SAN BEDA COLLEGE ALABANG

Provides guidance about what core to

preserve and what future to stimulate
progress toward.
 Vision
Core Ideology
Captures what you stand for and why you exist.
Envisioned Future
Role is to guide and inspire those inside, Aspirations
not to differentiate.

Core Purpose BHAG Vivid

Core Values
Timeless guiding principles.
Reason for being. Clearly articulated, Description
Rarely if ever change.
Rarely if ever changes. lofty goal -- What the future looks
15+ years out. like when youre successful.

Key Strategies
How will we achieve the BHAG within the context of our core ideology?
 A well-conceived vision consists of two major
components:
Core ideology
Yin in our scheme,
Defines what we stand for and why we exist.
Unchanging and complements yang
Envisioned future
Yang
What we aspire to become, to achieve, to createsomething
that will require significant change and progress to attain.
 Defines the enduring character of an
organization a consistent identity that
transcends product or market life cycles,
technological breakthroughs, management
fads, and individual leaders.

Provides the glue that holds an organization

together as it grows, decentralizes, diversifies,
expands globally, and develops workplace
diversity.
 Not created nor set. You discover.

You understand it by looking inside.

Must be authentic. Cannot be faked.

Must be meaningful and inspirational only to

people inside; it need not be exciting to
outsiders or differentiating vs. others.
 The point is not to create a perfect statement
but to gain a deep understanding of your core
values and purpose; which can then be
expressed in a multitude of ways.

Once you are clear about the core ideology, you

should feel free to change absolutely anything
that is not part of it. If its not core, its up for
change!
 Two distinct parts:
Core values
a system of guiding principles and tenets

Core purpose
the organizations most fundamental reason for existence.
 Guiding principles that already exist but may
not be articulated; ask: what core values do
we truly and passionately hold?

3-5 essential and enduring tenets (do not

change)
 Require no external justification; they have
intrinsic value and importance to those inside
(goal is to guide and inspire, not to
differentiate)

Must be authentic you can not fake it

 Articulates your reason for being

It doesnt just describe the organizations

output or target customers; it captures the
soul of the organization.

Provides inspiration and direction for doing

the work
 Should not change through time and
circumstances

Never truly completed a guiding star on

the horizon

Should not be confused with specific goals or

business strategies
 Criteria
States your organizations reason for being
Provides inspiration and direction for doing the
work
Timeless
Never truly completed
Not a statement of core competence
Doesnt have to be differentiating
 3M:
To solve unsolved problems innovatively

Fannie Mae:
To strengthen the social fabric by continually democratizing home
ownership

Hewlett-Packard:
To make technical contributions for the advancement and welfare
of humanity

Mary Kay Cosmetics:

To give unlimited opportunity to women

McKinsey & Company:

To help leading corporations and governments be more successful
 Merck:
To preserve and improve human life

Nike:
To experience the emotion of competition, winning, and
crushing competitors

Wal-Mart:
To give ordinary folk the chance to buy the same things as rich
people

Walt Disney:
To make people happy
 One powerful method for getting at purpose
is the five whys.
Start with the descriptive statement
We make X products or
We deliver X services, and
Then ask, Why is that important? five times.
After a few whys, youll find that youre getting
down to the fundamental purpose of the
organization. We
 One powerful method for getting at purpose
is the five whys.
Start with the descriptive statement
We make X products or
We deliver X services, and
Then ask, Why is that important? five times.
After a few whys, youll find that youre getting
down to the fundamental purpose of the
organization. We
 One powerful method for getting at purpose
is the five whys.
Start with the descriptive statement
We make X products or
We deliver X services, and
Then ask, Why is that important? five times.
After a few whys, youll find that youre getting
down to the fundamental purpose of the
organization. We
 Consists of a 10-to-30 year audacious goal
plus vivid descriptions of what it would be like
to achieve the goal.
 Big Hairy Audacious Goal
The goal is a huge challenge, akin to climbing Mt.
Everest.

It is clear and compelling; it serves as a unifying

focal point of effort, and acts as a catalyst for
team spirit.

Organizations may have many BHAGs at different

levels operating at the same time but must have a
vision-level BHAG that applies to the entire
organization.
 Big Hairy Audacious Goal (cont)
Requires thinking beyond current capabilities and
the current environment.

Should require extraordinary effort and perhaps a

little luck.
 Become a $125 billion company by the year 2000 (Wal-
Mart, 1990)
Democratize the automobile (Ford Motor Company, early
1900s)
Become the company most known for changing the
worldwide poor-quality image of Japanese products
(Sony, early 1950s)
Become the most powerful, the most serviceable, the
most far-reaching world financial institution that has ever
been (City Bank, predecessor to Citicorp, 1915)
Become the dominant player in commercial aircraft and
bring the world into the jet age (Boeing, 1950)
 Become the Nike of the cycling industry (Giro
Sport Design, 1986)

Become as respected in 20 years as Hewlett-

Packard is today (Watkins-Johnson, 1996)

Become the Harvard of the West (Stanford

University, 1940s)
 Crush Adidas (Nike, 1960s)

Yamaha wo tsubusu! We will destroy Yamaha!

(Honda, 1970s)
 Become number one or number two in every
market we serve and revolutionize this
company to have the strengths of a big
company combined with the leanness and
agility of a small company (General Electric
Company, 1980s)
 Criteria
A clearly articulated goal with a clear finish line

Achievable within a specific timeframe (10-30

years)

15% knowledge of how, 50%-70% sure we can

Tangible, energizing, highly focused people get

it right away
 Think of it as translating the vision of the
future from words into pictures, of creating
an image people can carry around in their
heads to make it tangible.
 Criteria
Vibrant, engaging and specific description of what
it will be like to achieve the BHAG
Makes the BHAG tangible in peoples minds
Passion, emotion and conviction are essential
parts of the description
Creative process
 We will create products that become pervasive
around the world. We will be the first Japanese
company to go into the U.S. market and
distribute directly. We will succeed with
innovations that U.S. companies have failed at
such as the transistor radio. Fifty years from
now, our brand name will be as well known as
any in the worldand will signify innovation and
quality that rival the most innovative companies
anywhere. Made in Japan will mean
something fine, not something shoddy. (Sony,
1950s)
 Beware of the Weve Arrived Syndromea
complacent lethargy that arises once an
organization has achieved one BHAG and
fails to replace it with another.
 Ford
Early 1900s : Democratize the automobile
Current: People working together as a lean global
enterprise to make peoples lives better through
automotive and mobility leadership.

Honda
1970: We will destroy Yamaha
Current: To be a company that our shareholders,
customers and society want
 Description of something in the future

Mental perception of the kind of

environment an individual, or an
organization, aspires to create within a broad
time horizon and the underlying conditions
for the actualization of this perception
 Strategic intent should lead to an end.

That end is the vision of an organization or an

individual.

It is what the firm or a person would

ultimately like to become.
 A vision statement answers the question,
What will success look like?
 We will be a world-class organization in
depositor protection (PDIC, 2016)

The BSP aims to be a world-class monetary

authority and a catalyst for a globally
competitive economy and financial system
that delivers a high quality of life for all
Filipinos. (BSP, 2016)
 Organizations relate their existence to
satisfying a particular need of the society.
They do it in terms of their mission.

It defines the role that an organization plays

in a society.

It refers to the particular need of that society

for instance, its information needs.
 essential purpose of the organization,
concerning particularly why it is in existence,
the nature of the business it is in, and the
customers it seeks to serve and satisfy.

purpose or reason for the organizations

existence.

mission is an enduring statement of purpose

that distinguishes one firm from other similar
firm.
 In short the mission describes the product,
market and technological areas of emphasis
for the business.

... an enduring statement of purpose that

distinguishes one business from other similar
firms. A mission statement identifies the
scope of a firms operations in product and
market terms.
 To be the preferred bank in every market we
serve by consistently providing innovative
products and flawless delivery of services,
proactively reinventing ourselves to meet
market demands, creating shareholders value
through superior returns, cultivating in our
people a sense of pride and ownership, and
striving to be always better than what we are
today... tomorrow. (BDO, 2016)
 Strategy can be defined as a
Plan
Ploy
Pattern
Position
Perspective
 A consciously intended course of action,
guideline or set of guidelines to deal with a
situation

Characteristics
Made in advance
Developed consciously or purposely

May be documented or stated explicitly

May be general of specific

 A plan can be a ploy too

A specific maneuver to outwit an opponent

 A pattern in stream of actions
Consistency in behaviour whether or not intended
Independent from plan

Deliberate strategy and emergent strategy

 Locating organization in environment
Match between internal & external context
Choice of niche

Collective strategy
 Ingrained way of perceiving the world
Strategy is a concept
All strategies are abstractions which exists only in
the mind of interested parties
Similar to personality to an individual

Shared perspective
Collective mind
 Definitions compete (in that they can
substitute for each other)

More importantly, they complement each

other
 As plan
It deals with how leaders establish direction for
organization
What is the intention of the strategy

As ploy
It deals with competition
How to reconcile the dynamic notion of strategy
as a ploy with static ones of strategy as a pattern
and other forms of plans
 As pattern
It deals with action and consistency in behaviour
Direction of the organization pushed by realized
strategy (plan)
Strategies can also emerge

As position
It deals with competitive environment
Organization in ecological terms
How much choice do organizations have
 As perspective
It deals with intention and behaviour in a
collective context
How intentions defuse through a group of people
to become shared as norms and values
How patterns of behaviour become deeply
ingrained in group
 It concentrates on keeping cost low.
 Position
the advantage that an organization gains in the
hands of the consumers.

Power
it is a competitive edge, a following of some sort
that a company should not allow competitors to
surpass.

Pace
it is the right time for a strategy to work.
 Potential
it is the probability of the success element of a
particular strategy.

Performance
it is the effective implementation of a particular
strategy.
 Low-cost
leadership

Differentiation Focus
COMMON REQUIRED SKILLS
AND RESOURCES
Access to the capital
required to make a
significant investment in
production assets
Process engineering skills
Intense supervision of
labour
Products designed for ease
Low-cost distribution
system
COMMON ORGANIZATIONAL
REQUIREMENTS
Tight cost control
Frequent, detailed control
reports
Structured organization
and responsibilities
Incentives based on
meeting strict quantitative
targets in manufacture
 Other firms may be able to lower their costs as
well.

As technology improves, the competition may

be able to leapfrog the production capabilities,
thus eliminating the competitive advantage.

Several firms following a focus strategy and

targeting various narrow markets may be able to
achieve an even lower cost within their
segments and as a group gain significant market
share.
COMMON REQUIRED SKILLS
AND RESOURCES
Strong marketing abilities
Product engineering
Creative flare
Strong capability in basic
research
Corporate reputation for
quality or technological
leadership
Long tradition in the industry
or unique combination of
skills drawn from other
businesses
Strong cooperation from
channels
COMMON ORGANIZATIONAL
REQUIREMENTS
Strong coordination
among functions in R&D,
product development, and
marketing
Subjective measurement
and incentives instead of
quantitative measures
Amenities to attract highly
skilled labour, scientists, or
creative people
 Imitation by competitors and changes in
customer tastes.

Various firms pursuing focus strategies may

be able to achieve even greater
differentiation in their market segments.
 Concentrates on a narrow segment and within
that segment attempts to achieve either a cost
advantage or differentiation.

The premise is that the needs of the group can

be better serviced by focusing entirely on it.

A firm using a focus strategy often enjoys a high

degree of customer loyalty, and this entrenched
loyalty discourages other firms from competing
directly.
 Because of their narrow market focus, firms pursuing
a focus strategy have lower volumes and therefore
less bargaining power with their suppliers.

However, firms pursuing a differentiation-focused

strategy may be able to pass higher costs on to
customers since close substitute products do not
exist.

Firms that succeed in a focus strategy are able to

tailor a broad range of product development
strengths to a relatively narrow market segment that
they know very well.
COMMON REQUIRED SKILLS
AND RESOURCES
Combination of the above
policies directed at the
particular strategic target
COMMON ORGANIZATIONAL
REQUIREMENTS
Combination of the above
policies directed at the
regular strategic target
 Include imitation and changes in the target
segments.

Furthermore, it may be fairly easy for a

broad-market cost leader to adapt its product
in order to compete directly.

Finally, other focusers may be able to carve

out sub-segments that they can serve even
better.
 These generic strategies are not necessarily
compatible with one another. If a firm
attempts to achieve an advantage on all
fronts, in this attempt it may achieve no
advantage at all.

Example
If a firm differentiates itself by supplying very high
quality products, it risks undermining that quality if it
seeks to become a cost leader. Even if the quality did not
suffer, the firm would risk projecting a confusing image.
 For this reason, Michael Porter argued that to
be successful over the long-term, a firm must
select only one of these three generic
strategies. Otherwise, with more than one
single generic strategy the firm will be "stuck
in the middle" and will not achieve a
competitive advantage.
 Porter argued that firms that are able to
succeed at multiple strategies often do so by
creating separate business units for each
strategy. By separating the strategies into
different units having different policies and
even different cultures, a corporation is less
likely to become "stuck in the middle."
 However, there exists a viewpoint that a
single generic strategy is not always best
because within the same product customers
often seek multi-dimensional satisfactions
such as a combination of quality, style,
convenience, and price.
 There have been cases in which high quality
producers faithfully followed a single strategy
and then suffered greatly when another firm
entered the market with a lower-quality
product that better met the overall needs of
the customers.
 Generic Strategies
Industry
Force Cost Leadership Differentiation Focus

Entry Ability to cut price Customer loyalty can Focusing develops core
Barriers in retaliation deters discourage potential competencies that can act as an
potential entrants. entrants. entry barrier.
Buyer Ability to offer lower Large buyers have Large buyers have less power to
Power price to powerful less power to negotiate because of few
buyers. negotiate -- few close alternatives.
alternatives.
Supplier Better insulated Better able to pass Suppliers have power because of
Power from powerful on supplier price low volumes, but a differentiation-
suppliers. increases to focused firm is better able to
customers. pass on supplier price increases.
Threat of Use low price to Customers become Specialized products & core
Substitutes defend against attached to competency protect against
substitutes. differentiating substitutes.
attributes, reducing
threat of substitutes.
Rivalry Better able to Brand loyalty to keep Rivals cannot meet
compete on price. customers from differentiation-focused customer
rivals. needs.