Strategic Intent

And
Strategy Formulation
• The foundation for the strategic management is laid by the hierarchy of
strategic intent. The concept of strategic intent makes clear WHAT AN
ORGANISATION STANDS FOR HARVARD Business Review, 1989 described
the concept in its infancy HAMEL AND PRAHALAD coined the term strategic
intent.
• Strategic Intent- Intention or Purpose
• What are the goals and objectives of a company?
It gives answers to

Why they want to

What they want to do?
do?
 You
are
Here

Establishment
Formulation of Implementation Strategic
of Strategic
Strategies of Strategies Evaluation
Intent

Strategic Control
 Strategic Intent
• Strategic intent is the purpose for which an organisation strives for. These
could be in the form of vision and mission statements for the organisation
as a corporate whole.
• At the business level of firms these could be expressed as the business
definition and business model.
• In precise terms, as an expression of aims to be achieved operationally,
these may be the goals and objectives
• Strategic intent lays down the framework within which firms would
operate, adopt a predetermined direction and attempt to achieve their goal.
Strategic Intent - A company exhibits strategic intent when it
relentlessly pursues an ambitious strategic objective and
concentrates its full resources and competitive actions on achieving
that objective.
• Strategic intent gives an idea of what the organization desires to attain
in future.
• It indicates the long-term market position, which the organization
desires to create or occupy and the opportunity for exploring new
possibilities.
 Understanding Strategic Intent
• The term strategic intent has been understood as an obsession with an organisation:
an obsession by having ambitions that may even be out of proportion to their
resources and capabilities. This obsession is to win at all levels of the organisation
while sustaining that obsession in the quest for global leadership.
• The concept also encompasses an active management process that includes:
focusing the organization's attention on the essence of winning, motivating people
by communicating the value of the target, leaving room for individual and team
contributions, sustaining enthusiasm by providing new operational definitions as
circumstances change and using intent consistently to guide resource allocations
 Strategic Intent Advantages
It help the company in many ways:
• Gains dominance
• Unseat existing firms in the industry
• Provides best customers service to the customers in the world
• Turn technology into products that are capable of changing the way the people live
• Future success and growth
 Concept of Stretch, Leverage and Fit
• Stretch is a misfit between resources and aspirations
• Leverage refers to concentrating, accumulating, complementing,
conserving, and recovering resources in such a manner that meagre
resource base is stretched to meet the aspirations that an organization
dares to have.
• Fit means positioning the firm by matching its organizational resources to
its environment
 Concept of Stretch, Leverage and Fit
• To achieve Strategic Intent – you need to Stretch. As of today there is a
misfit between resources and aspirations. So instead of looking at
resources, you will look at resourcefulness. To achieve you will stretch
and make innovative use of your resources.
• This leads to Leveraging your resources. Leverage refers to concentrating
your resources to your strategic intent, accumulating learning, experiences
and competencies, in a manner that a scarce resource base can be
stretched to meet the aspirations that an organizational resources to its
environment.
 Concept of Stretch, Leverage and Fit
• The strategic fit is the traditional way of looking at strategy. Using techniques
such as SWOT analysis, which are used to assess organizational capabilities
and environmental opportunities, Strategy is taken as a compromise between
what the environment has got to offer in terms of opportunities and the
counteroffer that the organization makes in the form of its capabilities.
• Under fit, the strategic intent is conservative and seems to be more realistic, but
you may not be aware of the potential; under stretch and leverage it could be
improbable, even idealistic, but then you look at something far beyond present
possibilities and look at the potential possibilities.
 Hierarchy of Strategic Intent
• The framework within which firms operate, adopt a predetermined
direction and attempt to achieve their goal is provided by a strategic
intent.
Hierarchy/Components

Low in number
VISION

MISSION

GOALS

OBJECTIVES

ACTION
PLAN More in number
• It is at the top in the hierarchy of strategic intent. It is what the firm
would ultimately like to become. A few definitions are as follows:
• MILLER and DESS defined vision as the “category of intentions that are
broad, all inclusive and forward thinking”
•  Kotter (1990) defines it as a "description of something (an organization, a
corporate culture, a business, a technology, an activity) in the future".
• The vision statement pertains to an idea or scheme representing a
foresight; a dream or mental image. The vision statement of your business
motivates individuals towards shared long-term goals.
• Having a well set out vision will help you determine the strategy you will
use and the strategic relationships that you will develop to drive you
towards achieving your business goals and objectives.
• Burt Nanus a well known expert of organizational vision has defined
vision as “ a realistic, credible and attractive future for an organization”.
• Realistic: Vision must be based on reality to be meaningful for an
organization; It should not be a merely day dreaming but a dream to be
converted into reality
• Credible: Vision must be believable to be relevant to the members of
organization. One of the purpose of vision is to aspire those in org. to
achieve a level of excellence
• Attractive: Vision must be attractive as to inspire and motivate the org.
members. People must want to be a part of future of org.
• Future: Vision is always for future
 Benefits of a vision
• Parikh and Neubauer (1993) point out the several benefits accruing to an organisation having a
vision.
 Good visions are inspiring and exhilarating.
 Visions represent a discontinuity, a step function and a jump ahead so that the company knows
what it is to be.
 Good visions help in the creation of a common identity and a shared sense of purpose.
 Good visions are competitive, original and unique. They make sense in the marketplace as they are
practical.
 Good vision foster risk taking and experimentation.
 Good vision fosters long-term thinking. – Good visions represent integrity: they are truly genuine
and can be used to the benefit of people.
• Mission is what an organisation is and why it exists., a statement that defines the
purpose of your business.
• Mission is a statement which defines the role that an organisation plays in the
society.
• Such a statement reflects the corporate philosophy, identity, character, and image
of an organisation.
• It is a statement highlighting the special task your business is destined to perform.
• It should ideally take into consideration all the stakeholders of your business.
 Characteristics of Mission Statements
Some of the characteristics include:
• It should be feasible
• It should be precise
• It should be clear
• It should be motivating
• It should be distinctive
• It should include major components of strategy
• It should indicate how objectives are to be accomplished
 Business Definition
• It seeks to explain the business undertaken by the firm, with respect to
customer needs, target audience, and alternative technologies.
• With the help of business definition, one can ascertain the strategic
business choices. The corporate restructuring also depends upon the
business definition.
• Business model, as the name implies is a strategy for the effective
operation of the business, ascertaining sources of income, desired
customer base, and financing details.
• Rival firms, operating in the same industry relies on the different business
model due to their strategic choice.
• Goals denote what an organization hopes to accomplish in a future period
of time. They represent the future state or outcome of effort put in now.
• Objectives are the ends that state specifically how the goals shall be
achieved. They are concrete and specific in contrast to goals that are
generalised.
• Goals may be qualitative, objectives tend to be mainly quantitative in
specification
 Role of Objectives
• Objectives define the organization's relationship with its environment
• Objectives help an organization pursue its vision and mission
• Objectives provide the basis for strategic decision-making
• Objectives provide the standards for performance appraisal
 Characteristics of Objectives
• Objectives should be understandable
• Objectives should be concrete and specific
• Objectives should be related to a time frame
• Objectives should be measurable and controllable
• Objectives should be challenging
• Different objectives should correlate with each other
• Objectives should be set within constraints
• Developing an action plan can help change makers turn their visions into
reality, and increase efficiency and accountability within an organization.
• An action plan describes the way your organization will meet its
objectives through detailed action steps that describe how and when these
steps will be taken.
• Steps that must be taken, or activities that must be performed well, for a
strategy to succeed. An action plan has three major elements
Specific Tasks what will be done and by whom

Time Horizon when will it be done

Resource Allocation what specific funds are available for specific activities
 Conclude

• The vision, mission, business definition, and business model explains the
philosophy of business but the goals and objectives are established with
the purpose of achieving them.
• Strategic Intent is extremely important for the future growth and success
of the enterprise, irrespective of its size and nature.
 Questions ?
Who coined the term Strategic Intent?
What are the different hierarchy levels of strategic intent?
What are the elements of action plan?
Goals denote what an organization hopes to accomplish in a future period
of time. True / False
• Difference between objectives and goals.
• The points of difference between the two are as follows:
 The goals are broad while objectives are specific.
 The goals are set for a relatively longer period of time.
 Goals are more influenced by external environment.
 Goals are not quantified while objectives are quantified.