Strategy and mission statement- Unit -1.pptx

useful presentation to understand Strategy and strategic planning

1. Strategic Management Hours Allotted: 30 maximum Marks: 50 B.Sc. HHA, IGNOU/NCHMCT Curriculum

2. Organizational Strategy 4 hours (15% weightage) What is strategic Management? Definition Strategic management can be defined as the art and science or formulating, implementation and evaluation cross-functional decisions that enable an organization to achieve its objectives. Therefore Strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development and computer information system to achieve organizational success. Three stages of Strategic management process are, Strategy formulation , Strategy implementation and strategy evaluation .

3. Mission Statement: Elements and Importance Definition of mission statement: Mission statements are “enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firms operation in product and market terms.” It addresses the basic question that faces all strategists: What is our business? A clear mission statement describes the values and priorities of an organization. Developing M/S compels strategists to think about the nature an scope of present operations and to assess the potential attractiveness of future markets and d activities. A M/S broadly charts the future direction of an organization.

4. Importance of Mission statement. Firms with formalized mission statements have twice the average return on shareholders’ equity that those firms without a formalized mission statement. Ratrick and Vitton . There is a positive relationship between mission statements and organizational performance. Bart and Baetz Firms using mission statements have a 30% higher return on certain financial measures that those without such statements. Business week. O’Gorman and Doran however found that having a mission statement does not directly contribute positively to financial performance, The extent of managers and employee involvement in developing vision and mission statement can make a difference in business success.

5. Elements/Characteristics of a mission statement A declaration of attitude. A customer orientation A declaration of social policy IHCL's mission is to improve the quality of life for the communities it serves globally, while its vision is to be the most iconic and profitable hospitality company in South Asia. IHCL's values are guided by principles such as serving stakeholders with dedication, creating a happy environment, and celebrating diversity. IHCL's culture is called Tajness , and its strategy is called Ahvaan 2025.

6. Apple's mission statement is to provide customers with the best user experience through its innovative hardware, software, and services. Apple's vision statement is that they are on earth to make great products, and that this will not change. Google's mission is to organize the world's information and make it universally accessible and useful. Its vision is to provide access to the world's information in one click. We believe in what people make possible. Our mission is to empower every person and every organization on the planet to achieve more.

7. Airtel's Mission, Vision and Values The Way Ahead At airtel, we always put you at the heart of what we do. We strive to enhance your experience with us and build a lasting relationship with you by delivering better results every time. And this, reflects in our mission too. Reliance To build a global enterprise for all our stakeholders, and great future for our country, To give millions of young Indians the power to shape their destiny, The means to realize their full potential…

8. Components of mission statement Customers; Who are the firm’s customers? Products and services: What are the firms major products and services. Markets: Geographically ,where does the firm compete? Technology: Is the firm technologically current? Concern for survival, growth and profitability: Is the firm committed to growth and financial soundness? Philosophy: What are the basic beliefs, values, aspirations and ethical priorities of the firm? Self concept: What is the firm’s distinctive competence, or major competitive advantage? Concern for public image? Is the firm responsive to social, community and environmental concerns? Concern for employees: Are employees a valuable asset of the firm?

9. Objectives Objectives are the results expected from pursuing strategies. Nature of Objectives: The objectives must be: Quantitative Measurable Realistic Understandable Challenging Hierarchical Obtainable and congruent among organization al units. Time bound Objectives are commonly stated in terms of : Growth in assets Growth in sales Profitability Market share Degree and nature diversification Degree and nature of vertical integration, earning per share, and social responsibility.

10. Necessity of formal objectives Provide direction Allow synergy Aid in evaluation Establish priorities Reduce uncertainty, minimize conflicts, stimulate exertion and Aids in allocation of resources and design of jobs. Long term objectives are needed at the corporate, divisional and functional levels in an organization . They are important measure of managerial performance.

11. 12 Objectives Specific Measurable Narrow Tactical—short-range, set by managers to support the accomplishment of goals Goals General Intangible Broad Abstract Strategic—long-range direction, set by senior management Goals define what should be accomplished while objectives define the actions needed to achieve the goal. Goals vs Objectives

12. Developing strategies- Strategy Formulation: Meaning, Aspects, Process, Approaches and Challenges. Strategy formulation is the process of offering proper direction to a firm. Strategy Formulation seeks to set the long-term goals that help a firm exploit its strengths fully and encash the opportunities that are present in the environment. There is a conscious and deliberate attempt to focus attention on what the firm can do better than its rivals. To achieve this, a firm seeks to find out what it can do best. Once the strengths are known, opportunities to be exploited are identified; a long-term plan is chalked out for concentrating resources and effort. Henry Mintzberg, after much research found that strategy formulation is typically not a regular, continuous process. “It is small often an irregular, discontinuous process, proceeding in fits and starts. There are periods of stability in strategy development, but also there are periods of flux, of grouping of piecemeal changes and of global change.”

13. Performance results are generally periodic measurements of developments that occur during a given time period like return on investment, profits after taxes, earnings per share and market share. Current performance results are compared with the current objectives and with that of the previous year’s performance results. If the results are equal to or greater than the current objectives and past year’s results, the company will mostly continue with the current strategy otherwise, the strategy formulation process begins in earnest. The strategic managers must evaluate the mission, objectives and policies. In fact, the strategic managers are evaluated in terms of management style, values and skills by the top management. Henry Mintzberg has pointed out that a corporation’s objectives and strategies are strongly affected by top management’s view of the world. This view determines the mode to be used in strategy formulation.

14. Strategic Formulation 4 Important Subjective Aspects: Culture, Politics, Leadership, and Managerial Bias. Strategy formulation is as much an art as it is a science. In fact, it is the art of strategy formulation that drives fast growth and catapults a firm into newer horizons. Leaders should develop skills and capabilities to sense early opportunities and be quick in making strategic moves. :The successes of Airtel and Bharti Enterprises in India, and Google and Southwest airlines abroad, are some examples. Cavin Kare, the Chennai- based FMCG company has moved from a personal care product company into a major FMCG over the years because of the bold strategic initiatives that it undertook. Similarly, snacks maker Haldirams has established its brand in the food segment with a range of ready-to-eat food items from ethnic India.

15. Modes of strategy formulation include: Entrepreneurial Mode: Strategy is formulated by one powerful individual. The focus is on opportunities rather than on problems. Strategy is guided by the founder’s own visions of direction. Adaptive Mode: This strategy formulation mode is characterized by reactive solutions to existing problems rather than a proactive search for new opportunities. Planning Mode: Analysts assume main responsibility for strategy formulation. Strategic planning includes both the proactive search for new opportunities and the reactive solution of existing problems. Strategic factors Intuitive search Picking niches

16. Adaptive search An adaptive approach to strategy is a way of thinking about strategy that emphasizes experimentation and adjustment in unpredictable environments, rather than long-term planning and analysis. It's based on the idea of temporary advantage over time, rather than sustainable competitive advantage. Adaptive strategies can help businesses:

17. Intuition search An intuitive approach is based on feelings rather than facts or proof. It's the ability to understand or know something through instincts, emotions, or "gut feelings" instead of rational thought or examining facts. Intuition can be a common process among people that's fed by subconscious information, images, impressions, and sensations the brain absorbs constantly. An intuitive approach is based on feelings rather than facts or proof. It's the ability to understand or know something through instincts, emotions, or "gut feelings" instead of rational thought or examining facts. In fact, intuition is the ability to have a grasp on a situation or information without the comfort of data analysis. It is like the leap of faith. In business, people may use intuition when facts are unavailable or when decisions are difficult. For example, an art dealer might use intuition to immediately distinguish an authentic piece from a forgery. Some say that practice and working on the subconscious information that feeds intuition can help improve the intuitive process.

18. Strategic factors The strategic factor approach to strategy formulation is based on the different factors that are important for an organization to achieve its goals and objectives. These factors can vary across different functions of the organization, such as finance, marketing, and operations.

19. Strategic niche management (SNM) is a research method that aims to create and nurture niches for sustainable innovations through real-life experiments. The goal is to trigger wider systemic transitions by stimulating co-evolution processes through experiments with new technologies and socio-technical arrangements.