B008 Indrajit B021 Dhruv B009 Vipul B051 Pratik B015 Tanmay B056 Gaurav Presented by: Strategy Development Closed Loop process : Each part influences other Strategic planning : Highest User Satisfaction (3.93/5) among all management tools Key Steps : Reaffirmation of mission, values and vision Analysis of external and internal forces affecting strategy Identification and analysis of key issues Formulation of new strategy Mission, Values and Vision Mission : Companys purpose Values: Internal compass that guides all actions Vision: Aspiration for future results Mission and Values : Stable over time Vision : Stable over 3-5 year plan The Mission Statement Reason for organizations existence What it provides to clients and customers Informs employees what they are working for Must be brief Googles mission is to organize the worlds information and make it universally accessible and useful. At Microsoft, mission is to enable people and businesses throughout the world to realize their full potential. The Value Statement Prescribes its attitude, character and behaviour Does not change from situtation to situation, time to time or person to person Considered to be Soul of a company 1. Focus on the user and all else will follow. 2. Its best to do one thing really, really well. 3. Fast is better than slow. 4. Democracy on the web works. 5. You dont need to be at your desk to need an answer. 6. You can make money without doing evil. 7. Theres always more information out there. 8. The need for information crosses all borders. 9. You can be serious without a suit. 10. Great just isnt good enough. The Vision Statement Mid to long term goals of organization Market oriented and expresses the desired perception of company by world Stretch Goal Should be ambitious and challenge all teams Should come directly from top management Define bold commitments to BHAGs Clear time frame and target
Leeds University, London : Our vision and strategy is that by 2015 our distinctive ability to integrate world-class research, scholarship and education will have secured us a place among the top 50 universities in the world. Vision Statement Qualities Stretch Goals : Top 50 Definition of niche: World class research, scholarship and education Time horizon : By 2015 Strategic Change Agenda A management tool to explain why transformational change is necessary and how the organization aims to undertake these changes Elaborates the redefined vision statement to uninformed employees of organization Promotes the sense of urgency and how the organization intends to create value in future Provides a comparison chart of the current processes with the aimed processes over next 3-5 years Strategic Change Agenda Strategic Change Agenda Drafted by the FBI Director Mr. Robert Mueller. Transition from case driven organization to threat driven organization Shift of work culture from traditional operational silos to integrated teams and endorse collaborative effort with all federal and local authorities Circulated to all teams with constant reminders why strategic change agenda was necessary for US national security FBI Post 9/11 Defining the Enhanced Vision Companies require integrated strategies 60% organizations lack such an integration The executive team can use the strategy maps four perspective framework to define an enhanced vision Comprehensive picture of enabling factors to achieve the mission
Nemours Strategy Map Architecture Conduct Strategic Analysis PESTEL Analysis Political Economic Social Technological Environmental Legal Michael Porters Five Forces Bargaining power of buyers Bargaining power of suppliers Availability of substitutes Threat of new entrants Industry Rivalry External Analysis Internal Analysis Examining an organisations performance and capabilities Value Chain Analysis Helps identify those activities that the organisation needs to perform better and different than competitors to gain advantage SWOT Analysis 1. Articulation of org aspirations 2. Identify business risks to be mitigated Strategic analysis results in a set of strategic issues that must be addressed Formulate the Strategy Stimulating Creative Strategies Resource based view, Core competencies, Value based Mgmt, Profit from the core, Blue Ocean TQM, Six Sigma, ISO, Lean Manufacturing, Minimize risks, Internal controls & COSO Methodologies to support strategy formulation process The expected outcome from any strategy formulation approach is to develop a direction that differentiates the organisation from its competitors to gain sustainable competitive advantage Using Strategy Map to guide strategy selection If company has poor capital utilization Value based management approach for financial strategy If company does not have distinctive brand or market presence identifying attractive customer segment, blue ocean etc If distinctive capabilities in business processes resource based view, identifying core competency If great human capital base create a learning organization, encourage new strategies The OAS Statement Select the strategy Codify to communicate to all managers and employees Objective (O) Similar to vision statement Quantitative goal profitability, size, market share etc Advantage (A) Means by which enterprise will achieve its objective Describes value proposition of the company Low cost or differentiation through features, services etc Scope (S) The domain in which the enterprise intends to operate Targeted customer segment, breadth of product line, geographic locations served The OAS Statement To be the most profitable US-based airline(O)
..by offering the speed of airline travel at a price, frequency, and reliability of cars, buses and trains(A)
..to travellers who are price sensitive and who value convenient flights.(S) Southwest Airlines Strategy direction statements After strategic analysis prepare a direction statement for each of the identified strategic issues Its like a vision statement for each strategic issue Three components: 1. Strategic Objectives: defines specific goal to be achieved 2. Do-wells: identify critical few activities that must be mastered if the objective is to be achieved helps in designing strategic maps 3. Preliminary measures: these are a first pass at the potential measures to be used on the Balanced Scorecard Strategy direction statements Incremental vs Transformational Change Companies observe and adapt to strategies of first mover Strategies last about 3-5 years Every year, companies make small incremental changes to their strategy When strategy has run its course or strategy not successful, company goes for transformational change To develop new strategy, company might change mission, vision, values, expectations, OAS and enabling capabilities Eg. Marriott Vacation Club International wants to go for transformational change in its policies; HSBC Rail did scenario analysis to reach viable solution for future problems; Intel changed product offering in 1980s Triggers of Transformational Change Burning platform of failed strategy Companies would rather change strategy than get burned by failed strategies Cigna Property and Casualty Mobil Marketing & Refining AT&T Canada New Leader Comprehensive review and transformational update of existing strategy Happens many a time for burning platforms of failed strategies Triggers of Transformational Change Technological changes Wells Fargo changed principles because of online banking Disrupted existing strategies in many industries Macroeconomic Increase in input Foreign exchange valuation Regulation changes Summary Identify future problems at the earliest A combination of incremental and transformational change is required. Eg: Chase Corporate team should meet annually to update strategy Reviews, reaffirms the mission, vision and values through SWOT, PESTEL and other tools Careful analysis of external changes and internal data to validate strategy should be applicable for one more year Else, transformational strategy to be applied for next several years Thank You!