2 Mgt of Strategy Vision and Mission

7/23/2019 2 Mgt of Strategy Vision and Mission

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Management of StrategyManagement of Strategy

(2)(2)

Vision and MissionVision and Mission


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Without a strategy the organizationWithout a strategy the organizationis like a ship without a rudder, goingis like a ship without a rudder, going

around in circles.around in circles.

Joel Ross and Michael Kami

McGraw-Hill/Irwin 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 3


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Thinking Strategically:Thinking Strategically:The Three Big Strategic QuestionsThe Three Big Strategic Questions

1.1. Where are we now?Where are we now?

2.2. Where do we want to go?Where do we want to go?

Business(Business(eses) to be in and market) to be in and market

Buyer needs and groups to serve?Buyer needs and groups to serve?

Outcomes to achieve?Outcomes to achieve?

3.3. How do we get there?How do we get there?


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What is Strategy?What is Strategy?

A companys strategy consists of the set of competitivemoves and business approaches that management isemploying to run the company

Strate is mana ements ame lanto Attract and please customers

Stake out a market position

Conduct operations

Compete successfully

Achieve organizational objectives


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What is a Business Model?

A companys business model addresses How do we makemoney in this business?

Is the strategy that management is pursuing capable ofdelivering good bottom-line results?

Do the revenue-cost-profit economics of the companys

strate make ood business sense? Look at the revenue streams the

strategy is expected to produce

Look at the associated cost structureand potential profit margins

Do the resulting earnings streams andROI indicate the strategy makes sense and that thecompany has a viable business model?


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Strategy vs. Business Model :

What is the Difference?

Strategy-- Deals with acompanys competitive

initiatives and business

approaches

Business Model--Concerns whether the

revenues and costs flowing

from the strategy

demonstrate that the

business can be amply

profitable and viable


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Microsofts Business Model

Employ a cadre of highly skilled programmers to developproprietary code; keep source code hidden from users

Employ a cadre of highly skilled programmers to developproprietary code; keep source code hidden from users

Sell resulting operating system and software packages to PCmakers and users at relatively attractive prices and achieve large

Sell resulting operating system and software packages to PCmakers and users at relatively attractive prices and achieve large

Most costs arise in developing the software; variable costs aresmallonce breakeven volume is reached, revenues from

additional sales are almost pure profit.

Most costs arise in developing the software; variable costs aresmallonce breakeven volume is reached, revenues from

additional sales are almost pure profit.

Provide technical support to users at no cost

Provide technical support to users at no cost


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Redhat Linuxs Business Model

Use volunteer programmers to create the software;make source code open andavailable to all users

Use volunteer programmers to create the software;make source code open andavailable to all users

those who download it (charge a small fee to users whowant a copy on CD)

those who download it (charge a small fee to users whowant a copy on CD)

Make money by employing a cadre of technical supportpersonnel who provide technical support to users for afee

Make money by employing a cadre of technical supportpersonnel who provide technical support to users for afee


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Why Are Strategies Needed?

Toproactivelyshape how a companys

business will be conducted

decisions of managers and employees into

a coordinated, company-wide game plan


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Strategic Management Concept

Competent execution of a well-

conceived strategy is the besttest of

managerial excellence and a proven

Good Strategy + Good Strategy Execution = GoodManagement


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The Five Tasks of Strategic Management

Craft a

Strategy

to Achieve

Objectives

Set

Objectives

Develop a

Strategic

Vision

and

Implement

and

Execute

Strategy

Task 1 Task 2 Task 3 Task 4 Task 5

Monitor,

Evaluate,

and Take

Corrective

Improve/

Change

Revise as

Needed

Revise as

Needed

Improve/

Change

Recycle

as Needed


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Why Vision?

VisionVision

Provides the heart to goagainst the status quo

Explains the worlddifferently

StrategiesStrategies

PlansPlans

Combines emotion andreason

Informs workers, partnersand customers

Tied to values and past

successes Brief and direct


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Vision: The Grace

of Great ThingsEnvironment

VisionMomentum

Self-knowledge

CultureConsensus

Directing Team


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Vision: The Grace

of Great Things

Drawn from core competencies and assets

if you do not know where you are going, any

road gets you there

assessment of environment

Given adequate time to develop, matureand be realized

Creates context for subsequent

implementation and planning work


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Vision: The Grace

of Great Things

From vision to systemicchange

Multi-level change process

Context, Timeframe, Skills,

Products

Preferences yours andtheirs

Ceilings and floors

Learn from the process

The Plan is Nothing, Planning is EverythingThe Plan is Nothing, Planning is Everything.. Dwight D. EisenhowerDwight D. Eisenhower


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Vision Strategy Action:

The perpetual balancing act

Think globally, act locally

Short term long term

Thought action

Decisiveness - inclusion


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McKinseys 7s Framework (1982, dalam Carr et al., 1996)

)

kills

haredhared

aluealue


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Developing a Strategic Vision

First Task in Strategic Management

Involves thinking strategicallyabout

Firms future business plans

ere to go

Tasks include

Creating a roadmap of the future

Decidingfuture business position tostake out

Providing long-term direction

Giving firm a strong identity


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Characteristics of a Strategic Vision

A roadmap of a companys

future

Future technology-product-

customer focus

Geographic and product

markets to pursue

Capabilities to be developed

Kind of company

management is trying tocreate


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The Gap


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Missions vs. Strategic Visions

A mission statement

focuses on current

business activities -- who

we are and what we do

Current product and

A strategic vision concerns a

firmsfuture business path --

where we are going

Markets to be pursued

Future technolo -service offerings

Customer needs beingserved

Technological andbusiness capabilities

product-customer focus

Kind of company thatmanagement istrying to create


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Why is a Strategic Vision Important?

A managerial imperative exists to look

beyondtodayand think strategicallyabout

Impact of new technologies

How customer needs and expectations are

changing

What it will take to outrun competitors

Which promising market opportunities ought to be

aggressively pursued

External and internal factors driving what acompany needs to do to prepare for the future


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Examples: Mission and Vision Statements

Microsoft Corporation

through great software

anytime, anyplace, and

on any device.


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Ourvision: Getting to a billion connected computers

worldwide, millions of servers, and trillions of dollars of

Intel

e-commerce. Intels core mission is being the building

block supplier to the Internet economy and spurring

efforts to make the Internet more useful. Being

connected is now at the center of peoples computing

experience. We are helping to expand the capabilities

of the PC platform and the Internet.


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The Ritz-Carlton Hotel is a place where the genuine

care and comfort of our guests is our highest mission.

Ritz-Carlton Hotels

We pledge to provide the finest personal service and

facilities for our guests who will always enjoy a warm,

relaxed yet refined ambiance.

The Ritz-Carlton experiences enlivens the senses,instills well-being, and fulfills even the unexpressed

wishes and needs of our guests.


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We are in the picture business.

Eastman Kodak


ap a(an Internet startup company)

Ourmission is to be the premier Internet investment banking firm focused

on the offering and selling of securities to a community of online

individual investors.


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The Gap

Documents

2 Mgt of Strategy Vision and Mission