Strategy Intro

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STRATEGY


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STRATEGIC MANAGEMENT

INTRODUCTION:

A strategic intent is a company's vision of what it wants to achieve in the long term.

It must convey

a significant stretch for your company,

a sense of direction,

discovery &

opportunity that can be communicated as worthwhile to all employees.

It should not focus so much on today's problems but rather on tomorrow'sopportunities.


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COMPARITIVE ANALYSIS

This is a analysis which is based on purely, the

factor of Comparison.

This analysis is often made by many,

even, all the companies for their Improvement.

Its also in the list as one of the reasonfor the formation of a company & its strategies.


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HISTORY


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(c) Macmillan & Tampoe 2001 5

What is Strategic Intent?

Vision + Intent

Where we wantto get to

How we intendto get there


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The Pyramid of Purpose

The language of Strategic Intent

Decision Criteria

Strategic Intent

Vision

Mission

Priorities ObjectivesAims

Strategic Initiatives Strategies


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Strategic Intent in Practice

Acceptable to stakeholders

Consistent with the history and culture of theenterprise

Must stretch beyond its present aspirationsand practices

Will tend to be based on inspired guess of the

future Includes both vision and goals


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Inspired guesses

of the future

The Strategy Formulation Process

Strategic Assessment

Strategic Choice

Stakeholder Groups

Strategic Intent

Survival

Profit

Growth

Shareholder Value

Unique for this

enterprise

Context

History & Culture

Ownership Structure

Corporate Values

Leadership

Goals Vision

Figure 7.2 Influences on Strategic Intent


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Levels of Strategy


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Let us begin with corporate level strategy

which has the largest domain. By definition,

corporate level strategy concerns itself with

the whole corporation as a unit and

consequently, aims to answer the purpose or

the mission of the organization.
http://www.gaebler.com/Three-Levels-of-Strategy.htmhttp://www.gaebler.com/Three-Levels-of-Strategy.htm


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The three management levels are related with the success ofthe strategic management. The top managers have to take thedecisions and for that the logical analysis of strategicenvironment is made.

At the middle level management, the activities are dividedaccording to the various products or geographical areas incontext to the strategic decisions.

Each part is known as Business Unit and for its success thegeneral manager provides the required resources and

facilities. While at the lower level management, the effectivemanagers implement the strategic and transactional decisionof top and middle level managers. In this way the role of allthe three levels become important for the success ofstrategies


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Three levels for Strategic decisions:

The success of the strategic management depends

on the speedy and timely taking of decisions. For this

the process of strategic decisions is followed asunder.

(A) Corporate level strategic decisions.

(B) Business unit level practical decisions

(C) Functional level operating decisions


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Corporate level strategy makers analyze the

commonalities of various business units and work to

add value to the whole system besides individual

growth of participating business units. In otherwords, corporate level strategy takes a view at the

overall scope of an organization and how to enhance

stakeholder value. Issues concerning the introduction

of new products or expansion into new markets orsegments are all a part of this strategic level.
http://www.gaebler.com/Three-Levels-of-Strategy.htmhttp://www.gaebler.com/Three-Levels-of-Strategy.htmhttp://www.gaebler.com/Three-Levels-of-Strategy.htmhttp://www.gaebler.com/Three-Levels-of-Strategy.htm


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Assessing the value of a business unit in the

overall portfolio of activities is also a

corporate level decision alongside optimal

resource allocation for units.


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Corporate level strategy forms the trunk of the

strategic decision tree and the management

has to be fully aware of its implications as well

as the sensitivity of all succeeding strategies,

no matter at what level


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It is of prime importance that corporate level

strategy is fully aligned with the overall vision

of the organization and the values and

expectations of stakeholders. Any deviation

can result in serious repercussions for the

management as also the stakeholders.


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Strategic decisions of corporate levelAt the top of the corporate level, promoters, members of theboard of directors, chief executive and administrative officersare working. They are responsible for the financial per-

formance of the corporation as a whole and for achieving thenon-financial goals of the firm for i.e. corporate image andsocial responsibility. While taking these decisions the interestof the equity shareholders of the company must beconsidered as they are the real owners of the company. The

equity shareholders bear the full risk of the business and as aresult their interests must be protected


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Besides this the company which is unable to bear thesocial responsibility cannot exist for a longer period.Considering this reality such a strategy is beingformed at the top level according to which the

customers can get the good quality of products atthe reasonable rates and along with it the ownersalso can get the proper return in context to theircapital investment. For this the long term strategicdecisions are taken by considering the mission and

for that the rules and regulations are also formed.


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By considering the decisions of the corporate

levels, the level of the business unit and

operative strategies are formed.


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Business level strategies are essentially positioningstrategies whereby businesses tend to secure forthemselves an identity and position in the market.The aim here is to increase the business value for the

corporate and stakeholders by increasing the brandawareness and value perceived by the customers. Ifwe understand products or a services offered by abusiness unit as a deck of cards, then we can safely

decipher that businesses do not have many suits toplay with.


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. Business unit level practical decisions

When the business activities of the company are

divided on the regional market, product standards by

keeping the profit in the centre, then each of thisdepartment is known as Business Unit. e.g. Videocon

Companys Television Division, Washing Machine

Division etc. Similarly B PL. Companys Television

Division, Telephone Division, Stereo Division etc.


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For all these decisions one person with all the powers isappointed who is known as General Manager. The strategicdecisions taken at the corporate level are to be considered forthe effective implementation of it for which the managershave to take the necessary practical decisions. The authorityfor this is decided by the corporate level and it is given to allthe divisional managers. This type of unit is known asStrategic Business Unit. The managers of all these SBUsorganize the activities of their unit by considering the time

period of 5 to 8 years so that they can get maximum return ontheir capital investment


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Single Business Unit Level: When the company is dealing in asingle type of single product or dealing in only one area, thenit is known as a Single Business Unit. In these circumstances,the manager of one business unit of middle level collectivelytakes the practical decisions along with the corporate strategyof high level. This is possible only because there is one unit. Inthese circumstances, there is no possibility of any disharmonybetween the practical decisions taken at corporate strategyand business unit level.


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Multiple Business Units Level: When the company isarranging on its business activities in context to morethan one region or product, then the businessactivities are divided according to the geographical

area, or product. In these circumstances the variousdivided units are known as Different Business Unitsand a separate general manager is appointed foreach one. Even though all the units are working

separately, the main corporate strategy decided atthe top level is being followed.


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The third level of strategy is the operational levelwhich primarily is concerned with successfullyimplementing the strategic decisions made atCorporate and business unit level through optimal

utilization of resources and competencies of thebusiness unit. This level of strategy is extremelysignificant in shaping the success of other strategiesas it translates strategic decisions into strategicactions by directly impacting the design of

operational processes and networks, human andother resources etc.


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Functional level operating decisions:Top managers prepare the strategic plans. At the middle levelthe resources are supplied and facilities are arranged for thesuccess of the strategies in context to the divisional units andfinally the lower level, which is known as the functional level,is implementing those strategic plans. For this functionaldecisions are taken for various activities. Functional activitiesinclude various activities such as production, marketing,personnel management, financial management, office

management, research and development etc.


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To make all these activities effective the functional managersand their assistants are being appointed. For the effectiveimplementation of the strategies at the operational level, theactivities must be examined properly. For this the supervisorsare being appointed to keep the control over all the functionalactivities. Normally all the functional managers prepareannual budgets for their departmental activities. Byconsidering the changes occurred at the corporate level andbusiness unit level, the necessary changes must be made also

in annual budgets prepared at the functional level similar to itand its continuous evaluation must be made.


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In the corporate form, at the top level after the

analysis of business environment the long term

strategic planning is done to achieve the mission of

the company and proper decisions are being taken atthe middle level in context to the business unit and

at the lower level in context to the functional

activities. Among all these three levels the extent to

which the inter relation is maintained properly, tothat extent the strategic plans are being success


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A thorough understanding of the three levels ofstrategy makes their strong co-dependence and non-hierarchical nature evidently clear. All strategies haveto be in complete harmonization with each other

since the success of one is inseparably linked to theother. So instead of being in a top-down order, theinter-linking can be visualized as a triangle with thethree corners representing the three levels. Theimpact of one node on the other is judged by the

flexibility of their relationship which further dependsupon the success of the adopted businessframework.

Documents

Strategy Intro