STRATEGIC MANAGEMENT

Session 2
Scope of the Firm
Setting Vision, Mission, Objectives and Goals

MBA II SEM III 2017-19

June 25, 2018

“…I would inspire my men with unity of purpose.”

- Sun Tzu in ‘The Art of War’
© Praveen Kshirsagar, 2018
Course Structure: a quick recap of last lecture
• Session 1: Introduction to Strategic Management
o Why Strategy / Strategic Management?
o What is Strategic Management?
o Business Environment
o Class Policies
o Assessment and Evaluations Plan

© Praveen Kshirsagar, 2018

Why study Strategy or Strategic Management?

TO CREATE ABOVE-AVERAGE RETURNS FOR

INVESTORS

THROUGH

SUSTAINABLE COMPETITIVE ADVANTAGE

© Praveen Kshirsagar, 2018

 A little exercise:

Draw Business Environment

© Praveen Kshirsagar, 2018

Layers of the Business Environment

Markets

Goals

© Praveen Kshirsagar, 2018

Course Pedagogy

Four-Pronged participative learning approach:

• Case study and analysis
• In-class experiential activities/games
• Lectures and class discussion
• Continuous assessments

My emphasis will be on…

1. explaining the concepts of strategic management
2. making this course fun, engaging, and value-add to you

© Praveen Kshirsagar, 2018

 Course Structure
Strategy Formulation Strategy Execution
(Creating Strategies) (Putting Strategies into Action)

Corporate Business Gaining

‘Scope’ of Environmnt MNC Strategy Managing Strategic
Level Level Competitive
a firm Analysis Strategies Execution Change Leadership
Strategy Strategy Advantage

Ext env
scanning Low-cost, Strategy Change
Diversificat
Differen- and Mngmnt Innovation
ion
tiation Structure Framework
Inter-
Setting the nationaliza
vision, Internal tion Guiding the
mission, env
and organization
goals, and analysis
objectives globalizati
on
Niche/ Knowledge
Portfolio Ethics and McKinsey
Value Managem
Planning Focus Governance 7S model
chain ent
analysis

© Praveen Kshirsagar, 2018

Evaluations and Assessments
Component Date / Deadline Marks Syllabus portion

Surprise Class Quizzes Between 2nd July and Covered until and including
10
Online (Best of two) 30th July 2018 that on the day of test

27th August 2018 Written Report on a chosen

Individual assignment
20 Strategy topic (from the list
submission
5:00 pm IST provided)

Covered until the start day

Mid-Term Exam TBN by exam coordinator 30
of exam

17th Sept and 18th Sept

Group assignment 2018 (in Class) Company analysis in an
submission and 30 industry of choice (from the
presentations 5:00 pm IST on day of list provided)
presentation

Final exam TBN by exam coordinator 60 Entire portion

© Praveen Kshirsagar, 2018
 Where are we in the course?
Strategy Formulation Strategy Execution

Corporate Business Gaining

‘Scope’ of Environmnt MNC Strategy Managing Strategic
Level Level Competitive
a firm Analysis Strategies Execution Change Leadership
Strategy Strategy Advantage

Ext env
scanning Low-cost, Strategy Change
Diversificat
Differen- and Mngmnt Innovation
ion
tiation Structure Framework
Inter-
Setting the nationaliza
vision, Internal tion Guiding the
mission, env
and organization
goals, and analysis
objectives globalizati
on
Niche/ Knowledge
Portfolio Ethics and McKinsey
Value Manageme
Planning Focus Governance 7S model
chain nt
analysis

© Praveen Kshirsagar, 2018

Course Structure: this week
• Session 1: Introduction to Strategic Management
o Why Strategy / Strategic Management?
o What is Strategic Management?
o ‘Nespresso’ case
o Class Policies
o Assessment and Evaluations Plan

• Session 2: Strategy Formulation -> Scope of a firm

o Organizational Aspirations - vision, mission, objectives and goals
o Importance of vision mission, objectives and goals
o Puzzle Vision strategy game
o Insights Discussion
© Praveen Kshirsagar, 2018
Are Organizational Aspirations relevant to Strategy?

3 Questions

“Achieving an aspiration requires a strategy.”

© Praveen Kshirsagar, 2018

Components of an Organization’s Aspirations

Purpose Why do we exist

Vision What future do we want to create

What business the organization is in and how

Mission do we do it

Values What do we stand for / What is important to us

© Praveen Kshirsagar, 2018
Questions addressed by Aspirations and
Competitive Strategy

• Purpose

Why do we exist • Strategy

How do we position
• Vision / Mission
ourselves in our
What future to we want to create industry to achieve
returns superior to our
competitors?
• Values

What do we stand for

© Praveen Kshirsagar, 2018

Two Dimensions of the Value of Organizational
Aspirations (by Campbell and Leung)

© Praveen Kshirsagar, 2018

Coherence and Alignment of Organizational
Aspirations

© Praveen Kshirsagar, 2018

Organizational Aspirations and Business
Performance

• Organizational aspirations can establish boundary

conditions for strategy decisions.

• They can increase employee motivation

• They can align efforts to achieve company objectives

• They can coordinate employee direction for greater

strategic impact.

• They facilitate communication with stakeholders.

© Praveen Kshirsagar, 2018

Core Ideology – Vision Mission Statements

Source: Collins, J., Porras, “Built to Last” © Praveen Kshirsagar, 2018

Vision and Mission key tests:
How should they be (written)?

• Motivating and inspiring

• Short
• Clear to all stakeholders
• Easy to remember
• Reflect choices among viable alternatives
• Consistent with stakeholders’ needs

© Praveen Kshirsagar, 2018

Organizations Vision Mission Statements
Some examples

Source: Collins, J., Porras, “Built to Last”

© Praveen Kshirsagar, 2018
Organizations Vision Mission Statements
Some examples

Source: Collins, J.,

Porras, “Built to Last”
© Praveen Kshirsagar, 2018
The Strategy Process

Setting PVMVO

Source: Adapted courtesy McKinsey and Company © Praveen Kshirsagar, 2018

Defining Strategy Statements

Goals Scope Advantage

1. What do you want to achieve (goals)?

2. Which markets allow you to achieve your goals (scope)?

3. What do you have to beat competitors in those markets

(advantages)?

© Praveen Kshirsagar, 2018

Characteristics of Strategy Statements

A strategy statement should describe:

• your strategic goals (mission/vision/objectives)

• your sources of competitive advantage

• the scope (range) of your business

© Praveen Kshirsagar, 2018

Let’s play a Strategy Game:
Puzzle Vision

© Praveen Kshirsagar, 2018

Puzzle Vision - Insights

Company Goals/ %
Name Condition Vision Objectives Resources Completion

A&B Control Yes Yes Yes

C&D Condition-1 No No Yes

E&F Condition-2 No No No

G&H Condition-3 Yes Yes No

© Praveen Kshirsagar, 2018

Strategy Game – Insights discussion

© Praveen Kshirsagar, 2018

Puzzle Vision - Insights

© Praveen Kshirsagar, 2018

Course Structure: What we covered this week
• Session 1: Introduction to Strategic Management
o Why Strategy / Strategic Management?
o What is Strategic Management?
o ‘Nespresso’ case
o Class Policies
o Assessment and Evaluations Plan

• Session 2: Strategy Formulation -> Scope of a firm

o Setting the vision, mission, objectives and goals
o Importance of vision mission, objectives and goals
o Puzzle Vision strategy game
o Insights Discussion
© Praveen Kshirsagar, 2018