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Strategy Strategy Formulation Formulation Topic Topic 1: 1: The The Concept Concept of of Strategy Strategyand andthe the Strategic Management Process Strategic Management Process
a a commitment commitment to to undertake undertake one one set set of ofactions actions rather than another rather than another
Oster Oster
Identify Identify current current mission, mission, objectives objectives & &strategies strategies
Strategy Strategy making making is is an an ongoing ongoing process process Boundaries Boundaries between between tasks:conceptual tasks:conceptualnot not real real Managers Managers have have many many other other responsibilities responsibilities Crafting/ Crafting/ implementing implementing happens happens erratically erratically
Who Who Performs Performs the the five five tasks? tasks?
CEO CEOand and other othermanagers managers Strategic Strategic planners planners Board Board of of directors directors
The The Three Three Strategy Strategy Making Making Tasks Tasks
Develop Develop a a strategic strategic vision/ vision/ business business mission mission Set objectives Set objectives Craft Craft a a strategy strategy
Chesire ChesirePuss Pussshe she(Alice) (Alice) began began... ... Would Wouldyou youplease pleasetell tellme mewhich whichway wayII ought oughtto togo gofrom fromhere here That Thatdepends dependson onwhere whereyou youwant wantto toget get to, said the cat. to, said the cat.
If Ifyou you dont dontknow knowwhere whereyoure youre going, going, any anyold oldroad roadwill willtake takeyou youthere. there. Anonymous Anonymous
Mission Mission
Defines Defines the the current currentboundaries boundaries Defines Definesthe the business business position position -Who are we? Who are we? -- What What do do we we do? do?
What What Business Business are are you you in: in: Coca Coca Cola Cola
soft softdrinks? drinks? Competition Competition is isPepsi, Pepsi, Finches Finches beverages? beverages? Competition Competition is is tea, tea, coffee, coffee, softdrinks softdrinks thirst thirst -quenching? -quenching? Competition Competition is is water water & &all all liquids! liquids!
Present Present
Vision Vision
Future Future
Importance Importance of of COMMUNICATING COMMUNICATINGthe the vision vision
Objectives Objectives
Strategic Strategic vs. vs. Financial? Financial? Long Long range range vs. vs. short short range? range? Challenging Challenging but but achievable achievable
Financial Financial
focus focusis ison onfinancial financialperformance performance
eg. eg.acceptable acceptableprofit profit margin/ margin/ROI ROI
Measurable Measurable
Measurable Measurable
Objectives Objectivesmust must be be measureable measureable
eg. eg.growth growth in inmarket marketshare share of 5% of 5%
Makes Makes resourcing/ resourcing/ investment investment decisions decisions Reviews/ Reviews/ unifies unifies business business unit unit strategies strategies
Approaches Approaches to to performing performing the the strategy strategy making making tasks tasks
Master Master strategist: strategist: manager manager is is chief chief architect architect Delegate Delegate to toothers others Collaborative Collaborative approach approach Champion approach Champion approach
Managers Managers Values, Values, Beliefs Beliefs and and Ambitions Ambitions
Management Management play play a a pivotal pivotal role role Strong Strong leadership leadershipbuilds builds commitment commitment Management --in Management communication communication -- buy buy in