Strategy: Definitions and Meaning

Introduction
The concept of strategy has been borrowed from the military and adapted for use in business. A review of what noted writers about business strategy have to say suggests that adopting the concept was easy because the adaptation required has been modest. In business, as in the military, strategy bridges the gap between policy and tactics. Together, strategy and tactics bridge the gap between ends and means (Figure 1). This paper reviews various definitions of strategy for the purpose of clarifying the concept and placing it in context. The author's aim is to make the concepts of policy, strategy, tactics, ends, and means more useful to those who concern themselves with these matters.

Figure 1 - Strategy & Tactics

Some Language Basics

Strategy is a term that comes from the Greek strategia, meaning "generalship." In the military, strategy often refers to maneuvering troops into position before the enemy is actually engaged. In this sense, strategy refers to the deployment of troops. Once the enemy has been engaged, attention shifts to tactics. Here, the employment of troops is central. Substitute "resources" for troops and the transfer of the concept to the business world begins to take form. Strategy also refers to the means by which policy is effected, accounting for Clauswitz famous statement that war is the continuation of political relations via other means. Given the centuries-old military origins of strategy, it seems sensible to begin our examination of strategy with the military view. For that, there is no better source than B. H. Liddell Hart.

Strategy According to B. H. Liddell Hart

In his book, Strategy [1], Liddell Hart examines wars and battles from the time of the ancient Greeks through World War II. He concludes that Clausewitz definition of strategy as "the art of the employment of battles as a means to gain the object of war" is seriously flawed in that this view of strategy intrudes upon policy and makes battle the only means of achieving strategic ends. Liddell Hart observes that Clausewitz later acknowledged these flaws and then points to what he views as a wiser definition of strategy set forth by Moltke: "the practical adaptation of the means placed at a generals disposal to the attainment of the object in view." In Moltke's formulation, military strategy is clearly a means to political ends. Concluding his review of wars, policy, strategy and tactics, Liddell Hart arrives at this short definition of strategy: "the art of distributing and applying military means to fulfil the ends of policy." Deleting the word "military" from Liddell Harts definition makes it easy to export the concept of strategy to the business world. That brings us to one of the people considered by many to be the father of strategic planning in the business world: George Steiner.

Strategy According to George Steiner

George Steiner, a professor of management and one of the founders of The California Management Review, is generally considered a key figure in the origins and development of strategic planning. His book, Strategic Planning [2], is close to being a bible on the subject. Yet, Steiner does not bother to define strategy except in the notes at the end of his book. There, he notes that strategy entered the management literature as a way of referring to what one did to counter a competitors actual or predicted moves. Steiner also points out in his notes that there is very little agreement as to the meaning of strategy in the business world. Some of the definitions in use to which Steiner pointed include the following: Strategy is that which top management does that is of great importance to the organization. Strategy refers to basic directional decisions, that is, to purposes and missions. Strategy consists of the important actions necessary to realize these directions. Strategy answers the question: What should the organization be doing? Strategy answers the question: What are the ends we seek and how should we achieve them?

Steiner was writing in 1979, at roughly the mid-point of the rise of strategic planning. Perhaps the confusion surrounding strategy contributed to the demise of strategic planning in the late 1980s. The rise and subsequent fall of strategic planning brings us to Henry Mintzberg.

Strategy According to Henry Mintzberg

Henry Mintzberg, in his 1994 book, The Rise and Fall of Strategic Planning [3], points out that people use "strategy" in several different ways, the most common being these four: 1. Strategy is a plan, a "how," a means of getting from here to there. 2. Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy. 3. Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets. 4. Strategy is perspective, that is, vision and direction. Mintzberg argues that strategy emerges over time as intentions collide with and accommodate a changing reality. Thus, one might start with a perspective and conclude that it calls for a certain position, which is to be achieved by way of a carefully crafted plan, with the eventual outcome and strategy

reflected in a pattern evident in decisions and actions over time. This pattern in decisions and actions defines what Mintzberg called "realized" or emergent strategy. Mintzbergs typology has support in the earlier writings of others concerned with strategy in the business world, most notably, Kenneth Andrews, a Harvard Business School professor and for many years editor of the Harvard Business Review.

Strategy According to Kenneth Andrews

Kenneth Andrews presents this lengthy definition of strategy in his book, The Concept of Corporate Strategy [4]: "Corporate strategy is the pattern [italics added] of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities. (pp.18-19)." Andrews definition obviously anticipates Mintzbergs attention to pattern, plan, and perspective. Andrews also draws a distinction between "corporate strategy," which determines the businesses in which a company will compete, and "business strategy," which defines the basis of competition for a given business. Thus, he also anticipated "position" as a form of strategy. Strategy as the basis for competition brings us to another Harvard Business School professor, Michael Porter, the undisputed guru of competitive strategy.

Strategy According to Michael Porter

In a 1996 Harvard Business Review article [5] and in an earlier book [6], Porter argues that competitive strategy is "about being different." He adds, "It means deliberately choosing a different set of activities to deliver a unique mix of value." In short, Porter argues that strategy is about competitive position, about differentiating yourself in the eyes of the customer, about adding value through a mix of activities different from those used by competitors. In his earlier book, Porter defines competitive strategy as "a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there." Thus, Porter seems to embrace strategy as both plan and position. (It should be noted that Porter writes about competitive strategy, not about strategy in general.)

Strategy According to Kepner-Tregoe

In Top Management Strategy [7], Benjamin Tregoe and John Zimmerman, of Kepner-Tregoe, Inc., define strategy as "the framework which guides those choices that determine the nature and direction of an organization." Ultimately, this boils down to selecting products (or services) to offer and the markets in which to offer them. Tregoe and Zimmerman urge executives to base these decisions on a single "driving force" of the business. Although there are nine possible driving forces, only one can serve as the basis for strategy for a given business. The nine possibilities are listed below:

1. Products offered 2. Market needs

4. Production capability 5. Method of sale

7. Natural resources 8. Size/growth

3. Technology

6. Method of distribution

9. Return/profit

It seems Tregoe and Zimmerman take the position that strategy is essentially a matter of perspective.

Strategy According to Michel Robert

Michel Robert takes a similar view of strategy in, Strategy Pure & Simple [8], where he argues that the real issues are "strategic management" and "thinking strategically." For Robert, this boils down to decisions pertaining to four factors:

1. Products and services 2. Customers

3. Market segments 4. Geographic areas

Like Tregoe and Zimmerman, Robert claims that decisions about which products and services to offer, the customers to be served, the market segments in which to operate, and the geographic areas of operations should be made on the basis of a single "driving force." Again, like Tregoe and Zimmerman, Robert claims that several possible driving forces exist but only one can be the basis for strategy. The 10 driving forces cited by Robert are:

1. Product-service 2. User-customer 3. Market type 4. Production capacity-capability 5. Technology

6. Sales-marketing method 7. Distribution method 8. Natural resources 9. Size/growth 10. Return/profit

Strategy According to Treacy and Wiersema

The notion of restricting the basis on which strategy might be formulated has been carried one step farther by Michael Treacy and Fred Wiersema, authors of The Discipline of Market Leaders [9]. In the Harvard Business Review article that presaged their book [10], Treacy and Wiersema assert that companies achieve leadership positions by narrowing, not broadening their business focus. Treacy and Wiersema identify three "value-disciplines" that can serve as the basis for strategy: operational

excellence, customer intimacy, and product leadership. As with driving forces, only one of these value disciplines can serve as the basis for strategy. Treacy and Wiersemas three value disciplines are briefly defined below:

1. Operational Excellence

Strategy is predicated on the production and delivery of products and services. The objective is to lead the industry in terms of price and convenience. Strategy is predicated on tailoring and shaping products and services to fit an increasingly fine definition of the customer. The objective is long-term customer loyalty and long-term customer profitability. Strategy is predicated on producing a continuous stream of state-of-the-art products and services. The objective is the quick commercialization of new ideas.

2. Customer Intimacy

3. Product Leadership

Each of the three value disciplines suggests different requirements. Operational Excellence implies worldclass marketing, manufacturing, and distribution processes. Customer Intimacy suggests staying close to the customer and entails long-term relationships. Product Leadership clearly hinges on market-focused R&D as well as organizational nimbleness and agility.

What Is Strategy?
What, then, is strategy? Is it a plan? Does it refer to how we will obtain the ends we seek? Is it a position taken? Just as military forces might take the high ground prior to engaging the enemy, might a business take the position of low-cost provider? Or does strategy refer to perspective, to the view one takes of matters, and to the purposes, directions, decisions and actions stemming from this view? Lastly, does strategy refer to a pattern in our decisions and actions? For example, does repeatedly copying a competitors new product offerings signal a "me too" strategy? Just what is strategy? Strategy is all theseit is perspective, position, plan, and pattern. Strategy is the bridge between policy or high-order goals on the one hand and tactics or concrete actions on the other. Strategy and tactics together straddle the gap between ends and means. In short, strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ends. Strategy is at once the course we chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make. Even when we are embarking on a voyage of discovery, with no particular destination in mind, the voyage has a purpose, an outcome, an end to be kept in view. Strategy, then, has no existence apart from the ends sought. It is a general framework that provides guidance for actions to be taken and, at the same time, is shaped by the actions taken. This means that the necessary precondition for formulating strategy is a clear and widespread understanding of the ends to be obtained. Without these ends in view, action is purely tactical and can quickly degenerate into nothing more than a flailing about. When there are no "ends in view" for the organization writ large, strategies still exist and they are still operational, even highly effective, but for an individual or unit, not for the organization as a whole. The risks of not having a set of company-wide ends clearly in view include missed opportunities, fragmented and wasted effort, working at cross purposes, and internecine warfare. A comment from Lionel Urwick's classic Harvard Business Review article regarding the span of control is applicable here [11]:

"There is nothing which rots morale more quickly and more completely than . . . the feeling that those in authority do not know their own minds." For the leadership of an organization to remain unclear or to vacillate regarding ends, strategy, tactics and means is to not know their own minds. The accompanying loss of morale is enormous. One possible outcome of such a state of affairs is the emergence of a new dominant coalition within the existing authority structure of the enterprise, one that will augment established authority in articulating the ends toward which the company will strive. Also possible is the weakening of authority and the eventual collapse of the formal organization. No amount of strategizing or strategic planning will compensate for the absence of a clear and widespread understanding of the ends sought.

The Practical Question: How?

How does one determine, articulate and communicate company-wide ends? How does one ensure understanding and obtain commitment to these ends? The quick answers are as follows: The ends to be obtained are determined through discussions and debates regarding the company's future in light of its current situation. Even a SWOT analysis (an assessment of Strengths, Weaknesses, Opportunities and Threats) is conducted based on current perceptions. The ends settled on are articulated in plain language, free from flowery words and political "spin." The risk of misdirection is too great to tolerate unfettered wordsmithing. Moreover, the ends are communicated regularly, repeatedly, through a variety of channels and avenues. There is no end to their communication. Understanding is ensured via discussion, dialog and even debate, in a word, through conversations. These conversations are liberally sprinkled with examples, for instances, and what ifs. Initially, the CEO bears the burden of these conversations with staff. As more people come to understand and commit to the ends being sought, this communications burden can be shared with others. However, the CEO can never completely relinquish it. The CEO is the keeper of the vision and, periodically, must be seen reaffirming it. Ultimately, the ends sought can be expressed via a scorecard or some other device for measuring and publicly reporting on company performance. Individual effort can then be assessed in light of these same ends. Suppose, for instance, that a company has these ends in mind: improved customer service and satisfaction, reduced costs, increased productivity, and increasing revenues from new products and services. It is a simple and undeniably relevant matter for managers to periodically ask the following questions of the employees reporting to them: What have you done to improve customer service? What have you done to improve customer satisfaction? What have you done to reduce costs? What have you done to increase productivity? What have you done to increase revenues from new products and services?

The Decisions Are the Same

No matter which definition of strategy one uses, the decisions called for are the same. These decisions pertain to choices between and among products and services, customers and markets, distribution channels, technologies, pricing, and geographic operations, to name a few. What is required is a structured, disciplined, systematic way of making these decisions. Using the "driving forces" approach is

one option. Choosing on the basis of "value disciplines" is another. Committing on the basis of "valuechain analysis" is yet a third. Using all three as a system of cross-checks is also a possibility.

Some Fundamental Questions

Regardless of the definition of strategy, or the many factors affecting the choice of corporate or competitive strategy, there are some fundamental questions to be asked and answered. These include the following: Related to Mission & Vision

1. 2. 3. 4. 5. 6.

Who are we? What do we do? Why are we here? What kind of company are we? What kind of company do we want to become? What kind of company must we become?

Related to Corporate Strategy

1. What is the current strategy, implicit or explicit? 2. What assumptions have to hold for the current
strategy to be viable?

3. What is happening in the larger, social and 4. 5. 6. 7.

Related to Competitive Strategy educational environments? What are our growth, size, and profitability goals? In which markets will we compete? In which businesses? In which geographic areas?

1. What is the current strategy, implicit or explicit? 2. What assumptions have to hold for the current
strategy to be viable?

3. What is happening in the industry, with our 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
competitors, and in general? What are our growth, size, and profitability goals? What products and services will we offer? To what customers or users? How will the selling/buying decisions be made? How will we distribute our products and services? What technologies will we employ? What capabilities and capacities will we require? Which ones are core? What will we make, what will we buy, and what will we acquire through alliance? What are our options?

14. On what basis will we compete?

Some Concluding Remarks

1. Strategy has been borrowed from the military and adapted for business use. In truth, very little adaptation is required. 2. Strategy is about means. It is about the attainment of ends, not their specification. The specification of ends is a matter of stating those future conditions and circumstances toward which effort is to be devoted until such time as those ends are obtained. 3. Strategy is concerned with how you will achieve your aims, not with what those aims are or ought to be, or how they are established. If strategy has any meaning at all, it is only in relation to some aim or end in view. 4. Strategy is one element in a four-part structure. First are the ends to be obtained. Second are the strategies for obtaining them, the ways in which resources will be deployed. Third are tactics, the ways in which resources that have been deployed are actually used or employed. Fourth and last are the resources themselves, the means at our disposal. Thus it is that strategy and tactics bridge the gap between ends and means. 5. Establishing the aims or ends of an enterprise is a matter of policy and the root words there are both Greek: politeia and politesthe state and the people. Determining the ends of an enterprise is mainly a matter of governance not management and, conversely, achieving them is mostly a matter of management not governance. 6. Those who govern are responsible for seeing to it that the ends of the enterprise are clear to the people who people that enterprise and that these ends are legitimate, ethical and that they benefit the enterprise and its members. 7. Strategy is the joint province of those who govern and those who manage. Tactics belong to those who manage. Means or resources are jointly controlled. Those who govern and manage are jointly responsible for the deployment of resources. Those who manage are responsible for the employment of those resourcesbut always in the context of the ends sought and the strategy for their achievement. 8. Over time, the employment of resources yields actual results and these, in light of intended results, shape the future deployment of resources. Thus it is that "realized" strategy emerges from the pattern of actions and decisions. And thus it is that strategy is an adaptive, evolving view of what is required to obtain the ends in view. This paper has taken a broad, multi-faceted look at the subject of strategy. Some readers might go away disappointed that no final, unambiguous definition of strategy has been provided. The quick response is that there is none, that strategy is a broad, ambiguous topic. We must all come to our own understanding, definition, and meaning. Helping the reader do so is the chief aim of this paper.

References
1. 2. 3. 4. 5. 6. 7. 8. 9. Strategy (1967). B. H. Liddell Hart. Basic Books. Strategic Planning (1979). George Steiner. Free Press. The Rise and Fall of Strategic Planning (1994). Henry Mintzberg. Basic Books. nd The Concept of Corporate Strategy, 2 Edition (1980). Kenneth Andrews. Dow-Jones Irwin. "What is Strategy?" Michael Porter. Harvard Business Review (Nov-Dec 1996). Competitive Strategy (1986). Michael Porter. Harvard Business School Press. Top Management Strategy (1980). Benjamin Tregoe and John Zimmerman. Simon and Schuster. Strategy: Pure and Simple (1993). Michel Robert. McGraw-Hill. The Discipline of Market Leaders (1994). Michael Treacy and Fred Wiersema. Addison-Wesley.

10. "Customer Intimacy and Other Value Disciplines." Michael Treacy and Fred Wiersema. Harvard Business Review (Jan-Feb 1993). 11. "The Span of Control." Lionel Urwick. Harvard Business Review (May-Jun 1956).

Related Reading
There are other strategy-related articles on my web site. The links are provided below. The links in red are to .pdf versions.

Sir Basil H. Liddell-Hart's Eight Maxims of Strategy .htm

Competitive Strategy & Industry Analysis: The Basics a la Michael Porter .htm

The Goals Grid: A New Tool for Strategic Planning A Strategic and Business Planning Bibliography Strategic Decision Making Strategy Is Execution .htm Strategy, Strategic Management, Strategic Planning and Strategic Thinking Three Forms of Strategy: General, Corporate & Competitive .htm

Porter's 5-Forces Model

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Porter's 5-Forces Model

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A means of providing corporations with an analysis of their competition and determining strategy, Porter's five-forces model looks at the strength of five distinct competitive forces, which, when taken together, determine long-term profitability and competition. Porter's work has had a greater influence on business strategy than any other theory in the last half of the twentieth century, and his more recent work may have a similar impact on global competition.

Michigan native Michael Porter was born in 1947, was educated at Princeton, and earned an MBA (1971) and Ph.D. (1973) from Harvard. He was promoted to full professor at Harvard at age 34 and is currently C. Roland Christensen Professor of Business Administration at the Harvard Business School. He has published numerous books and articles, the first Interbrand Choice, Strategy and Bilateral Market Power, appearing in 1976. His best known and most widely used and referenced books are Competitive Strategy (1980) and Competitive Advantage (1985). Competitive Strategy revolutionized contemporary approaches to business strategy through application of the five-forces model. In Competitive Advantage, Porter further developed his strategy concepts to include the creation of a sustainable advantage. His other model, the value chain model, centers on product added value. Porter's work is widely read by business strategists around the world as well as business students. Any MBA student recognizes his name as one of the icons of business literature. The Strategic Management Society named Porter the most important living strategist in 1998, and Kevin Coyne of the consulting firm McKinsey and Co. called Porter "the single most important strategist working today, and maybe of all time." The five-forces model was developed in Porter's 1980 book, Competitive Strategy: Techniques for Analyzing Industries and Competitors. To Porter, the classic means of developing a strategy formula for competition, goals, and policies to achieve those goalsas antiquated and in need of revision. Porter was searching for a solution between the two schools of prevailing thought-the Harvard Business School's urging firms to adjust to a unique set of changing circumstances and that of the Boston Consulting Group, based on the experience curve, whereby the more a company knows about the existing market, the more its strategy can be directed to increase its share of the market.

Figure 1 Porter applied microeconomic principles to business strategy and analyzed the strategic requirements of industrial sectors, not just specific companies. The five forces are competitive factors which determine industry competition and include: suppliers, rivalry within an industry, substitute products, customers or buyers, and new entrants (see Figure 1).

Although the strength of each force can vary from industry to industry, the forces, when considered together, determine long-term profitability within the specific industrial sector. The strength of each force is a separate function of the industry structure, which Porter defines as "the underlying economic and technical characteristics of an industry." Collectively, the five forces affect prices, necessary investment for competitiveness, market share, potential profits, profit margins, and industry volume. The key to the success of an industry, and thus the key to the model, is analyzing the changing dynamics and continuous flux between and within the five forces. Porter's model depends on the concept of power within the relationships of the five forces.

THE FIVE FORCES

INDUSTRY COMPETITORS.

Rivalries naturally develop between companies competing in the same market. Competitors use means such as advertising, introducing new products, more attractive customer service and warranties, and price competition to enhance their standing and market share in a specific industry. To Porter, the intensity of this rivalry is the result of factors like equally balanced companies, slow growth within an industry, high fixed costs, lack of product differentiation, overcapacity and price-cutting, diverse competitors, high-stakes investment, and the high risk of industry exit. There are also market entry barriers.
PRESSURE FROM SUBSTITUTE PRODUCTS.

Substitute products are the natural result of industry competition, but they place a limit on profitability within the industry. A substitute product involves the search for a product that can do the same function as the product the industry already produces. Porter uses the example of security brokers, who increasingly face substitutes in the form of real estate, money-market funds, and insurance. Substitute products take on added importance as their availability increases.
BARGAINING POWER OF SUPPLIERS.

Suppliers have a great deal of influence over an industry as they affect price increases and product quality. A supplier group exerts even more power over an industry if it is dominated by a few companies, there are no substitute products, the industry is not an important consumer for the suppliers, their product is essential to the industry, the supplier differs costs, and forward integration potential of the supplier group exists. Labor supply can also influence the position of the suppliers. These factors are generally out of the control of the industry or company but strategy can alter the power of suppliers.
BARGAINING POWER OF BUYERS.

The buyer's power is significant in that buyers can force prices down, demand higher quality products or services, and, in essence, play competitors against one another, all resulting in potential loss of industry profits. Buyers exercise more power when they are large-volume

buyers, the product is a significant aspect of the buyer's costs or purchases, the products are standard within an industry, there are few changing or switching costs, the buyers earn low profits, potential for backward integration of the buyer group exists, the product is not essential to the buyer's product, and the buyer has full disclosure about supply, demand, prices, and costs. The bargaining position of buyers changes with time and a company's (and industry's) competitive strategy.
POTENTIAL ENTRANTS.

Threats of new entrants into an industry depends largely on barriers to entry. Porter identifies six major barriers to entry:

Economies of scale, or decline in unit costs of the product, which force the entrant to enter on a large scale and risk a strong reaction from firms already in the industry, or accepting a disadvantage of costs if entering on a small scale. Product differentiation, or brand identification and customer loyalty. Capital requirements for entry; the investment of large capital, after all, presents a significant risk. Switching costs, or the cost the buyer has to absorb to switch from one supplier to another. Access to distribution channels. New entrants have to establish their distribution in a market with established distribution channels to secure a space for their product. Cost disadvantages independent of scale, whereby established companies already have product technology, access to raw materials, favorable sites, advantages in the form of government subsidies, and experience.

New entrants can also expect a barrier in the form of government policy through federal and state regulations and licensing. New firms can expect retaliation from existing companies and also face changing barriers related to technology, strategic planning within the industry, and manpower and expertise problems. The entry deterring price or the existence of a prevailing price structure presents an additional challenge to a firm entering an established industry. In summary, Porter's five-forces models concentrates on five structural industry features that comprise the competitive environment, and hence profitability, of an industry. Applying the model means, to be profitable, the firm has to find and establish itself in an industry so that the company can react to the forces of competition in a favorable manner. For Porter, Competitive Strategy is not a book for academics but a blueprint for practitioners-a tool for managers to analyze competition in an industry in order to anticipate and prepare for changes in the industry, new competitors and market shifts, and to enhance their firm's overall industry standing. Throughout the relevant sections of Competitive Strategy, Porter uses numerous industry examples to illustrate his theory. Since those examples are now over twenty years old, changes in technology and other industrial shifts and trends have made them somewhat obsolete. Although immediate praise for the book and the five-forces model was exhaustive, critiques of Porter have appeared in business literature. Porter's model does not, for example, consider nonmarket changes, such as events in the political arena that impact an industry. Furthermore, Porter's model has come under fire for what critics see as his under-evaluation of government regulation and antitrust violations. Overall, criticisms of the model find their nexus in the lack of

consideration by Porter of rapidly changing industry dynamics. In virtually all instances, critics also present alternatives to Porter's model. Yet, in a Fortune interview in early 1999, Porter responded to the challenges, saying he welcomed the "fertile intellectual debate" that stemmed from his work. He admitted he had ignored writing about strategy in recent years but emphasized his desire to reenter the fray discussing his work and addressing questions about the model, its application, and the confusion about what really constitutes strategy. Porter's The Competitive Advantage of Nations (1990) and the more recent On Competition (1998) demonstrate his desire to further stimulate discussion in the business and academic worlds.

FURTHER READING:
Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press, 1998. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press, 1998. Mahon, J. F., and R.A. McGowan. "Modeling Industry Political Dynamics." Business and Society 37, no. 4 (1998, December): 39013. Porter, M.E. Michael Porter on Competition. Boston, MA: Harvard Business School Press, 1998. "Professor Porter Ph.D.: Management Theorists." Economist, 333 (1994, October): 75. Siaw, I. and A. Yu. "An Analysis of the Impact of the Internet on Competition in the Banking Industry, Using Porter's Five Forces Model". International Journal of Management 21, no. 4 (2004, December): 51424. Slater, S. F. and E.M.A. Olson. "Fresh Look at Industry and Market Analysis." Business Horizons 45. no. 1, (2002, January/February): 153. Surowiecki, J. "The Return of Michael Porter." Fortune 139, no. 2 (1999, February): 13538.

Source: Encyclopedia of Management, 2006 Gale Cengage. All Rights ReserveGrameen Phone profile

GP is the number 1 mobile operator with 44% market share (September, 2010). Number of subscribers stands at 2865 mn (Sep'10). - For 2010 up to end 03, total revenues were SOT 55.1 ho versus R0T48.6 hr for same comparable period in 2009, whereas 525 for 2010 up to end 0.3 was SOT 523 against BDT 537 for the same period in 2009. - For the fiscal year ended December 2009, GP generated total revenues of BDT 6S.3Bn (030942.8mn) and EBITDA of ROT 37.2Bn (USD 537.lmn), representing an EBITDA margin of 57% - Q2'10 ARPU stands at DOT 241 (US $ 3.47), ARPM BDT0..S3 (US$ 0.0119) which were BDT 0.85 (US$0.0122) respectively in the same period of 2009. - Initial capex cycle of geographical coverage build Out complete. - Subscriber churn levels at 1% per month in 2010; amongst the lowest in emerging Asian markets. - One of the largest ISPs in Bangladesh with approximately 4.5mn active subscribers. - Its network covers over 99.14% of the population in all 64 districts of Bangladesh and 88.84% of the total land area,

and the network infrastructure included around 114,000 TRXs in more than 7,200 base stations. - Grameenphone operates on both OSM 900 & 1800 bands with a bandwidth of 22MHz. The recent allocation of 7,4M1lz to OP in addition to the 14.6MHz it already has will help to decrease the pressure on GPs network. OP has 11300 base stations in over 6500 locations across Bangladesh. Overview Grameen Phone (GP) started operations in 1997. In 2009, GP offered 69,439,400 ordinary shares at BDT 10 (US$. 014) each, in addition to a BDT 60 (US$ 0.871 premium, totaling BDT 4.86 bn (US$ 70.lSmn) & got Listed on OSE & CSE. - Quickly after its inception in 1997, GP established itself as the leading mobile operator in the country by providing superior coverage and better network quality perception than its competitors. - In the last 4 years, market dominance of GP has slowly eroded through intense competition, falling from 63% in 2005 to about 44% (September 2010). - GP's AR?U has teen constantly declining, as mobile voice tariffs continue to fall and as greater numbers of subscribers come from lower income groups. From USD 5.4 in Q1'07, the ARPU has come down to USD 3.03 in 03'10 (02 2010 USD 3.47). - GP was the first mobile operator to introduce prepaid mobile connections in Bangladesh in 1999. Apart from internet services through EDGE, Crameenphone is also the only medium through which Cell Bazaar operates a service where people can buy and sell products through a mobile. It

also operates a telemedicine service called Health line, It provides a host of other VAS services including ringtones, welcome tunes, SMS-MMS, instant messaging, sports-news updates, stock market updates, electronic ticketing service etc. OP plans to introduce mobile banking services in the country once the regulations are in place. Shareholder Profiles - Telenor-Ownership: 55.80% - million mobile subscribers worldwide. - World's seventh largest mobile service provider in terms of subscribers. - Have operations in 13 countries. - Strong subscription growth, particularly in Asian operations. - Named the sector leader in mobile telecommunications by the Dow Jones Sustainability Indexes (in which year). - Revenues 2009: USD 17.15 bn - Workforce 2009: 40000 - Listed on the Oslo Stock Exchange and headquartered in Norway - Telenor AS is the leading telecommunications company of Norway listed on the Oslo Stock Exchange with a market capitalization of USD 9.0 bn as of November 12, 2008 - In addition to Norway and Bangladesh, Telenor has interests in mobile telephony companies in Sweden, Denmark, Hungary Russia, Ukraine, Montenegro, Thailand, Malaysia. Pakistan and Serbia with more than 150 million mobile subscribers worldwide as of September 30, 2008

Grameen Telecom-Ownership: 34.2% - Grameen Telecom is a nonprofit company affiliated with Noble award winning Grameen Bank - Operates "Village Phone" program to over 297,079 (Q2. 2010) rural. - Head quartered in Ohaka, Bangladesh. - Grameen Telecom ("GTC') is a not-for-profit company in Bangladesh, working in collaboration with Grameen Bank, winner of the Noble Peace Prize in 2006, along with Professor Muhammad Yunus - GE's mandate is to provide, easy access to GSM cellular services in rural Bangladesh and create new opportunities for income generation through self-employment by providing villagers, mostly poor, rural women, with access to modern information and communication-based technologies - In conjunction with Grameen Bank, GTC administers Village Phone Program, through which OP provides its services to certain rural customers - General public & other Institutions: 10% Growth strategy & near-term objectives - Grameenphone has been developing its rural market offering and their rural footprint has been strengthened through their new product Baadhon' bundled with low cost handsets. - Grameeriphone still maintains leadership in the enterprise and mass market with the highest (44%) market share. - Grameenphone do have very good focus in data market. The introduction of 3G in 2010 is also on the cards. tv'oreover they provide data cards with enhanced Micro SD features, Internet mini-pack for economy data users etc. - GP plans to introduce mobile banking in Bangladesh and

working with Central Bank of Bangladesh to develop a regulation for the business- This is a potentially lucrative business given its large subscriber base, increasing remittance inflows (over USD 10bn '09) and an estimated only 5% of the 150 mn population having bank accounts. - Innovative VAS like telemedicine, Community Information Center GP used a large portion of the fund that is collected from the scheduled Q1'09 P0 for network enhancement. - GP has recently selected Huawel for its network equipment supplier for better cost efficiency to maintain the competitiveness in the market. - Penetrate rural Bangladesh with voice and data services.
Academic Study about Mission and Vision: A mission statement is a statement of the purpose of a company or organization. The mission statement should guide the actions of the organization, spell out its overall goal, provide a path, and guide decision-making. It provides "the framework or context within which the company's strategies are formulated. For example, the charity might provide "job training for the homeless and unemployed". The statement may also set out a picture of the organization in the future. A clear business mission should have each of the following elements:

Vision: defines and describes the future situation that a company wishes to have, the intention of the vision is to guide, to control and to encourage the organization as a whole to reach the desirable state of the organization The vision is a long-term view, sometimes describing the organization's picture of an "ideal world". For example, a charity working with the poor might have a vision statement which reads "A World without Poverty." A Vision statement outlines what the organization wants to be, or how it wants the world in which it operates to be. It concentrates on the future. It is a source of inspiration. It provides clear decisionmaking criteria. Profile of Grameen Phone: Grameenphone widely known as GP is the leading telecommunications service provider in Bangladesh. With more than 32 million subscribers (as of June 2011), Grameenphone is the largest cellular operator

in the country. It is a joint venture enterprise between Telenor and Grameen Telecom Corporation, a non-profit sister concern of the internationally acclaimed microfinance organization and community development bank Grameen Bank. Telenor, the largest telecommunications company in Norway, owns 55.8% shares of Grameenphone, Grameen Telecom owns 34.2% and the remaining 10% is publicly held. THE VISION OF GRAMEEN PHONE: To be leading provider of telecommunication services all over Bangladesh with satisfied customers and shareholders, and enthusiastic employees. MISSION STATEMENT: Grameen Phone Ltd. aims at providing reliable, widespread, convenient mobile and cost effective telephone services to the people in Bangladesh irrespective of where they live Such services will also help Bangladesh keep pace with other countries including those in South Africa region and reducing her existing disparity in telecom services between urban and rural areas Purpose of Grameen Phone: *To receive an economic return on its investments. *To contribute to the economic development of Bangladesh where telecommunications can play a critical role. Profile of south east bank limited Southeast Bank Limited is a scheduled Bank under private sector established under the ambit of bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations effective from May 25, 1995. During this short span of time the Bank had been successful to position itself as a progressive and dynamic financial institution in the country. Corporate Mission and Vision Mission q High quality financial services with the help of latest technology. q Fast and accurate customer service. q Balanced growth strategy. q High standard business ethics. q Steady return on shareholders equity. q Innovative banking at a competitive price. q Deep commitment to the society and the growth of national economy. q Attract and retain quality human resource. Vision: To be a premier banking institution in Bangladesh and contribute significantly to the national economy. Organization Chart:

Board Training International Head Share Research Credit Export Import International Human Others Remittance Cash Loan Loan Loan Accounts Customer Foreign Manager Executive Shariah Board The Deputy Islamic Treasury Information Internal Financial Credit

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Directors Institute Trade Branch Division Division Department

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Division Resources Division

Exchange

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Service International

Trade

Board President

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Islamic Managing

Administration Documentation Appraisal Department Department Department (Operations) Committee Banking Secretariat Director Director Division Division Division Division Division

Control Control

Compliance Accounts

Strategies of Grameenphone: STRATEGIES using products Applied by Grameenphone Business Level Strategies: features or services GP are distinguishing the firms offerings from its competitors. Some product features are Apon, Bondhu, Sohoj, Djuice, Xplore, Business Solution, Internet SIM, Public Phone, Village Phone to increase market share by expanding the network, The Company was. Successfully listed in November 2009 which was the largest IPO in the history of the Bangladesh capital market.

Functional Level Strategies: Grameenphones focus is on efficiency, quality, innovation, and customer Their main focus on After Sales Service thats why for responsiveness. The first time they introduce 24 Hours Helpline and many GPC with the GPs Human Resource motto, We are here to Help & People management procedure is so much powerful rather than the other telecom companies, which are helping the company to achieve the first place. Under Grameenphone there are more than 5000 Employees working all over the country. Grameenphone (The Global Level Strategies: Company of Telenor Group) is using multidomestic strategies because it expanded its telecom business under different countries with different name. Such as: o Grameenphone in Bangladesh, Uninor in India, Telenor in Pakistan, Norway, Hungary; DiGi in Malaysia, dtac in Thailand etc. Multi-domestic Strategies Telenor Uninor Grameenphone Figure: in Pakistan, in in Norway, Hungary India Bangladesh Multi-domestic

Strategies of GP Its also follows transnational strategies, like Telenor Group provide different strategies for different countries depend on the people demands. So Grameenphone segmented our Bangladeshi market depending on what people actually need, thats why they invented different types of SIM, Packages Plan, Internet Options and Handsets for BD people. Grameenphone is vertically integrated, now Corporate Level Strategies: They establish some plans for grab more rural customers by producing Handset Badhon Grameenphone C100, Grameenphone V100 at cheap price. Also they producing Grameenphone Modem to establish and introduce internet everywhere in Bangladesh under the slogan of Alo Grameenphone now concentrated on Ashbei, which has the 100% mobility other field also. They are opening Grameenphone IT Ltd. as well as Grameenphone Communication Ltd. Management Team of Grameenphone SWOT ANALYSIS (GP) STRENGTHS: Largest Geographical Coverage Largest International roaming Service Strong Distribution Channels Pre-Paid service that are so Flexible Low price handsets with quality and variability for rural people Lease of Fiber-Optic cable from Bangladesh Railway Market Leadership & financial soundness Good Owner Structure Competitive Price Dynamic Management Team 24 Hours Customer Services Skilled Human Resource Access to the Widest Rural Distribution network through Grameen Bank More

Attractive VAS (Value Added Services)OPPORTUNITIES: Unmet demand Possibility of further network expansion Increasing interconnection with BTTB Favorable Regulatory Authority Possibility of innovative products and services. WEAKNESS: Billing inflexibility growing customer dissatisfaction Lack of follow-up from customers Deviation from original business plan marketing plan. THREATS: Introduction of BTTB mobile phones Aggressive marketing by competitors Possibility of new entrances using GSM Technology. Better relationship of competitors with regulatory body. Findings & Overall Impact From the above empirical description, GrameenPhone has contributed to development in Bangladesh in several ways: Building technical infrastructure with increasingly more advanced services, working towards a critical mass, where telecommunication impact on development will increase significantly. Through the transfer of technology and managerial expertise. Building production and maintenance capacity locally. Through strict codes of conduct possibly strengthening the norm against corruption. Through high production and related high tax payments, as well as through continuous investments in competition and product differentiation. This results in a larger consumer Surplus. Wages and payments paid out to close 100,000 people, with considerable income effects. Through extended business activities such as CIC, Bill Pay and Health Line reducing consumer costs of basic services. Through professional HR practices and training programs enhancing human capital as well as setting a standard for behavior and conduct. Through community services which help fund basic services for poor people. It seems that the impact of GrameenPhone on the development of Bangladesh is very significant, and also clearly beyond what is traditionally expected from a private company, such as investments, wages and taxes. The code of conduct, HSE policy, HR practices and extended business activities seem to play an important role in GrameenPhone and also have effects beyond the companys own specific goals. A particularly interesting observation is the "intellectual domestication" process going on, most likely implying increasing management independence. Strategies of South-east bank: The emergence of Southeast Bank Limited was at the juncture of liberalization of global economic activities. The experience of the prosperous economies of the Asian countries and in particular of South Asia has been the driving force and the strategic operational policy option of the Bank. The company philosophy - "A Bank with Vision" has been precisely an essence of the legend of success in the Asian countries. Southeast Bank Limited is a scheduled commercial bank in the private sector, which is focused on the established and emerging markets of Bangladesh. In Dhaka, the first branch was launched in 1995 and the bank has been growing ever since. Southeast Bank Limited has 25 branches throughout Bangladesh and its aim is to be the leading bank in the country's principal markets. The bank by concentrating on the activities in its area of specialization has achieved good market reputation with efficient customer service. The Bank is committed to providing continuous training to its staff to keep them up to date with modern practices in their respective fields of work. The Bank also tries to fulfill its share in community

responsibilities. By such measures the Bank intends to grow and increase shareholders' earning per share. Southeast Bank Limited pledges to maximize customer satisfaction through services and build a trusting relationship with customers, which has stood the test of time for the last eight years. SWOT Core analysis Transparent Efficient and team quick of decision (SEBL) Strengths making performers

Threats: Safeguarding the availability of critical banking channels Southeast Bank is committed to providing high quality and innovative financial products and services at a competitive cost. IT is fundamental in helping the bank achieve these goals. In particular it needs a highly available network infrastructure is support both its internal business process and customer-facing operations. Poor performance or availability will quickly impact ability to process financial network. RECOMMENDATION: For Provide training to Employee Management should Infrastructure Number of Should give

SEBL:Southeast Banks network management team should be customer oriented. take proper step to motivate employee. should be developed. branch should be increase. more concentration on advertising.

FOR GP:Based on the findings & analysis, some realistic recommendations are mentioned in the following: QA department is strongly working but the department should give more concentration on contractual employees in making them permanent to make faster growth of GP than the present time. Besides existing customers, other customers should be strongly targeted. Performance appraisal system should be controlled and followed to measure the performance of each employee. Should give more concentration on advertising & sponsorship. GP should increase the service quality/after sales service. CONCLUSION Grameenphone Company and Southeast Bank is still a growing company, in spite of all the success it has achieved so far. GP holds a kind of a monopoly position in the mobile telecommunications market. And SEBL hold a strong position in the financial market. Completions always on the lookout for new ideas and schemes. In order to maintain no: 1 position GP use to follow many strategies like business level strategies, functional level strategies, global level strategies & corporate level strategies, SEBL use to follow many strategies like functional level strategy and corporate level strategy. Executive summary

The assignment addresses the mission, vision, and strategies of two companies and portraying their organogram and structure and preparing strategy that means in which strategy they are following to run their business. We have selected two companies one is Grameenphone providing telecommunication services and another one is South East Bank Ltd providing services in banking sector. At first is defined mission and vision in theoretically and then demonstrated two companys mission and vision as well as their organogram. The strategy has been made of this two company is based on our own point of view and also on their performance. Objectives of the study: The objective of this study is to have a understanding of the strategic policies of the GP & SEBL. Gain utmost experience of the mission and vision of these two company. Limitations of the study:

The limitations of the study are as follows: a) The organizations policies and data are confidential nature and thus it is difficult for us to collect the necessary Information and documents within this short time. c) The website doesnt contain enough information for detail study. d) Also we have not enough time to cooperate in the information gathering process. Posted by assignment at 21:32 Email ThisBlogThis!Share to TwitterShare to Facebook 0 comments: Post a Comment