Slide 1: The
Managerial Process of
Crafting and Executing
Strategy.
Slide 2: Fig. 2.1:
The Strategy-Making, Strategy-Executing Process.
Slide 3: Developing
a Strategic Vision.
Phase 1
of the Strategy-Making Process
- Involves thinking strategically about
ú Future
direction of company
ú Changes
in company’s product/market/customer technology to improve
Current market position
Future prospects
A strategic
vision describes the route a company intends to take in developing and
strengthening its business. It lays
out the company’s strategic course in preparing for the future.
Slide 4:
Slide 5:
Slide 6:
Slide 7: Strategic Vision vs. Mission
¡ Vision: A strategic vision
concerns a firm’s future business path - “where
we are going”
we are going”
§ Markets
to be pursued
§ Future
product/market/
customer/technology focus
customer/technology focus
§ Kind
of company management is
trying to create
trying to create
¡ Mission
: The mission statement of a firm focuses on its present
business purpose - “who we are and what we do”
§ Current
product and service offerings
§ Customer
needs being served
§ Technological
and business
capabilities
and business
capabilities
•
Slide 8: Characteristics of a Mission Statement
Identifies the boundaries
of the current business and highlights
– Present
products and services
– Types
of customers served
– Geographic
coverage
• Conveys
– Who
we are,
– What
we do, and
– Why
we are here
A well-conceived mission statement distinguishes a
company’s business makeup from that of other profit-seeking enterprises
in language specific enough to give the company its own
identify!
Slide 9: Setting Objectives
Phase 2
of the Strategy-Making Process
• Purpose
of setting objectives
– Converts
vision into specific performance targets
– Creates
yardsticks to track performance
• Well-stated
objectives are
– Quantifiable
– Measurable
– Contain
a deadline for achievement
• Spell-out
how much of what kind
of performance by when
of performance by when
Slide 10: Types
of Objectives Required
Financial
Objectives: Outcomes focused on improving financial performance.
Strategic
Objectives: Outcomes focused on improving competitive vitality and
future business position.
Slide 11: A Balanced Scorecard Approach – Setting Strategic and Financial Objectives:
¡ A balanced scorecard for
measuring
company performance is optimal; it entails
company performance is optimal; it entails
§ Setting
financial and strategic objectives
§ Placing
balanced emphasis on achieving
both types of objectives
both types of objectives
(However,
if a company’s financial performance is dismal or if its very survival is in doubt
because of poor financial results, then stressing the achievement of the
financial objectives and temporarily de-emphasizing the strategic objectives
may have merit)
¡ Just
tracking financial performance overlooks the importance of measuring whether a
company is strengthening its competitiveness and market position.
The surest path to sustained future profitability
year after year is to relentlessly pursue strategic outcomes that
strengthen a company’s business position and give it a growing competitive
advantage over rivals!
Slide 12: Short-Term vs. Long-Term Objectives
• Short-term objectives
– Targets
to be achieved soon
– Milestones
or stair steps for reaching long-range performance
• Long-term
objectives
– Targets
to be achieved within
3 to 5 years
3 to 5 years
– Prompt
actions now that will
permit reaching targeted
long-range performance later
permit reaching targeted
long-range performance later
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