achieving targeted
results
Corporate Governance:
Strategic Role of a Board of Directors
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
“Analysis is the critical
starting point of strategic
thinking.”
Kenichi Ohmae
Understanding the Factors that
Determine a Company’s Situation
• Diagnosing a company’s situation has two facets
– Assessing the company’s external or
macro-environment
• Industry and competitive conditions
• Forces acting to reshape this environment
– Assessing the company’s internal or
micro-environment
• Market position and competitiveness
• Competencies, capabilities, resource strengths
and weaknesses, and competitiveness
Fig. 3.2: The Components of a Company’s Macro-
environment
Key Questions Regarding the
Industry and Competitive Environment
What are the
industry’s
dominant
economic traits?
– Good substitutes
do not exist
• A strategic group is a
cluster of firms in an industry
with similar competitive
approaches and market positions
Procedure for Constructing
a Strategic Group Map
STEP 1: Identify competitive characteristics that differentiate
firms in an industry from one another
STEP 3: Assign firms that fall in about the same strategy space
to same strategic group
• Clever advertising –
to induce beer drinkers to
buy a particular brand
Example: KSFs for Apparel
Manufacturing Industry
• Appealing designs and
color combinations –
to create buyer appeal
• Low-cost manufacturing
efficiency – to keep selling
prices competitive
Question 7: Does the Outlook for the Industry
Present an Attractive Opportunity?