The Strategic Management Process

KSOM
Business Model

Strategic Direction: Vision, Mission and Goals

External Analysis: Opportunity & Threats Strategic Choice Internal Analysis: Strengths & Weaknesses

Functional Level Strategy

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Business Level Strategy Global Strategy Corporate Level Strategy Corporate Performance Implementing STM-2012 Strategy

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KSOM Most Integrative

Strategic Direction Hierarchy of Strategic Intent

Fewest in number

Vision
Mission

Values
Goals Objectives
Most specific
Strategic Direction

Plans
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Miller - 1998

Greatest in 2 number

Vision
KSOM

Vision statement answers the question: What do we want to become? Components of a vision
Core ideology
Core values companys essential tenets Core purpose companys reason for being

Envisioned future
10-30 year BHAG aid long term vision Vivid description

A Clear Vision statement provides foundation for comprehensive mission statement

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Vision - Examples
KSOM

NTPC:
To be one of the worlds largest and best power utilities powering Indias growth.

KSOM:
To create an intellectual environment which would provide the countrys best educational preparation for a career of business leadership and support a faculty of acknowledged thought leaders who are also outstanding teachers.
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Mission
KSOM

Why the organization exists, or the purpose What differentiates the organization from others, or the identity; and The basic beliefs, values, and philosophy of the organization Business definition Key elements: Obligations the firm holds to its stakeholders; The scope of the business; Sources of competitive advantage; The organizations view of the future.
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Gasts Laws
KSOM

1. Produce a want-satisfying commodity or service, and continually improve its ability to meet needs. 2. Increase the wealth or quality of life of society through the economic use of labor and capital. 3. Provide opportunities for the productive employment of people. 4. Provide opportunities for the satisfaction of normal occupational desires. 5. Provide just wages for labor. 6. Provide a just return on capital.
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KSOM

Attract quality students; develop quality students; graduate quality students; and meeting the talent development requirements of networked organizations.

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KSOM

Mission Statement: Ace Bank

To provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that encourages the individual potential of our employees and emphasizes the highest quality services for our customers.
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Law1
KSOM

Produce a want-satisfying commodity or service, and continually improve its ability to meet needs
Many businesses havent defined clearly what it is they do. The leaders dont know the business they are in. People expect the organization to continually improve its ability to satisfy the needs of its constituents.
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Law 1: Ace Bank

KSOM

To provide the highest quality financial services for the individuals, businesses, and financial institutions that we serve, to provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that encourages the individual potential of our employees and that continuously improves out ability to serve our customers.
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Law 2
KSOM

Increase the wealth or quality of life of society through the economic use of labor and capital.
The organization must improve society in general, and the communities where it does business in particular. Workers and managers have an obligation to ensure that the organization produces high quality goods or services in a cost effective way.

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Law 2: Ace Bank

KSOM

To provide the highest quality financial services at a reasonable cost for the individuals, businesses, and financial institutions that we serve, to provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that encourages the individual potential of our employees and that continuously improves out ability to serve our customers.
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Law3
KSOM

Provide opportunities for the productive employment of people.

A business must have respect for people and people must be able to trust the organization. A business does not own its employees. However, employees who join a business do so with intrinsic rights and responsibilities. A business is not obligated to hire people it doesnt need. But if and when it does hire them, it has a responsibility to keep them productively employed.
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People Naturally Dream of:

KSOM

Fairness

Challenges
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Law 3: Ace Bank

KSOM

To provide the highest quality financial services at a reasonable cost for the individuals, businesses, and financial institutions that we serve, to provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that recognizes the people of Ace Bank as our greatest asset, that encourages the individual potential of our employees and that continuously improves out ability to serve our customers.
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Law4
KSOM

Provide opportunities for the satisfaction of normal occupational desires.

People dream of a sense of participation in the conditions and rewards of the organization. The question is for each of these laws, What will the business do to meet these obligations or needs?

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Law 4: Ace Bank

KSOM

To provide the highest quality financial services at a reasonable cost for the individuals, businesses, and financial institutions that we serve, to provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that recognizes the people of Ace Bank as our greatest asset, that encourages maximizes the individual potential of our employees and that continuously improves out ability to serve our customers.
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Law 5
KSOM

Provide just wages for labor.

Just wages apply to:
Labor Contractors Vendors Others

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Law 5: Ace Bank

KSOM

To provide the highest quality financial services at a reasonable cost for the individuals, businesses, and financial institutions that we serve, to provide maximum economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that recognizes the people of Ace Bank as our greatest asset, that encourages maximizes the individual potential of our employees and that continuously improves out ability to serve our customers, and that provides fair compensation to our employees, vendors, and subcontractors.
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Law6
KSOM

Provide a just return on capital.

The Just Return ground rule is to maximize profits, subject to the constraints imposed by the other five laws.

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Law 6: Ace Bank

KSOM To provide the highest quality financial services at a reasonable cost for the individuals, businesses, and financial institutions that we serve, to provide maximum reasonable economic return to our shareholders over the long term, and to contribute to the economic vitality and quality of life of our communities. We believe this is accomplished by providing an environment that recognizes the people of Ace Bank as our greatest asset, that encourages maximizes the individual potential of our employees and that continuously improves out ability to serve our customers, and that provides fair compensation to our employees, vendors, and subcontractors.

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Values
KSOM

commonly held beliefs, mindsets, and assumptions that shape how work is done in an organization

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Values
KSOM TCIL: To excel in providing communication solutions globally by anticipating opportunities in technology. The company also specifies the TCIL Waywhich the company employees pride as the reason why TCIL is such a high performer, in spite of being a Public Sector Undertaking (PSU) NTPC: COMIT (Customer focus, Organizational pride, Mutual respect and trust, Initiative and speed, Total quality.) KSOM: Everything KSOM does is guided by general principles and values it shares with KIIT University relating to integrity, excellence, community, individuality, diversity, and inclusiveness.

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Goals
KSOM

Financial & non-financial Stretched goals

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Objectives
KSOM

Provide the measurable parameters for monitoring/evaluating the performance of the organization Quality, quality, cost and time dimension The eight areas Market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, and public responsibility
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KSOM

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Balanced Scorecard for a Oil Refining & Marketing Company

Strategic Objectives Financially
F I N A N C I A L
F1 Return on Capital Employed F2 Cash Flow F3 Profitability F4 Lowest Cost F5 Profitable Growth F6 Manage risk

Strategic Measures
* * * * * * ROCE Cash Flow Net Margin Full cost per gallon delivered to customer Volume growth rate Vs. industry Risk index

KSOM

Strong

Delight the Consumer Win-Win Relationship

CO UM SE TR -

C1 Continually delight the targeted consumer

* Share of segment in key markets * Mystery shopper rating * Dealer/distributor margin on gasoline * Dealer/distributor survey

C2 Improve dealer/distributor profitability

Safe and Reliable

I1 Marketing 1. Innovative products and services 2. Dealer/distributor quality

* Non-gasoline revenue and margin per square foot * Dealer/distributor acceptance rate of new programs * Dealer/distributor quality ratings * * * * ROCE on refinery Total expenses (per gallon) Vs. competition Profitability index Yield index

Competitive Supplier Good Neighbor

I N T E R N A L

I2 Manufacturing 1. Lower manufacturing costs 2. Improve hardware and performance

I3 Supply, Trading, Logistics 1. Reducing delivered cost 2. Trading organization 3. Inventory management I4 Improve health, safety, and environmental performance I5 Quality

Delivered cost per gallon .Vs. competitors * Trading margin * Inventory level compared to plan & to output rate * Number of incidents * Days away from work

On Spec On time
L E & A G R R N O I W N T G H

* Quality index

Motivated and Prepared

L1 Organization Involvement L2 Core competencies and skills L3 Access to strategic information

* Employee survey * Strategic competing (?) availability * Strategic information availability

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KSOM

Proposed Balanced Scorecard of KSOM

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Plans
KSOM

Indicate the specific actions that will be taken by the organization in order to achieve the objectives. Specify the roles members of the organization will perform, the resource allocation across different organizational sub-units and departments, and prioritize and schedule the various activities.
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