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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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(c) Macmillan & Tampoe 2001 6
The Pyramid of Purpose
The language of Strategic Intent
Decision Criteria
Strategic Intent
Vision
Mission
Priorities ObjectivesAims
Strategic Initiatives Strategies
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(c) Macmillan & Tampoe 2001 7
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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(c) Macmillan & Tampoe 2001 8
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.
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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.
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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.