There is an island of opportunity

in the middle of every difficulty.

Albert Einstein

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 Chapter One & Two
What Is Strategy and Why Is It Important?

Charting a Company's Direction: Its Vision,

Mission, Objectives, and Strategy

Dr. Jashim U. Ahmed

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 Strategy

A clear vision of what the

organization will be; based on a
sustainable competitive
advantage; specifying what must
be done and the resources
required.

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 Strategy is War!
companies do compete
aggressively - even viciously -
for strategic advantage in a
chaotic arena that is increasingly
similar to the modern theater of
war.

Source: E. K. Clemons & J. A. Santamaria,

April 2002, Harvard Business Review
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 Strategy Should Include
A Clear understanding of the
Companys Competitive Advantage
Specific Objectives - Growth and
Profits
Products and Services
Markets and Customers
Priority areas of Business
Investment, Organization,
Resources and Skills required
Implementation Plan 5
The Five Elements of Strategy

Staging Vehicles
What will be our speed How we will get there?
and sequence of moves?

Economic Logic
How will we obtain
our returns?

Arenas Differentiators
Where will we be active? How will we win?

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Source: D. C. Hambrick & J. W. Fredrickson, 2001
 The Benefits of Strategy
Clarity of Direction
Rationale for Future Success
Basis for Resource Allocation
Decisions
Basis for Operational Decisions
Identifies Critical Issues
Communication Improved
Common Purpose Amongst
Management 7
 Strategic Management

Something an organization needs or

uses in order to win, or establish its
legitimacy in a world of competitive
rivalry strategy is what makes a
firm unique, a winner, or a survivor.

Howard Thomas, 1993

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When Do You Need a Strategic
Review

External Changes
Internal Changes

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 Vision
Vision is simply an inner picture of
something, which has not yet
happened. The vision set by leading
companies on Europe and US
requires the transformational style
adopted so successfully in much
admired companies like Shell,
GlaxoSmithKline and Cisco
Systems. Each began with an idea.
A clear vision.
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 Vision & Mission
Vision is a possible and
desirable future state of an
organization. Mission is why a
firm exists, its role in life. It is
more associated with behavior
and the present.

---A. Campbell and S. Yeung, 1991

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The Four Parameters of Mission

Purpose
Values
Strategy
Behavior Standards

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 The Ashridge Mission Model
PURPOSE
Why the Company Exists

STRATEGY VALUES
Competitive Position What the Company
& Distinctive Competence Believes in

BEHAVIOUR STANDARDS
The Policies & Behavior patterns that Underpin the
Distinctive Competence and the Value system.

Source: R. Koch, Strategy, 2000, p. 240, Financial Times.

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 Components of A Mission
Statement
Mission statements can and do vary in
length, content, format, and specificity.
Most practitioners and academicians of
strategic management feel that an
effective statement exhibits nine
components. Because a mission
statement is often the most visible and
public part of the strategic management
process.

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F. R. David, 2003.
Nine Components of A Mission
Statement
Customers: Who are the firm's customers?
Productsor Services: What are the firms
major products or services?
Markets:
Geographically, where does the
firm compete?
Technology: Is the firm technologically
current?
Concern for Survival, Growth and
Profitability: Is the firm committed to
growth and financial soundness? 15
Nine Components of A Mission
Statement (cont.)
Philosophy:What are the basic beliefs,
values, and ethical priorities of the firm?
Self-concept:
What is the firm's major
competitive advantage?
Concernfor Public Image: Is the firm
responsive to social, community, and
environmental concerns?
Concern for Employees: Are employees
a valuable asset of the firm?
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F. R. David, 2003.
 Long-term Growth in
Shareholder Value

A Mission-Driven Company
A Values-Centered Organization
An Adaptable Business Strategy

W. W. George,
Academy of Management Executive, 2001,
Vol. 15, No. 4, p. 41.
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1. A Mission-Driven Company

Motivating employees with a mission

and a clear sense of purpose is the
only way to deliver innovative
products, superior service, and
unsurpassed quality to customers
over an extended period.

W. W. George,
Academy of Management Executive, 2001,
Vol. 15, No. 4, p. 41.
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2. A Values-Centered Organization
In the mission driven organization is
the consistency with serving
customers, quality, integrity in
business dealings, respect for
employees, and good citizenship. It
is hard to create unique set of
values.

W. W. George,
Academy of Management Executive, 2001,
Vol. 15, No. 4, p.1941.
All Organizations Have Values
Business people dont like to talk about
values. But without these, all business is
about is making money. To me,
achieving business goals is great. But
no business goal is worth sacrificing
your values You can build an
organization based on mutual loyalty,
even in todays economy. But you cant
do it if you treat people as disposable.

Pat Kelly
CEO, PSS World
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 Value-Based Organizations
These organizations place less emphasis
on following a clear strategy than on
building a rich, engaging corporate
purposefocus less on formal
structural design and more on effective
management processesand are less
concerned with controlling employees
behavior than with developing their
capabilities. Such a transformation can
start only with top management.

Chris Bartlett and Sumantra Ghoshal

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3. An Adaptable Business Strategy

The third necessary condition for

sustainable growth in shareholder
value is a sound business strategy
that is adaptable to changing
business conditions.

W. W. George,
Academy of Management Executive, 2001,
Vol. 15, No. 4, p. 41.
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 Why is Vision so Powerful?
The key reason is that it grabs
attention. It provides focus. Every
organization has lots of ways to go.
The outside world pulls it in every
direction. Each has its own
attractions. Yet, no organization can
be all things to all people - not
General Motors, not IBM, not even the
United States of America.

Burt Nanus
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Issues for Strategic Management
Where Are We Now?
S.W.O.T analysis
Where Do We Want to Be?
Vision - Mission - Goals - Objectives.
What is Stopping Us?
Organizational blockages.
What Should We Do?
Strategic action.
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Strategic Thinking Viewpoints

Satisfying Customer Needs:

Customer Segments.
Customer Perceptions.
Unmet Customer needs.
Future Customer Needs.

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Strategic Thinking Viewpoints
Sustaining the Competitive
Advantage:

Competitive Interaction.
Competitors Gaps.
Cost versus Value.
Competitors Reaction.
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Strategic Thinking Viewpoints
Capitalizing on Corporate
Strengths:
S.W.O.T analysis.
New Applications for Existing
products or services.
Business Portfolios.
Opportunities and Threats.
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Criteria for Selecting Strategic
Options
Superior profit Potential.
Coherence with Group Strategy and
Mission.
Reinforcement of Long term Viability.
Fit with Existing Competencies and
Infrastructure.
Low exist Cost.
Positive Cash flow Potential.
Corporate Image. 28
 Offensive Strategies
Attack Competitors Strengths.
Attack Competitors Weaknesses.
Attack on Many Fronts
Simultaneously.
First-Mover Initiatives.
Guerrilla Attacks.
Pre-Emptive Strikes.
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 Strategy Generation Methods
Redefine Product & Market Scope
Seek Opinions of External Experts
Imitate Competitors
Create Variations on an existing theme.
Differentiate using Competitive Advantage.
Become Lowest cost operator
Focus activities
Change your size
Give best Quality
Use Different types of Portfolio Analysis.
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 Strategic Growth Based On

New Levels of
Services/Product/Distribution
New Technologies
New Applications
Product Performance
Differentiation
Innovation
Distinctive Skills or Resources
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 Selections of Strategies
Must be Imaginative, Practical & Relevant.
High Chance of Achieving Adequate
Results.
Does not Create Excessive Risk.
Uses Organization's Major Strengths.
Corrects or Neutralizes major Weaknesses.
Exploits Major Opportunities
Eliminate or Reduces Major Threats.

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 Final Thought

Achieving maximum possible

Differentiation over the
Competition in Meeting Customer
Needs.

Source: K. Ohmae

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Thank you

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