These unchanging ideas form the business vision, as discussed in the above segment, and are expressed in the company mission statement. These include: o Business principles like commitment to various stakeholders. The identity of the organization delimits the scope of the business and identifies the key sources of competitive advantage for that business.
The scope of this definition typically serves as the basis of further decisions on corporate strategy and competition. MetLife Inc. We thereby earn their loyalty. NIKE Inc. To Bring Inspiration and innovation to every athlete in the world. ITC To enhance the wealth generating capability of the enterprise in a global environment, delivering superior and sustainable stakeholder value. Coca Cola Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.
The sequence of the statements in the mission typically signifies the relative priority of the various values added. A well-conceived vision consists of core ideology and envisioned future. Core ideology rests on core values. Collins and Porras have popularized this concept.
Core Values are the foundation of management style in any business. They provide the justification of behavior and, therefore, exert significant influence on marketing decisions. These are few in numbers and are central to the firm.
They reflect the deeply held values of the organization and are independent of the current industry environment and management short-term trends or fads. The beliefs may have economic orientation or social orientation. The entire organization structure revolves around the philosophy coming out of core values. Good core value statements clearly delineate the observable norms of behavior, which reflect the desired values of the organization.
These core values and the related norms of behavior reflect the culture of the organization. The ways to determine whether a value is core to the organization can be understood by asking whether it would continue to be supported if circumstances changed and caused it to be seen as a liability. If the answer is that it would be kept, then it is core value. Another way to determine which values are core is to imagine the firm moving into a totally different industry. The values that would be carried with it into the new industry are the core values of the firm.
Core values will not change even if the industry in which the company operates changes. If the industry changes such that the core values are not appreciated, then the firm should seek new markets where its core values are viewed as an asset. For example, if innovation is a core value but then 5 years down the innovation is no longer valued by the current customers, rather than seeking a change in its values, the firm should venture into new markets where innovation is advantageous.
In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels. A business definition is the clear-cut statement of the business or a set of businesses, the organization engages or wishes to pursue in the future. It also defines the scope of the organization.
Business can be defined along three dimensions i. It must reflect two features: Focus - Focus of business is defined in terms of the kind of functions the business performs rather than the broad spectrum of industry in which the organization operates. Differentiation - The next feature involved in business definition is differentiationi. Differentiation can be on several bases like quality, price, delivery, service or any other factor which the concerned market segment values.
For example, an organization can charge comparatively lower price as compared to its competitors in the same product quality segment, then price is not the differentiating factor. As against this, if the organization is charging a much lower price in the same product group excluding quality, price becomes a differentiating factor. A clear business definition is helpful in identifying several strategic choices.
The choices regarding various customer groups, various customer functions and alternative technologies give the strategists various strategic alternatives. The diversification, mergers and turnaround depend upon the business definition. Customer oriented approach of business makes the organization competitive.
Business can be defined at the corporate or SBU levels. Another version of the business definition explains the business of an organization in terms of customer needs, customer groups and alternative technologies. Oerik Abell suggests defining business along the three dimensions of customer groups, customer functions and alternative technologies.
They are developed as follows: i Customer groups are created according to the identity of the customers. It may be a gift item also. Broadly, it is more convenient to use one term rather than both. The difference between the two is simply a matter of degree and it may vary widely.
All people work to achieve the objectives. Long-term perspective is translated in short-term goals. All decisions taken at all levels of management are oriented towards accomplishment of objectives. Corporate level 2. Business unit level 3. Functional or departmental level Corporate objectives are those that relate to the business as a whole. The top management of the business usually sets them and they provide the focus for setting more detailed objectives for the main functional activities of the business.
They tend to focus on the desired performance and results of the business. It is important that corporate objectives cover a range of key areas where the business wants to achieve results rather than focusing on a single objective. It begins with broad statement of vision and mission and ends with key specific goals. These objectives are made achievable at the lower level. Organizational problems and relationship cover a multiplicity of variables and cannot be integrated into one objective.
They may be economic objectives, social objectives, political objectives etc. Hence, multiplicity of objectives forces the strategists to balance those diverse interests. This timeframe helps the strategists to fix targets.
If objectives set are beyond the reach of managers, they will adopt a defeatist attitude. Attainable objectives act as a motivator in the organization.
Clarity and simplicity should characterize the language of formulation. These factors are: Environmental forces, both internal and external, may influence the interests of various stakeholders. Further, these forces are dynamic by nature. Hence, objective setting must consider their influence on its process. As objectives should be realistic, the efforts be made to set the objectives in such a way so that objectives may become attainable.
For that, existing resources of enterprise and internal power structure be examined carefully. The values of the top management influence the choice of objectives. A philanthropic attitude may lead to setting of socially oriented objectives while economic orientation of top management may force them to go for profitability objective. Past is important for strategic reasons.
Organizations cannot deviate much from the past. Unnecessary deviations will bring problems relating to resistance to change. Management must understand the past so that it may integrate its objectives in an effective way. These are summarised below: Specific The objective should state exactly what is to be achieved.
Measurable An objective should be capable of measurement — so that it is possible to determine whether or how far it has been achieved Achievable The objective should be realistic given the circumstances in which it is set and the resources available to the business. Relevant Objectives should be relevant to the people responsible for achieving them Time Bound Objectives should be set with a time frame in mind. Shareholders are generally the most powerful of these stakeholders.
In developing markets like India, the firms mainly have their strategic intents limited to market leadership in domestic markets due to limited availability of resources, whereas in developed markets, firms may intend to capture a much larger share of the global market. Depending on the nature of the economy and industry the firm is operating in, the firm determines its scope or strategic intent.
Mission: We will meet the mobile communication needs of our customers through a Error-free service delivery, b Innovative products and services, c Cost efficiency, and d Unified messaging solutions. It can be seen that the company has not committed itself to any specific technology while formulating its intent.
It has kept the scope of innovation and re-alignment open in this regard. Its leadership, history and culture The history, leadership, and culture of an organization play a significant role in shaping the intent. The culture of the firm determines how aggressive will the firm be in its pursuit of the stated intent. Usually, owner-managers superimpose their personal vision on the organization, and play a significant role in shaping the strategic intent and direction of the firm.
It is also likely that powerful leaders transform organizations through infusing new intent into the members of the organization for example, Steve Jobs at Apple Computers, Andy Grove at Intel, and Jack Welch at GE. Thus the history, culture, and leadership of the firm determine how broad, aggressive, and powerful the strategic intent of the organization is going to be.
To conclude, answering the following set of questions can summarize the process of determining the strategic intent of the firm: 1. What business we are in? In what way will the organization serve the interests of the various stakeholders? How does the organization define its various scopes of businesses?
Limitations of Strategic Intent Strategic intent as a concept has its own limitations. Strategic intent is not a static concept; rather it is a dynamic one. Just having a differentiator is not sufficient, it is important that the differentiation adds value to the customer.
For instance, Indian watchmaker HMT continued its focus on mechanical watches in the name of low prices, when the industry shifted towards quartz watches. Gradually, the industry matured to provide quartz watches at the same low prices HMT was offering its mechanical watches at, thereby limiting the value of HMT to the consumers.
ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers, through a variety of delivery channels, and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital, asset management, and information technology.
Where the strategy is multi-staged or multi-pronged, it becomes very important to specify the sequence and priorities of the various actions. The economic logic defines how the firm will take advantage of the differentiators.
For instance, The Times of India leverages on its large, national circulation base to charge a premium from its advertisers.
The business model is based on reducing marginal costs through exploiting scale and scope economies. When this change is huge, it will change the ultimate destiny of the company. The point at which the company changes from an older structure to a newer structure is called strategic inflection point.
What is strategic intent? Explain hierarchy of strategic intent and its importance. What is mission? How is it different from purpose? Discuss the essentials of a mission statement. Stage five mission statements of big companies in India and review them critically. Explain the three dimensions of a business definition. What are objectives? How are they set? State the characteristics of objectives. How will you set objectives for a large organization?
Assume imaginary details. Visit two companies of your choice and collect the details regarding hierarchy of strategic intent. Choose a major organization under you and proclaim its strategic intent. Identify if your organization expects to transcend beyond its current resources and capabilities, and achieve a supernormal vision. Take the case of any organization in your neighborhood and try and evolve the strategic diamond for them.
Describe the concept of strategic dissonance. Give an example of how a firm has handled strategic dissonance through redefinition of its strategic intent. Discussion Questions 1. Highlight how the mission statement of NTPC operationalizes the vision, and reinforces the strategic intent. Critically analyze the list of objectives that NTPC has set for themselves. Are these objectives specific enough? Do they provide the necessary direction for managers in their day-to-day functioning?
In order for a business to succeed and gain the competitive edge, the business must know what changes are taking place and how the scenario is going to be in the future.
Various informational resources are critical to business intelligence and the consequent short-term and long-term forecasts. There is a strong linkage between the changing environment, the strategic response of the business to such changes and the performance. It is therefore important to understand the environmental forces that influence this linkage.
Environmental analysis or environmental appraisal is an exercise in which total view of environment is taken; it is the process through which an organization monitors and comprehends various environmental factors and their interplay. Ultimately the analysis of these components is aggregated to have a total view of the environment. A large part of the process of environmental analysis seeks to explore the unknown terrain, the dimensions of future. The analysis emphasizes on what could happen and not necessarily what will happen.
A common process of environmental analysis can be identified in the steps as fol- lows: a Monitoring or identifying environmental factors - As a first step, a business strategist needs to identify all the relevant factors, both internal and external components that might affect the business. This includes an overall assessment of the interaction and interplay of all stakeholders. All the factors are not equally important and affecting to the business. In this context, a strategist has to scan the environmental trend to select only the most prominent environmental factors which affect the business.
This step paves the way of environment analysis and forecasting. A concept can be interpreted as a series of different variables. For example, the economic environment might cover many variables such as Per Capita Income, GDP, and eco- nomic policies that can be further classified into many other variables.
These variables can be used in different ways to envision the clearer picture of the broader concept. Some of the major methods of analysis can be Scenario Building, Benchmarking, and Network methods. These factors are internal to the business, some of which can be easily changed or improved upon.
These are generally as follows: - Organizational Structure - Management Style - Staff - Skills - Systems - Shared values and organizational culture, etc. Add 2 Exhibit - 3. Tax changes, new laws, trade barriers, demographic change, government policy changes etc.
In order to analyze these factors, the strategists can categorize them using the following model and the variants: A PEST Political, Economic, Social and Technological The PEST model focuses on the analysis of the political, economic, social and technological external factors that must be understood in order for an organization to succeed. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.
These may have direct or indirect impact on the organization's operation. All these aspects have a bearing on the strategies adopted by the business firms. The stability of the government also influences business and related activities to a great extent. The social structure and the values that a society cherishes have a considerable influence on the functioning of business firms.
For example, during festive seasons there is an increase in the demand for new clothes, sweets, fruits, flower, etc. Due to increase in literacy rate the consumers are becoming more conscious of the quality of the products. Due to change in family composition, more nuclear families with single child concepts have come up.
Join over Business Policy 1 — 15 2. Strategy And Strategic Management 16 — 42 3. Competitive Advantage And Strategies 43 — 70 4. Business Environment 71 — 5. Strategic Planning — 6. Strategic Control And Evaluation — Strategy Implementation — The knowledge of business policy and techniques of strategic management is the need of the hour to prospective business managers.
The present competitive environment has brought several drastic changes in policy making and strategic management. Hence, there is necessity of theoretical understanding about the business policy as well as strategic.
This innovative introduction to business policy and strategic management, covering both the illustrative cases and conceptual foundation, offers authoritative approaches to strategic leadership in emerging markets. Uploaded by AprilV on December 22, Internet Archive's 25th Anniversary Logo. Search icon An illustration of a magnifying glass. User icon An illustration of a person's head and chest. Sign up Log in. Web icon An illustration of a computer application window Wayback Machine Texts icon An illustration of an open book.
Books Video icon An illustration of two cells of a film strip. The authors' well-known strategic management model runs throughout the core chapters as a unifying concept. With a new experiential exercise at the end of each chapter, students have the opportunity to apply their knowledge to real-world situations.
The book presents a number of experiential exercises and projects for use in and out of class. Because the exercises include thought, action, and feedback-assessment components, they promote an understanding of strategic management through comprehensive active learning.
All exercises and scenarios have been thoroughly updated to provide accurate and relevant information that ensure consistency with changing strategic management concepts. Important Notice: Media content referenced within the product description or the product text may not be available in the ebook version. The book, being an augmented version of the previous edition, equips the young managers with the fundamentals and basics of strategic management and financial management in a cogent manner.
The text now provides a better orientation to the students on the topics like corporate restructuring, divestitures, acquisitions, and mergers in the global context with the help of examples and caselets.
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