Module 2 Strategy Formulation By Prof Ajit Deva MBA Dept RNSIT

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Developing a Strategic Vision

Involves thinking strategically about Firms future business plans Where to go Tasks Include Creating a roadmap of the future Deciding future business position to

stake out
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Developing a Strategic Vision

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Characteristics of
v Charts a companys future strategic course v Defines the business makeup for 5 years (or

more)
v Specifies future technology- product-

customer focus
v Indicates capabilities to be developed v Requires managers to exercise foresight 5/23/12

Entrepreneurial Challenges in Forming a Strategic Vision

v How to creatively prepare a company

for the future

v How to keep the company responsive

to
Evolving customer needs
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Mission Vs. Strategic Vision

A mission statement focuses firms strategic vision concerns a on

future business path current business activities where we are going who we are and what we do
Current product and service offerings Markets to be pursued Customer needs being served Future technology- product-customer

focus Technological and business capabilities Kind of company that management is trying to create
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Characteristics of a Mission Statement

v Defines current business activities v Highlights boundaries of current business v Conveys
Who we are, What we do, and Where we are now v Company specific, not generic so as to give

a company its own identity A companys mission is not to make a profit! 5/23/12

Characteristics of a Mission Statement

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Strategy Formulation
Strategy formulation refers to the

process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision
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Steps involved in Strategy Formulation

1. Setting Organizations objectives. 2. Evaluating the Organizational

Environment
3. Setting Quantitative Targets 4. Aiming in context with the divisional

plans
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Strategic Objective
A broadly defined objective that an

organization must achieve to make its strategy succeed.

Financial Objective
Goals related to returns that a firm will

strive to accomplish during the period covered by its Financial Plan.

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Balanced Score Card

The Balanced scorecard is a strategic

planning and management system that is used extensively in business, industry, government, and non profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external
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Company Philosophy
Company Philosophy is nothing but

the way we do things in the company. Vision

Values
Customer Focus Development of People Entrepreneurship Quality Teamwork
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Company Philosophy
Measures
Customer Focus Supplier Focus People Focus Internal Focus

Tools
Kaizen Mistake Proofing
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Company Philosophy
Concepts
Marketing Concepts Quality first Recurrence prevention Speak with data Upstream Management

Principles
Elimination of waste
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The hierarchy of strategic Intent

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The hierarchy of Strategic Intent

Strategic Intent refers to the

purposes the organization strives for. It is the leveraging of a firms internal resources, capabilities and core competencies to accomplish the firms vision, mission and objectives in a competitive environment. It is all
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The hierarchy of Strategic Intent

The process of establishing the

hierarchy of strategic intent is very complex.

In this hierarchy, the vision, mission,

business definition and objectives are established.

Establishing the hierarchy of the 5/23/12

Merging the Strategic Vision Objectives and Strategy

Strategy Formulation
Determination of mission and objectives SWOT analysis Strategic Alternatives Evaluation and Choice

Implementation
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The hierarchy of Strategic Intent

Creating and communicating a vision Designing a mission statement Defining the business Setting objectives

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