FORMULATION OF STRATEGIES: TOP MANAGEMENT

CRAFTING OF VISION AND MISSION STATEMENT

STRATEGY FORMULATION
Strategy formulation is a process by which an organization produces a clear set of
recommendation, with supporting justification that revise as necessary mission and objectives of
the organization, and supply the strategies for accomplishing them. In formulation, we are trying
to modify the current objectives and strategies in ways to make the organization more successful.
Formulation of strategy involves analyzing the environment in which the organization
operates, then making a series of strategic decisions about how the organization will compete.
Formulation ends with a series of goals or objectives and measures for the organization to
pursue.
Environmental analysis includes the:

Remote external environment, including the political, economic, social, technological,

legal and environmental landscape (PESTLE)
Industry environment, such as the competitive behavior of rival organizations, the
bargaining power of buyers/customers and suppliers, threats from new entrants to the
industry, and the ability of buyers to substitute products (Porter's 5 forces)
Internal environment, regarding the strengths and weaknesses of the organization's
resources (i.e., its people, processes and IT systems, SWOT).
3 ASPECTS OF STRATEGY FORMULATION

CORPORATE LEVEL STRATEGY

In this aspect of strategy, it is concerned with the board decisions about the total
organizations scope and direction. This consider what changes should be made in
growth objective and strategy for achieving it, the line of business that
organization are in, and how this lines of business fit together.
Growth or directional strategy what should be our growth objective,
ranging from retrenchment through stability to varying degrees of growth
and how do we accomplish this
Portfolio strategy what should be our portfolio of lines of business,
which implicitly requires reconsidering how much concentration or
diversification we should have
Parenting strategy how we allocate resources and manage capabilities
and activities across the portfolio, where do we put special emphasis, and
how much do we integrate our various lines of business
COMPETITIVE STRATEGY/BUSINESS LEVEL STRATEGY
This involves deciding how the company will compete within each line of
business or strategic business unit, how to build and improve the companys
competitive position for each line of business. A company has competitive
 advantage whenever it can attract customers and defend against competitive
forces better than its rivals. Successful competitive strategies usually involve
building uniquely strong or distinctive competencies in one or several areas
crucial to success and using them to maintain a competitive edge over rivals.
FUNCTIONAL STRATEGY
These are relatively short-term activities that each functional area within a
company will carry out to implement the broader, longer-term corporate level and
business level strategies. Each functional area has a number of strategy choices
that interact with and must be consistent with the overall company strategies.
Examples are the area of marketing, finance, production or operations, research
and development, and human resources management.
TOP MANAGEMENT
Top Management refers to a relatively small group of people include president, chief
executive officer, vice president, and executive vice president. The highest ranking executives
are responsible for the entire enterprise.
Top management translates the policy (formulated by the board-of-directors) into goals,
objectives, and strategies, and projects a shared-vision of the future. It makes decisions that
affect everyone in the organization, and is held entirely responsible for the success or failure of
the enterprise.
The direct participation by the highest level executives in a specific and critically
important aspect or program of an organization includes (1) setting up and serving on a quality
committee, (2) formulating and establishing quality policies and objectives, (3) providing
resources and training, (4) overseeing implementation at all levels of the organization, and (5)
evaluating and revising the policy in light of results achieved.

CRAFTING OF VISION AND MISSION STATEMENT

Mission and Vision Statements Explained

These statements are the words leaders use to explain an organization's purpose and
direction. When expressed clearly and concisely, they can motivate the team, or the organization
as a whole, with an inspiring vision of the future and when they are communicated effectively to
everyone in the organization. They also express your organization's purpose to customers,
suppliers and the media, on whom they can have the same effect, too.

Purpose

The two statements do distinctly different jobs.

Mission statements
 It defines the organization's purpose and primary objectives. These statements are
set in the present tense, and they explain why you exist as a business, both to members of the
organization and to people outside it. Mission statements tend to be short, clear and powerful.
Vision statements

It also defines your organization's purpose, but they focus on its goals and
aspirations. These statements are designed to be uplifting and inspiring. They're also timeless:
even if the organization changes its strategy, the vision will often stay the same.

Creating Mission Statement

1. Develop winning idea
First, identify your organization's "winning idea," or unique selling
proposition. This is the idea or approach that makes your organization stand out
from its competitors, and it is the reason that customers come to you and not your
competitors.
2. Clarify the Goal

Buzzwords and jargon are generally ineffective in a mission statement. If

you tell people that you deliver business efficiencies using optimized software
solutions, theyre unlikely to commit this phrase to memory.

When your mission is hard to remember, its difficult for team members to
align their daily activities with the goals outlined. Choose your words wisely and
use terms that are easily understood and relevant to your business.

3. Inspire

While its important to make your mission plausible and attainable, it can
also be powerful to include an inspirational element. This element can encourage
your team members to work toward your vision. You might also find it useful to
tie your mission statement to specific activities or behaviors, which can move it
from the conceptual realm to the practical world.
Creating Vision Statement
1. Find Human Value at Work
First, identify your organization's mission. Then uncover the real, human
value in that mission. For example, how does your organization improve people's
lives? How do you make the world a better place?
2. Distill into Values
 Next, identify what you, your customers and other stakeholders value the
most about how your organization will achieve this mission. Distill these
into values that your organization has, or should have.

3. Combine your Mission and Values

Combine your mission and values, and polish your words until you have
an inspiring statement that will energize people, inside and outside your
organization.

Example of Mission Statement

Toyota Motor Sales USA - "To attract and attain customers with high-valued products
and services and the most satisfying ownership experience in America."
Nike - "To bring inspiration and innovation to every athlete in the world."
Facebook - To give people the power to share and make the world more open and
connected.
Google To organize the worlds information and make it universally accessible and
useful.

Dell - To be the most successful computer company in the world at delivering the best
customer experience in markets we serve.

Example of Vision Statement

Amazon (online retail) "Our vision is to be earth's most customer-centric company
where customers can find and discover anything they might want to buy online at the lowest
possible prices."
Ikea (retail) "To create a better everyday life for the many people."
Avon - To be the company that best understands and satisfies the product, service and
self-fulfillment needs of women globally,
Toys R Us - To put joy in kids hearts and a smile on parents faces.
McDonalds - To be the worlds best quick service restaurant experience. Being the best
means providing outstanding quality, service, cleanliness, and value, so that we make every
customer in every restaurant smile.
REFERENCES:
http://www.introduction-to-management.24xls.com/en217 , July 24,20115
www.csun.edu/~hfmgt001/formulation.doc, July 24,20115
http://www.mindtools.com/pages/article/newLDR_90.htm, July 24,20115
http://www.businessdictionary.com/definition/top-management.html#ixzz3hUC9Xdbe ,
July 24,20115
 FORMULATION OF STRATEGIES: TOP
MANAGEMENT
CRAFTING OF VISION AND MISSION
STATEMENT

Reported by:

Mary Anne B. Balbontin